Power plant developers to be incentivised soon
Tamil Nadu, which has been at the forefront of RE adoption in the country, has a total installed RE capacity of 22,628 MW, including 10,790 MW of wind energy and 7800 MW of solar.
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CHENNAI: To neutralise variability in renewable energy generation, the state government has developed a policy to incentivise developers, particularly the private sector, to identify pumped storage projects (PSPs). PSPs store excess energy generated during periods of low demand and release it during peak demand.
Tamil Nadu Pumped Storage Projects Policy 2024, one of the three renewable energy policies approved by the state cabinet recently, offers to develop identified PSP sites through the public sector undertakings or bidding process while private developers can identify their off-river closed loop PSP sites.
Tamil Nadu, which has been at the forefront of RE adoption in the country, has a total installed RE capacity of 22,628 MW, including 10,790 MW of wind energy and 7800 MW of solar.
“One of the significant challenges with RE is its variability—solar power generation peaks during the day while wind power is often strongest at night. PSPs offer a solution by storing excess energy generation during periods of low demand and releasing it during peak demand. This capability allows for better integration of renewable energy into the grid, optimising the use of green energy and reducing reliance on fossil fuels,” the policy stated.
The policy seeks to harness PSP potential by encouraging the development of off-river and on-river PSPs. The closed-loop PSP is located away from rivers and does not involve a connection to a natural water source to create a lower reservoir. The open loop, by contrast, has an ongoing hydrologic connection to a natural body of water like a river or a lake.
The new PSP policy aims to create an attractive investment environment for the public and private sectors by providing clear regulatory frameworks, financial incentives, and a streamlined approval process to reduce investment risks and uncertainties.
For the on-river PSP sites, where at least one of the reservoirs is located on a river stream, the policy seeks to allot such sites to the central or state public sector or joint ventures of the PSUs. Tamil Nadu Green Energy Corporation Ltd (TNGECL), a state-designated nodal agency, could invite proposals from interested parties to develop on-river PSP sites under the PPP mode.
Under the policy, if the developer brought power from outside for pumping, they would be charged up to Rs 0.25 per unit. The developer will pay TNGECL up to Rs 0.50 per unit for output power sold outside the state. They should pay one-time filling facilitation charges, and annual charges up to Rs 20,000/MW will be paid to the TNGECL.
The developer will be charged up to 50 per cent of the existing Rs 1.50 per 1,000 litres rate fixed by the Water Resources Department as the necessary water charges for one-time filling.
Ongoing projects
TANGEDCO plans to set up 15 PSP projects with a combined generation capacity of 14,500 MW
It plans to take up Sillahalla Stage-I and Stage-II (1000 MW each), Kodayar (1500 MW), Manalar (1200 MW), Aliyar (700 MW) and eight other projects through the PPP mode
It has already applied for environmental clearance for Sillahalla Stage-I, Kodayar, and Manalar PSP projects
