Cabinet approves Rs18,1000-cr PLI scheme for advanced cell battery storage system

The cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the '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 Rs18,100 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. 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.

While several companies have already started investing in battery packs, the capacities of these facilities are too small when compared to global averages. Also, the investment in manufacturing and value addition in ACC in India is negligible. The rntire demand for ACCs is currently being met through imports in India. The National Programme on Advanced Chemistry Cell (ACC) Battery Storage will reduce import dependence. It will also support the Atmanirbhar Bharat initiative. 

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 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 five (5) GWh capacity and ensure a minimum 60 per cent domestic value addition at the project level within five years. Furthermore, the beneficiary firms have to achieve a domestic value addition of at least 25 per cent and incur the mandatory investment Rs225 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 a `Hub and Spoke’ structure.

The scheme is expected to help set up a cumulative 50 GWh of ACC manufacturing facilities in India with direct investment of around Rs45,000 crore in ACC battery storage manufacturing projects.

It will facilitate demand creation for battery storage in India besides, the emphasis on domestic value capture and subsequent reduction in import dependence.

This will result in net savings of Rs2,00,000 crore to Rs2,50,000 crore on account of reduction in oil import bill on increased 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 programme will be a key contributing factor for reducing India's Green House Gas (GHG) emissions, which will be in line with India's commitment to combat climate change.

It will help achieve import substitution of around Rs20,000 crore every year and give impetus to R&D to achieve higher specific energy density and cycles in ACC besides promoting newer and niche cell technologies.