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The Ministry of Power has recently introduced tariff-based competitive bidding guidelines for procuring stored energy from various types of Pumped Storage Projects (PSPs). The guidelines aim to increase the capacity of PSPs in India, which will play a crucial role in meeting the country’s future electricity demands. As per the National Electricity Plan 2023, India requires an additional 74 GW of pumped storage capacity, which accounts for 41% of the total 179 GW of new capacity additions planned by 2032.
Pumped Storage Projects are a type of hydroelectric power plant that stores energy by pumping water from a lower reservoir to an upper reservoir during off-peak hours and releasing it during peak hours to generate electricity. This technology has the potential to provide both peak and non-peak power as per the grid requirements. PSPs can contribute significantly to the grid stability and help in peak load management.
The new tariff-based competitive bidding guidelines aim to encourage private sector participation in the development of PSPs. The guidelines specify that the bids will be evaluated on the basis of the lowest tariff offered for the sale of stored energy. The procurement process will be based on a competitive bidding system, where the winning bidder will be the one offering the lowest tariff.
The guidelines also specify the eligibility criteria for PSPs to participate in the bidding process. The projects should have a minimum capacity of 250 MW and a maximum capacity of 500 MW. The projects should also have a guaranteed availability of 90% and a maximum of 3-5 sags (short circuit tendency to ground) during the contract period.
The move is expected to attract private sector investment in the development of PSPs, which will help in meeting India’s increasing energy demands. The government’s initiative will also lead to an improvement in the overall grid stability and reliability. Moreover, the increase in PSP capacity will help to reduce the country’s reliance on fossil fuels and promote the use of renewable energy sources. The new guidelines are considered a significant step towards achieving India’s goal of becoming a global leader in the energy sector by 2047.