According to a study by Council on Energy, Environment, and Water, India needs investments of up to INR 33,750 crore. The investment will meet the government PLI target of building 50 GWh of lithium-ion cell and battery manufacturing facilities (CEEW). Lithium-ion batteries will largely satisfy the nation’s need for up to 903 GWh of energy storage to decarbonize its power and mobility sectors by 2030. The government revealed earlier this month that it had inferred the presence of 5.9 million tonnes of lithium in Jammu and Kashmir’s Reasi district.
The CEEW study ‘How can India indigenous lithium-ion battery manufacturing?’ calculates the material and financial requirements and offers a blueprint for the domestic strategy as India’s demand is expected to increase significantly. The analysis is based on the minimum manufacturing plant capacity allocated under the PLI 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.
Rishabh Jain, Senior Programme Lead, CEEW, said, “For a green future, 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. This year’s Budget has shown India’s interest in addressing these challenges by eliminating duties on battery manufacturing equipment and providing viability gap funding for battery projects. To scale up domestic lithium-ion manufacturing, India should step up R&D investments, focus on battery cell component manufacturing and reducing material costs, and support recycling to reduce the need for new materials.”
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. This requires the country to prioritise other energy storage technologies as well. The CEEW study 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.
Dhruv Warrior, Research Analyst, 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 mobilizing resources to indigenize battery cell manufacturing. The focus on mineral processing and component manufacturing is, however, limited. The study estimates that the share of upstream component manufacturing and material processing can be as high as 61 percent. Going forward, India must develop its capabilities to build skills, technology know-how, and infrastructure to indigenize this part of the value chain too.”
