India towards Atma Nirbhar Bharat

IESA believes that it is high time for the Indian industry to take up R&D and advanced cell manufacturing so that the country reduces its dependence on other countries.The recent pandemic related to COVID19 has highlighted the importance of domestic manufacturing considering the risk of global supply chain disruptions. Energy storage and EVs have importance for national energy security and we should learn from the recent events and accelerate ourefforts for building domestic capabilities.

September 24, 2020. By News Bureau

Introduction:
The onset of COVID-19 (novel coronavirus) began in China, and quickly spread to South Korea.Together they comprise much of the world’s Lithium-ion (Li-ion) battery manufacturing.China is dominant in the battery supply chain as it accounts to three-quarters of battery manufacturing capacity.The COVID-19 impact then expanded to Europe and North America,which together comprise a bulk of non-Chinese demand for those batteries.This progression created a series of disruptions in the supply chain for Li-ion batteries, which will also affect Indian electric vehicle and stationary energy storage market. Apart from Li-Ion Ion Batteries, the continuous lockdown in India,has also affected the supply and demand gap of the lead acid battery manufacturing industry.It will affect all verticals of business such as energy storage for renewable integration, applications in residential back up, C&I back up,telecom,datacentre and others.While most of market participants expected some delays, the extent of disruption may not be fully revealed for several months.
 
An understanding of the supply chain, related supply markets (e.g., Li-ion electric vehicle batteries) and how these markets interact with the broader economy will be critical to analyze the impact, as well as suggest strategies that market participants, regulators, and policymakers can employ to mitigate some the adverse effects. Even though, India is encouraging indigenous manufacturing and have succeeded to an extent, but the most important part of any battery being the cell, which are still being imported mostly from China and other East Asian countries, the growth is expected to slow down the industry event further. As the coronavirus spread, our focus should shift from foreign manufacturing capability to develop indigenous ecosystem development.
 
To understand the importance of energy storage & eMobility technologies IESA is organizing a global conference on 22nd September on the occasion of world Energy Storage Day in association with 30+ international partners.
 
India picture:
India is one of the leading countries in lead acid manufacturing.The li-ion battery manufacturers in India are currently assembling packs importing cells. Indigenous manufacturing is highly essential to make the current energy transition sustainable.Reliance on imports has many demerits and India as a country has been on the receiving end of the same more than often.We witnessed the effects of rising oil price in recent past.The Government of India has realized the advantages of indigenous manufacturing and has been promoting the same actively. With the recent announcement of AtmaNirbhar Bharat, our Honorable Prime Minister has made clear the intent of the Government. NITI Aayog has also in lines of the same developed National program for Advanced Chemistry Cell (ACC) Manufacturing with an outlay of 35,500 crore, that is anticipated to get launched shortly. NITI Aayog has sought Cabinet approval for the proposal which outlays building up to 10 large gigafactories which would get subsidies to produce Lithium ion batteries.Once it gets the approval, the Aayog will invite bids for setting up these gigafactories, with a total capacity of 50 GWh, over ten years.
 
The move is part of an effort to push use of EVs, for which high battery cost is a big hurdle and promote integration of energy storage more actively in the power grid.The Finance Ministry has already sanctioned the Aayog’s proposal to offer a Rs 700 crore a year in subsidies to battery makers, starting 2022.The proposal is made more output based rather than input based, with subsidy linked to the capacity creation committed and the level of indigenization (60% necessary). Most recently, Hon’ble PM Shri Narendra Modi mentioned about energy storage R&D and manufacturing for solar integration and encouraging investment in this space. Finance Minister Smt. Nirmala Sitharaman also mentioned in AtmaNirbhar Bharat package to consider energy storage manufacturing as the champion sector for India.The current pandemic related to COVID19 has highlighted the importance of domestic manufacturing, considering the risk of global supply chain disruptions.
 
 
Way forward:
Apart from attracting investments for giga factories, state governments and MSME ministry need to support small scale industries to diversify into component supply, Policy on raw materials and ancillary business area of energy storage & EV manufacturing.The Ministry of Mines and other governmental bodies should invest and allow the exploration of raw materials in India. Also, India needs to focus on developing material processing capabilities with appropriate quality to supply to advanced storage manufacturing ecosystem.The government should create a separate body to promote export of advanced batteries and ESS solutions and drive trains to other countries. New skill development and reskilling should be the priority of the government for the advanced technology sector. As the leading industry alliance, IESA is working on the above areas and recycling batteries in India. We anticipate significant investments from Indian conglomerates looking to diversify in energy storage and EVs in the next 3-5 years.
 
This would require sustained policy push and a strong will to implement the policies in a timely fashion by the government. Recently the EV policy announcement by States like Delhi and Telangana will catalyze the manufacturing and adoption of energy storage and EV in these states. During the 3rd IESA AtmaNirbhar Bharat Roundtable Mr. Satendar Singh, Joint Secretary, Ministry of Mines, Government of India said that the Ministry of Mines is looking for the availability of minerals required in making batteries. As far as availability of lithium is concerned the ministry is mainly looking at a few minerals bearing lithium. Geological Survey of India (GSI) is actively doing exploration work for these minerals. So far, there have been encouraging results from the state of Chhattisgarh, Bihar, and Rajasthan. The initial findings indicate that there could be possible lithium-bearing minerals [in these states]. In the Purulia district, West Bengal, they have found a deposit of pegmatite which has around 1.05% of lithium in it. They are further working on these findings and trying to locate all such areas to establish actual reserves and resources that we find in India.” Last month, an MoU was signed between KABIL from India and JEMSE from Argentina for sourcing of lithium and cobalt. There is a need to reduce dependence on the import of lithium ion batteries, one of the key components in electric vehicles (EVs), road transport and highways minister Nitin Gadkari said on 6thAugust during IESA’s India eMobility Conclave (IMC 2020). In e-mobility technology, the most imp thing is we should not depend on import the material used to make these vehicles. Our priority is to make all these materials, particularly lithium ion batteries in India, Gadkari said at the e-mobility conclave. Energy Efficiency Services Limited (EESL), signed an MoU with India Energy Storage Alliance (IESA) for faster adoption of e-mobility and scaling EV infrastructure across India with the launch of EV Adopters Club (IESA-EAC). During four series EV Battery Swapping Roundtable with key industry stakeholders, IESA sent a suggestion letter to consider various suggestions to central government departments. We are thankful to the Ministry of Power and Ministry of Road Transport & Highways for considering EV Battery Swapping as an alternative solution. India is at a nascent stage with respect to large scale energy storage installations with renewable or for grid stability. But central agencies like SECI and others have been proactive during COVID time with the release of multiple energy storage integrated tenders and appropriate policy discussion on RTC and peak management. Recently, two projects for peak management and RTC for RE with energy storage options and SECI’s Solar+ Energy Storage tender for Lakshadweep islands allocated to two leading companies in India. In the meantime, NLC India Commissioned 20 MW Solar Project with 8 MWh (16 MW) Battery Energy Storage in Andaman.
 
Conclusion:
India has recently gained stature as one of the fastest-growing markets for advanced energy storage technology supporting the exponential growth expected in its electric vehicle market over the next 5 years. IESAhas estimated the stationary energy storage market potential in India to be around 230GWh during the period 2020-2027, of which grid scale applications contribution is expected to be 15%, with behind-the-meter applications making up the rest. In grid application, renewable energy integration takes up majority of this share, split between solar and wind projects.
 
India is expected to attract investment in two-to-four giga factories for advanced li-ion batteries, attracting over $ 3 billion in investments in the next 3 years. The battery pack manufacturers in India are currently assembling high capacity packs with the goal to target electric vehicles and stationary storage market. Assembling of li-ion battery packs is a dynamic industry in India and is growing at a healthy pace. At IESA, we, however, believe that it is high time for the Indian industry to take up R&D and advanced cell manufacturing so that we reduce our dependence on other countries. The recent pandemic related to COVID19 has highlighted the importance of domestic manufacturing considering the risk of global supply chain disruptions. Energy storage and EVs have importance for national energy securityand we should learn from the recent events and accelerate our efforts for building domestic capabilities.
 
- Debi Prasad Dash, Executive Director, India Energy Storage Alliance (IESA)
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