The government is considering a plan to establish a battery making capacity of 40 gigawatts (GW) to give a boost to its electrical vehicles and renewable energy initiatives, an official said.
It will ask states to compete for the opportunity to set up internationally competitive facilities that will also service global markets. Domestic and global battery makers will be asked to bid for setting up plants in the selected states.
The proposal is expected to entail investments of $40 billion in the next two-three years and is likely to garner interest from global battery manufacturing firms and renewable energy players such as SoftBank, Tesla and Panasonic, a government official said.
The Centre is working on fiscal and non-fiscal measures to enable states to set up manufacturing units as competitive as those in China. Bids will be judged on the basis of land, incentives, power tariff discounts and regulatory and industrial support. Plants have to be competitive so that exports are commercially viable.
The large-scale battery manufacturing proposal is aimed at making storage systems competitive in India so electric vehicle adoption becomes more viable.
FAST GROWTH IN RENEWABLES
Batteries and battery cells are imported from the likes of China and the US. With plans to add 175 GW renewable energy generation capacity by 2022 and ensure that 30% of India’s vehicles are electrically powered by 2030, the demand for battery storage is pegged at 300 GW.
“The Centre is exploring opportunities on how to make battery manufacturing at giga-scale happen quickly and in the shortest possible time because that is the crux of the entire growth, be it electric vehicles or new and renewable energy sources,” the government official said.
“The industry needs to have the confidence to come forward, as there is a huge requirement of battery storage,” said another official. “Even for just the FAME-II targets of e-vehicles, we will require 70 GW batteries in the next three years. A company that starts making them here can become a global leader rather than looking up to countries such as Vietnam, Korea or China.” The official urged India to first make batteries before moving on to cells.
Batteries consist of many cells packed together. Nearly a fifth of components for lithium-ion cells are not available locally.
The proposal is part of the National Mission on Transformative Mobility and Battery Storage approved by the Cabinet in March. An inter-ministerial steering committee chaired by Niti Aayog chief executive officer Amitabh Kant has been set up to promote clean mobility initiatives. This involves a phased manufacturing roadmap to implement large-scale battery module and pack assembly plants by 2019-2020, followed by integrated cell manufacturing by 2021-2022.
State officials welcomed the proposal but said the Centre needed to ponder challenges such as battery technologies, integration with existing EV makers and Chinese competition. “There are aspects other than financial incentives that help ground investments such as environmental clearances, other approvals, land bank, power tariffs,” a state official said on condition of anonymity. “Some are directly under state purview and the Centre needs to involve state departments.”
Source- The Economic Times