Odisha Rolls Out PSP Policy to Boost Renewable Integration

Bhubaneswar-18/09/2025:Pumped Storage Hydro Projects (PSPs) are emerging as a vital enabler of India’s energy transition. By storing surplus energy during off-peak hours and releasing it during peak demand or low renewable availability, PSPs offer cost-effective, long-duration grid-scale storage. They not only address the intermittency of renewables but also enhance grid stability by providing instant load response, black start capability, spinning reserves, frequency regulation, and other critical ancillary services. PSPs thus serve as a strategic backbone for a reliable, resilient, and low-carbon power system.

The Odisha Government has notified the Pumped Storage Project (PSP) Policy to fast-track energy storage infrastructure and enable smoother integration of renewables into the grid. GRIDCO shall be the nodal agency, for allocation of both self-identified and state-identified project sites. 45 number of potential PSP sites identified by the state have been published on the official web portal of GRIDCO. Operational guidelines for the implementation of the PSP policy has been notified on 17.09.2025.

All projects will follow the Build-Own-Operate-Transfer (BOOT) model with a 40-year concession period, extendable by 30 years. Post-concession projects will be transferred to the State Government, except captive PSPs, which retain CGP status.
Hon’ble Deputy Chief Minister and Energy Minister Shri Kanak Vardhan Singh Deo called the policy a vital step toward grid stability and Net Zero goals. With streamlined execution and faster approvals, Odisha is set to scale up PSP capacity rapidly.
PSPs in Odisha enjoy all benefits under OREP-22, along with key exemptions such as no electricity duty or cross-subsidy surcharge on input energy, no water cess for non-consumptive use, and no obligations for free power or LADF contributions. Developers are eligible for central budgetary support and full RE incentives if energy input is sourced from in-state renewables and face no penalty for sourcing from outside Odisha. Projects availing IPR incentives cannot claim benefits under this policy or OREP-22.

With its PSP Policy, Odisha is laying the groundwork for a resilient, renewable-powered future. This marks a decisive step toward sustainable growth and climate-conscious development, said Hon’ble Deputy Chief Minister Shri Singh Deo.