According to reports from CNBC TV18 and Business Standard, Tata Power Company Ltd. has secured a Letter of Award (LoA) from the Solar Energy Corporation of India Ltd. (SECI) for a 324 MW / 2,592 MWh Pumped Storage Plant (PSP). The project will provide energy storage services for 40 years from the scheduled commencement of supply at an agreed fixed annual charge and cycle loss. SECI will sign a Pumped Storage Purchase Agreement (PPA) with Tata Power after signing a Pumped Storage Sale Agreement with the buying entities. As per Business Standard, the project was awarded under SECI's tariff-based global competitive bidding for the supply of 1,500 MW / 12,000 MWh of power from pumped hydro storage projects being set up in the country, secured through an e-reverse auction.
As reported by CNBC TV18, the project carries an annual fixed charge of ₹1.0841826 crore per MW per year, with an annual cycle loss of 24.61%. For the full 324 MW capacity, the total annual fixed charge works out to ₹351.3 crore. According to Business Standard, the project will be developed under the Build, Own, Operate (BOO) model and is scheduled for commissioning by 2029. Under the terms of the award, Tata Power is required to commence the supply of storage capacity within 36 months from the effective date of the PPA. The project is entirely domestic, with no interests held by the promoter, promoter group, or group companies in the entity awarding the order, and does not fall under related party transactions.
According to Business Standard, the SECI's award further strengthens Tata Power's position in long-duration energy storage, a segment central to integrating India's fast-growing solar and wind capacity into the grid by converting surplus daytime generation into firm, dispatchable, round-the-clock power. The award aligns with Tata Power's broader clean-energy strategy and its Net Zero 2045 ambition. The company's clean and green portfolio now stands at 17.5 GW, including a 9.6 GW pipeline, of which 2.8 GW is pumped storage. The Tata Power Company Ltd, a vertically integrated power company and part of the Tata Group, has built a diversified portfolio across the entire power value chain, with its total operational and pipeline capacity surpassing 26 GW.
According to CNBC TV18, shares of Tata Power Company Ltd. ended 0.03% lower at ₹377.00 on the NSE following the announcement. Bernstein maintains a positive outlook on Tata Power, targeting ₹430 with strong growth potential driven by pumped storage projects. Based on the economics of the latest pumped storage project bid, Bernstein estimates the project could generate an equity IRR of around 20%, with the initial investment recoverable in roughly five years despite the contract having a tenure of 40 years. Pumped storage remains a cost-competitive energy storage solution, with PSP storage costs estimated at around ₹4.6/kWh compared to approximately ₹5.5/kWh for BESS based on the latest PSPCL tender and about ₹6.9/kWh for BESS assuming a battery capex of $150/kWh. Bernstein believes the tender's requirement to commission the project within three years of signing the power purchase agreement also reduced competition, with the latest SECI pumped storage tender attracting only three bidders compared to more than 20 bidders in recent solar-plus-BESS tenders.
