As India's renewable energy capacity expands, Debmalya Sen, President of IESA, discusses the critical role of pumped storage hydropower in grid stability, stretching peak durations, and scaling off-river projects.
Pumped storage hydropower, which accounts for over 95 percent of global long-duration electricity storage, is emerging as a cornerstone of India’s grid transition as renewable penetration accelerates. Yet its success will depend on market design, location planning, and integration with dispatch and ancillary services. In an interview with ENERGDIVE, Debmalya Sen, President, India Energy Storage Alliance (IESA), explains why energy arbitrage is currently the dominant use case, how peak durations are stretching beyond six hours, and why off-river pumped hydro must be scaled for the needs of the next decade.
At present, the most emerging problem of the Indian grid is how to manage its peak power. The evening peak and morning peak are the major difficulties for Distribution Companies (DISCOMs). Therefore, energy arbitrage has emerged as the main use case where we find energy storage to be attractive. Energy storage can be batteries, pumped hydro, or any other form. Meanwhile, the duration of these peaks is increasing from two hours to six hours—in some states six hours, in others even eight hours. That is the current trend. Hence, energy arbitrage is the most important use case that energy storage can provide today.
Along with this, once we have a developed energy arbitrage market, energy storage will become a very large contributor. I mention energy storage because it includes both pumped hydro as well as battery storage, which are available options today.
One key aspect is the identification of location, because now we have come to the conclusion that off-river pumped hydro works better. So finding locations that do not disturb farmlands, defence lands, or forest lands is very important. The identification of such locations has to be strategic, because pumped hydro requires elevation. You need elevation for pumped hydro, and it should also not be very far from water sources, because makeup water is required. If the distance increases, the cost simply goes up. Therefore, identifying suitable locations that are not too far from water bodies is crucial.
Energy storage as a sector works best when you sweat the asset more, that is, through multi-stacking of benefits. You should not only do energy arbitrage, but also participate in the ancillary market and in broader market participation. That is where you increase your revenue stack, and as a result, the cost per unit comes down drastically.
The ancillary market in India, till now, is not well implemented. The regulations are there and the guidelines are there, but implementation is still limited today.
What we need is faster implementation of the ancillary market so that it becomes an additional revenue source rather than relying only on energy arbitrage. That is where we see the real opportunity.
Today, the energy storage requirement of the grid ranges between two to four hours. But this will increase as the share of renewables in the grid grows. At present, the renewable share of our electricity requirement, considering wind and solar, is only around 12 percent. As per the National Electricity Plan, this is expected to rise to 40 percent by 2030.
When this happens, it will create several challenges for the grid, and this volatility will need to be addressed. This is where energy storage, particularly pumped hydro, plays a crucial role. The National Electricity Plan talks about five hours of storage beginning early next decade. By 2031–32, we will need five hours of storage. That is a domain where batteries may face challenges, while pumped hydro naturally operates at that level. Therefore, we need to construct pumped hydro projects today so that we get the benefits by then.
From a planning perspective, we need to build this infrastructure now so that when storage requirements reach five to eight hours, the system is ready. Fast scaling up of pumped hydro is essential.
Today we often hear that pumped hydro is not coming up. Yes, in this decade we may not have a significant number of pumped hydro projects, but we also do not yet require storage durations of eight or ten hours. However, early next decade we will require it. For the grid to be ready, pumped hydro must scale up without policy or regulatory disruptions and reach the required level by 2031–32. India’s Net Zero target by 2070 is very ambitious. It will mean coal use becoming minimal and wind and solar increasing substantially.
The growth of wind and solar is directly proportional to the amount of storage available in the grid. As renewable penetration rises, storage requirements will only increase going forward. Even if nuclear power expands, we do not expect the need for storage to reduce.
