As India prioritises electric vehicles, it will have to look at alternatives to reduce dependence on traditional lithium-ion batteries.
For electricity supply to become fully free of fossil fuels, generation from renewables will need to be stored.
As renewables gain market share, many experts see a serious problem with the availability of lithium as well as its price.
Sodium-ion battery technology is now emerging as a potentially viable alternative for large-scale application.
India is accelerating its energy transition away from fossil fuels. Its ambition has been rising. From the initial target of a decade back of putting up 20 GW of solar power by 2022, it now has the goal of having 170 GW of renewable electricity capacity by the same year, 2022. More recently, Prime Minister Narendra Modi has said that India would have the objective of putting up 450 GW of renewable energy. India is also promoting the use of electric vehicles with a range of policy instruments. As the share of renewables in electricity generation increases rapidly and as the share of electric vehicles rises, both electricity and transport would simultaneously be reducing their carbon intensity. But for electricity supply to become fully free of fossil fuels, generation from renewables will need to be stored. Electric vehicles run on batteries which store electricity.
Increasing popularity of EVs
A real breakthrough for a net carbon-neutral economy needs success in cost-effective energy storage. Battery storage is one of the most promising options being pursued. At present, lithium-ion batteries are being used for all computers and smartphones. They are being used in electric vehicles and the performance of electric cars is getting better. The prices of these batteries have been coming down and so have the prices of electric cars as batteries are what make electric cars more expensive than the comparable petrol/diesel car. Electric cars may well be on the cusp of succeeding in the market though at present their market share globally is just over 2 per cent. But when they begin to gain market share substantially, many experts see a serious problem with the availability of lithium as well as its price. Therefore, there has been considerable research and technology development work going on across the world to find an alternative which has no such potential constraint.
A more efficient alternative
Among a number of battery storage options that researchers have been pursuing, sodium-ion battery is now emerging as a potentially viable option for large-scale application. Sodium is abundantly available in salt in the oceans and is cheap. It can meet potential demand fully. It is in the same category as lithium as an element and was considered along with lithium in the early stages. Being heavier than lithium, it lost out at that stage. But now, quite a few are confident that they have gotten over the technological challenges, have patents and are now ready to enter the market and succeed. More than cars, the electricity grid needs large-scale storage capacities to store solar power for use when the sun does not shine and when the wind does not blow. For grid storage, volume and weight are not as sensitive a consideration as they are for high performing cars. Sodium battery storage for the grid seems promising.
The advantage for India
Make in India is now a high priority. India has already provided incentives for the production of electric cars. Batteries for cars and grid storage are high on the agenda for manufacturing in India. The EV market for two-wheelers, three-wheelers, cars and minibuses is more price sensitive than performance sensitive. If a sodium-ion battery has a price advantage over a comparable lithium-ion battery whose performance parameters are marginally higher, it would still find a better market opportunity in India than elsewhere.
India has already invited its first major bid for renewable energy with storage. The tariff discovered has been surprisingly low. Renewable energy with storage is now cheaper than a new fossil fuel-based plant. Based on this success, India should be going in for a series of bids for renewable electricity with storage. India has a competitive industry structure for renewable energy developers. They would be looking for partners/suppliers of grid-level storage solutions with batteries. Sodium batteries made with economies of scale have huge market potential in the GW range in India. Investors could expect a supportive government keen on getting such investments and willing to 'go the extra mile' in facilitating and incentivising GW scale sodium-ion battery storage manufacturing plants.
With all-new technologies and products, there is invariably the first mover's advantage in getting a leading position by way of market share which is then easier to retain. There is also the potential of moving quickly down the cost curve with economies of scale in production. Needless to add that the Indian market, given India's population and size, would in the coming decades be among the three largest in the world.
Ajay Shankar is a Distinguished Fellow at TERI (The Energy and Resources Institute).