Tata Power Bags 40-Year Pumped Hydro Storage Contract, To Earn ₹351 Crore Annually.

Integrated power utility Tata Power Company Ltd has received a Letter of Award (LOA) from the Solar Energy Corporation of India Ltd (SECI) to develop a major clean energy storage project, strengthening its renewable energy infrastructure portfolio.

Under the long-term agreement, Tata Power will establish a 324 MW / 2,592 MWh Pumped Storage Plant (PSP) to provide energy storage capacity. The contract was awarded through a domestic competitive bidding process.

The project is backed by a 40-year energy storage service agreement, providing long-term revenue visibility for the company. The contract carries a fixed annual charge of ₹1.0841826 crore per MW per year, translating into an estimated annual revenue pool of around ₹351.3 crore for the awarded capacity.

The agreement includes an annual cycle loss threshold of 24.61% and will remain effective for four decades from the Scheduled Commencement of Supply Date.

Following the LOA, SECI will enter into a formal Pumped Storage Purchase Agreement (PSPA) with Tata Power after completing back-to-back Pumped Storage Sale Agreements with downstream buyers, including distribution companies and commercial utilities.

Tata Power will be required to commence supply of the contracted storage capacity within 36 months from the effective date of the PSPA.

The pumped hydro storage project is expected to play a key role in supporting India's renewable energy expansion by providing grid balancing capability. Such facilities function as large-scale energy storage systems, storing surplus renewable power during low-demand periods and releasing electricity during peak demand.

The addition of the 2,592 MWh storage asset will further strengthen Tata Power’s clean energy portfolio and support the integration of intermittent renewable sources such as solar and wind into the power grid.