Bhubaneswar: The Odisha Government has notified its Pumped Storage Project (PSP) Policy aimed at accelerating sustainable growth and climate-conscious development.

PSPs work by storing surplus energy during off-peak hours and releasing it during peak demand or when renewable power generation is low. They provide cost-effective, long-duration grid-scale storage solutions while addressing the intermittency challenges of renewable energy.

According to official sources, the PSP Policy is expected to fast-track the development of energy storage infrastructure and ensure smoother integration of renewable energy into the state grid. GRIDCO has been designated as the nodal agency for allocation of both self-identified and state-identified project sites. A total of 45 potential PSP sites have already been published on GRIDCO’s official portal.

The operational guidelines, notified on September 17, 2025, stipulate that projects will be developed under the Build-Own-Operate-Transfer (BOOT) model, with a 40-year concession period, extendable by another 30 years. At the end of the concession, projects will be transferred to the State Government, except captive PSPs which will retain their Captive Generating Plant (CGP) status.

Deputy Chief Minister and Energy Minister Kanak Vardhan Singh Deo described the policy as a “vital step toward grid stability and achieving net-zero goals.”

PSPs in Odisha will receive all benefits available under OREP-22, along with additional exemptions, including: No electricity duty or cross-subsidy surcharge on input energy, No water cess for non-consumptive use and No obligation to provide free power or contribute to the Local Area Development Fund (LADF).

Developers will also be eligible for central budgetary support and full renewable energy incentives if input energy is sourced from within the state. There will be no penalties for sourcing energy from outside Odisha. However, projects availing Industrial Policy Resolution (IPR) incentives cannot claim benefits under this policy or OREP-22.