Time to Prioritise Energy Storage in India
India’s rapid shift to solar and wind energy has created an urgent need for reliable energy storage systems. As renewable energy grows, managing intermittency and peak power demand becomes critical. This article explains why India must prioritise battery storage, pumped hydro, and energy banking to ensure a stable, affordable, and clean power future.
Introduction
Context & Background
Key Points
- •What Is Power Swapping? Power swapping is a short-term exchange of electricity between two States. A State with surplus power supplies electricity to another State facing a shortage, and later, the receiving State returns the power when the first State needs it. It helps balance regional demand temporarily but cannot address renewable intermittency.
- •Benefits of Power Swapping: It allows States to avoid expensive electricity purchases, improves the use of idle power plants, and stabilises the grid temporarily. It is useful during seasonal variations — like monsoon excess in one State and summer shortage in another.
- •Limitations of Power Swapping: Swapping depends on the availability of surplus in another State — which may not always match your demand timing. It also involves high transmission charges and losses. Most importantly, it cannot store clean energy from solar and wind.
- •What Is Energy Banking? Energy banking allows renewable energy producers to feed surplus electricity into the grid during periods of high generation and withdraw it during low generation. Think of it as depositing electricity like money in a bank and withdrawing it later.
- •Why Banking Is Better Than Swapping: Banking directly supports renewable energy by preventing wastage, enabling producers to earn better returns, and improving grid stability. It also helps States optimise their demand peaks without relying on other States.
- •Energy Storage Technologies: India needs large-scale storage options such as Battery Energy Storage Systems (BESS), Pumped Hydro Energy Storage (PHES), Thermal Storage, and Compressed Air Energy Storage (CAES). These technologies store energy mechanically, chemically, or thermally and release it on demand.
- •Why Storage Is Critical: Without storage, solar and wind cannot provide reliable 24×7 power. Energy storage reduces curtailment, avoids costly coal backups, prevents blackouts, and supports electric vehicles and green hydrogen. For beginners: Storage is the ‘missing link’ that connects renewable energy with a stable power grid.
Comparison: Power Swapping vs Energy Banking vs Energy Storage
| Mechanism | How It Works | Advantages | Limitations | Bookmark |
|---|---|---|---|---|
| Power Swapping | Two States exchange electricity based on seasonal or daily surplus. | Reduces short-term shortages; avoids costly spot market purchases. | Does not store power; depends on another State’s surplus; involves transmission losses. | |
| Energy Banking | Producers deposit surplus renewable energy and withdraw it later. | Supports renewables; prevents wastage; allows smarter grid operation. | Requires clear policies; needs coordination between DISCOMs and States. | |
| Battery Storage (BESS) | Stores electricity in batteries and discharges during high demand. | Fast response; supports EVs; reduces grid instability. | High cost; relies on imported lithium, cobalt. | |
| Pumped Hydro (PHES) | Water is pumped uphill using surplus power and released to generate electricity. | Large capacity; long life; cheapest long-duration storage. | Geographic limitations; environmental clearances required. |
Major Energy Storage Technologies Explained for Beginners
| Technology | Simple Explanation | Where It Is Used | Bookmark |
|---|---|---|---|
| Battery Energy Storage (BESS) | Like a giant power bank for the grid. | Solar parks, wind projects, smart grids. | |
| Pumped Hydro Energy Storage (PHES) | Stores energy by pumping water uphill. | Hilly States like Maharashtra, MP, AP. | |
| Thermal Energy Storage | Stores heat instead of electricity. | Industry, CSP plants, district heating. | |
| Compressed Air (CAES) | Stores energy as compressed air in underground caverns. | Large utility-scale applications. |
Related Entities
Impact & Significance
- •Improved Grid Reliability: With rising solar and wind, grid fluctuations increase. Storage smoothens supply and prevents blackouts.
- •Higher Renewable Utilisation: India wastes a significant portion of renewable energy during off-peak hours. Storage allows every unit of green power to be used.
- •Reduced Dependence on Coal: Coal plants struggle to ramp up quickly. Storage replaces the need for coal-based balancing.
- •Lower Power Costs in the Long Run: Although expensive initially, storage reduces reliance on costly spot market purchases and stabilises prices.
- •Boost to Green Hydrogen: Hydrogen electrolyser plants need stable power. Storage ensures uninterrupted renewable supply.
- •Support for Electric Mobility: India’s EV sector needs stable charging infrastructure powered by clean energy — storage makes this possible.
- •Energy Security: Storage reduces dependence on imported fossil fuels and protects India during global energy crises.
Challenges & Criticism
- •High Capital Costs: Battery storage is still expensive (~₹8–10 crore/MWh). This prevents faster adoption.
- •Dependence on Imported Minerals: Lithium, cobalt, and nickel are not mined in India, increasing vulnerability to global price shocks.
- •Regulatory Uncertainty: India lacks a national policy on inter-State energy banking and long-duration storage.
- •Land and Clearance Issues: Pumped hydro projects face environmental concerns and require large geographical areas.
- •Financial Stress on DISCOMs: DISCOMs (State electricity boards) are often in debt, limiting their ability to invest in modern storage.
- •Technology Risks: Battery chemistries evolve rapidly, making investors hesitant to commit to a single technology.
- •Integration Challenges: Storage needs updated grid codes, advanced forecasting systems, and smart meters — all still under progress.
Future Outlook
- •India will increasingly shift from power-swapping arrangements to modern energy storage solutions as renewable penetration rises.
- •Battery storage will scale rapidly as costs fall globally and domestic manufacturing improves under the PLI Scheme.
- •Pumped hydro will emerge as India’s backbone for long-duration storage, with States like Maharashtra, MP, AP, and Karnataka leading.
- •Energy banking policies will become formalised, allowing renewable developers to trade banked energy across States.
- •India’s transition to green hydrogen will force industries to adopt large-scale storage for 24×7 renewable power.
- •Advanced technologies such as sodium-ion batteries, flow batteries, and CAES will enter the market by 2030.
- •India could become a global hub for low-cost renewable power + storage hybrid systems, boosting exports to Africa, ASEAN, and the Middle East.
UPSC Relevance
- • GS-3: Renewable energy, energy security, infrastructure, technology, environment.
- • GS-1: Impact of climate change on monsoon-dependent power systems.
- • GS-2: Centre–State relations in energy policy coordination.
- • Essay: Energy transition, climate change, sustainable development.
- • Prelims: PHES, BESS, CAES, RPO, VGF, net-zero, power grid basics.
Sample Questions
Prelims
With reference to energy storage in India, consider the following statements:
1. Pumped Hydro Energy Storage is currently India’s largest form of energy storage.
2. Battery Energy Storage Systems (BESS) are used mainly for long-duration storage of 12–24 hours.
3. Energy banking allows renewable energy producers to store power with the grid during surplus generation.
4. Power swapping is a reliable long-term solution for renewable intermittency.
Answer: Option 1, Option 3
Explanation: BESS is used for short-duration storage (minutes to a few hours), not long-duration. Power swapping is only a temporary mechanism. Pumped hydro is currently the largest storage source.
Mains
India’s rising renewable energy capacity requires a parallel expansion in energy storage systems. Discuss how energy banking, battery storage, and pumped hydro can strengthen India’s long-term energy security.
Introduction: India’s renewable energy expansion is rapid, but intermittency and peak demand mismatches have made energy storage a national priority.
Body:
• Need for Storage: Solar generation peaks in the day but consumption peaks at night; renewable curtailment wastes clean energy.
• Energy Banking: Allows renewable producers to deposit surplus power and withdraw it later, enabling better grid management.
• Battery Storage (BESS): Provides fast-response balancing, supports EV charging, improves grid stability, and reduces dependence on coal.
• Pumped Hydro: India’s most reliable long-duration storage option; provides large capacity, long life, and low operating costs.
• Challenges: High costs, critical mineral dependence, regulatory gaps, and limited domestic manufacturing.
• Way Forward: National energy banking policy, PLI schemes for batteries, expansion of pumped hydro, and hybrid RE+storage projects.
Conclusion: Energy storage is the backbone of India’s clean energy future. With supportive policies and investment, India can ensure 24×7 renewable power and long-term energy security.