India’s top conglomerates have been racing to capitalise on the country’s journey to net-zero emissions, and the Adani Group has so far focused on solar and wind energy generation. Now it also plans to generate clean energy using PSH, which produces electricity by moving water between two reservoirs at different elevations.
Under the plan, Adani Green will set up PSH capacity of 5 GW in the next five years. “We will eventually increase this to 25 GW, which will take the group’s total green-energy capability to 70 GW,” one of the sources said. The two people said the group has also revised its original green-energy target for 2030 from 45 GW to 50 GW.
To start with, the group will set up PSH generation facilities in four states – Maharashtra, Andhra Pradesh, Tamil Nadu and Telangana, they said. “This will require an investment of ₹25,000-27,500 crore, based on the current costs. Some of the required reservoirs and separate elevation facilities have already been put in place,” said the second person.
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PSH is a type of hydroelectric energy storage that comprises two water reservoirs at different elevations. Power is generated when water moves from one reservoir to the other through a turbine. When there is a surplus of electricity available, typically during off-peak hours or from solar and wind energy, it is used to pump water from the lower reservoir to the higher one.
This type of energy generation is fast catching on with power companies because it is capable of supplying electricity around the clock, unlike solar and wind. The reservoirs essentially act as batteries, saving costs and boosting margins, which is why both the government and private companies are keen to set up or ramp up their PSH capacities.
“The financial closure for commissioning 3.5 GW of PSH capacity has already been done,” said the first person. The two people added that the 5GW target will be funded by issuing new shares and raising debt, and that the group has already begun basic construction work for the first 500 MW PSH project in Andhra Pradesh, which will be commissioned in FY27.
India’s PSH push
India’s companies are keen on expanding their clean-energy portfolios as the country is the third largest emitter of carbon dioxide after China and the US. In January, the government cleared eight PSH projects worth ₹81,981 crore in five states, according to the ministry of environment, forest and climate change.
Adani Group’s closest rivals Tata Power, NTPC and JSW have already announced plans to enter this space, but the Ahmedabad-based conglomerate has the largest capex target.
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On 19 February, a report in The Economic Times quoted Tata Power CEO Praveer Sinha, who said the conglomerate was looking to set up 2.8 GW of PSH capacity by FY29 with an investment of ₹15,000 crore. In November 2023, a Moneycontrol report said state-run NTPC Ltd had identified at least nine states where it planned to build PSH units with a total installed capacity of 14 GW. In December, the government had cleared Greenko Energy’s proposal for a 3.66-GW PSH project in Uttar Pradesh’s Sonbhadra district.
Two projects in Chhattisgarh with a capacity of 1.2 GW each, by Sterlite Grid and Gandhwani Energy, have also received recommendations. Another 2.22 GW project by Oju Subansiri Hydro Power Corporation in Arunachal Pradesh and a 1.5 GW project by JSW Energy in Maharashtra have also received clearance.
A 1.2 GW project by Non-conventional Energy Development Corporation of Andhra Pradesh Ltd in Annamayya district has been given terms of reference (ToR) clearance, while the company’s 1 GW project in YSR district, which will be operational in three to four years, has received environmental clearance.
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According to a 17 June report by energy research firm Rystad Energy, as South East Asian countries look to transition from fossil fuels to clean energy, PSH capacity in Southeast Asia is likely to increase from about 2.3 GW at present to 18 GW by 2033. This surge is expected to attract a total investment of $12-70 billion, the report added. Currently, fossil fuels account for 64% of Southeast Asia’s power generation.
An email sent to Adani Group remained unanswered.