India needs over $4 billion to create 50 GWh of lithium battery capacity under PLI Scheme: CEEW


India needs up to INR 33,750 crore (over $4 billion) of investments to achieve the production-linked incentive (PLI) Scheme’s 50 GWh target of lithium-ion cell and battery manufacturing capacity, according to an independent study by the Council on Energy, Environment and Water (CEEW). 

The study also finds that the nation requires a cumulative 903 GWh of energy storage to meet the demand from utility-scale storage and electric vehicles by 2030.

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

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 energy storage demand is expected to increase significantly. 

The analysis is based on the minimum manufacturing plant capacity of 5 GWh allocated under the PLI scheme. These plants will also be energy-intensive – requiring 250 GWh of power annually for a 5 GWh plant – and require a cheap and reliable power supply. 

 “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,” said Rishabh Jain, senior program lead, CEEW.  

“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 fulfill the overall battery demand, India will need 969-1,452 kilotonnes of anode, cathode, and electrolyte material between 2022 and 2030. This requires the country to prioritize 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. 

“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. Going forward, India must develop its capabilities to build skills, technology know-how, and infrastructure to indigenize this part of the value chain too,” said Dhruv Warrior, research analyst.

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