India’s Electricity Demand and the Challenge of Storing Surplus Power

India’s electricity system has entered a period of unprecedented growth and transformation. The country’s energy needs are soaring, even as it accelerates one of the fastest renewable transitions in the world. Understanding the scale of India’s electricity demand, and how the nation manages its surplus power, is critical to making sense of its energy future.

A Record-Setting Demand

In the financial year 2024–25, India touched a new peak with electricity demand surging past 250 gigawatts. On some days in mid-2025, daily peaks reached around 231 gigawatts. This rise reflects the country’s expanding industrial output, greater household consumption, and the increasing electrification of sectors like transport and services.

Annual generation has grown to nearly 1,950 terawatt-hours in 2023–24, a staggering amount that underscores the scale of India’s energy economy. To meet this demand, India has built an installed capacity of almost 468 gigawatts as of March 2025, nearly half of which now comes from renewable sources such as solar, wind, and hydro.

Looking ahead, the Central Electricity Authority projects that peak demand could rise to about 272 gigawatts by 2026–27, with annual consumption nearing 1,850 billion kilowatt-hours. This growth trajectory makes energy storage one of the most pressing issues for India’s power sector.

How India Stores Its Surplus Electricity

Unlike coal or gas, renewable sources such as solar and wind are variable, often producing electricity when it is not immediately needed. This creates the challenge of storing surplus electricity so it can be dispatched during peak hours or at night.

Pumped hydro storage has been India’s traditional solution. By using excess electricity to pump water uphill into a reservoir, the stored water can later be released to generate power when demand spikes. At present, India operates around 4.8 gigawatts of pumped hydro capacity. Studies suggest the country has potential sites that could support nearly 94 gigawatts of additional pumped hydro, making it a crucial pillar of future storage expansion.

In recent years, battery energy storage systems have begun to take on a bigger role. Currently, India has around 2 gigawatts of battery storage in operation, with another 10 gigawatts in development. The government has launched schemes to fund at least 30 gigawatt-hours of new capacity, while the Central Electricity Authority projects a need for more than 400 gigawatt-hours of storage by the early 2030s, split between batteries and pumped hydro.

Other Balancing Mechanisms

Beyond direct storage, India also manages surplus electricity through flexible generation and grid strategies. Coal plants are being upgraded to ramp output up and down more quickly, and gas-fired plants are used as a backup to meet short-term peaks, though their contribution remains modest.

Cross-border power trade is another valve in the system. India exports electricity to Bangladesh and imports hydropower from Bhutan, though these exchanges function more as balancing mechanisms than long-term storage.

On a smaller scale, local innovations are emerging. For example, Modhera in Gujarat became India’s first solar-powered “model village,” running on a mix of rooftop solar and a 15 megawatt-hour battery that allows residents to use clean power day and night. Similarly, Maharashtra’s state distribution company has announced plans for a ₹20,000 crore battery project to store solar power, highlighting how large-scale storage is moving from plan to execution.

The Road Ahead

India’s electricity demand is climbing faster than almost any other country’s, and while its renewable energy capacity is among the largest in the world, storage remains the weak link. Meeting future peaks will depend on a massive rollout of both pumped hydro projects and battery energy storage, supported by flexible thermal generation and stronger regional grids.

The stakes are high. Reliable storage will not only help India avoid blackouts during record demand but also enable it to fully integrate the clean energy that is essential to its climate commitments. In this sense, storage is not just a technical solution — it is the bridge between India’s surging demand today and its clean energy future tomorrow.