The Union Cabinet on May 12, 2021, gave its approval to the proposal of the Department of Heavy Industry for Implementation of Production Linked Incentive Scheme ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’. It will help in achieving the manufacturing capacity of 50 Giga Watt Hour (GWh) of ACC and 5 GWh of ‘niche’ ACC with a cost of Rs. 18,100 crores.
The Minister of Information and Broadcasting, Prakash Javadekar while informing about the decision stated that it will lead to the direct investment of around Rs. 45,000 crores in ACC Battery storage manufacturing projects.
The minister further added that the decision will facilitate the demand creation for battery storage in India. It will boost Make in India with a greater emphasis on the domestic value-capture and reduction in import dependence.
The #Cabinet chaired by PM @narendramodi took a significant decision which will give a big push to electric mobility, benefiting 3-wheeler, 4-wheeler and heavy vehicles.
— Prakash Javadekar (@PrakashJavdekar) May 12, 2021
Rs 18,100 crore under the PLI incentive scheme for increasing the battery storage capacity has been approved. pic.twitter.com/vY3RnXIkp4
What is Advanced Chemistry Cell (ACC)?
According to an official release, the Advanced Chemistry Cells (ACCs) are the new generation of advanced storage technologies that are able to store electric energy either as chemical energy or electrochemical and convert it back to electric energy, as and when required.
Significance of PLI scheme for battery storage:• The scheme will lead to savings of Rs. 2,00,000 crores to Rs. 2,50,000 crores on account of the oil import bill reduction. The ACCs manufactured under the scheme are expected to promote electric vehicle adoption in the country. • The ACCs manufacturing will further facilitate the demand for EVs, which are less polluting. It can be a contributing factor in reducing India’s Green House Gas (GHG) emissions. • The scheme will also lead to the import substitution of around Rs. 20,000 every year. It will also push Research and Development to achieve higher specific energy density and cycles in ACC as well as promote newer cell technologies. |
National Programme on Advanced Chemistry Cell (ACC) Battery Storage: Key details
• The PLI Scheme ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ will help in reducing the import dependence and will support the Atmanirbhar Bharat initiative.
• Under the PLI Scheme, the ACC battery storage manufacturers will be selected through a transparent competitive bidding process.
• As per the release, the manufacturing facility of ACC battery storage will have to be commissioned within a period of two years.
• The incentive will be disbursed thereafter over a time period of 5 years and the incentive amount will increase with an increased specific energy density and cycles and the increased local value addition.
• Each selected manufacturer of ACC battery Storage will have to commit to set up an ACC manufacturing facility of a minimum 5 GWh capacity and will have to ensure a minimum 60% domestic value addition at a project level within 5 years.
• The beneficiary companies will have to achieve a domestic value addition of at least 25% and will have to incur the investment of Rs. 225 crores/GWh within the two years. The addition must be raised to 60% domestic value addition within 5 years.
How much India currently invests in ACCs manufacturing?
While various companies have already started investing in the battery packs. Though the capacities of these facilities are too small when compared to the global averages, the investment in manufacturing, along with the value addition of ACCs, is still negligible in India. The demand for ACCs is met through imports in India.
Electric vehicles, consumer electronics, solar rooftops, advanced electricity grids which are the major battery consuming sectors are projected to achieve robust growth in the coming years. It is expected that the dominant battery technologies will be controlling some of the world’s largest growth sectors.
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