By Ms. Kavita Shirvaikar, Managing Director at Patel Engineering Limited
“India’s energy ambitions stand on five pillars: harnessing resources, encouraging innovation, economic strength, strategic geography, and commitment to global sustainability” – Shri Narendra Modi, Prime Minister
With India accelerating its energy shift to address growing electricity needs, pumped storage projects have become a critical component of the country’s power infrastructure. These projects function as large-scale energy reservoirs, storing surplus renewable energy during low-demand periods and releasing it when demand peaks. By stabilizing power supply fluctuations, they enhance grid reliability, reduce dependence on fossil fuels, and facilitate the seamless integration of renewable energy. As a result, pumped storage plays a pivotal role in ensuring a sustainable and resilient energy future for India.
Growing Energy Demand in India
India’s energy demands are growing at an unforeseen rate through urbanization, industrialization, and economic development. According to the report by International Energy Agency (IEA), the nation’s energy demand is expected to grow on average by 6.3% annually from 2025-27, this estimated is following a strong growth of 8.3% in 2023 followed by 5.8% growth in 2024. This makes it essential for the country to develop a robust energy infrastructure capable of stabilizing supply fluctuations from renewable sources.
Pumped storage technology is also essential in sustaining grid stability by storing power during periods of low demand and providing it when there is high demand. India is becoming a leader in green energy solutions due to its peculiar geography and technology breakthroughs, and it is doubling down on its long-term commitment to global sustainability.
Key Developments and Government Policies
With a realisation of the full potential of pumped storage, the government of India has been encouraging its development. In April 2023, the Ministry of Power laid down guidelines to propel the growth of pumped storage projects (PSPs). Waiver of charges of the inter-state transmission system (ISTS) and financial support by the Centre to the state governments as equity participation in joint ventures with central public sector undertakings is provided by the guidelines.
Building upon the strong emphasis placed on the renewable energy sector in the Union Budget 2024, the Union Budget 2025 continues to provide policy framework support aimed at significantly promoting pumped storage projects. This helps to counterbalance the issues triggered by power outages and the smooth integration of renewable energy onto the national grid. Given the variable and intermittent nature of renewable sources like solar and wind, pumped storage projects play a crucial role in enhancing grid stability, optimizing energy distribution, and supporting India’s transition towards a more sustainable and resilient energy ecosystem.
In addition, large hydro schemes, including pumped storage, have been classified as renewable energy sources, entitling them to incentives and support. The government has also put in place tariff rationalization steps to reduce the hydropower cost and given budgetary assistance for the development of infrastructure enablers.
Impact of Pumped Storage on the Energy Industry
Pumped storage has had a profound effect on India’s power sector. It facilitates the effective integration of renewable energy, counteracting its intermittency and variability while maintaining grid stability. By storing surplus power during low demand and releasing it during peak hours, it reduces reliance on fossil fuels, lowering carbon emissions. Pumped storage also boosts grid resilience, avoiding fluctuations and blackouts. As of February 2025, India operational pumped storage capacity stands at 4,745.60 MW, with many projects under construction and in different phases of planning.
The Need for Pumped Storage in the Energy Mix
Since pumped storage provides a way to address the intermittent nature of renewable energy sources, it is essential to India’s energy mix. Pumped storage maintains grid stability and an even supply of power by storing excess energy generated during periods of low demand and releasing it during periods of high demand. Round-trip efficiencies of up to 80% demonstrate how efficient this technology is, and it can provide large-scale energy storage capacity.
Looking ahead, pumped storage is going to have a major role to ensure India’s growth energy needs. Based on a study by The Energy and Resources Institute (TERI), India possesses an approximate on-river pumped storage capacity of around 103 GW. India is well on its way to achieving this potential and reaching its ambitious target of 500 GW of non-fossil fuel capacity by 2030 with the installed capacity now in place and the projects planned.
As India moves on with its transition to a more robust and environmentally friendly energy future, pumped storage will be at the core of solving the problems of energy demand and grid stability. With ongoing developments and supportive government policies, pumped storage stands poised to power India’s energy future with a reliable and efficient flow of electricity for generations to come.
