The government of Tamil Nadu is planning to build its largest hydroelectricity and first pumped storage project (PSP) in Nilgiris. Two reservoirs across Sillahalla and Kundah rivers are proposed to be built for the purpose.

The project has been conceptualised at an estimated cost of Rs 4,200 crore by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO). The Sillahalla Pumped Storage Hydroelectric Project Stage-1 will house four power plants with a combined capacity of 1,000 MW. An upper dam across Sillahalla river and lower dam across Kundah river downstream of existing Kundah Palam dam will be built and interconnected by a tunnel to generate electricity for peak hours (six hours daily).

The water from lower dam will be recycled to upper dam at the time of non-peak hours using reversible turbine/generator. About 421 acre of land will come under submergence. Additional land required for constructing dams, water conductor system, power house and other project appurtenances works will be carried out on to 356 acre.

The total land proposed to be acquired for the project is 777 acre, of which 445 acre is forest/government land and the remaining is private land.

The construction will cause a permanent change to riverine system. TANGEDCO has already submitted the project proposal to the Union Ministry of Environment, Forest and Climate Change (MoEF&CC) seeking prior environmental clearance in October 2019 and the proposal will come-up for discussion before Expert Appraisal Committee dealing with river valley projects shortly.