JSW Energy signs 1GW pumped hydro MOU with Indian state government

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JSW Energy, part of Indian conglomerate JSW Group, has inked a memorandum of understanding (MOU) with the Chhattisgarh government to build a 1GW pumped hydro storage project.

The agreement to build the Hasdev Bango Pumped Storage Project (PSP), reported by The Economic Times, saw the company’s share price jump 4% in the early hours of today (April 4). Chhattisgarh is a landlocked state in central east India.

“By integrating Hydro PSPs with our solar and wind power plants in the near future, we can provide firm dispatchable renewable power,” said Prashant Jain, joint managing director and CEO of JSW Energy.

Fossil fuel generation accounted for 70% of the company’s 4.6GW power output in the year ending Mach 31, 2021 (FY21) with the remainder from two pumped hydro projects and a small solar site.

But it has aims to ramp up renewables production by 18% a year from 1.4GW in FY21 to 16.8GW by FY30, and is targeting green hydrogen, pumped storage and battery energy storage alongside attached products and services. It has 225MW of solar near the commissioning stage and around 2,000MW of wind energy under construction.

Last year saw JSW Energy sign agreements with other state governments for pumped hydro storage projects. It says that water allocation has been approved for a 1.5GW project in Maharashtra and a 1GW project in Rajasthan, with environmental clearance processes and techno-economical feasibility studies underway. Looking further ahead, it has MOUs for renewable energy resources of 5GW and 10GW in each state, respectively.

The company says that India has 90GWh of potential to host pumped hydro, of which only 3.3GWh has been tapped to-date. Greenko is the main existing player in the pumped hydro space there.

JSW Energy also sees green hydrogen as a big opportunity with India having the second-largest hydrogen demand base in the world, and is working with a subsidiary of Australian iron ore giant Fortescue, FFI, to explore potential projects.

The capital expenditure needed to get to its 2030 target amounts to ₹75,000 crore, or US$10 billion, the company says. It had total income of ₹7,160 crore last year (US$950 million).

One source of funding could be development banks. UK development bank British International Investment, known as the CDC until November 2021, plans to invest £2bn (US$2.6 billion) in climate finance infrastructure in India and Southeast Asia, according to its Head of Asia Srini Nagarajan in an interview with the The Economic Times.

He said it wants to broaden out its infrastructure investments beyond pure wind and solar towards battery storage paired with solar and emerging storage technologies like green hydrogen, which it sees as a “major investment opportunity across multiple markets.”

BII/CDC founded Ayana Renewables in 2018 with a US$100 million commitment.

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