Timely implementation of market reforms is important to improve the financial viability of pumped storage hydro project (PSP) in the country, an Icra report said on Tuesday.
The levellised tariff for pumped storage hydro projects in the base case, assuming a capital cost of `6.5 crore per MW, is estimated at about `5 per unit, and the landed tariff, including the cost of energy required for pumping, is estimated at `9 per unit, said a statement in the Icra report.
It explained that while the tariff competitiveness of the storage component for PSPs is modest, the PSPs benefit from a long economic life of 40 years with a very mature and indigenous technology available.
PSPs are also estimated to remain cost competitive against the storage cost associated with battery energy storage.
“Nonetheless, the timely implementation of market reform measures as highlighted in the guidelines remains important to improve the financial viability of PSPs,” stated Girishkumar Kadam, Senior Vice President & Co-Group Head - Corporate Ratings, Icra.