CEA seeks to ease green norms for hydro pumped-storage projects

Eco-sensitive zones are areas surrounding protected areas, notified by the Ministry of Environment, Forest and Climate Change, to protect environmentally fragile ecosystems. At present, PSPs and hydropower projects are prohibited within ESZs as well as the default 10-km buffer around protected areas.

If implemented, the recommendations — outlined in CEA’s roadmap for developing 100 gigawatt of hydro pumped storage capacity by 2035-36 and released on Tuesday — would mark a significant policy shift, allowing PSPs to be developed in ESZs where such projects were earlier barred.

The roadmap seeks to address India’s growing energy storage challenge arising from the increasing penetration of variable and intermittent renewable energy sources such as solar and wind in the power mix.

According to CEA estimates, India’s total installed PSP capacity is projected to rise sharply to 87 GW by 2033-34 from the current 7.1 GW. It also estimates the installed PSP capacity is expected to cross 100 GW by 2035-36.

The CEA has prioritised PSPs over Battery Energy Storage Systems (BESS), citing their ability to provide flexible, fast-responding grid balancing support and store electricity for longer durations.

PSPs are large-scale energy storage systems that use the gravitational potential of water to store and generate electricity. They operate by pumping water from a lower reservoir to an upper reservoir during low electricity demand or surplus renewable generation, and releasing it back through turbines to produce power during peak demand.

The roadmap also calls for extending Viability Gap Funding (VGF) support to PSPs — on the lines of VGF scheme for BESS — to help offset high capital costs.

Environmental bottlenecks

The CEA roadmap flags environmental and forest-related clearances as a key reason behind the slow pace of PSP development in India.

“Presently, the environmental clearance and forest clearance processes of PSPs are very cumbersome, since these projects are treated at par with the conventional hydro projects for the purpose of grant of environmental clearance (EC) and forest clearance (FC),” the roadmap said.

It notes that PSPs built on existing reservoirs, on-the-river sites, or off-the-river locations have a significantly lower environmental impact compared to conventional hydropower projects.

“Further, unlike the conventional hydro projects, development of PSPs do not lead to significant displacement of the people and thus, require minimum rehabilitation and resettlement,” it added.

Thus, it proposed that the PSPs developed on existing reservoirs and off-the-river sites be treated as a distinct category while processing environmental and forest clearances.

It flagged multiple regulatory and procedural bottlenecks that continue to slow the development of pumped-storage. One key issue is the difficulty in finding suitable non-forest land for compensatory afforestation, especially near project sites. It also pointed out regulatory issues such as the blanket prohibition of PSPs within eco-sensitive zones and the default 10-km buffer around protected areas, which, according to the CEA, limits project development in resource-rich regions.

Delays in forest clearances, particularly the Stage-II approval, were flagged as another major challenge. According to the CEA, these delays are caused by prolonged state-level approvals of rehabilitation and resettlement plans.

It also highlighted issues delaying PSP projects such as the need for fresh environmental clearances even for small increases in generation, pending approvals of mining plans, and long gaps between Stage-I and Stage-II clearance, among others.

Easing green norms

Among other recommendations, the CEA has proposed easing several environmental and land-related norms to speed up the development of pumped storage projects. It has suggested allowing the use of degraded forest land — twice the area of forest land diverted — for compensatory afforestation, instead of non-forest land, a provision that is currently available only to central public sector undertakings and captive coal block developers. The authority has also recommended creating a national-level land bank for compensatory afforestation, with mapped degraded land, a GIS-based repository and a monitoring framework.

The roadmap further proposes permitting PSPs within ESZs and within a 10-km aerial distance from protected areas where ESZs have not been notified, alongside adopting a differentiated regulatory approach for renewable projects and relaxing restrictive conditions applicable to the Western Ghats. To avoid construction delays, the CEA has suggested allowing work on non-forest land in projects that involve both forest and non-forest areas, particularly for off-stream PSPs. It has also recommended exempting surface land above deep underground tunnels — where the tunnel depth exceeds 5D below the surface and the surface land is not required for project use — from forest land diversion calculations.

CEA has also called for the creation of a centralised online portal for submission and processing of Forest Rights Act certificates, while urging state governments to proactively address Gram Sabha rights during project allocation. The roadmap also recommends classifying off-stream PSPs under the “White Category,” recognising their minimal environmental impact and simplifying environmental and forest clearance procedures.