The government aims to incentivise and achieve 50-Gigawatt hour of production under the PLI scheme.
12 May 2021 | 15863 Views | By Nilesh Wadhwa
The government of India has approved the proposal of the Department of Heavy Industry for implementation of the Production Linked Incentive (PLI) scheme for 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ for achieving manufacturing capacity of 50-Gigawatt hour (GWh) of ACC and 5-GWh of ‘Niche’ ACC with an ...
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The government of India has approved the proposal of the Department of Heavy Industry for implementation of the Production Linked Incentive (PLI) scheme for 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ for achieving manufacturing capacity of 50-Gigawatt hour (GWh) of ACC and 5-GWh of ‘Niche’ ACC with an outlay of Rs 18,100 crore.
The Minister of Environment, Forest & Climate Change; Information & Broadcasting; & Heavy Industries & Public Enterprises, Prakash Javadekar mentioned that at present India is importing almost Rs 20,000 crore worth of batteries in the country for energy storage.
“With PLI, we will not only reduce import but also enable production of the batteries which are not yet being manufactured in the country. These batteries will accelerate e-mobility in the country. Long-lasting, efficient and quick charging capable batteries are the need of the hour. Till now, the battery storage segment was not growing fast because we were not manufacturing the batteries,” said Javadekar.
According to the minister, India is one of the largest producers of solar power with almost 136-gigawatt of energy being produced in the country. But the energy goes wasted if not used in the day, as there is not much of it being stored. Even for grid balancing, battery storage plays an important role. He said that the programme will benefit a number of segments including consumer electronics, railways and shipping where the government sees huge potential for battery storage.
ACCs are the new-gen 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 batteries are used in consumer electronics, electric vehicles, advanced electricity grids and solar rooftop among others, 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.
The government says while several companies have already started investing in battery packs, 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. The National Programme on Advanced Chemistry Cell (ACC) Battery Storage aims to reduce import dependence. 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.
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 minimum 5GWh 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 Rs 225 crore /GWh within 2-years and raise it to 60 percent 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 scheme is expected to bring outcomes such as –
He further mentioned that the Heavy Industry Ministry in addition to procuring electric vehicles for official use was also setting up 2,800 EV charging stations across the country.
Industry welcomes move
Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles (SMEV): “We thank the government for approving the PLI scheme for promoting battery storage. It would strengthen our 'Make in India’ initiative and also attract huge investments in the EV industry in the next 1-2 years. Battery occupies a larger portion of any electric vehicle's cost. Thus, the right policy move will help us steer towards green growth in the industry, while exponentially increasing our manufacturing capacity. Once we fully start battery manufacturing operations in the country, it will lead to the reduction of cost on purchase of electric vehicles owing to increased accessibility.”
Akshay Singhal, founder and CEO, Log 9 Materials: “The newly-approved PLI Scheme will be quite beneficial for India's self-reliance in the Energy Storage sector. We at Log 9 are particularly quite impressed with the long-term vision of the government to facilitate the development of advanced battery technologies and provide special impetus on R&D. One of the important requirements for the success of the scheme would be to incentivise peripheral manufacturing companies to develop competency for providing value-added materials for battery manufacturing locally within India.”
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