Critically evaluate the regulatory and fiscal measures taken since 2023 to accelerate PSP development in India.

Pumped Storage Projects (PSPs), or "water batteries", store surplus solar and wind power by pumping water uphill. The CEA estimates India needs 26.69 GW of PSP storage by 2031–32 [1]. Since 2023, the Centre has changed PSP regulation and finance. More projects have started construction, but commissioning is still too slow.

Regulatory measures

• MoP Guidelines (April 2023): several ways of allotting sites, simpler Environmental Clearance, and exhausted coal mines allowed as sites [2].
• Faster appraisal: the time for CEA approval of project reports was cut from 90 to 50 days, and off-stream closed-loop PSPs need no CEA approval [3].
• Lighter environmental studies: MoEF&CC asks for one season of baseline data for closed-loop PSPs and two for open-loop [3].
• TBCB guidelines (2025): competitive bidding to buy storage capacity [3].

Fiscal measures

• No free-power or LADF obligations for PSPs [2].
• No ISTS (inter-state transmission) charges for 25 years for projects awarded by June 2028, plus budget support for access roads and transmission lines [4].
• No VGF (viability gap funding): the government says the levelised cost of storage is already viable [5].

Strengths

• 11 PSPs (15,870 MW) are under construction and 6 more (8,140 MW) are approved [4].
• The shift to off-stream sites limits damage to rivers [1].

Limitations

• Slow commissioning: capacity rose only from 4,745.6 MW (2023) [6] to 7.43 GW (2026) [1]. That is under 1 GW a year, against about 3.5 GW a year needed.
• Little reason for states to host PSPs: water and land are state subjects, and the Centre wants states to take the lead [7]. But the free-power waiver removes their main benefit.
• Cost is still a barrier: the Standing Committee on Energy named high cost as the main reason storage is growing slowly [8]. The Committee on Public Undertakings (COPU) asked for a structured VGF framework and a 70–75% land-consent threshold [9].
• Thin environmental checks: one season of data misses either the monsoon or the dry months [3]. Porous ground, such as old mine pits, can leak water through seepage [10].

Conclusion

Overall, the reforms have removed delays at the approval stage, but they have not yet sped up completion. Four steps would help: VGF only for approved projects that have not started, a share of revenue for host states, seepage studies matched to site risk, and a public tracker for each project. Together they would help PSPs support the 500 GW non-fossil target [1] and SDG-7.