India, the world’s third-largest energy consumer, requires investments worth ₹33,750 crore to achieve the government’s production-linked incentive (PLI) target of setting up 50 gigawatt hour (GWh) of lithium-ion cell and battery manufacturing plants

In a report, the Council on Energy, Environment and Water (CEEW) revealed that the country requires up to 903 GWh of energy storage to decarbonise its mobility and power sectors by 2030 and lithium-ion batteries will meet the majority of this demand.

Earlier this month, the government announced that it had established Lithium inferred resources of 5.9 million tonnes (MT) in Reasi district of Jammu and Kashmir, the think tank said.

The study ‘How can India indigenise 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,” CEEW explained.

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.

“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,” CEEW Senior Programme Lead Rishabh Jain said.

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, he added.

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