New Delhi: India will need Rs 33,750 crore to meet the government’s target of lithium-ion cells and battery manufacturing plants, in order to strengthen the country’s “green future”.
This was revealed in a study by non-profit policy researcher, Council on Energy, Environment and Water (CEEW).
The independent study said the country requires up to 903 GWh of energy storage to decarbonise its mobility and power sectors by 2030, and that lithium-ion batteries will meet the majority of this demand.
Earlier this month, the government said it had found lithium-inferred resources of 5.9 million tonnes in the Reasi district of Jammu and Kashmir.
The CEEW study – “How can India indigenise lithium-ion battery manufacturing?” — calculated material and financial requirements, offering a blueprint for the domestic strategy as “India’s demand is expected to increase significantly”.
Its analysis was based on the “minimum manufacturing plant capacity allocated under the PLI (production linked investment) scheme – 5 GWh”. “These plants will also be energy-intensive – requiring 250 GWh of power annually for a 5 GWh plant – and require cheap and reliable power supply,” the study said.
CEEW Senior Programme Lead Rishabh Jain said: “For a green future, minerals like lithium will be as important as oil and gas are today. It’s in India’s strategic interest to secure not just the mineral, but also set up the required cell and battery manufacturing systems within the country. It will reduce our dependence on other countries in the long run, and power our grid and EV transition.”
Jain cited the 2023024 Budget to highlight “India’s interest in addressing these challenges by eliminating duties on battery manufacturing equipment and providing viability gap funding for battery projects”.
He said India should step up investment in research and development to scale up domestic lithium-ion manufacturing. It should also focus on battery cell component manufacturing and reducing material costs, and support recycling to reduce the need for new materials, he added.
Jain said to fulfil the overall battery demand, India will need 969-1,452 kilotonnes of anode, cathode, and electrolyte material (the components for a battery) between 2022 and 2030.
For this, the country should prioritise “other energy storage technologies as well”.
The CEEW study, he said, recommends focusing on the strategic sourcing of critical minerals and pushing for research, development and demonstration in all technologies to retain competitiveness. “At the same time, reducing the cost of manufacturing batteries by innovating and updating manufacturing processes, and making policy changes to lower the cost of cell components are important,” the study said.
Research analyst Dhruv Warrior said development and deployment of batteries will have far-reaching impacts on India’s energy transition journey. “Currently, India is import-dependent but the government has already started mobilising resources to indigenise battery cell manufacturing,” he said, adding, “The focus on mineral processing and component manufacturing are, however, limited. The study estimates that the share of upstream component manufacturing and material processing can be as high as 61 per cent. Going forward, India must develop its capabilities to build skills, technology know-how and infrastructure to indigenise this part of the value chain too.”
Also read: In a first, 5.9 million tonnes of Lithium reserves found in India