Archive · 23 Jul 2026
Pumped Storage Gains Over Batteries
Pumped storage, a method of storing energy by pumping water to a higher elevation, is becoming more popular again.
This is because the cost of batteries has gone up, and there are shortages of power in the evenings.
The Indian government also wants to rely less on imported batteries.
Tata Power, a big energy company, has a project that could make a lot of money (22% return on investment) over 40 years.
The government is supporting pumped storage with policies and waivers on transmission charges.
This makes pumped storage a good investment again, even though batteries were cheaper before.
There are also fewer competitors for pumped storage projects because suitable sites are limited.
Pumped storage is regaining favor due to rising battery prices and government support.
Tata Power's project could generate a 22% equity IRR over 40 years.
Government policies and waivers improve the economic viability of pumped storage.
Pumped storage projects have lower storage costs compared to battery storage.
Limited suitable sites for pumped storage reduce competition and make projects more viable.
- Who
- Tata Power, Bernstein, Indian Government
- What
- Pumped storage is regaining favor over battery storage due to economic and policy factors.
- When
- Current trends and projections indicate a shift towards pumped storage.
- Where
- India, with a focus on reducing dependence on imported battery cells.
- Why
- Rising battery prices, evening power shortages, and government support for pumped storage.
Pumped Storage Advocates
Battery Storage Advocates
Cost and Economic Viability
Pumped Storage Advocates
Pumped storage offers lower storage costs (Rs 4.6 per kWh) and better returns (22% equity IRR) compared to battery storage.
Battery Storage Advocates
Battery storage has historically been cheaper and more flexible, with rapidly falling prices making it more attractive.
Government Policy and Dependence
Pumped Storage Advocates
Government support and a focus on reducing dependence on imported battery cells favor pumped storage.
Battery Storage Advocates
Battery storage is crucial for energy independence and innovation, with significant investments in battery technology.
Project Competition and Site Availability
Pumped Storage Advocates
Pumped storage projects have limited suitable sites, reducing competition and making them more viable.
Battery Storage Advocates
Battery storage projects attract more bidders due to their flexibility and scalability.
- Equity IRR
- 22%
- Project Payback Period
- 5 years
- Contract Duration
- 40 years
- Storage Cost (Pumped Storage)
- Rs 4.6 per kWh
- Storage Cost (Battery Storage)
- Rs 5.5 per kWh
- Government Waiver
- 25-year waiver on transmission charges
- Project Site Advantage
- Existing reservoir at Tata Power's project site
- Policy Support
- Central Electricity Authority projects 66 GW of pumped storage additions by FY36