Securing the energy storage surge

This article is authored by Arun Goyal, former CERC member and senior advisor, MSL, and Jaisal Sarma, public policy professional, MSL.

India’s ambitious commitment to establish 500 GW of non-fossil electricity capacity by 2030 marks one of the most dramatic clean energy expansions. Achieving this goal, however, hinges on an operational reality: solar and wind power are inherently variable, requiring massive utility-scale energy storage capacity to keep the electric grid balanced, stable, resilient, and reliable.

Electricity (PTI)

The Central Electricity Authority’s National Generation Adequacy Plan estimates that India will need the energy storage installed capacity of 174 GW/888 GWh including Battery Energy Storage System (BESS) of 80 GW/321 GWh by the year 2035-36 to effectively manage this clean power transition. Yet, as the nation accelerates its energy transition, it faces a new and complex strategic vulnerability. Clean energy technology is no longer simply an environmental and economic transaction; it is fundamentally a global contest for critical raw materials. Without secure, cost-effective access to key battery inputs, such as lithium, graphite, cobalt, and nickel, India’s energy storage deployment remains deeply exposed to global price volatility, unilateral export restrictions, and geopolitical disruption across international supply corridors.

To build energy sovereignty in an increasingly fractured global order, India cannot rely on conventional market imports alone. It must instead execute a thoughtful, dual-track strategy that pairs strategic international technology alliances with a robust domestic circular economy. Across the globe, clean energy supply chains are re-aligning along geopolitical lines as major economies seek to de-risk their manufacturing hubs and secure raw material inputs. Multilateral frameworks like the US-led Pax Silica initiative, designed to build resilient supply chains across semiconductors, critical minerals, and advanced technologies, alongside the Minerals Security Partnership, reflect a historic shift towards friend-shoring. For India, active participation in these technological coalitions offers vital strategic advantages. It provides access to international co-investment mechanisms for overseas mineral processing, technology sharing for next-generation battery chemistries like sodium-ion and helps diversify raw material inputs away from single-country concentrations.

From an economic perspective, establishing a closed-loop domestic recycling ecosystem fundamentally improves the financial viability of clean energy infrastructure over its entire operational lifecycle. Processing secondary battery scrap inside India creates an immediate buffer against wild fluctuations in global critical mineral spot prices, thereby stabilizing long-term power purchase agreements and lowering the overall lifetime cost of storage systems. At the same time, implementing clear Extended Producer Responsibility guidelines ensures that valuable battery materials remain within the domestic industrial ecosystem rather than moving overseas as unprocessed scrap. A predictable stream of recycled secondary feedstocks lowers raw material costs for domestic cell manufacturers, creating a self-sustaining feedback loop that supports long-term industrial competitiveness. By recovering these critical inputs locally, India can expand its energy storage capacity while significantly reducing the net capital outlay required for fresh critical mineral imports.

Translating this strategic blueprint into an operational reality requires pragmatic policy execution, cluster-based industrial infrastructure, and aligned fiscal structures. Foremost among these is updating tax policy to support new clean technologies. Lowering the GST on standalone energy storage systems and specialised recycling machinery to a uniform 5% can immediately lower upfront capital barriers and attract private investment. Simultaneously, regulatory bodies can establish clear, standardised quality and safety benchmarks for battery state-of-health diagnostics, enabling second-life electric vehicle batteries to be safely repurposed for stationary grid storage applications. Furthermore, public procurement agencies and energy developers should modernize their evaluation frameworks to assess storage projects based on full lifecycle economic value, factoring in secondary material recovery and recycling buybacks, rather than relying strictly on initial capital expenditure.

Ultimately, India’s clean energy sovereign future cannot be built on import dependencies or uncoordinated execution. International technology blocs like Pax Silica open vital doors to global capital and advanced research, but internal administrative execution will decide whether India achieves true energy independence. By pairing strategic geopolitical alliances with a vibrant circular economy, specialised industrial infrastructure, and forward-looking policy frameworks, India can insulate its critical supply chains and emerge as a resilient leader in the global clean energy transition.

(The views expressed are personal)

This article is authored by Arun Goyal, former CERC member and senior advisor, MSL, and Jaisal Sarma, public policy professional, MSL.