Possibility of Making India the Storage Manufacturing Hub (LI-ion Battery)

Possibility of Making India the Storage Manufacturing Hub (LI-ion Battery)

As the world is advancing in shifting from fossil based energy to renewable energy India too is aspiring for the same. To match the pace, India would however need a strong and sustainable energy storage industry. Right from the electric vehicles to grid applications and telecom sector to solar storage, some of the major energy consumers, the demand for energy storage technologies will also show a steep growth. Currently India imports almost all of the battery components, except battery packs, from countries like China, South Korea and Malaysia. ‘We need to develop indigenous production capabilities for lithium-ion batteries’ said secretary in the department of Heavy industry Girish Shankar in one of the conclaves held in New Delhi earlier this year.

energy storage technologies

India’s ambition of being ‘all electric car nation by 2030’ would require a major shift from conventional fuel energy to less environmentally-harsh source of energy. Although international players like Toshiba Corp. and Suzuki Motor Corp. have made their li-ion battery plans public however given the size of Indian market it would require other major players to invest in the sector. However, the reluctance shown by the major players is majorly due to lack of coherent policies by the government.

Besides government’s inconsistent policy, a comprehensive report by NITI Ayog has also highlighted some of the major challenges India would have to overcome before becoming energy storage manufacturing hub.

Li-ion battery marketAccording to NITI Ayog the key challenge India would face is the lack of mineral reserves India. The cathode materials for the li-ion batteries vary but the basic and common minerals used in the formulation are aluminium, cobalt, Lithium, manganese, and nickel while the graphite is used for anode.

The country has minimal reserves of some of the main components used in the li-ion batteries. Also the copper that is used in cables and busbars would not meet the demand of local market. India, however, is fortunate enough that global supplies and declared reserves of the other countries are sufficient enough to meet the demands.

A study by MIT also shows that the availability of minerals used in li-ion batteries in abundance and in some cases would outpace the demand. To achieve its demands, of raw material and technology, for local production, India would need a strong international partnership to procure both.

It is estimated that from 2017 to 2030 India’s Li-ion battery market will grow by 33 percent by volume and as of now there are no major producers of EV batteries in the country. The country also lacks state-of-art facilities of both capability and capacity. However there are many efforts made by research institutes like IIT Madras, who have started a research and development centre exclusively for advanced battery technology, and battery manufacturers who have geared up their efforts to build the local capacity.

Also the first indigenous li-ion fabrication facility for batteries which are used in defence, railways, telecom, is set-up by Centre Electrochemical Research Institute. Although the assembling of batteries from imported material would help in early stages it would however be challenge for the country to meet the local demands by local production.

As stressed by the Union Minister of Power and New Renewable Energy R K Singh in recently held talks with battery manufacturers in Delhi that the future demand for batteries is going to be very high given the fact that government is aggressively promoting EVs in the country.

The Indian market is scattered as of now and there is no coordination between different stakeholders in the country thus leaving the industry walk snail’s pace. Although organisations like India Energy Storage Alliance have provided a platform to, ‘accelerate the market development for Energy Storage Technologies in India, through active dialogue among various stakeholders.

Among the stakeholders would include material suppliers, battery manufacturers local and central governments, vehicle manufacturers, think tanks and research institutions. To streamline efforts of becoming the energy storage hub all players need to work in coordination with each other. It would not only streamline funding and define technology but also would help in building the robust supply chain. To bring all these stockholders on one platform would be a major challenge in near future unless a strong push form

government is not applied. Due to this uncoordinated approach the investment risk in this sector is also perceived very high. Currently the companies that deal with Li-ion batteries import all the cells from China and manufacture and assemble battery packs in India. It would be very expensive to set up manufacturing cell units compared to that of importing them. Although the government has tried to woo the US based EV specialist and Tesla Founder Elon Musk to setup Gigafactory in India but he too has shown concerns about having local equipment in India.

However there are other players like Japan’s Panasonic, China’s BYD, China’s Zhuhai Yinlong New Energy who are considering entering India. All these major players are known to have proven track record in the industry of energy storage.

The ambition of India going 100 percent election in automobile industry by 2030, the scale of demand would also encourage domestic investment for manufacturing locally. If done properly this could position India among the top countries that are investing and manufacturing li-ion batteries heavily. At the same time India is competing with China, US, South Korea, and Europe where the investment in li-ion batteries is much higher than India.

These countries are investing in 35-50 GWh of Liion manufacturing and if India has to match the pace it should at-least have 5-10 GWh of Li-ion manufacturing capacity. It would also give chance and prepare India for global supply chain.

With the proper investment and scaling India can also scale down the global prices if batteries. Currently the price of Li-Ion batteries is falling globally but in India it still costs nearly half of an EV’s cost. Given the scale of Indian market local production can also help in reducing the costs by 16 percent.

According to India Energy Storage Alliance ‘Indian auto industry is a perfect example of Make in India and same lessons can be adopted for making India a global hub for advanced energy storage technologies manufacturer by 2022. Else we will end up following the path where India has become one of the largest markets for computers, solar panels and telephones, without having any significant domestic manufacturing capability with over 90% of critical components getting imported.’

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