Clean energy is changing India's power landscape, and an age-old technology is opening the way to a strong new energy future. Pumped storage, often called a water battery, relies on water and gravity to store electricity, closing the gap between the time power is produced and the time it is needed. From reservoirs to modern grids, it is helping build an energy future that is cleaner, more reliable and more resilient.
Building India's Energy Future with Storage
Renewable energy is becoming the backbone of India’s energy transition, strengthening both energy security and sustainability. The country is quickly adding solar and wind capacity so that rising electricity demand can be met from cleaner sources. As of July 2026, India's installed non-fossil fuel-based electricity generation capacity has crossed 300 GW. Around 55.29 GW of non-fossil fuel capacity was added in FY 2025–26. India has also fixed a target of 500 GW of non-fossil fuel capacity by 2030, and solar and wind energy will be major contributors to reaching it.
Renewable generation, however, changes with sunlight, weather and daily demand patterns. Because of this variability, there is a growing need to store electricity whenever renewable output is higher than demand. That stored energy can then be supplied when renewable generation is low or demand peaks.
The need for energy storage is expected to grow quickly as renewable capacity increases. According to projections by the Central Electricity Authority (CEA), India will need 73.93 GW of storage capacity by 2031–32, made up of 26.69 GW from Pumped Storage Projects (PSPs) and 47.24 GW from Battery Energy Storage Systems (BESS).
PSPs can play a key role in meeting this need for long-duration storage. When generation is in surplus, they store electricity by pumping water up to an upper reservoir; when demand rises, the stored water is released through turbines. In this way, PSPs move renewable electricity from one time period to another and help keep the grid stable. Their long-duration storage and peaking support make them important for integrating large amounts of renewable capacity.
Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSPs) complement each other in bringing renewable energy into the grid. BESS respond quickly to short-duration needs and support frequency regulation, peak management and grid balancing. PSPs, on the other hand, offer long-duration storage, moving large volumes of electricity between periods of surplus and demand. BESS can be installed fairly quickly and near renewable generation or consumption centres, while PSPs need suitable geography but can store energy at large scale for long periods. Their long operating life also serves the grid's infrastructure needs over many years.
Understanding PSPs: Cycle of Energy Storage and Supply
A typical Pumped Storage Project has two reservoirs at different heights. When there is surplus electricity, water is pumped from the lower reservoir to the upper one and the energy is held as potential energy. When electricity is required, water from the upper reservoir is released through turbines to generate power. After demand eases, water is again pumped up to the upper reservoir using surplus electricity, which completes the storage cycle. In effect, Pumped Storage Projects work as large-scale energy storage systems that support grid stability and renewable energy integration.
Categorising Pumped Storage Power Plants
PSPs are classified on the basis of how their reservoirs are linked to, or placed in relation to, natural watercourses. There are three types: on-stream, off-stream open-loop and off-stream closed-loop schemes. Each configuration reflects a different relationship between the project's reservoirs and natural watercourses.
In on-stream pumped storage schemes, both reservoirs lie on a river, stream or nallah. To meet electricity demand, water held in the upper reservoir passes through turbines to generate power. When demand is low or power is in surplus, the water is pumped back up to the upper reservoir to be used again.
In off-stream open-loop pumped storage schemes, one reservoir is on a river, stream or nallah, while the other is not located on a river, a perennial stream, or a perennial nallah. When electricity is required, water from the upper reservoir flows through turbines to produce power. The water is later pumped back using surplus electricity, readying the system for the next cycle.
In an off-stream closed-loop pumped storage scheme, neither reservoir lies on a river, perennial stream or perennial nallah; both are located away from perennial natural watercourses. When electricity is required, water from the upper reservoir runs through power-generating turbines and is later pumped back to the upper reservoir when demand is low or power is in surplus.
Each of the three types of Pumped Storage Projects has a role depending on site-specific geographical and technical conditions. Even so, efforts are under way to identify more off-stream projects away from rivers, as these allow faster execution and reduce the impact on aquatic ecology and the surrounding environment.
Scaling Up Energy Storage: India's Pumped Storage Momentum
To support its growing renewable energy base, India is quickly expanding its pumped storage capacity. Progress is visible at the operational, construction and pre-construction stages, and this growing pipeline is strengthening the country’s long-duration energy storage infrastructure.
Operational Capacity: India had 7.43 GW of operational PSP capacity across 10 projects as of August 2026. Each of these projects has an installed capacity of more than 25 MW.
Under Construction/ implementation Stage: Another 15.87 GW, spread across 11 PSPs in the country, is under construction and/or under implementation.
Next Stage of Pipeline: The Central Electricity Authority has concurred or appraised 10.40 GW across 8 projects.
India's Regionally Diverse Pumped Storage Potential
India has identified 320 pumped storage projects with a total potential of 345.38 GW. These comprise 62 on-stream projects with 56.67 GW and 258 off-stream projects with 288.71 GW. The projects cover all five regions and are at different stages of development, including some that are already operating.
Developing a PSP and judging a site's suitability involves assessing several technical and environmental factors, such as topography, geology, hydrology, reservoir characteristics, foundation conditions, seismicity and environmental considerations. Construction materials, power potential and transmission connectivity are also reviewed during project appraisal. The Western Region has the largest identified potential at 129.72 GW, which CEA attributes mainly to its topography and the steep gradients of rivers that originate in the Western Ghats. Within it, Maharashtra accounts for 67.36 GW, followed by Gujarat with 33.36 GW.
The Southern Region has 97.76 GW, with Andhra Pradesh, Telangana and Tamil Nadu in the lead. The Eastern Region has 53.41 GW, of which 41.53 GW is in Odisha. The Northern Region has 50.32 GW, led by Uttar Pradesh and Himachal Pradesh, while the North Eastern Region adds 14.18 GW to the identified national potential. Together, these regional resources show how large and widely spread India’s pumped storage opportunity is.
Projected Capacity Addition of Pumped Storage Projects
This large resource base gives India a solid foundation for expanding long-duration energy storage. Accordingly, the Central Electricity Authority has laid out a major capacity addition pathway up to 2035–36. Projects adding up to 100.81 GW are planned for commissioning by 2035–36; including projects already under construction, this would raise cumulative PSP capacity to 105.56 GW. Such an expansion can greatly improve grid flexibility and allow more renewable energy to be integrated, making pumped storage an important pillar of India’s future electricity system.
Pumped Storage Hydropower is the most widely used form of large-scale energy storage in the world, reflecting its proven scale and maturity compared with other storage technologies. According to the International Renewable Energy Agency (IRENA), global installed pumped hydro capacity was 159.8 Gigawatts at the end of 2025. China had nearly 66 Gigawatts of this, followed by Japan with around 22 Gigawatts and the United States with around 19 Gigawatts. India stands fourth in the world in installed pumped storage capacity, with 7.18 Gigawatts at the end of 2025. Its capacity has since risen to 7.43 Gigawatts as of July 2026, strengthening its position in the global pumped storage landscape.
To promote the development and deployment of PSPs, the Government of India has taken a set of coordinated policy, regulatory, demand-side and supply-side measures.
Dedicated PSP Development Guidelines: In April 2023, the Ministry of Power notified the Guidelines to Promote Development of Pumped Storage Projects in India, which set out a policy framework to speed up PSP development. Click to Access Guideline
Support for Enabling Infrastructure: Budgetary support is available for the essential infrastructure required for PSP development, such as roads, bridges, railway sidings, ropeways, communication facilities and transmission lines. These measures improve project connectivity and make projects more viable.
Competitive Procurement Framework: The Tariff-Based Competitive Bidding (TBCB) Guidelines, notified in February 2025, give a transparent and standardised framework for procuring storage capacity and stored energy from PSPs.
Inter-State Transmission System Charge Waiver: PSPs that are awarded for construction by 30 June 2028 qualify for a 100% ISTS charge waiver for 25 years from commercial operation, which improves their financial viability.
Faster Project Approvals: Under revised CEA guidelines, the time taken for Detailed Project Report concurrence has been cut from 90 days to 50 days for all PSPs. The need for clearance of Inter-State Aspects has also been done away with. Both steps help projects move faster.
Streamlined Environmental Appraisal: The Ministry of Environment, Forest and Climate Change has brought in separate appraisal provisions for PSPs. Under the applicable provisions, eligible projects can be placed in the B2 category, and off-stream projects need less baseline data. These steps can speed up environmental appraisal while keeping regulatory safeguards in place.
Facilitating Survey and Investigation: MoEF&CC has extended forest land survey provisions and raised borehole exploration limits for PSPs, helping in the timely preparation of technically sound Detailed Project Reports.
Integrated Grid and Transmission Planning: Energy storage and transmission development are planned together as part of national electricity planning. This approach tackles renewable energy variability, eases congestion and improves grid reliability. A roadmap plans for the integration of 100 GW of PSP capacity between 2025–26 and 2035–36.
Digital Project Monitoring: The Jal Vidyut DPR portal of the Central Electricity Authority allows real-time tracking of survey and investigation activities and helps stakeholders coordinate while projects are being prepared. This digital approach makes approvals smoother and speeds up PSP development.
Review of limit of capital expenditure requiring the concurrence of the CEA: Through a Gazette Notification dated 01.08.2025, the Government of India has revised to ₹3,000 crore the capital expenditure limit for schemes related to setting up hydro generating stations that require the concurrence of the CEA. In addition, off-stream closed-loop pumped storage schemes, irrespective of the quantum of capital expenditure have been exempted from the requirement of concurrence by the CEA
Taken together, these measures — covering policy clarity, fiscal support, simpler clearances, competitive procurement and integrated grid planning — have created a supportive environment for faster PSP development.
India's goal of reaching 500 Gigawatts of non-fossil fuel capacity by 2030 marks a basic shift in the country's electricity landscape. As renewable energy takes on a bigger role, the ability to store energy and use it as demand requires will matter more and more for keeping the power system reliable and balanced. Pumped Storage Hydropower is well suited to meet this need, as it offers large-scale, long-duration energy storage while serving several wider power system needs. Its role ranges from handling peak demand and integrating variable renewable energy to improving grid flexibility and resilience. As the clean energy ecosystem develops further, deploying energy storage effectively along with generation and transmission infrastructure will be central to building a cleaner, more flexible and future-ready power system.
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