The Challenge for India’s Renewable Surge: Storage

UPSC Syllabus: Gs Paper 3- Infrastructure

Introduction

India is rapidly expanding renewable energy to achieve its climate and clean energy goals. Renewable sources now account for 53% of India’s installed power capacity, with solar power contributing over 150 GW. However, solar and wind energy remain intermittent because generation changes with sunlight and weather conditions. This creates a mismatch between electricity supply and demand, increasing pressure on the grid. As renewable energy grows further, energy storage and stronger grid infrastructure are becoming essential for reliable and stable electricity supply.

Understanding Energy Storage and Its Importance

1. Meaning of energy storage: Energy storage systems store excess renewable electricity during periods of high generation and release it when electricity demand rises but generation remains low.
2. Role in balancing renewable energy: These systems convert renewable electricity into stored forms of energy and later convert it back into electricity when required. This helps manage fluctuations in solar and wind generation.
3. Importance for grid stability: Intermittent renewable energy increases pressure on the power grid. Storage systems help smooth supply fluctuations and improve the reliability of renewable power.

Energy Storage Technologies

1. Pumped Hydro Storage (PHS): PHS uses surplus electricity to pump water from a lower reservoir to a higher reservoir. During peak demand, the stored water is released downhill through turbines to generate electricity.
2. Battery Energy Storage Systems (BESS): BESS stores electricity chemically and discharges it when needed. Lithium-ion batteries, especially Lithium Iron Phosphate (LFP) batteries, dominate grid-scale storage because of falling costs, high efficiency, and long operational life.
3. Dominance of LFP batteries: According to BloombergNEF, LFP batteries accounted for more than 90% of annual storage additions in 2025. Lithium-ion batteries now form the largest share of global battery storage deployment.
4. Solar-thermal storage systems: These systems use mirrors to focus sunlight onto a receiver. Materials such as molten salt store the heat, which is later used to generate steam and electricity.
5. Compressed-air energy storage: This system uses excess electricity to compress air and store it in underground caverns or tanks. The compressed air later drives turbines to generate electricity.
6. Flywheel energy storage systems: Flywheel systems store electricity as rotational energy by spinning a rotor at very high speeds. They can inject power into the grid almost instantly and help manage short-term fluctuations.
7. Gravity energy storage systems: Gravity storage systems use electricity to lift heavy weights to higher elevations. When electricity is needed, the weights are lowered to generate electricity through generators.

India’s Energy Storage Capacity and Expansion Plans

1. Storage deployment lagging behind renewable growth: India’s energy storage deployment has not kept pace with rapid renewable energy expansion. This is raising concerns regarding the grid’s ability to absorb larger volumes of renewable power.
2. Present storage capacity: India currently has around 0.27 GW of installed BESS capacity and nearly 7.2 GW of PHS capacity. The government is mainly focusing on these two technologies.
3. CEA projections for 2035-36: The Central Electricity Authority (CEA) estimates that India’s energy storage capacity could reach 174 GW by 2035-36. This includes around 80 GW of battery storage systems (BESS) and nearly 94 GW of pumped hydro storage (PHS), showing that both technologies will play a major role in supporting renewable energy growth.
4. Importance of storage duration: The CEA stated that storage systems with durations of four to six hours will become increasingly important beyond 2030. BESS is suitable for short-duration storage, while PSPs are more suitable for long-duration storage.
5. Expansion of PHS projects: India is rapidly expanding pumped hydro storage projects. More than 13 GW of PHS capacity is already under construction, around 9.5 GW has received approval, and nearly 75 GW is still under survey and investigation for future development.
6. Rapid growth in battery storage projects: Battery energy storage systems are also expanding quickly. Around 10.6 GW of BESS capacity is under construction, while projects worth more than 22 GW are currently at the tendering stage.
7. Growing momentum in storage deployment: India’s energy storage capacity increased from nearly 507 MWh to around 5 GWh in 2025. Around 102 GWh of projects have also been tendered, including nearly 60 GWh allocated to BESS projects.
8. Policy support for storage systems: Measures such as viability gap funding, waivers on interstate transmission charges, and storage obligations are improving project viability. The Draft Electricity (Amendment) Act, 2025 also proposes recognising energy storage as a core part of the power system.

Key Challenges in India’s Storage Transition

1. Grid congestion and transmission bottlenecks: Renewable energy projects are often located far from demand centres. This creates bottlenecks in power evacuation and sometimes leads to renewable energy curtailment.
2. Slow transmission infrastructure expansion: Transmission systems originally designed for thermal power are now supporting renewable energy evacuation. However, transmission upgrades are slower than renewable capacity additions.
3. Intermittency increasing grid complexity: Solar generation peaks during the day and falls to zero at night, while wind output remains variable. This makes grid balancing more difficult and increases the need for real-time management.
4. Heavy dependence on imported battery cells: India imports nearly 75-80% of its lithium-ion cells, which account for around 80% of battery storage system costs. This increases dependence on global supply chains.
5. Geopolitical and price risks: One Asian country dominates more than 75-80% of global battery manufacturing. This exposes India to geopolitical risks, trade frictions, and price volatility.
6. Need for smart grid technologies: Digital technologies, automation, and real-time monitoring are becoming increasingly important for managing renewable energy fluctuations and improving grid flexibility.

Global Trends in Energy Storage

1. Global dominance of PHS and BESS: PHS and BESS remain the most widely deployed electricity storage technologies globally. Worldwide installed PHS capacity stands at nearly 160 GW.
2. China leading storage deployment: China leads global PHS deployment with nearly 66 GW of installed capacity. It also accounted for nearly 60% of global battery storage additions in 2025.
3. Rapid growth in battery storage: Global battery storage capacity is estimated at around 270 GW. According to the International Energy Agency, 108 GW of new battery storage capacity was added globally in 2025 alone.
4. Expansion beyond major markets: Battery storage deployment is also expanding rapidly in Australia and parts of the Middle East. Storage is increasingly being viewed as essential for electricity security and renewable integration.

Way Forward

Expanding storage infrastructure: India needs faster deployment of both PHS and BESS to match rising renewable energy capacity and future electricity demand.

Strengthening transmission and smart grids: Transmission infrastructure, digital technologies, automation, and real-time monitoring must expand together to improve grid flexibility and manage renewable intermittency more efficiently.

Reducing import dependence: India needs to reduce dependence on imported lithium-ion cells to avoid geopolitical risks, trade disruptions, and price volatility.

Supporting policy and investment: Measures such as viability gap funding, storage obligations, and transmission charge waivers can improve project viability and encourage investments in storage systems.

Building reliable clean energy systems: The focus should shift from only adding renewable capacity to creating a reliable system that can store, transmit, and deliver clean energy efficiently.

Conclusion

India’s renewable energy transition now depends not only on increasing clean energy generation but also on improving storage and grid infrastructure. Expanding PHS, BESS, transmission networks, and smart grid systems will be essential for balancing electricity supply and demand. The success of India’s clean energy transition will depend on how effectively renewable power can be stored, transmitted, and delivered.

Question for practice:

Discuss the importance of energy storage systems in supporting India’s renewable energy transition and the challenges associated with their expansion.

Source : Indian Express