Cabinet nod for PLI scheme for National Programme on ACC Battery Storage

New Delhi, May 12, 2021

The Union Cabinet today approved a proposal for the implementation of the Production-Linked Incentive (PLI) Scheme in the National Programme on Advanced Chemistry Cell (ACC) Battery Storage.

The proposal by the Department of Heavy Industry aims to achieve a manufacturing capacity of 50 Giga Watt Hour (GWh) of ACC and 5 GWh of niche ACC with an outlay of Rs 18,100 crore.

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.

An official press release said consumer electronics, electric vehicles, advanced electricity grids, solar rooftop and so on, 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.

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

All the demand is currently being met through imports. The National Programme on Advanced Chemistry Cell (ACC) Battery Storage will reduce import dependence. It will also support the "Atmanirbhar Bharat" (Self-Reliant India) initiative. ACC battery storage manufacturers will be selected through a transparent competitive bidding process.

The manufacturing facility would have to be commissioned within two years. The incentive will be disbursed thereafter over five years.

The incentive amount will increase with increased specific energy density & cycles and increased local value addition. Each selected ACC battery storage manufacturer would have to commit to set up an ACC manufacturing facility of a minimum 5 GWh capacity and ensure a minimum 60% domestic value addition at the project level within five years.

The beneficiary firms also have to achieve domestic value addition of at least 25% and incur the mandatory investment of Rs 225 crore /GWh within 2 Years (at the Mother Unit Level) and raise it to 60% 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 includes setting up a cumulative 50 GWh of ACC manufacturing facilities in India.

It also aims at a direct investment of around Rs 45,000 crore in ACC Battery storage manufacturing projects and facilitates demand creation for battery storage in India, the release said.

It will have a greater emphasis on domestic value-capture and therefore reduction in import dependence.

It would bring net savings of Rs 2,00,000-2,50,000 crore on account of oil import bill reduction due to EV adoption as ACCs manufactured under the programme is expected to accelerate EV adoption.

"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 the country’s Green House Gas (GHG) emissions which will be in line with its commitment to combat climate change.

"It will lead to import substitution of around Rs 20,000 crore every year. It will provide an impetus to Research & Development to achieve higher specific energy density and cycles in ACC besides promoting newer and niche cell technologies," the release added.

NNN