Even though the country has missed out on manufacturing opportunities in the past, as it happened with the solar sector, storage is one of the emerging areas which is also critical for the national energy security programme. The government recently approved the PLI scheme on ACC battery storage for achieving manufacturing capacity of 50 giga-watt-hour (GWh) with an outlay of Rs 18,100 crore. Rahul Walawalkar, president of the India Energy Storage Alliance, tells FE’s Anupam Chatterjee he believes the scheme can provide the right platform for the industry to turn India into a global storage manufacturing hub. Excerpts:
Is the incentive of Rs 2,000 per kWh sufficient to attract industry?
The incentive of Rs 2,000/unit offered under PLI is a good amount. In fact, practically we expect most of the companies to receive much lower incentives. The incentive is contingent on the domestic value capture and in the initial years, this domestic value capture is expected to be around 50% and the companies will be incentivised accordingly. However, we feel that it is sufficient to help the industry get through some of the teething inefficiencies which we will have when we start the plants. The scheme structure provides higher incentive for companies manufacturing advanced cells.
How about the market for storage products in the country?
The government is giving five years to scale up manufacturing capacity to 50 GWh and we do expect that the domestic demand itself will cross this capacity by 2026 or 2027. We think the stationary market (mostly power sector) will contribute to most of the demand growth till 2025, and beyond that, the electric vehicle market will start taking up the larger share. In other parts of the world such as the US, Europe and Australia, GWh scale storage deployment has been happening for the last couple of years because policy makers in these countries did detailed cost benefit analysis back in 2012-13. Unfortunately in India, policy makers had been looking for cheaper solutions and while were waiting for it, cost has fallen down by around 50% in the last five years.
Does that mean we have missed out the opportunity?
We are definitely late. But the good part is, there has been a lot of changes in the technology front. Right now China is the dominant player and the US has less than 40 GWh of manufacturing capacity, while Europe has around 20-30 GWh. The other countries do not have a huge lead, so if we move fast right now, we can catch up. We are late by 2-3 years, but if we now run, we can still catch the train.
Will locally manufactured products be cheaper than imports?
There are companies which are setting up 100 GWh storage manufacturing units outside, so it is impossible for domestic players with much lower capacities to match their rates. It will take some time to build the capacities and achieve the economy of scale for local companies to become competitive without any government support.
How do you expect the manufacturing industry to react to the PLI scheme?
We expect the government to receive bids for 70-100 GWh and anticipate around five to seven companies to benefit from the scheme. Right now it is easier to name the handful of large companies which have not shown any interest in the energy storage sector. Currently, we do not have the entire supply chain in India.
The cell prices are also expected to keep dropping. So, we expect the government incentive to be in the range of Rs 1,000/unit or thereabouts, which is sufficient to overcome the initial challenges for the industry. In another two years, import duties are also expected to be levied on the cells. On a ballpark basis, it requires investment of $50-75 million per GWh for setting up manufacturing capacities, depending on the technologies to be used.
Aren’t there raw material supply constraints?
For lithium-ion batteries, lithium comprises only 3-5% of the total material cost. Many other materials like nickel, manganese, cobalt, aluminum, copper, graphite are also required. India has sufficient reserves for a number of these elements. India may not have traditional reserves for items like lithium, but countries like Australia and Bolivia are very much eager to supply these materials to us and we can process them to make battery-grade products. The shortage of raw materials is more of a distraction and these are not the main issues. There are challenges in the processing side, but India has a very strong chemical industry.
Significant progress has been made in battery technology and infrastructure for electric vehicles (EVs) in the past few years, Rahul Walawalkar, founder and executive director of the India Energy Storage Alliance (IESA), said.
In an interaction with TOI, Walawalkar said more needs to be done in terms of financing and raw materials.
IESA has worked with the Union government and other stakeholders, such as NITI Aayog, for the R18,100 crore product-linked incentive scheme announced by the Centre last week. The scheme aims to create 50GWh of energy storage in advanced chemistry cell (ACC) batteries over the next five years. The policy includes both mobile and stationary batteries — for EVs and electrical grid supply.
“That process started in 2016, when giga factories to manufacture batteries and EVs were just about to be built. This incentive scheme will accelerate the process to create more energy storage, both mobile and stationary. We are a key stakeholder,” Walawalkar said.
He added that electric vehicles were slowly gaining traction in India, and despite the comparatively higher unit costs, overall savings were many times that of vehicles running on fossil fuels, especially for fleet owners. “The transition to electric vehicles can save a lot of money for fleet owners. The only issue with buying electric vehicles in India is adequate financing. More people in India will buy electric vehicles if manufacturers produce aspirational vehicles with good features, like Tesla did in the United States,” he said.
Walawalkar added that several PSUs and private companies have set up a considerable number of charging stations in India, while issues such as power ratings, and fast and slow charging are being looked at by the Bureau of Indian Standards and other organizations. He added that raw materials were also not a concern for Indian manufacturers, but processing may be.
“Even if India does not have much commercial-grade lithium, many countries in Asia and Latin America do, and they are more than willing to supply Indian companies. Processing of raw materials, however, is an issue. India can also utilize its recycling infrastructure and meet its lithium requirements by recycling,” he added.
At a time when fighting against Covid-19 and improving the health infrastructure in the country are top priorities, India's push towards electric mobility may have taken a backseat. Even as the world races towards electrification of its public and individual transport options, India's strides - comparatively slower as these already were - are likely to become shorter still. But the Indian automotive industry remains optimistic about the future of electrification in India even if it is largely cognizant of the fact that present times have more pressing requirements.
A report in December of last year by India Energy Storage Alliance (IESA) predicted that the EV market in India will touch 63 lakh units per year by 2027. It may be rather ambitious because sales of EVs in India fell 20% to 2.36 lakh units in FY 2021, as per Society of Manufacturers of Electric Vehicle (SMEV). This includes electric PVs, two-wheelers, three-wheelers etc.
From 2.36 lakh to over 63 lakh would be quite a climb - possible yet challenging. And the pandemic isn't expected to help matters either.
A number of players in the luxury segment either launched or confirmed plans to bring in their respective EV offerings. Jaguar Land Rover launched the I-Pace. Volvo showcased its XC40 Recharge. Audi will bring in e-tron and Mercedes already launched EQC late last year. And key mass-market players reportedly also have plans to offer more affordable products.
But with the second wave of the pandemic - and a predicted third later in 2021, EV infrastructure may drop down in the list of government priorities. "World over, higher upfront costs and challenges around charging of electrified vehicles (EVs) are key barriers to adoption of electric mobility. In India, these are further accentuated due to higher consumer price sensitivity and value proposition," Vikram Gulati, Country Head and Senior VP (External Affairs, PR and CSR) at Toyota Kirloskar Motor, explains. "As the current Covid-19 pandemic continues to affect both the health and economy, the impact is as much on the automotive industry so to say. The on-going pandemic is likely to further heighten the challenge over customer acceptance of EVs."
Gulati feels government support for electric mobility in India has been 'commendable' but what lies ahead?
Jyoti Malhotra, MD at Volvo Car India, admits Covid-19 will have implications but that these won't just be for the auto industry alone. "Covid will have an impact on the speed of EV infrastructure growth, but then this is true for other sectors also," he tells HT Auto, adding that he remains optimistic. "Transformation towards electric vehicles is not an overnight process. It is a complete ecosystem that is evolving and will continue to do so."
Santosh Iyer, VP (Sales and Marketing) at Mercedes-Benz India, also agrees that while Covid-19 has emerged as a massive challenge for the country, improving EV infrastructure is a long-drawn process. "EV infrastructure ramp-up in India requires a mid to long-term approach with certain key focus areas and there has been progress in those areas," he explains. "(However) The current focus is to do all that can be done to subside the health crisis. Our priorities also remain to protect the health of our people and also sustain the health of the business moving forward."
Iyer expects some markets to gradually open by the end of June but adds that much would depend on how the rate of transmission and the spread of the pandemic is checked.
But at a crucial time when taxes on conventional sources of fuel remain key revenue sources for central and state governments looking at providing relief to people at large, what would it mean for the fate of battery-powered options. "This is a Catch 22 situation. While conventional fuels do give revenue to central and state governments, they also account for the largest chunk of forex outflow from the country. The country will have to do a fine balancing act on this front," says Malhotra.
There is little doubting that the road ahead is rather uncertain and it isn't just for EVs or the automotive sector alone. The overall consensus though is that much would depend on how fast - and how effectively - India manages to turn the tide on Covid.
Indian Businesses To Act Fast On Climate; Minister Prakash Javadekar And Dr John Murton, UK's COP26 Envoy Gives Special Address
India Energy Storage Alliance (IESA) and Greenstat Hydrogen India, a Norwegian energy organization, have signed a Memorandum of Understanding for two years to accelerate the hydrogen technology development in India. The two partners will collaborate on establishing a Norwegian Centre of Excellence on Hydrogen in India and the development of green hydrogen technologies in India.
In the Union Budget 2021, India’s government announced its plan to launch a National Hydrogen Mission. The draft mission is likely in the next two months.
For the financial year 2021-22, the Ministry of New and Renewable Energy (MNRE) has been allotted INR 25 crore for research and development (R&D) in hydrogen.
Once the draft of the mission is in place, it will be floated for public consultation. There will be five focus areas, including R&D, demand creation, industry application, eco-system creation (including policies) and bringing industry on board along with international partnerships.
In these five areas, demand creation will focus on the niche products that can be taken up and effective use of the fuel in trucks and buses. In the industrial sector, the government is looking at hydrogen as a replacement for coke in the steel industry and making use of the fuel in the fertilizer sector. The Ministry of New and Renewable Energy (MNRE) has indicated that by 2025-26, the industrial sector will be one of the major hydrogen recipients.
Debi Prasad Dash, Executive Director, India Energy Storage Alliance (IESA) said hydrogen presents a potential opportunity for India to decrease reliance on oil imports and focus on alternate energy sources. In line with the industry needs, IESA launched the MIGHT (Mobility and Infrastructure with Green Hydrogen Technology) initiative in 2020 for supporting policies to enable use of green hydrogen in both stationery and mobility sector.
“We anticipate that advanced chemistry cell battery manufacturing mission and hydrogen mission together can enable India to fast-track decarbonization of grid, industrial sector, and transportation sector in the coming decade,” he added.
Sturle Pedersen, Chairman, Greenstat Hydrogen India, said, “Leading a broad representation of Norwegian cutting-edge expertise within the hydrogen sector, we are thrilled to be a part of this exciting journey together with IESA, the Indian industry, R&D institutes and the Indian government. Hydrogen is already a dominant part of the energy value chain world-wide. The challenge now is to revert the energy ecosystem back into its natural evolution. Renewable energy must replace fossil fuels, to preserve our habitat, and to preserve our mobility. Hydrogen is the natural energy carrier representing a vital part of the sustainable energy solution together with sustainable battery manufacturing.”
Since 2012, IESA has been working to help address enabling policy framework for all forms of energy storage technologies for both stationary and emobility applications. It worked to include hydrogen as part of the National Energy Storage Mission developed for the Ministry of New and Renewable Energy in 2018.
Your dream of owning a Tesla electric car will soon be a reality as the company is set to begin its India journey with its highest-selling Model 3, before the premium Model S and Model X, which would be available later in the year and in early 2022.
Arriving in India via Tesla Motors Amsterdam that will give the electric car-maker tax benefits related to dividend payments and capital gains, the Model 3 may start from around Rs 60 lakh.
The base Standard Range Plus model now claims a driving range of 423 km per charge, while the Long-Range Model 3 can give you 568 km range on one single charge. CarDekho.com has even listed the price of three Tesla models with their expected arrival: Tesla Model 3 from Rs 60 lakh in as early as March, Tesla Model S from Rs 1.5 crore in July and Model X from Rs 2 crore in early 2022.
The India arrival dates and prices, however, have not been revealed by Tesla, which now has a registered office in Bengaluru.
According to Prabhu Ram, Head-Industry Intelligence Group (IIG), CMR, Tesla’s bold bet on India will supercharge and transform the country’s mobility future.
“Over the short-term, Tesla’s entry will give a boost to the government’s policy initiatives, strengthen EV manufacturing in India, spur new mobility startups, and most importantly, fasten the development of enabling EV infrastructure,” Ram told IANS.
Tesla is setting up its research and development (R&D) centre in Bengaluru to commence its India operations. The Karnataka government had earlier made a strong pitch to invite Tesla to the state. Tesla is also in touch with other state governments in Maharashtra, Gujarat, Tamil Nadu and Andhra Pradesh to start its India operations.
The move will also open India to select as one of the countries where Tesla cars can be purchased. People are eying its most loved car – Model 3 – which is built from the ground up as an electric vehicle with ultra-high strength steel and a low, solid centre of gravity.
Model 3 achieved a US NHTSA (National Highway Traffic Safety Administration) 5-star safety rating in every category and subcategory with its energy absorbent crash structure, rigid passenger compartment, incredible side impact protection and one of the lowest rollover risks of any sedan on the road.
Model 3 comes with the option of dual motor all-wheel drive, 20-inch Uber Turbine wheels and performance brakes and lowered suspension for total control in all weather conditions. A carbon fibre spoiler improves stability at high speeds, allowing the Model 3 to accelerate from 0-96 km in as little as 3.1 seconds.
A 15-minute recharge at a Supercharger location can get it ready to go for up to 280 km. The inside of Model 3 is unlike any other car. You can use your smartphone as a key, and access all driver controls in the central 15-inch touchscreen.
The all-glass roof extends from front to back, creating a sense of openness from every seat. In the US, the warranty on the base Model 3 variant is four years or 50,000 miles (whichever comes first) and on the battery and drive unit, the warranty is 8 years or 120,000 miles (whichever comes first).
The electric vehicle (EV) market in India is expected to reach over 63 lakh unit-mark per annum by 2027, according to a recent report by the India Energy Storage Alliance (IESA).
The demand for the batteries is also going to rise substantially over the same period. The EV sales in India stood at 3.8 lakh units in 2019-20, and the EV battery market reached 5.4GWh during the year. Tesla’s entry will only boost the EV sector.
“Over the long-term, India stands to leapfrog the current conventional mobility and build a strong foundation for e-mobility. With India’s advanced capabilities in manufacturing and information technology, the country is potentially poised for success and lead the world in the post-Covid future,” Ram noted.