With the expansion of solar and wind power, role of energy storage in balancing supply and demand, is very critical

As India’s power sector evolves, “I firmly believe that energy storage is the critical enabler, particularly with the acceleration towards clean energy components and their penetration currently at 50% of the total generation capacity in India,” says Vikram Gandotra, President, Indian Electrical & Electronics Manufacturers' Association (IEEMA) in an exclusive interaction with Bizz Buzz.

“With the expansion of solar and wind power, the role of energy storage in balancing supply and demand, increasing grid stability, and improving overall system stability is very critical,” he said

As India's power sector evolves, how do you see energy storage emerging as a critical enabler for discoms and utilities in managing demand and ensuring grid stability?

As India’s power sector evolves, I firmly believe that energy storage is the critical enabler, particularly with the acceleration towards clean energy components and their penetration currently at 50% of the total generation capacity in India.

With the expansion of solar and wind power, the role of energy storage in balancing supply and demand, increasing grid stability, and improving overall system stability is very critical. The CEA estimates a project requirement of 411.4 GWh (175.18 GWh from PSP and 236.22 GWh from BESS) of energy storage systems by 2032. Storage is being planned both at the generation level and at the distribution level.

At the generation level, the storage helps to provide power during the non-solar periods and optimises the utilisation of transmission line capacities. Discoms can benefit by using storage to store energy at non-peak hours, which is likely to be lower priced and also benefit by using the power during peak periods, thereby avoiding buying at higher prices.

This gives a possibility to defer capacity addition, which is planned just to meet the peak demand for a few hours. This can also help in the integration of rural energy generation into the national grid.

While energy storage has often been linked with electric mobility, how can its application be expanded to strengthen India’s utility and renewable sectors?

Although energy storage has been widely used for electric mobility for decades, the utility and renewable sectors both benefit from its use in grid integration. As the country is targeting 500 GW of non-fossil fuel capacity by 2030, large-scale solar and wind farms can be combined with pumped hydro or sophisticated battery storage to help utilities reduce intermittency and smooth power output.

Between 2022 and 2032, India plans to add over 47 GW of battery storage capacity, with a total investment of around Rs 3.5 lakh crore.

This can also offer supplementary grid functions. India is embarking on becoming a global manufacturing hub, modern corridors running on electricity generated from renewable sources, coupled with battery storage, will play a key role in ensuring reliable green power.

Do you consider energy storage the “missing link” in India’s renewable energy revolution? What are the key challenges and opportunities in bridging this gap?

Yes, I agree. The biggest obstacles at the moment are high costs because of exports, lack of domestic manufacturing capacity and regulatory bottlenecks. With a large number of projects getting announced and awarded, India is on track to overcome these hurdles.

India has achieved a landmark in its energy transition journey by reaching 50% of its installed electricity capacity from non-fossil fuel sources (242.8 GW) - five years ahead of the target set under its Nationally Determined Contributions (NDCs) to the Paris Agreement.

This growth accompanied by the need to be flexible on storage solutions, is critical. Government programs like Viability Gap Funding (VGF) are incentivising opportunities to deploy storage.

On the cost front as well, there seems to be progress. The domestic production of Advanced Chemistry Cell batteries under the government's PLI scheme is likely to reduce costs drastically in the coming years.

The BSES Rajdhani Power Ltd. (BRPL) BESS project at Kilokri is India's first commercially approved, South Asia's largest utility-scale Battery Energy Storage System (BESS).

The 20 MW/40 MWh project was inaugurated in May 2025 in South Delhi to enhance grid stability, reduce peak load, provide backup power, and facilitate renewable energy integration for over 100,000 residents.

With AI applications rapidly expanding, what impact is this having on power consumption trends in India’s industrial and digital sectors?

Consumption patterns in digital and industrial sectors are changing as a result of the growing use of AI - especially in data centers and industry automation spurred by PLI and Make in India initiatives - as an accelerating force reshaping India’s power consumption landscape across industrial and digital sectors. India will need additional electricity to meet the demand for data centres driven by artificial intelligence.

This underscores both the challenge and opportunity ahead: while AI and digitalisation escalates energy demand, they also present a strategic imperative for innovations in energy efficiency, smart consumption, and infrastructure modernisation.

Data centres, especially AI-driven ones, are now integral to both the digital and energy transitions. How can India ensure these centres are both energy-efficient and aligned with its renewable energy goals?

Data centres—particularly those powered by AI—represent a new frontier in energy and digital transformations. Some of these centres use as much electricity as entire towns.

IEEMA supports many innovative solutions such as smart building solutions, which can reduce the power consumption. Some of these are integration of rooftop solar, BESS, and microgrids, and aggressive renewable procurement.

Per capita electricity consumption rose by 45.8% to 1,395 kWh in 2023-24 from 957 kWh in 2013-14. Policy must make efficiency, renewable sourcing, and grid integration essential requirements. If this is done, then India will be able to demonstrate leadership in sustainable data centre operations in the coming years.

The carbon footprint of these centres can also be significantly decreased by requiring on-site renewable integration and implementing global efficiency standards in all new facilities.

Hyderabad is already showcasing renewable-powered data centre models. How can such innovations be scaled across the country, and what policy or industry support is essential to accelerate this transformation?

Hyderabad’s model of renewable-powered data centres demonstrates the possibilities that can be unlocked through forward-thinking policies and industry participation.

To scale this model nationwide, India must establish green energy feeder corridors that deliver dedicated renewable power to data hubs. Expanding incentives for renewable energy procurement, requiring energy audits, establishing minimum green sourcing requirements, and creating standards for energy efficiency and digital monitoring are crucial steps for scaling this up nationally.

Potential hubs for data centres are beginning to emerge in Tier-2 cities like Pune, Coimbatore, and Ahmedabad. In these areas, pre-planned green energy infrastructure can guarantee sustainable scaling without putting undue strain on grids.