Slow progress in securing commodity may pose problem for energy storage in India: Panasonic official
The Indian government’s relatively slow progress in securing lithium reserves could be a big problem for the energy storage industry in the country, according to a senior official at Panasonic India, who said that this would mean the country would have to rely on imports from China.
“China securing its lithium ion reserves and India not doing as much in this area could be a big problem,” said Atul Arya, head, Energy Systems at Panasonic India. “There are two ways to do it. We can either do it in the way we are doing solar, where we are importing everything from China. There is no need to worry about anything, somebody else is making it, and we are only consuming.”
“But, if Make in India is a motto and we are serious about it, then we have to do a lot of things in terms of securing various commodities that go into it,” Mr. Arya added.
“And at the same time, we have to look at the other aspects such as the finance required to ramp up manufacturing, which means attracting investors, and upgrading the skills of the human resources. That is all required.”
“It’s like running your own kitchen,” he added.
“If you are cooking your own food, then you have to obviously worry about your groceries. But if you are happy with somebody delivering food, then you don’t need to have a kitchen itself, forget about groceries.”
Mr. Arya explained that India had moved substantially away from the prevalent lead acid batteries towards those based on lithium ion technology, which was far more efficient. He added that creating large scale batteries was not a simple matter of scaling up the batteries found in phones or laptops.
“The wheel was invented thousands of years ago, but we still have new types of wheels rolled out now and then,” he said. “They are technologically far superior, even when you look at the wheels on cars. That’s how it is with lithium ion technology. It’s not just about scaling it up. A cycle tyre and a bus tyre are two very different things. You have to do a lot more research and a lot more design and development work.”
Mr. Arya also said the government can do a lot on the policy and taxation side to boost the domestic energy storage sector.
“Today, storage is not really classified as a generation technology, but if you put it in a generation plant and you use the stored energy, does it become a generator component,” he said. “It’s not a transmission asset either, but it can be used in transmission. It is not a distribution asset, but it can be used there as well. We have a policy on ancillary services, but it does not cover storage based ancillary services.”
The Panasonic executive also said that there was scope for tax relief for the sector under the Goods and Services Tax (GST) regime, saying that the current tax rate is leading to higher costs.
“Lithium attracts 28% GST as of today,” Mr. Arya said. “This is the highest slab. And so you can understand the impact on costs. There are many areas that are purely in the purview of the government where it can help the sector.”