Rec­om­men­da­tions for en­ergy stor­age in In­dia, by Pradeep Saini (Re­search In­tern) and Arad­hana Gahlaut (Ju­nior An­a­lyst), IESA.

Power Watch India - - CONTENTS - By Pradeep Saini and Arad­hana Gahlaut The au­thors are Re­search In­tern and Ju­nior An­a­lyst, In­dia En­ergy Stor­age Al­liance (IESA).


In­dia’s en­ergy sec­tor has grown rapidly over the last year driven by poli­cies, re­forms and in­vest­ments. Var­i­ous pol­icy ini­tia­tives such as in­tro­duc­tion of UDAY, amend­ments in Na­tional Elec­tric­ity Act, new so­lar RPO tar­get for states, bio­fuel pol­icy, small hy­dro pol­icy, off­shore wind pol­icy and new hy­dro­car­bon pol­icy have all con­trib­uted to growth of the in­dus­try. How­ever, there is still a long way to go with some per­sist­ing is­sues re­quir­ing at­ten­tion and res­o­lu­tion at the ear­li­est, mak­ing the up­com­ing bud­get cru­cial to the en­ergy sec­tor.

The In­dia En­ergy Stor­age Al­liance (IESA) took into ac­count the in­dus­try’s views and along with its re­search-backed opin­ion, com­piled a list of rec­om­men­da­tions for Union Bud­get 2017-18 to fos­ter rapid growth of the en­ergy stor­age in­dus­try in In­dia. Re­new­able en­ergy in­te­gra­tion with stor­age has been on the radar for the last few years and MNRE al­lo­cated Rs 18 crore to­wards R&D and im­ple­men­ta­tion of schemes re­lated to en­ergy stor­age in the RE sec­tor in 2016. This al­lo­ca­tion needs to be en­hanced sig­nif­i­cantly un­der the 2017-

18 Bud­get to fos­ter in­no­va­tion in en­ergy stor­age re­search. In the ex­ist­ing struc­ture, ba­sic im­port duty is cur­rently 10% on Lithium ion cells, lead­ing to im­port­ing Li-ion bat­ter­ies be­ing ex­pen­sive. This re­quires that im­port duty on the cell should be waived off com­pletely or at least re­duced to en­cour­age the man­u­fac­tur­ing of Lithium ion bat­ter­ies in In­dia. This should go hand in hand with the in­tro­duc­tion of ex­cise duty and lo­cal tax ex­emp­tion on lo­cal assem­bly of Lithium ion packs. The govern­ment has suc­cess­fully aided so­lar project in the past and sim­i­lar to that, there should be an Ac­cel­er­ated De­pre­ci­a­tion of up to 80% on en­ergy stor­age projects to re­duce the tax bur­den. The govern­ment should also pro­vide a tax re­bate on pur­chase of BMS, charge con­trollers, so­lar in­vert­ers, UPS and power elec­tronic equip­ment along with in­cen­tives for set­ting-up of man­u­fac­tur­ing clus­ters. Keep­ing up with en­vi­ron­ment-con­scious trends, it is time car­bon cred­its and any other in­cen­tives ap­pli­ca­ble for Green En­ergy pro­mo­tion must be in­tro­duced.

The nascent elec­tric ve­hi­cle mar­ket in In­dia has started gain­ing mo­men­tum once again. The in­dus­try is ex­pect­ing long-term sup­port from the govern­ment to push EV’s at a large scale in In­dia but cer­tain changes are re­quired for mass adop­tion of EV’s in In­dia and also to achieve the am­bi­tious tar­get set by the govern­ment of In­dia un­der NEMMP 2020 of hav­ing 6-7 mil­lion EV’s on road by 2020. The Govern­ment of In­dia launched the FAME In­dia scheme in 2015 for two years which is end­ing on 31st March 2017. FAME In­dia should be ex­tended for at least five years to fa­cil­i­tate the EV mar­ket in In­dia and should be made ap­pli­ca­ble in all states. E-cycles should also be in­cluded in the FAME scheme. EV man­u­fac­tur­ing should be en­cour­aged with 0% BCD in­stead of sub­si­dies. Re­mov­ing cus­tom du­ties for a few years would en­cour­age EV’s to be­come main-stream. Not for­get­ting pub­lic trans­port, anti-dump­ing duty must be im­posed on the im­port of low grade e-rick­shaws to pro­tect the in­dige­nous in­dus­try of e-rick­shaw man­u­fac­tur­ing in In­dia. The govern­ment should also re­duce the high im­port duty (~30%) on elec­tric buses for a pe­riod of 3-5 years within which the do­mes­tic man­u­fac­tur­ing of EV’s is ex­pected to com­mence. There should be a greater fo­cus on the de­vel­op­ment of charg­ing in­fra­struc­ture and pro­vi­sion of at least 20-30% sub­sidy of the cost of the charg­ing in­fra­struc­ture. Greater in­vest­ment is re­quired in the R&D sec­tor to at­tract so­phis­ti­cated tech­nolo­gies for EV’s. The US pro­vides a tax credit for the pur­chase of a new qual­i­fied plug-in elec­tric drive ve­hi­cle mo­tor that draws propul­sion us­ing a trac­tion bat­tery that has at least five kWh of ca­pac­ity, uses an ex­ter­nal source of en­ergy to recharge the bat­tery and meets spe­cific emis­sion stan­dards. The min­i­mum credit amount is $2500 and the credit may be up to $7500 based on each ve­hi­cle trac­tion bat­tery ca­pac­ity. This can be re­ferred to and im­ple­mented keep­ing In­dian con­di­tions in mind to en­cour­age the stor­age mar­ket in our coun­try.

Var­i­ous in­dus­try ex­perts have stated their ex­pec­ta­tions and are now keenly wait­ing for the govern­ment to in­vig­o­rate eco­nomic pol­icy and di­rec­tion amidst all the un­cer­tainty and po­lit­i­cal in­flu­ence. Tata Power ex­pects a stronger fo­cus on so­lar in the bud­get with em­pha­sis on man­u­fac­tur­ing and dis­trib­uted power gen­er­a­tion. Delta In­dia Elec­tron­ics in­tends to start Lithium ion bat­tery man­u­fac­tur­ing in the coun­try for which they sug­gest a re­duc­tion in im­port duty on the cell in or­der to boost en­ergy in­dus­try in In­dia, which will fur­ther en­cour­age ‘Make in In­dia’. Mum­bai-based CNC ser­vice provider, Vi­sion Mecha­tron­ics, voices their con­cerns over present ex­cise and cus­tom duty and hope for ex­emp­tion and/or re­duc­tion. Dhivik Reddy of GoGreenBOV ex­presses the elec­tric ve­hi­cle in­dus­try’s rec­om­men­da­tion of 0% BCD for the ini­tial years in­stead of sub­si­dies to en­cour­age EV man­u­fac­tur­ing.

The govern­ment has been demon­strat­ing a strong vi­sion for the en­ergy and re­new­ables sec­tor that in­cludes en­ergy se­cu­rity, clean en­ergy and af­ford­able power for all. It is im­por­tant to learn from past mis­takes and adopt a more hands-on ap­proach to res­o­lu­tion of pend­ing is­sues. In­dia is emerg­ing as a leader in sus­tain­able power and has gar­nered great in­ter­na­tional in­ter­est. All eyes are on us as we aim to trans­late words into ac­tions and in­crease mo­men­tum to en­force re­forms for more sus­tain­able and com­pre­hen­sive growth.

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