The Central Electricity Authority (CEA) has released a comprehensive report titled “Roadmap to 100 GW of Hydro Pumped Storage Projects [PSPs] by 2035-36,” detailing the infrastructure and regulatory requirements for large-scale energy storage integration. Power Finance Corporation (PFC), a Schedule-A Maharatna Central Public Sector Enterprise, and its subsidiary, PFC Consulting Limited (PFCCL), are designated as primary entities in this transition. PFC serves as the Bid Process Coordinator for Independent Transmission Projects (ITPs), tasked with establishing the infrastructure necessary to evacuate power from these facilities and support grid stability.
Technical Project Background and Capacity
The roadmap aligns with the National Electricity Plan (Transmission) released in October 2024, which identifies a requirement for transmission systems to support 35.6 GW of PSP capacity by 2031-32. This infrastructure is essential for “balancing the grid,” providing critical services such as frequency regulation, voltage support, and inertia as renewable energy penetration increases.
CEA resource adequacy studies indicate that India’s storage requirements will rise significantly to meet future demand:
- 2029-30: 62 GW of storage required.
- 2034-35: 161 GW of storage required.
- 2046-47: 476 GW of storage required.
The infrastructure planned by PFC and PFCCL is designed to facilitate these capacity additions, ensuring that power from PSPs can be effectively moved to the national grid.
PFC’s Role and Operational Framework
PFC is India’s largest government-owned Non-Banking Financial Company (NBFC) specializing in the power and infrastructure sectors. Its wholly owned subsidiary, PFCCL, provides transaction advisory and project development services specifically tailored for the Indian power sector. As the Bid Process Coordinator, PFC manages the selection of developers for ITPs through competitive bidding.
To support these capital-intensive projects, PFC utilizes a spectrum of financial products:
- Fund-based Products: Project Term Loans (in Indian Rupee and foreign currency), Corporate Loans, and Debt Refinancing.
- Non-fund-based Products: Guarantees for Performance of Contract/Obligations in Power Purchase Agreements (PPAs) and Letters of Comfort (LoC).
Financial Estimates and Investment Scope
The development of the identified PSP capacity involves a specific capital structure. The CEA report estimates the total investment requirement based on a four-year construction cycle.
- Average capital cost per MW: Rs 0.05 billion to Rs 0.06 billion.
- Total estimated roadmap investment: Rs 5,813.16 billion.
- Phased spending structure:
- Year 1: 20%
- Year 2: 30%
- Year 3: 30%
- Year 4: 20%
The CEA has recommended the extension of Viability Gap Funding (VGF) to PSPs. This mechanism is intended to improve project economics, allowing PSPs to remain competitive against Battery Energy Storage Systems (BESS) under competitive tariff structures.
Regulatory and Infrastructure Context
To support timely execution, the government relaxed qualification requirements for contractors on January 8, 2026. This allows manufacturers with proven experience in vertical centrifugal pumps and successful model testing of reversible fixed-speed Francis pump turbines to participate in tenders.
The CEA has also proposed several policy interventions to address development bottlenecks:
- Compensatory Afforestation: Allowing developers to conduct afforestation on degraded forest land at twice the area of forest diverted.
- Procedural Simplifications: Increasing document upload limits on the PARIVESH 2.0 portal and allowing the independent processing of forest diversion proposals for linear and non-linear project components.
- Approval Stages: Deferring the submission of approved mining plans until the start of actual mining and treating land mutation as a post-clearance compliance condition for Forest Clearance Stage II (FC-II).
- Environmental Classification: Suggesting off-stream PSPs be included under the “White category” due to minimal environmental impact.
As of November 30, 2025, transmission systems were finalized for 73 projects totaling 100,810 MW of capacity.
Current Project Status and Next Steps
According to the CEA roadmap, there are currently 11,620 MW of PSP capacity under construction. PFC and PFCCL are continuing their roles in coordinating the bidding processes for transmission infrastructure as additional requirements are firmed up through pre-detailed project report (pre-DPR) and DPR submissions.
Following the award of transmission projects, developers must seek connectivity from the Central Transmission Utility of India Limited or respective state utilities. The final objective of the roadmap is the successful commissioning of an aggregate 100,810 MW of PSP capacity by 2035-36 to ensure long-term resource adequacy and grid resilience.
Official References & Citations
- Central Electricity Authority (CEA), Ministry of Power, Government of India
- Document Title: Roadmap to 100 GW of Hydro Pumped Storage Projects (PSPs) by 2035-36 (January 2026).
- Scope & Details: Details India’s strategic roadmap to achieve over 100 GW of pumped storage capacity by 2035–36, including regional potential, projected capital investment (~₹5.8 lakh crore), transmission evacuation infrastructure, and regulatory guidelines.
- Official Website: Central Electricity Authority (CEA) | Ministry of Power
- Ministry of Power, Government of India / Parliament of India
- Document Title: Lok Sabha Unstarred Question No. 2030: Setting Up of Pumped Storage Projects in Madhya Pradesh (Answered on 30.07.2026).
- Scope & Details: Official parliamentary reply outlining key central policy measures to encourage PSP development, including tariff-based competitive bidding (TBCB) guidelines, ISTS fee waivers, revised CEA concurrence thresholds, and project assessments in Madhya Pradesh.
- Official Portal: Digital Sansad (Lok Sabha Questions) | Ministry of Power Notifications
- Power Finance Corporation Limited (PFC)
- Document Title: Committed to India’s Energy Transition – 38th Annual Report 2023–24.
- Scope & Details: Official annual report of PFC (a Maharatna CPSE), covering its role as the premier energy transition financier, Bid Process Coordinator (BPC) for Independent Transmission Projects via PFC Consulting Limited, and financial commitments across India’s power infrastructure.
- Official Portal: Power Finance Corporation Ltd. (PFC India)
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