Mumbai/New Delhi: India’s top renewable energy firms are now locked in a race to secure the most suitable sites for setting up hydropower plants around the country. Some key players include Adani Green Energy, JSW Energy, Tata Power and Greenko Group, among other private players as well as public sector power companies.
The outcome of this race could influence the pecking order of power companies in a future where India has slowly weaned itself off its coal addiction.
Pumped energy storage plants, an energy storage process that work on the principles of hydropower technology, are gaining prominence as the share of renewable energy in India’s power consumption matrix grows.
These plants work like giant batteries, which help even out the inconsistencies of power availability and supply that is inherent in green electricity generated using sunlight or wind.
However, suitable locations for setting up such pumped storage plants are a scarce resource.
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“Our focus is to lock up locations for pumped hydro, similar to what we did for solar energy,” said Sagar Adani, executive director of Adani Green Energy at a recent media interaction.
“It’s a resource game. If a location is gone, it is gone for the next 100 years,” he said.
The Central Electricity Authority (CEA) estimates that there is a potential of setting up about 103 gigawatts (GW) of on-river pumped storage. Off-river pumped storage potential is also available, with suitable sites under evaluation across the country.
Andhra Pradesh and Maharashtra have the highest concentration of such sites.
Gaining ground
JSW Energy has already cornered about 6 GW of pumped storage sites so far, while Adani Green has secured about 5 GW, and Greenko is estimated to have captured about 7.6 GW of storage sites.
Tata Power is constructing 2.8 GW of pumped storage projects in Maharashtra. The company’s chief executive and managing director, Praveer Sinha, in a recent interview with the Economic Times, said that the company has its own reservoirs, and it wouldn’t have to look outside for them.
JSW Energy, Adani Green, Greenko, and Tata Power did not respond to queries at the time of publishing.
Currently nine pumped storage projects, with a total installed capacity of about 4.7 GW, are operational in the country. Five more projects with a total capacity of 4.1 GW are under construction.
Additionally, 39 projects with a total capacity of about 56 GW have been allotted by states to players like Adani Green, Tata Power, Greenko, JSW Energy and other state-owned power companies.
Analysts say these projects have relatively longer gestation periods and considerable capacity may become live only by 2028.
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“There is intense competition for pumped storage sites as these projects have specific requirements including the necessity to build upper and lower reservoirs in close proximity. Thus, a site having the requisite altitude benefits, along with availability of contiguous land is needed for optimal functionality. Achieving a target of 27 GW by 2032 will necessitate an investment of ₹1.6 lakh crore and debt of ₹1.2 lakh crore on the storage component alone,” said Jatin Arya, director and ratings head, CareEdge Ratings.
As per the National Energy Plan, India will require about 74 gigawatts of energy storage capacity by 2032. Of this, 27 GW is expected to come from pumped storage plants and 47 gigawatts from battery energy storage systems (BESS).
Key’s in the site
In pumped storage plants, two interconnected reservoirs at different elevations are used to store energy. When water flows from the higher reservoir to the lower one, it generates electricity like a conventional hydropower plant.
This helps plug the demand gap when renewable energy supply dips, for instance after sunset. When there is surplus power, it is used to pump water from the lower reservoir to the higher one. The system is more sustainable than conventional hydropower stations as the water is reused.
However, unlike a coal-fired power or a BESS plant, a pumped storage plant cannot be set up on any piece of land.
“Site selection is the key for pumped storage hydropower projects. There are only a few sites that provide the right combination of existing favourable topography, adequate head and the right geological stability to optimize the construction and operating costs. Such sites will be very lucrative for companies looking to invest in pumped storage,” said Hitesh Singh, Head of Strategy, Afcons Infrastructure.
Afcons is one of the engineering companies with expertise in building such pumped storage hydropower plants.
The key considerations when selecting a site include the geological and topographical profile of the site, Singh explained. For instance, all things being equal, a site in Maharashtra, where basalt rock is more common, would be preferable for a hydropower plant than a site in Uttarakhand, where the geology consists of relatively younger rocks from the Himalayas.
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Similarly, a site where the elevation difference between the two reservoirs, called head, is sufficiently large, would be preferable.
Adani Green’s Sagar Adani compares sites for pumped storage plants to a natural resource.
“Ultimately renewables are like any other resource game,” he said.
“For example, like in oil and gas, the value of an oil and gas company is fundamentally based on the reserves of oil they have. Similarly, the value of any renewable company is only, only, and only, based on the locked-in reserves that they have in their control,” he said.
While Adani Green is working on BESS too, the young executive said that there is a limited competitive advantage that the company can gain with batteries.
“If you have 100 acres of land, anyone can put it in battery storage. But a large competitive advantage comes for us with regards to pumped hydro storage. Those are geographical locations which get locked-in. If you have access to a location, only you have access to that location,” he said.