Storing Electricity: Batteries and Pumped Hydro

Why storing electricity is key to using more solar and wind, and the economics of batteries and pumped hydro storage in India.

Solar peaks at midday, but demand peaks in the evening. Storage bridges the gap.

Battery storage

Lithium-ion batteries store power for a few hours.
Costs have fallen sharply.
India’s Viability Gap Funding scheme (2023) supports battery projects.
Auctions for solar-plus-storage projects have delivered falling tariffs.

Pumped hydro

Water is pumped uphill when power is cheap and released through turbines when needed.
Can store power for many hours.
Needs suitable geography and takes years to build.
India has large pumped hydro potential and several projects under construction.

Why storage matters

Makes renewables dispatchable when needed.
Reduces need for new coal peaking plants.
Improves grid stability.

The economic calculation

Storage earns money by buying low (midday) and selling high (evening). Its value depends on the price gap between these times.

Charging at noon

A battery park near a solar farm charges at midday when exchange prices are low, then discharges at 8 pm when prices are high, earning the difference.

Thinking renewables alone can supply power all day

Without storage, solar can't meet evening demand.

Key takeaways

Storage shifts solar power to evening peaks.
Battery costs have fallen; India supports projects with viability gap funding.
Pumped hydro stores power for longer.
Storage profits from price gaps between hours.