Andhra Pradesh scraps two Adani PSP projects
Author: PPD Team Date: July 30, 2025
The Andhra Pradesh government has cancelled two pumped storage power (PSP) projects allotted to Adani Green Energy Limited (AGEL) in Parvathipuram Manyam district. The decision follows AGEL’s request, which cited border disputes with Odisha as a major obstacle to project development.
The cancelled projects are the 1,200 MW Kurukutti and 1,000 MW Karrivalasa PSPs. AGEL also requested that facilitation fees already paid be refunded or adjusted toward its remaining PSP allocations in Pedakota and Raiwada.
Feasibility reports prepared by Tata Consulting Engineers (TCE) for the New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) provide insight into the challenges faced by both projects.
The Kurukutti PSP, located near Kurukutti village, involved two dams on different elevations and an underground powerhouse with five reversible turbines. The Rs 4,766 crore project was designed to store surplus solar and wind energy and deliver seven hours of peaking power each day. However, land acquisition for 638 acres, including forest areas, led to protests from affected communities. Environmental clearance delays, ecological concerns in the Eastern Ghats, and unresolved water-sharing issues with Odisha further slowed progress. Technical constraints included high sediment inflow and unstable geological conditions. The project’s levelized cost of Rs 7.85 per kWh and an energy loss rate of 23.6 percent raised additional questions about financial viability.
The Karrivalasa PSP, located near Ganjaibhadra and Kurukutti villages, was a Rs 4,446 crore project with four reversible units and an expected annual output of 2,106 million units. It required 593 acres and also faced environmental and resettlement challenges. Forty-two percent of the lower reservoir’s catchment was located in Odisha, leading to concerns over downstream impacts. The project faced similar technical hurdles, including complex rock formations and sedimentation risk. Its levelized cost was estimated at Rs 8.38 per kWh, making it less competitive than emerging alternatives like battery storage and hybrid solar-wind systems.
Both projects were allocated to AGEL in 2022 by the previous Y S Jagan Mohan Reddy administration. While survey and investigation works had begun, NREDCAP, the nodal agency, later recommended cancellation due to these compounded challenges. The agency stated that the decision was not the result of any fault by the developer.
On July 17, the State Investment Promotion Board approved the proposal. Chief secretary K Vijayanand issued a formal government order confirming the cancellations, citing the developer’s request and local implementation barriers.
Opposition from tribal communities in the nearby Alluri Sitharama Raju (ASR) district has also intensified resistance to pumped storage projects in Scheduled Areas. Four of the seven PSP projects approved by the previous government lie in such constitutionally protected tribal regions, including Kurukutti and Karrivalasa.
