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).
