Tata Power Secures Massive 40-Year Pumped Storage Plant Contract from SECI Worth ₹351 Crore Annually

Integrated power major The Tata Power Company Limited (NSE: TATAPOWER; BSE: 500400) announced today that it has received a formal Letter of Award (LOA) from the Solar Energy Corporation of India Limited (SECI) to establish a major clean energy storage project.

The long-term contract is to provide energy storage capacities through a 324 MW / 2,592 MWh Pumped Storage Plant (PSP).

Contract Framework and Project Economics

The project marks a significant addition to Tata Power's green energy infrastructure pipeline, backed by long-term financial visibility:

Annual Revenue Value: The contract is structured around a fixed annual charge of ₹1.0841826 crore per MW per year. For the total awarded capacity of 324 MW, this translates to a total fixed revenue pool of ₹351.3 crore annually.

Contract Lifecycle: The agreement guarantees energy storage service delivery for a prolonged tenure of 40 years from the Scheduled Commencement of Supply Date.

Operational Parameters: The arrangement factor incorporates an annual cycle loss threshold of 24.61%.

Execution Timeline and Agreement Structure

The development follows a structured multi-party purchasing framework designed for large-scale utility grids:

PPA Execution: Subsequent to this LOA, SECI will sign a formal Pumped Storage Purchase Agreement (PPA) with Tata Power. This will take place once SECI concludes corresponding back-to-back Pumped Storage Sale Agreements with the final downstream buying entities (distribution companies or commercial utilities).

Commissioning Window: Tata Power is mandated to commence the supply of storage capacity within 36 months from the effective date of the PPA execution.

Strategic Significance of Pumped Hydro Storage

Pumped Hydro Storage acts as a giant natural battery. During off-peak hours when solar or wind power is abundant and cheap, water is pumped from a lower reservoir up to a higher reservoir. During peak demand hours, that water is released downhill through hydro turbines to generate electricity instantly.

As India aggressively scales up intermittent renewable energy assets, massive balancing infrastructures like this 2,592 MWh asset are vital to maintaining grid stability. Securing a locked-in, 40-year sovereign-backed revenue stream from a Government of India enterprise significantly enhances Tata Power's long-term utility portfolio visibility.

The company confirmed that the contract was won through a domestic competitive bidding process.

Shares of Tata Power Company Limited was last trading in BSE at Rs. 377.10 as compared to the previous close of Rs. 376.95. The total number of shares traded during the day was 122797 in over 3613 trades.

The stock hit an intraday high of Rs. 379.05 and intraday low of 375.30. The net turnover during the day was Rs. 46320398.00.

Source : Equity Bulls

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TataPowerCompany INE245A01021 ElectricUtilities SECI Contract