State-owned electricity distribution companies (DISCOMs) continue to be plagued with financial problems. This is so despite efforts by both central and state governments to bail out the beleaguered DISCOMs with rescue packages. In a last-ditch effort, the Central Government announced INR 3.05 lakh crore in the Union Budget 2021–22 to redeem the utilities.

There is an urgent need to ramp up utility-scale energy storage solutions in the power grids of most countries. This surge in demand for energy storage is being experienced due to renewable capacity increment and its intermittencies. Pumped-hydro energy storage (PHES) is one of the most promising solutions. However, PHES systems are significantly more expensive than conventional hydro power plants. Therefore, some countries are providing funding support of various kinds to attract investors and developers towards this sector.

Existing pumped-hydro-energy storage (PHES) plants in India are inadequately utilised and hence have low economic benefits. With high renewable energy (RE) penetration expected in the coming years, energy storage systems will gain prominence. One of the most economical, available, mature, and bulk energy storage mechanisms is PHES. However, PHES plants are capital-intensive and topographically dependent.

India’s clean energy transition is largely driven by the ambitious target of installing 450 gigawatts (GW) of renewable energy (RE) by 2030. While such huge RE deployment can pose several operational and technical challenges for the grid, energy storage can mitigate them.

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India’s rapid urbanisation underscores the need to balance growing consumption patterns, development goals, and climate commitments. The scenarios presented in this paper were created using our Sustainable Alternative Futures for India (SAFARI) model, a system dynamics model that simulates interlinkages between sectors in India and their competition for resources and energy at the national scale.

India has to overcome several developmental challenges in the coming decades. Bridging the housing shortage; improving healthcare and education infrastructure; providing 24/7 electricity, clean water, and clean cooking fuels to all; and maintaining food security are some of the challenging goals for India that are in line with the UN’s Sustainable Development Goals (SDGs). The Government of India has also emphasised its commitment to climate action by ratifying the Paris Agreement and formulating Nationally Determined Contribution (NDC) targets.