Approximately 5 GW of pumped hydro energy storage is expected in the next five years: Crisil Ratings – EQ Mag
According to credit rating agency Crisil, in the next five fiscal years, pumped hydro energy storage (PHES) projects would add around 5 GW of capacity as a result of the Ministry of Power’s (MoP) latest guidelines.
The guidelines call for the rental of land at discounted rates on a yearly basis. They also permit the use of depleted mines for PHES projects and offer a one-year extension for projects whose construction is put off while awaiting forest and environmental clearance.
The Ministry of New and Renewable Energy estimates that 5 GW of PHES capacity will likely be installed over the next five fiscal years, of that, 2.8 GW is under construction, and the remaining may be added at potential sites, totalling 29.9 GW.
Furthermore, according to Crisil Ratings, infrastructure investments in storage are essential given the growing proportion of renewable energy produced outside of peak times.
The MoP guidelines provide a special emphasis on PHES projects due to their advantages over battery energy storage systems (BESS), including their approximate 50-year project life without considerable maintenance expenses, low residual waste generation, and extended storage times without much discharge.
By providing ancillary services like reactive assistance and peak hour shaving, which have the potential to enhance cash flow by around 5% yearly, the guidelines open the door for PHES projects to increase income streams.
Moreover, PHES now has a 5 GW operational capacity, which was mostly set up by the federal, state, and local governments and their agencies. They have a combination of independent reservoirs and dam connections.