Energy Storage Systems (ESS)

The growing mismatch between the generation and consumption of electricity has made Energy Storage Systems (ESS) indispensable for ensuring grid stability, reliability, and efficient utilization of renewable energy. As India rapidly expands its renewable energy capacity to achieve its climate commitments and strengthen energy security, the challenge of managing intermittent sources of power such as solar and wind has become increasingly significant.

India's Renewable Energy Capacity and the Challenge of Intermittency

India has emerged as one of the world's fastest-growing renewable energy markets. Renewable energy sources account for nearly 53 per cent of the country's installed power capacity, with about 283 GW out of a total 532 GW coming from clean energy sources. Solar energy alone contributes more than 150 GW, highlighting India's strong commitment towards a low-carbon energy future.

However, the rapid expansion of renewable energy introduces the challenge of intermittency, which refers to the irregular and non-continuous nature of electricity generation. Solar power generation declines during cloudy weather and completely stops at night, while wind energy depends on varying wind speeds. This mismatch between electricity production and consumption necessitates efficient energy storage mechanisms to maintain a reliable and uninterrupted power supply.

Understanding Energy Storage Systems

Energy storage refers to technologies that capture surplus electricity generated during periods of high renewable energy production and release it when demand exceeds supply. In essence, storage systems act as a buffer between electricity generation and consumption. They help balance supply and demand, reduce renewable energy curtailment, enhance grid reliability, support peak-load management, and facilitate the delivery of round-the-clock renewable power.

The importance of energy storage is expected to grow significantly as India moves towards achieving its ambitious renewable energy targets and increasing the share of clean energy in its electricity mix.

Global Scenario of Energy Storage

Globally, Pumped Hydro Storage (PHS) remains the most widely deployed energy storage technology, with an installed capacity of approximately 160 GW. China leads the world with around 66 GW, followed by Japan and the United States. Pumped hydro systems have been preferred due to their ability to provide large-scale and long-duration storage solutions.

At the same time, Battery Energy Storage Systems (BESS) have witnessed remarkable growth. Global battery storage capacity has reached nearly 270 GW, and according to the International Energy Agency (IEA), about 108 GW of new battery storage capacity was added in 2025, representing a substantial increase over the previous year. China accounted for nearly 60 per cent of these additions, while the United States, Europe, Australia, and the Middle East are increasingly deploying storage systems to strengthen energy security and integrate renewable energy into their grids.

India's Energy Storage Status and Future Requirements

India's current energy storage capacity remains relatively modest, with approximately 0.27 GW of Battery Energy Storage Systems and about 7.2 GW of Pumped Hydro Storage. However, the country's future requirements are expected to increase dramatically.

According to projections made by the Central Electricity Authority (CEA), India will require nearly 174 GW of energy storage capacity with 888 GWh of storage capability by 2035-36. Out of this, Battery Energy Storage Systems are expected to contribute 80 GW and 321 GWh, while Pumped Hydro Storage will account for 94 GW and 567 GWh. Storage systems capable of providing electricity for four to six hours are likely to play a crucial role in integrating larger volumes of renewable energy into the national grid.

India is already expanding its storage infrastructure, with more than 13,000 MW of pumped hydro projects under construction, several thousand megawatts approved, and nearly 75,000 MW under survey and investigation. Similarly, large-scale battery storage projects are under construction and tendering stages, reflecting the country's commitment to strengthening its energy storage ecosystem.

Major Energy Storage Technologies

Pumped Hydro Storage (PHS)

Pumped Hydro Storage is the most mature and widely used large-scale energy storage technology in the world. It operates by pumping water from a lower reservoir to an upper reservoir during periods of excess electricity generation and releasing the water through turbines to generate electricity when demand rises.

The technology offers several advantages, including long-duration storage, high reliability, large-scale capacity, and a long operational lifespan. However, it also faces significant limitations. Pumped hydro projects require specific geographical conditions, involve high initial investments, and often encounter environmental concerns, land acquisition issues, and lengthy approval processes.

Battery Energy Storage Systems (BESS)

Battery Energy Storage Systems store electricity in electrochemical form and release it whenever required. Among various battery technologies, Lithium Iron Phosphate (LFP) batteries currently dominate global markets and accounted for more than 90 per cent of global battery storage additions in 2025.

BESS provides several advantages, including fast response times, modular deployment, operational flexibility, and suitability for short-duration storage ranging from four to six hours. Nevertheless, the technology faces challenges such as dependence on critical minerals, battery degradation over time, and significant reliance on imported cells and components.

Emerging Energy Storage Technologies

Apart from conventional technologies, several innovative energy storage solutions are gaining attention. Concentrated Solar Thermal Storage uses mirrors and molten salts to store solar heat, which can later be converted into electricity. Compressed Air Energy Storage (CAES) stores compressed air in underground caverns and releases it to drive turbines during peak demand. Flywheel Energy Storage Systems provide instant power support by storing energy in rapidly spinning rotors, while gravity-based storage technologies generate electricity by lowering heavy masses that were previously lifted using surplus energy.

Challenges Facing Energy Storage Development in India

One of the most significant challenges is import dependence. Nearly 75 to 80 per cent of lithium-ion cells used in India are imported, and these cells constitute almost 80 per cent of the total battery system cost. Such dependence creates vulnerabilities related to geopolitical tensions, supply-chain disruptions, trade restrictions, and price fluctuations.

Another major issue is the high capital cost associated with Battery Energy Storage Systems. Although global battery prices have declined, large-scale deployment still requires substantial investments, which can discourage private sector participation.

India also suffers from limited domestic manufacturing capacity for advanced battery cells and critical components. This dependence on imported technology undermines self-reliance and affects the competitiveness of domestic industries.

The availability of critical minerals such as lithium, cobalt, nickel, and graphite poses another challenge. Since India possesses limited reserves of many of these resources, it remains heavily dependent on imports to support its battery manufacturing ambitions.

Pumped hydro projects face their own set of difficulties. They require extensive land areas and suitable topographical conditions, while environmental clearances, biodiversity concerns, and issues related to displacement often delay project implementation. Furthermore, the long gestation periods associated with such projects can slow down renewable energy integration efforts.

Grid integration also remains a major concern. Incorporating large-scale storage systems into existing transmission and distribution networks requires substantial infrastructural upgrades and the development of new operational and regulatory frameworks.

Financial risks constitute another barrier. Uncertainties regarding revenue streams, evolving market mechanisms, and long payback periods often discourage investors from participating in energy storage projects.

Battery disposal and recycling represent an emerging challenge as well. The large-scale deployment of batteries in the coming years will generate significant quantities of battery waste, and India's recycling ecosystem is still in its developmental stages.

Government Initiatives to Promote Energy Storage

Recognizing the strategic importance of energy storage, the Government of India has undertaken several initiatives to accelerate its deployment.

The Central Electricity Authority (CEA) has prepared a long-term roadmap projecting a requirement of 174 GW and 888 GWh of storage capacity by 2035-36, thereby providing clear guidance for future investments and infrastructure planning.

The government has also introduced Viability Gap Funding (VGF) for Battery Energy Storage Systems to improve the financial viability of projects and reduce storage costs. Similarly, the Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cells (ACC) seeks to strengthen domestic manufacturing capabilities and reduce dependence on imported battery cells.

The National Programme on Advanced Chemistry Cell Battery Storage aims to promote indigenous battery technologies and enhance technological self-reliance. At the same time, efforts are being made to fast-track the development of Pumped Storage Projects (PSPs) through streamlined approvals and accelerated implementation.

The introduction of Energy Storage Obligations (ESO) under the Renewable Purchase Obligation framework requires designated entities to procure electricity from storage-backed renewable sources, thereby creating a market for energy storage solutions.

The Green Energy Corridor Programme is strengthening transmission infrastructure to facilitate the efficient integration of renewable energy and storage systems across different regions. Likewise, the National Green Hydrogen Mission recognizes green hydrogen as a potential long-duration energy storage medium for the future.

Initiatives such as PM Surya Ghar: Muft Bijli Yojana are encouraging rooftop solar adoption and creating opportunities for the future integration of household-level battery storage systems.

The Battery Waste Management Rules, 2022, which incorporate the principle of Extended Producer Responsibility (EPR), are promoting sustainable battery recycling and resource recovery. Furthermore, India's Critical Minerals Strategy focuses on securing overseas mineral assets and expanding domestic exploration to support long-term battery manufacturing.

International collaborations through platforms such as the International Solar Alliance (ISA) are also facilitating technology transfer, investment, and the sharing of best practices in energy storage.

Conclusion

Energy storage systems are central to India's transition towards a sustainable and resilient energy future. As renewable energy capacity continues to expand, the importance of efficient storage technologies will increase significantly. While challenges relating to imports, critical minerals, financing, environmental concerns, and regulatory frameworks persist, ongoing policy initiatives and technological advancements provide a strong foundation for future growth. Strengthening domestic manufacturing, promoting innovation, and developing robust recycling and regulatory mechanisms will be essential for establishing India as a global leader in energy storage and ensuring long-term energy security