Sunday, June 26, 2022

Cabinet approves PLI scheme worth Rs 18,100 cr for ACC battery storage manufacturers

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  • The manufacturing of ACCs will facilitate demand for EVs, which are proven to be significantly less polluting, said an official statement

  • All the demand of the ACCs is currently being met through imports in India

New Delhi: The Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal of the Department of Heavy Industry for the implementation of the Production Linked Incentive (PLI) Scheme — ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ — for achieving manufacturing capacity of 50 Giga Watt Hour (GWh) of ACC and 5 GWh of ‘Niche’ ACC with an outlay of Rs 18,100 crore, an official statement said on Wednesday. “The National Programme on Advanced Chemistry Cell (ACC) Battery Storage will reduce import dependence. It will also support the Atmanirbhar Bharat initiative,” the statement added.

Incentive will be disbursed under PLI scheme over 5 years

While several companies have already started investing in battery packs, though the capacities of these facilities are too small when compared to global averages, but there still is negligible investment in manufacturing, along with value addition, of ACCs in India. All the demand of the ACCs is currently being met through imports in India. 

According to the PLI guidelines, ACC battery storage manufacturers will be selected through a transparent competitive bidding process. The manufacturing facility would have to be commissioned within a period of two years. The incentive will be disbursed thereafter over a period of five years.

How will PLI scheme work for ACC battery storage manufacturers?

The incentive amount will increase with increased specific energy density and cycles and increased local value addition. Each selected ACC battery storage manufacturer would have to commit to setting up an ACC manufacturing facility of minimum five 5 GWh capacity and ensure a minimum 60 percent domestic value addition at the project level within five years. Furthermore, the beneficiary firms will have to achieve a domestic value addition of at least 25 percent and incur the mandatory investment of Rs 225 crore /GWh within two years (at the Mother Unit Level) and raise it to 60 percent domestic value addition within five years, either at mother unit, in-case of an integrated unit, or at the project level, in-case of “Hub & Spoke” structure, said the statement.

The statement said that the scheme is expected to bring in a direct investment of around Rs 45,000 crore in ACC Battery storage manufacturing projects, facilitate demand creation for battery storage in India, facilitate Make-in-India with greater emphasis upon domestic value-capture and therefore reduction in import dependence. Net savings of Rs 2,00,000 crore to Rs 2,50,000 crore on account of oil import bill reduction is also expected during the period of this programme due to EV adoption as ACCs manufactured under the programme is expected to accelerate EV adoption, said the government.

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“The manufacturing of ACCs will facilitate demand for EVs, which are proven to be significantly less polluting. As India pursues an ambitious renewable energy agenda, the ACC program will be a key contributing factor to reduce India’s Green House Gas (GHG) emissions which will be in line with India’s commitment to combat climate change,” the statement added.

What is ACC battery storage?

ACCs are the new generation of advanced storage technologies that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required. The consumer electronics, electric vehicles, advanced electricity grids, solar rooftop, etc, which are major battery consuming sectors are expected to achieve robust growth in the coming years. It is expected that the dominant battery technologies will control some of the world’s largest growth sectors.

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