The challenge for India’s renewables surge: Storage

Why in the News?

India’s renewable energy capacity has expanded rapidly, with renewables contributing more than half of India’s installed power capacity for the first time. However, this growth has exposed a major challenge: energy storage. As renewable energy use increases, inadequate storage systems are creating concerns over grid stability and reliable electricity supply. The issue has become more important as India aims to achieve 500 GW renewable energy capacity by 2030, but storage infrastructure remains insufficient.

How does inadequate storage undermine India’s renewable energy transition?

1. Intermittency Problem: Solar generation ceases after sunset, while wind output fluctuates according to weather conditions. This creates instability in electricity availability.
2. Demand-Supply Mismatch: Electricity demand often peaks during evening hours, whereas solar generation remains concentrated during daytime, creating temporal imbalance.
3. Grid Stability Risks: Large-scale renewable integration without storage increases frequency fluctuations and voltage instability, affecting grid reliability.
4. Renewable Curtailment: Surplus renewable electricity often remains unused during periods of excess generation due to inadequate storage infrastructure.
5. Thermal Dependence: Limited storage necessitates continued dependence on thermal power plants for balancing electricity demand.

Why has energy storage become central to India’s power transition?

1. Renewable Expansion: Renewable energy now accounts for more than half of India’s installed power capacity, indicating a structural shift in the energy mix.
2. 2030 Energy Target: India aims to achieve 500 GW of renewable energy capacity by 2030, making storage essential for effective grid integration.
3. Peak Demand Management: Storage systems release electricity during high-demand periods, reducing shortages and supply disruptions.
4. Energy Security: Domestic storage capacity reduces dependence on imported fossil fuels and strengthens energy resilience.
5. Net-Zero Pathway: Reliable storage facilitates deeper renewable penetration and supports long-term decarbonisation commitments.

What are the major energy storage technologies available to India?

1. Pumped Hydro Storage (PHS)
   1. Operating Mechanism: Stores electricity by pumping water to an elevated reservoir during surplus generation and releasing it through turbines during peak demand.
   2. Established Technology: Represents the most mature and widely deployed large-scale storage technology globally.
   3. Installed Capacity: India currently possesses nearly 7.2 GW of pumped hydro storage capacity.
   4. Future Expansion: The Central Electricity Authority (CEA) projects nearly 94 GW of PHS capacity by 2035-36.
   5. Key Advantage: Ensures long-duration storage and utility-scale grid balancing.
2. Battery Energy Storage Systems (BESS)
   1. Technology Base: Primarily relies on Lithium-Ion Phosphate (LFP) batteries, recognised for declining costs, higher efficiency and longer life cycles.
   2. Operating Mechanism: Stores electricity during surplus renewable generation and discharges power when output declines.
   3. Current Capacity: India currently possesses nearly 0.27 GW battery storage capacity.
   4. Projected Requirement: Battery storage requirement is projected to reach nearly 80 GW by 2035-36.
   5. Auction Momentum: Around 10,658.94 MW / 28,739.32 MWh of BESS capacity remains under implementation.
   6. Pipeline Expansion: Nearly 22,347.15 MW / 69,836.70 MWh projects remain under tendering.
3. Emerging Storage Technologies
   1. Concentrated Solar Thermal Storage: Uses mirrors to concentrate sunlight and heat molten salts, enabling electricity generation during non-solar hours.
   2. Compressed-Air Energy Storage: Stores compressed air underground during excess generation and releases it to produce electricity during peak demand.
   3. Flywheel Energy Storage: Stores rotational kinetic energy and supports short-duration grid frequency regulation.
   4. Gravity Energy Storage: Converts gravitational potential energy into electricity by lifting and lowering heavy masses.

Why is India falling short in energy storage deployment?

1. Slow Deployment Pace: Storage installation has not kept pace with rapid renewable capacity expansion.
2. Import Dependence: India imports nearly 75-80% of lithium-ion cells, creating supply-chain vulnerability.
3. High Cost Structure: Battery systems account for nearly 90% of total storage project costs, affecting affordability.
4. Policy Gaps: Long-term resource adequacy planning for storage remains insufficient.
5. Critical Mineral Dependence: Dependence on imported lithium, cobalt and rare earth minerals exposes India to geopolitical risks.

How prepared is India institutionally for large-scale renewable integration?

1. CEA Planning: The National Electricity Plan (NEP) projects a requirement of nearly 47 GW / 188 GWh battery storage and 94 GW / 676 GWh pumped hydro capacity by 2035-36.
2. Transmission Expansion: Grid infrastructure requires substantial expansion for integrating variable renewable energy.
3. Power System Flexibility: Smart grids, flexible thermal generation and demand-side management remain necessary.
4. Domestic Manufacturing Push: Production Linked Incentive (PLI) schemes seek to strengthen indigenous battery manufacturing capacity.

How does India compare globally in energy storage deployment?

1. Pumped Hydro Leadership: China leads globally with nearly 360 GW installed PHS capacity, while India remains significantly behind.
2. Battery Storage Growth: Global battery storage capacity reached nearly 270 GW, with projections of 1,080 GW by 2030.
3. Chinese Dominance: China accounts for nearly 60% of global battery storage deployment, followed by Europe, Australia and the United States.
4. Regional Momentum: Rapid deployment increasingly supports renewable-heavy grids worldwide.

What are the policy alternatives for strengthening India’s storage ecosystem?

1. Domestic Manufacturing: Strengthens battery ecosystems through PLI incentives and domestic mineral processing.
2. Critical Mineral Strategy: Ensures secure overseas access to lithium, cobalt and nickel reserves.
3. Market Mechanisms: Facilitates storage viability through time-of-day pricing and ancillary service markets.
4. Hybrid Renewable Projects: Integrates solar, wind and storage for round-the-clock electricity supply.
5. Research and Innovation: Supports emerging technologies such as sodium-ion and solid-state batteries.
6. Regulatory Reforms: Ensures long-term procurement frameworks and storage deployment certainty.

Conclusion

India’s renewable energy transition now depends not only on increasing generation capacity but also on strengthening energy storage systems. Rapid expansion of solar and wind power without adequate storage can undermine grid stability and energy reliability. Expanding battery storage, pumped hydro capacity and domestic manufacturing, along with regulatory support, will be critical to ensuring a stable, secure and sustainable clean energy transition.

Government Policies and Schemes Supporting Energy Storage in India National Framework for Promoting Energy Storage Systems (2023): It provides the overall policy framework for integrating energy storage into generation, transmission and distribution systems. It recognises storage as a key enabler of renewable energy integration. PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage (2021): Supports domestic battery manufacturing through a ₹18,100 crore Production Linked Incentive (PLI) programme. Targets establishment of 50 GWh ACC battery manufacturing capacity to reduce import dependence on lithium-ion batteries. Viability Gap Funding (VGF) Scheme for Battery Energy Storage Systems (BESS): Provides financial support to make battery storage commercially viable and accelerate grid-scale deployment of BESS projects. Operational guidelines were issued in 2024. Tariff-Based Competitive Bidding (TBCB) Guidelines for BESS (2022): Enables transparent procurement of storage capacity by power distribution companies and improves investor confidence. Energy Storage Obligation (ESO): Mandates power utilities to integrate a minimum share of energy storage alongside renewable procurement to ensure grid reliability and peak balancing. Green Energy Corridor Programme: Expands transmission infrastructure to facilitate integration of renewable energy and storage systems into the national grid. ISTS Charges Waiver for Renewable + Storage Projects: Waives inter-state transmission charges for co-located renewable energy and storage projects, improving project viability.

PYQ Relevance

[UPSC 2022] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain

Linkage: The PYQ tests understanding of India’s renewable energy transition, structural bottlenecks and policy support required for achieving energy targets. The article expands the debate beyond renewable generation to issues of grid stability, intermittency and reliable power supply.