Cabinet Okays Rs 18,100 Cr PLI Scheme for Advanced Chemistry Cell Battery Manufacturing

In providing a significant boost to battery manufacturing in India, the Union Cabinet has approved the Rs 18,100 crore Production Linked Incentive (PLI) Scheme for achieving a manufacturing capacity of 50 GWh of ACC and 5 GWh of ‘Niche’ ACC battery storage.

May 13, 2021. By Manu Tayal

In providing a significant boost to battery manufacturing in India, the Union Cabinet has approved the Rs 18,100 crore Production Linked Incentive (PLI) Scheme for achieving a manufacturing capacity of 50 GWh of ACC and 5 GWh of ‘Niche’ ACC battery storage.

Several companies have already started investing in battery packs, though the capacities of these facilities are too small when compared to global averages, and there is still negligible investment in manufacturing, along with value addition, of ACCs in the country.

Currently, maximum demand of the ACCs in India is being met through imports. It is expected that the National Programme on Advanced Chemistry Cell (ACC) Battery Storage will reduce import dependence and will also support ‘Atmanirbhar Bharat’ initiative.

The government said that, the ACC battery storage manufacturers will be selected through a transparent competitive bidding process, and the manufacturing facility would have to be commissioned within a period of two years. However, the incentive will be disbursed thereafter over a period of 5 years.

Moreover, 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 set-up an ACC manufacturing facility of minimum 5 GWh capacity and ensure a minimum 60 per cent domestic value addition at the project level within 5 years.

Furthermore, the beneficiary firms have to achieve a domestic value addition of atleast 25 per cent and incur the mandatory investment of Rs 225 crore /GWh within 2 Years (at the Mother Unit Level) and raise it to 60 per cent domestic value addition within 5 Years, either at Mother Unit, in-case of an Integrated Unit, or at the Project Level, in-case of ‘Hub & Spoke’ structure.

The outcomes/ benefits expected from the scheme are as follows:

  1. Setup a cumulative 50 GWh of ACC manufacturing facilities in India under the Programme.
  2. Direct investment of around Rs 45,000 crore in ACC Battery storage manufacturing projects.
  3. Facilitate demand creation for battery storage in India.
  4. Facilitate Make-in-lndia: Greater emphasis upon domestic value-capture and therefore reduction in import dependence.
  5. Net savings of Indian Rs 2,00,000 crore to Rs 2,50,000 crore on account of oil import bill reduction during the period of this Programme due to EV adoption as ACCs manufactured under the Programme is expected to accelerate EV adoption.
  6. 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.
  7. Import substitution of around Rs 20,000 crore every year.
  8. Impetus to Research & Development to achieve higher specific energy density and cycles in ACC.
  9. Promote newer and niche cell technologies.
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