Kerala seeks central funding, faster nod for hydro and storage projects
Kerala has urged the Union government to provide financial support and expedite environmental and forest clearances for hydroelectric, pumped storage, and battery energy storage projects in the state. The requests were made during meetings between Kerala Electricity Minister Sunny Joseph and Union Power Minister Manohar Lal Khattar and Union New and Renewable Energy Minister Pralhad Joshi in New Delhi on Tuesday.
The state government sought viability gap funding (VGF) for hydropower projects, battery energy storage systems (BESS), and pumped storage projects (PSPs). VGF is a mechanism through which the government provides capital support to make infrastructure projects financially viable, particularly in the initial years when revenue streams may not cover costs.
Kerala also requested relaxations in conditions for implementing hydro and PSP schemes in villages designated as ecologically sensitive areas (ESA) of the Western Ghats. The state asked for these projects' environmental and forest clearances to be fast-tracked. The Western Ghats, a UNESCO World Heritage site, is a biodiversity hotspot. The ESA notification imposes restrictions on developmental activities to protect the region's ecology. Kerala's request is to ease specific conditions to permit clean energy infrastructure while maintaining environmental safeguards.
On the supply side, Kerala sought an extension of 262 MW of power from plants in the southern region until June 2028. The state also asked for additional allocations from the unallocated and surplus power of central generating stations. This is aimed at meeting the state's growing electricity demand while stable renewable capacity is being expanded.
In addition, the state requested the Centre to speed up BESS projects being implemented through NTPC Ltd, the central public sector enterprise. The Kerala State Electricity Board (KSEB) has projects under way or as active proposals in all three categories — hydro projects, BESS, and PSPs.
Minister Joseph stated that these measures are part of the state government's efforts to improve power sector infrastructure and ensure long-term energy security. Pumped storage and battery storage are considered critical for managing the intermittency of solar and wind power, while hydro projects contribute to meeting peak power demand. The central government's response will determine the pace of these projects and the state's ability to integrate renewable energy reliably.
Kerala's requests reflect a broader push by several states to leverage clean energy while dealing with challenges such as ecological regulations and financing gaps. The Centre's decisions will likely balance development needs with environmental concerns, setting a precedent for other states with similar proposals.
