As India transitions to renewable energy, it will require storage capacity to balance the grid. The output of renewable energy sources is greatly dependent on climate, weather, and other uncontrollable factors. While newer technologies emerge, the industry appears to prefer lithium-ion batteries.
The increasing demand for electric vehicles and the rising shift towards clean energy sources will drive the lithium-ion battery market’s growth in the coming years.
An analysis conducted by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA) estimated that the Indian lithium battery market would grow from 2.3 GWh in FY2021 to 104 GWh in FY2030, with electric vehicles (EVs) accounting for 90 percent of the total industry.
Annual lithium-ion battery demand for automotive applications is expected to rise as a result of government programs such as FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) and various state-level EV laws.
The Indian government has set a 30 percent electric car sales target by 2030. The Central Electricity Authority predicts that India will need 34 GW/136 GWh of battery storage to add 450 GW of renewable sources. This will speed up the country’s move to becoming a major user of lithium batteries.
Trends influencing the lithium-ion battery market growth
The automobile industry, which was once dominated by fossil fuels, is increasingly becoming a leader in alternative energy sources such as solar power and Li-ion batteries. A rising number of car manufacturers in India have been working hard to facilitate this transition.
The government is also committed to helping this change happen by passing new laws to help make cities less polluted. A report by the India Energy Storage Alliance (IESA) suggests that the Indian EV market will grow at a CAGR of 36 percent by 2026. During the same time frame, the EV battery market is expected to increase at a CAGR of 30 percent.
Battery cost: A factor that has spurred demand for lithium-ion batteries over the last decade has been the reduction in battery costs. Furthermore, lithium-ion technology, which is safer than older types of batteries since it is less likely to catch fire or explode if managed properly, has contributed greatly to this trend.
Technology ramp up: The technology of lithium batteries is constantly evolving. Until recently, the two dominant chemistries seen in the Indian market were LFP (Lithium Ferro Phosphate) and NMC (Nickel Manganese Cobalt). In Indian contexts, LFP chemistry is regarded to be safer, but NMC chemistry has a higher energy density.
Solid-state batteries are intrinsically safer because they are non-flammable, and much research is being done in this field. In this decade, there will be further advances in lithium battery technology, which can lead to higher adoption.
Software and semiconductors: Software and semiconductor businesses are also contributing to this trend by developing solutions that enable automakers to better manage their vehicle fleets, cut vehicle maintenance costs, and improve fuel efficiency through improved software systems.
The intelligence of the lithium battery, known as the Battery Management System (BMS), controls, monitors, and protects the battery from overuse, and controls Performance, efficiency and safety. A typical BMS is made up of high-end microcontrollers and other active semiconductor components.
The lithium battery is monitored and regulated using advanced algorithms and software. Given its inherent superiority in this area, India has the potential to outperform the rest of the world in this area.
Availability: Domestic Li-ion battery manufacturers offer mobility packs that are designed to perform effectively on Indian roads under a variety of riding and environmental conditions. Their Li-ion energy storage technologies are also used in a wide range of applications, including residential, commercial, and industrial contexts.
The battery management system ensures the performance, safety, and dependability of its battery packs. Because of the BMS, the packs will always run at the desired charge, power, health, and energy levels. These companies try to provide their customers with batteries that are durable, safe, and affordable.
Urban mining and recycling: The method of extracting valuable metals from outdated batteries is known as urban mining. Other countries have proven the ability to recycle lithium-ion batteries in zero-effluent plants and recover more than 90% of the metals. India could now strive to be at the top of the global rankings for urban mining. Recycling is expected to cover the majority of the world’s lithium needs by 2030, generating 80-gigawatt of capacity.
Safety: The safety of the vehicle’s battery is critical for India. The vehicle’s range, charging speed, battery cycle life, battery weight, price, and so on have all gotten a lot of attention. But the most crucial question is whether it is suitable for Indian conditions.
The performance of lithium-ion battery packs is evaluated using the IS-17855 standard, which was recently developed by the Bureau of Indian Standards (BIS). BIS has created a new set of performance tests for this standard to assess energy efficiency, cranking power, quick charging efficiency, temperature-dependent deterioration, loss of charge during storage, and other factors.
The Bureau of Energy Efficiency (BEE) recently launched a Star Rating program for lithium batteries. With this system, consumers will be able to tell the difference between different battery packs in terms of safety, quality, and so on, which can lead to increased trust and adoption.
Promoting domestic lithium-ion cell development
Domestic production of lithium-ion batteries is essential for India to meet its EV targets without relying on imports. The government launched the National Mission on Transformative Mobility to promote programs for the phased manufacturing of batteries and EV parts.
Over the next ten years, NITI Aayog plans to invest $5 billion in megafactories. This should make India less reliant on imports from other countries and increase the number of Li-ion batteries made in India.
People are embracing greener habits as they become more conscious of climate change and its effects on the environment. The growing awareness of this issue has prompted individuals to consider adopting electric vehicles and sustainable energy sources to reduce their carbon footprints.
In terms of the supply chain, India has a supply-demand imbalance. This can be attributed to customers’ lack of understanding of the benefits of Li-ion batteries as well as an insufficient manufacturing infrastructure.
Nonetheless, the auto industry will continue to drive Li-ion battery demand in the coming years.
The author is Ganesh Moorthi, CTO, Renon India.
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