UPSC Weekly Concepts Snapshot: Energy storage technologies, Bond Yield and ENSO

— At its core, energy storage systems convert electricity from renewable sources such as solar and wind, when it is available, into forms that can be stored. Later, it converts these back into electricity when need arises.

— A range of energy storage technologies are being deployed globally. Among them, pumped hydro storage (PHS) and battery energy storage systems (BESS) are currently the most widely used. 

• PHS uses surplus electricity to pump water from a lower reservoir to a higher one. When electricity demand peaks, it releases the stored water downhill through turbines to generate power.

• BESS technology stores electricity chemically and discharges it when needed. Lithium-ion batteries, particularly lithium iron phosphate (LFP) batteries, are currently the dominant technology for grid-scale storage because of their falling costs, high efficiency and long operational life.

📍UPSC Twist Points– Other energy storage solutions

— Beyond PHS and BESS, several other energy storage technologies exist globally at smaller scales. Their distinct working mechanisms make them important for conceptual clarity, especially in UPSC Prelims where such differences are often tested.

• Concentrating solar-thermal storage systems: This technology uses mirrors that capture and focus sunlight onto a receiver. As the receiver gets heated, materials such as molten salt are circulated inside the receiver to store the heat. The stored heat can later be used to produce steam. This steam is converted into mechanical energy in a turbine, which powers a generator to produce electricity.

• Compressed-air energy storage systems use excess electricity to compress air and store it in underground caverns or tanks. When power demand rises, the compressed air is released to drive turbines and generate electricity.

• Flywheel energy storage systems store electricity as rotational energy by spinning a rotor at extremely high speeds. Because they can inject power into the grid almost instantly, they are particularly useful for maintaining grid stability and managing short-term fluctuations.

• Gravity energy storage systems use electricity to lift heavy weights to higher elevations. When electricity is needed, the weights are lowered, converting gravitational energy back into electricity through generators.

ECONOMY

Bond yields 

Core Concept: 

— In any economy, the government is the least risky borrower because it is least likely to fail in paying back. It is, after all, the government. In a crisis, it can even resort to printing money — a facility not available to businesses or households.

— However, governments borrow in a slightly different way. They float a bond — differently referred to as Treasurys in the US, Gilts in the UK, Bunds in Germany, G-Secs or government securities in India, and JGBs in Japan — which is essentially like an “I owe you” statement.

— It states that the government borrows a particular sum (say $100) for a particular period (say 10 years) and promises to pay a given return or coupon at the end of each year (say $5) apart from paying back the principal at the end of 10 years. Unlike the annual interest rate (expressed in percentage) for home, car or factory loans, government bonds provide a predetermined exact amount. If all goes well, the annual interest rate (or yield) for this example will be 5%.

— But imagine a scenario where the government decides to launch a war during the year and, as a result, inflation starts rising and the government’s demand for money also rises, while the economic prospects of the country decline. The government may be forced to borrow more money, but investors and lenders would now demand a higher rate of return because they are wary of the increased risks. The government would have to promise a higher coupon, say of $10, on the new bonds.

— This will, in turn, make the old bonds (with an annual coupon return of $5) appear sub-optimal. Holders will try to sell them, often at prices lower than $100. How much lower? Anyone buying the old bond must have a yield or expected return of 10% from them, and as such, the old bond prices will have to fall to $50 so that they can be sold in the markets.

— Essentially, this is what is happening around the world: government bond yields are rising, and rising sharply. It must be noted that countries borrow and refinance in trillions of dollars, as such, yield movements are tracked upto three decimal places.

So, is rising bond yield good or bad? 

— Higher yields for government bonds — which are the least risky loans — basically mean even higher interest rates for common people and businesses.

— Higher yields also mean that governments will have to spend even more of their annual budgets towards paying back annual interest on bonds. That, in turn, can only happen either by spending cuts in other areas such as welfare schemes or defence or by higher taxation. In sum, a bond sell-off and rising yields is not good news

📍UPSC Twist Points– Open Market Operations (OMOs)

— The RBI uses Open market operations in order to adjust the rupee liquidity conditions in the market on a durable basis. When the Reserve Bank feels that there is excess liquidity in the market, it resorts to the sale of government securities, thereby sucking out the rupee liquidity.

— Similarly, when the liquidity conditions are tight, the central bank buys securities from the market, thereby releasing liquidity into the market. It’s used as a tool to rein in inflation and money supply in the system.

— However, when liquidity is sucked out, it can lead to a spike in bond yields as the RBI will release more government securities into the market and bond buyers demand more interest rate on these securities.

ENVIRONMENT

El Niño Southern Oscillation (ENSO)  

Core Concept: 

— The El Niño Southern Oscillation (ENSO) is a climate phenomenon marked by changes in sea temperatures along the eastern Pacific Ocean, coupled with fluctuations in the overlying atmosphere. It can alter and interfere with the global atmospheric circulation, which, in turn, influences the weather worldwide.

— It has three phases: warm (El Niño, Spanish for little boy), cool (La Niña, Spanish for little girl), and neutral. It occurs in irregular cycles of 2 to 7 years. 

— In the neutral phase, the eastern side of the Pacific Ocean (near the northwestern coast of South America) is cooler than the western side (near the Philippines and Indonesia). This is due to the prevailing wind systems that move from east to west, sweeping the warmer surface waters towards the Indonesian coast. The relatively cooler waters from below come up to replace the displaced water.

ENSO phases.

— During El Niño, the surface waters of this region of the Pacific get unusually warm, disrupting the flow of moist winds in India. The result is a weak or delayed monsoon for India, as well as dry spells in major agricultural states. There is also evidence that the frequency and severity of heatwaves India experiences are linked with the El Niño phenomenon. 

— The opposite happens when La Niña is underway: cooling of the surface waters of the eastern Pacific. India thus gets stronger, moisture-bearing winds, and typically experiences a boost in its southwest monsoon. In extreme situations, the excessive rain has caused flooding and crop damage as well.

📍UPSC Twist Points– Madden-Julian Oscillation (MJO)

Since both El Niño and the MJO influence several weather phenomena worldwide, including the Indian monsoon. Hence, understanding the MJO and its differences from El Niño becomes important.

— MJO is one of the most important and complex ocean-atmospheric phenomena influencing Indian monsoons, with origins in the Indian Ocean.

— Notably, El Nino is a stationary system, whereas the MJO is a moving system of wind, cloud and pressure that brings rain as it circles around the equator.

— A key feature of MJO is that a disturbance of clouds, wind and pressure moves eastward at a speed of 4-8 metres per second. Within 30 to 60 days, MJO wind bands can travel around the world and cause significant weather changes during their movement. In a favourable phase, it can enhance rainfall over India during the monsoon season.

Prelims Practice MCQ

Let’s see how much can you recall

Consider the following statements:

1. Battery energy storage systems technology stores electricity chemically and discharges it when needed.

2. Rising government bond yields generally indicate that borrowing costs for governments are declining.

3. El Niño is associated with warming of eastern Pacific Ocean waters and can weaken the Indian monsoon.

Which of the statements given above is/are correct?

(a) 1 and 3 only

(b) 1 and 2 only

(c) 2 only

(d) 1, 2 and 3

ALSO CHECK

UPSC Prelims S.E.E. Snapshot: GPS interference, RBI’s Monetary Policy, Heatwaves

UPSC Prelims S.E.E. Snapshot: Dimethyl Ether, CPI overhaul, Tar Balls 

UPSC Prelims ‘SEE’ Snapshot : Induction cooktop, Forex reserve, and Earth’s energy imbalance 

UPSC Prelims ‘SEE’ Snapshot: Talking cars, GDP rebasing and Nor’westers — quick look 

🚨 Click Here to read the UPSC Essentials magazine for May 2026. Share your views and suggestions in the comment box or at manas.srivastava@indianexpress.com🚨 

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