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We recently visited the 900MW (4 x 225MW) pumped storage plant (PSP) of West Bengal State Electricity Distribution Co. (WBSEDCL) at Purulia, consequent to our recently released report ‘Pumped storage: Back in the limelight’ where we highlighted the importance of PSP in energy transition and emerging multi-billion dollar opportunities for utilities, EPC and capital good players over the coming decade. Purulia PSP is one of the largest, and the best, pump storage plants in the country. It is touted as one of the global success stories in PSP technology with 6-8 hours of storage capacity and overall plant efficiency of 77.80%. For large scale energy storage, PSP technology, developed over a century ago, is still the best on offer. The high maturity of the technology, relatively low-gestation period and bigger role for domestic industry players in it vis-à-vis BESS makes PSP attractive for policy makers as is evident from the power ministry’s recent guidelines on pumped hydro storage.

* Jewel in a deep forest: We reached the Purulia PSP after traversing through deep forest for almost five hours at night. We were spellbound and enthralled by this hidden and under-recognised jewel in the country. For a long time since it was set up, the unit hardly attracted any visitors. But that has changed suddenly, with a host of visitors including EPC players, developers, policymakers and other industries making a beeline to the plant in recent months. This 900MW PSP is not only the largest project of its kind in India, it is one of the global beacons for what PSP technology can do. With maintenance of grid stability becoming a challenge due to the increasing share of renewables, and the resultant imperative to boost energy storage capabilities and capacities, people are happy to discover that a solution to these problems lies in their backyard. The PSP solution also has the added advantages of supporting ‘Aatmanirbhar Bharat’ (new plants can largely be done by Indian companies), technology maturity unlike in BESS, and EPC capability adjacencies (largely similar to a typical hydropower plant). For us, the visit was an eyeopener to the immense possibilities that lie ahead for players as energy transition initiatives kick into high gear. What was also heart-warming to see was the pride and confidence on the faces of the small team of young engineers, led by Mr Kalyan K Maiti, the Project site in-charge, who manage the project.

* Purulia PSP: The plant at Purulia is a closed-loop (reservoirs are separate from natural waterways) pumped storage hydroelectric power plant, located at Ayodhya Hills in Purulia, West Bengal. The plant is equipped with technology and main plant equipment from Toshiba, Japan. The main work on the project started in May’02 and it was commissioned in Dec’07. Larsen & Toubro Ltd was the sub-contractor for civil work for the plant. The total cost of the project in 2007 was INR 25bn and was funded by JICA.

* Capital cost: The capital cost for a typical river side PSP project is ~INR 40-50mn/MW with a 5-year execution period and 40+ years of plant useful life. Civil and HM works (30%) and electro-mechanical works (50%) account for a majority (80%) of the capex to be incurred on setting up a PSP.

* Upcoming projects of WBSEDCL: WBSEDCL is developing two new projects in the same region - 4x250MW Turga pumped hydro storage project (project cost of INR 69bn) and 4x225MW Bandu PSP (project cost of INR 47bn). Pre-construction activities at Turga have begun. The selection of a developer for Bandu on DBFOT basis is in process.

* Existing and projected capacities: India has 4,746MW of PSPs under operation and 2,700MW are under construction. With Further, DPRs for 1,000MW projects have been concurred by CEA, and 25,630MW projects are under various stages of survey and investigation. It is estimated that PSP-based storage capacity of about 6.81GW/18.82GW with 46.65GWh/135GWh of storage is required by FY27/FY32. The government has already allocated projects of more than 73GW to various central utilities.

* Likely beneficiaries: We expect the entire value chain to benefit from the traction in PSP over the next few years. NHPC, SJVNL, NTPC, JSW Energy, Tata Power, Adani Green, and Greenko will likely be the key beneficiaries, going forward. EPC players such as L&T, and capital goods players such as Siemens and Voith will benefit greatly. We have a BUY rating on NTPC (TP – INR 205), and a HOLD rating on both JSW Energy (TP – 270) and Tata Power (TP – INR 220).

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