Being one of the largest democracies of the world, India is all set to become the 5th largest economy and projected to achieve the U$30 Trillion by 2050. This growth will be driven by consumption, exports, industrialization, and urbanization. Fueling which, energy will be a key component and available data points towards the requirement of minimum of 4X that of the 2018 levels. To protect the environment, we need to move beyond fossil fuels but unfortunately we can’t only depend on known forms of clean energy, wind, solar, hydro due to vagaries of nature. We need options for energy storage and fast to meet the steep renewable targets that are set by the government.
Given the urgency of situation where the demand for energy storage is huge across automotive, mission critical applications such as hospitals, hotels, datacenters etc., we need to look through microscopic lens to understand it better. With advances in chemistry and physical sciences we have learnt to store electricity for our consumption usually at smaller scale for UPS, car ignition, laptops, mobile phones among others through batteries. It is possible to now power a car, offices, homes, cities and towns with a combination of renewable energy and batteries, making our homes and cars emission free by use of stored electricity.
Understanding the Li-Ion battery chemistry
With that premise, the foremost task is to ensure an effective battery management, resulting in a safe and prolonged battery life. Battery composition has significantly evolved from lead – acid to nickel cadmium (NiCd) to Nickel metal hydride (NiMH) and, now, latest Lithium ion (LiB) based batteries which can store larger energies in a lighter form amongst the other battery compositions. Each battery type has different weight, size resulting in different “energy density”, ability to charge & discharge repeatedly called “Cycles” and ‘Efficiency’ meaning losses during charge & discharge. And, this is how we have been getting lighter, better capacities and longer life batteries for our cell phones, earphones etc.
In simple terms, Lithium ion batteries come with higher energy density, are lighter and more efficient, occupy less space and have a longer life.
Opportunity that beckons
Electric Vehicles market is on a gradual rise as the government is offering isincentives in form of FAME, PLI, GST rate cuts and road tax waivers to name a few. This is a fantastic beginning and a step in the right direction to tap the gigantic opportunity that lies ahead.
The energy storage market is projected to be around 600 GWh by 2030, presenting a very large opportunity for Indian industry for manufacturing of -Lithium ion cells, Battery packs, Battery management systems, Power controls systems, Electric motors for vehicles, Power train for EVs, Charges for EVs, Services for design, installation for various components & systems and services for connected systems and vehicles.
Electric Vehicles
If I take an example of just the Electric Vehicle (EV) space, the total sales in India in October ‘22 stood at 1,11,971 units including passenger vehicles as compared to 39,329 units in Oct ‘21 witnessing triple-digit growth (185%) y-o-y as per FADA. This depicts the enormous potential of the battery manufacturing industry.
Consumers are now looking at owning an electric vehicle. In fact, they are looking for a holistic solution that not only offers a charging platform but also makes use of new age technologies such as cloud, analytics, and artificial intelligence to deliver an enhanced, intuitive experience both for individual users and OEMs.
Therefore, in my opinion, EV manufacturers must focus on building long-term partnerships with battery manufacturers for a customized offering that can complement their EV’s design and performance, eventually optimizing the TCO (Total Cost of Ownership). In a price-sensitive market like India, low upfront cost is one the key components driving adoption and choice of chemistry.
Making in India:
The good news here is automotive manufacturers today are exploring the EV opportunity while, other entrants are trying their hand at newer technological developments. Government too has taken cognizance of this need and made many policy announcements in form of FAME II investment, auctioning of renewable tenders with Energy storage as integral part, Transformative Mobility and Energy Storage Mission by NITI Aayog to name a few.
At present, EV manufacturers are dependent on imports. For India to be at the forefront for electric mobility, it is imperative for the government to reduce GST on lithium-ion batteries to 5% (from 18% currently). This will encourage new business models related to local manufacturing of batteries. There is an urgent need for Indian academia and industry to focus on innovation and R&D to develop our own technology and solutions which are not only cost effective but also have large potential for exports.
Additionally, due to large amount high energy density in the batteries there is also a need to build stringent safety standards to ensure human and asset safety and longevity. The work in this direction has already begun and an integrated inter-ministerial approach towards building the same will help the industry increase affordability, enhance the quality of locally manufactured batteries thereby accelerating adoption of EVs. We also need to focus on challenges related to limited availability of Lithium and other rare metals required for manufacturing and environmental impact of disposal of these batteries.
On the environment front, there is good news as new techniques have already started emerging on responsible disposal of the batteries. Recycling can also help recover rare metals for reuse in manufacture of batteries again giving rise to circular economy around these batteries.
It is a matter of time that India will see adoption of this trend as mainstream to clean its environment and soon realize India’s vision for a safe planet ie, Mission LiFE (Lifestyle for Environment) - a mission set forth in our National Statement at COP26.
