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India is prioritising pumped hydro storage over battery systems for large-scale grid applications.
While batteries offer flexibility, pumped storage is seen as more reliable and cost-effective.
It also addresses concerns regarding battery waste and high integration costs, as the country ramps up its renewable energy infrastructure.
India is prioritising pumped hydro storage projects over battery systems for large-scale grid applications, with the Prime Minister’s Office (PMO) pushing reforms to fast-track approvals and improve project viability.
While batteries offer flexibility, the country braces for a looming challenge of battery waste and high integration costs.
India is witnessing a major push in its renewable energy (RE) infrastructure, with rapid progress in Pumped Storage Projects (PSP) over battery storage projects. This is because the government realises that hydro pump storage is a more viable, long-term and cost-effective solution for large-scale storage, though battery energy storage systems (BESS) is also being pushed, as highlighted by the Central Electricity Authority (CEA) chairperson Ghanshyam Prasad.
“As far as India is concerned, we should deploy as many pumped storage plants as possible,” Prasad said in a media interaction on the sidelines of Bharat Electricity, a global energy forum, on September 2. “However, PSP alone will not be sufficient, and BESS will also be required.”
BESS has certain advantages — it is not site-dependent and can be installed almost anywhere. This flexibility makes it particularly useful for integrating with large solar or wind projects, where developers may prefer to add storage alongside variable renewable generation.
That said, both PSP and BESS will need to develop in parallel. From a grid stability and longevity perspective, PSP has a clear edge. Once commissioned, a pumped storage project can operate reliably for 70-100 years, whereas the lifespan of BESS is limited to about 15 years. “This raises concerns about what happens to the batteries after their end of life — especially since the goal of clean energy should not create new waste or environmental problems,” he said.
BESS are utility-scale installations that use large lithium-ion batteries to store and release energy, often co-located with renewable power plants. BESS, along with batteries from EVs and consumer electronics, is the source of India's growing end-of-life battery recycling challenge.
India’s battery recycling sector faces significant challenges, including insufficient collection infrastructure, high costs of collection and transport, low overall recycling capacity, among others. These hinder the development of a robust circular economy for batteries.
By 2030, roughly 1.2 million end-of-life EV batteries will need to be recycled per year and the number could rise to 14 million per year by 2040, according to the International Council on Clean Transportation, a nonprofit organisation.
The Indian government’s thinktank NITI Aayog, in its 2022 report, titled Advanced Chemistry Cell Battery Reuse and Recycling Market in India, estimated that the cumulative potential of lithium-ion batteries in India during 2022-30 will be around 600 GWh across all segments in the base case.
Of this, 128 GWh will be available for recycling by 2030, with 46 per cent (59 GWh) estimated to be coming from EVs alone. To plan for this demand without locking in capital in underutilised assets would be the biggest challenge.
As battery storage in India faces a cost and lifespan challenge, making it unattractive to DISCOMs today, Alok Kumar, director general of All India Discom Association said the way forward lies in better financial support, parallel investment in PSP, demand electrification and smarter market design to integrate storage affordably.
The recent National Thermal Power Corporation Vidyut Vyapar Nigam Ltd (NVVN) tender for a 15-year composite supply to Uttar Pradesh illustrates the core challenge with battery storage in India: While the discovered tariff was Rs 6.6 per unit, it was possible only with 30 per cent viability gap funding. Citing an example, Kumar said, “Without this support, the actual cost of delivering 4-hour battery-backed peak power rises to around Rs 9 per unit, making it uncompetitive and unaffordable for distribution companies compared to coal-based alternatives, thereby highlighting the urgent need for financial and policy interventions to make battery energy storage viable.”
Meanwhile, recognising the bottleneck, authorities and technical bodies, such as Geological Survey of India (GSI), Central Water Commission (CWC) and Central Electricity Authority (CEA), held consultations with developers to improve the bankability of Detailed Project Reports (DPR), CEA's Prasad said.
Earlier, all DPRs were routed through single offices in Delhi. Now, regional GSI offices and multiple CWC divisions have been empowered to process applications in parallel. As a result, the timeline for DPR concurrence has been drastically reduced.
CEA, which previously took up to four months for clearances, now processes DPRs within just 1-2 weeks after submission, he mentioned.
The country expects to have around 50 GW of pumped storage capacity by 2032.
India will require $50 billion new investment in storage by 2032 for its clean energy transition, a new study by the India Energy & Climate Centre at the University of California, Berkeley and the Power Foundation highlighted on August 26.