Recognizing the growing need for long-duration, grid-scale energy storage to integrate renewable energy reliably, the Government of Odisha has introduced the Odisha PSP Policy 2025. This policy supplements the Odisha Renewable Energy Policy 2022 (OREP-22) and aligns with recent national guidelines on PSP development, offering a structured framework for facilitating public and private sector investment in pumped hydro storage.
To position Odisha as a leading destination for pumped storage development in India, leveraging its natural topography, water abundance, and commitment to sustainable energy to provide reliable, resilient, and cost-effective power for industrial and domestic consumers alike.
The Odisha PSP Policy 2025 covers two broad categories of Pumped Storage Projects (PSPs):
| State-Identified PSPs | Sites surveyed and published by state nodal agencies (currently 45 locations) based on technical feasibility for gravity-based water storage systems. |
|---|---|
| Self-Identified (Off-the-River) PSPs | Off-stream, closed-loop PSPs proposed by private developers or public agencies in locations not yet surveyed or registered by the state. |
This policy applies to projects built for: Power procurement by GRIDCO, DISCOMs, SLDC, Captive consumption by industries, Sale through Open Access or other permissible routes
The Odisha PSP Policy provides multiple pathways for allocating PSP sites, balancing transparency, competitiveness, and strategic interest:
| State-Identified Sites |
Nomination/MoU Route: For Central or State PSUs and their joint ventures based
on technical and financial qualifications. Competitive Bidding: Projects may be bid out based on:
|
|---|---|
| Self-Identified Sites | Developers can propose off-stream sites during a pre-announced application window. If only one developer applies, allocation is made after due diligence. In case multiple applications are received for the same site, competitive bidding is held, with minimum base revenue share set at ₹0.10/unit with 10% escalation every 5 years. |
To enhance the commercial viability of PSPs and attract large-scale private investment, the policy offers a host of fiscal and non-fiscal incentives:
| S/N | Incentive Name | Incentive Particulars as per Odisha PSP Policy 2025 |
|---|---|---|
| 1 | Input Energy Incentives | Exemption from Electricity Duty & Cross-Subsidy Surcharge on input energy from renewable sources (e.g., solar or wind). No water cess for first-time or annual refilling (non-consumptive use), though applicable water charges will apply. |
| 2 | Cost Reductions | No obligation of free power supply or contribution to Local Area Development Fund (LADF). |
| 3 | Financial Support | Eligibility for budgetary support from the Government of India (MoP) for enabling infrastructure under relevant schemes. Possibility of Viability Gap Funding (VGF) support for projects meant for DISCOM usage (not applicable to captive or third-party sale projects). |
| 4 | Compatibility with OREP-22 | All benefits under Odisha Renewable Energy Policy 2022 (OREP-22) are applicable if input energy is sourced from RE projects within Odisha |
