• Three selected bidders have signed agreements under the Rs 18,100 crore Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell Battery Storage.

• Private players are expected to create battery manufacturing capacity of 95 GWh in addition to the capacities allocated under the PLI programme by the heavy industries ministry.

• Three selected bidders, Reliance New Energy, Ola Electric Mobility and Rajesh Exports, signed the program agreement under PLI scheme for Advanced Chemistry Cell Battery Storage.

Advanced Chemistry Cells

• Advanced Chemistry Cells (ACCs) are new generation 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.

• Globally, manufacturers are investing in these new generation technologies at commercial scale to fill the expected boom in battery demand through 2030. 

• All the demand of the ACCs is currently being met through imports in India.

National Programme on Advanced Chemistry Cell Battery Storage

• On May 12, 2021, the Union Cabinet approved a Production Linked Incentive (PLI) scheme for setting up manufacturing facilities for Advanced Chemistry Cell (ACC) battery storage in India, with a total manufacturing capacity of 50 Giga Watt Hour (GWh) and with an outlay of Rs 18,100 crore for five years. 

• The scheme aims to enhance India’s manufacturing capabilities and exports — for manufacture of Advanced Chemistry Cell (ACC) in India and envisages incentivising large domestic and international players in establishing a competitive ACC battery setup in the country.

• Under the PLI Scheme for ACC, the production-linked subsidy is based on applicable subsidy per KWh and percentage of value addition achieved on actual sale for manufacturers who set up production units with a capacity of at least 5 GWh up to a maximum of 20 GWh.

• The manufacturing facility would have to be set up within a period of two years. The incentive will be disbursed thereafter over a period of five years on sale of batteries manufactured in India.

Expected outcomes of the scheme:

• Set up a cumulative 50 GWh of ACC manufacturing facilities in India under the programme.

• Direct investment of around Rs 45,000 crore in ACC battery storage manufacturing projects.

• Facilitate demand creation for battery storage in India.

• Facilitate ‘Make in India’. Greater emphasis upon domestic value-capture and therefore reduction in import dependence.

• 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 to reduce India’s Greenhouse Gas (GHG) emissions which will be in line with India’s commitment to combat climate change.

• Net savings of Rs 2-2.5 lakh 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.

• Import substitution of around Rs 20,000 crore every year.

• Impetus to Research & Development to achieve higher specific energy density and cycles in ACC.

• Promote newer and niche cell technologies.

This PLI scheme for Advanced Chemistry Cell (Rs 18,100 crore) along with the already launched PLI Scheme for automotive sector (Rs 25,938 crore) and Faster Adoption of Manufacturing of Electric Vehicles (FAME India) (Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system. 

PLI schemes

An outlay of Rs 1.97 lakh crore has been announced in Union Budget 2021-22 for Production Linked Incentive (PLI) schemes for 13 key sectors for a period of five years starting from FY 2021-22.

These 13 sectors are:

1) Mobile manufacturing and specified electronic components 

2) Critical key starting materials/drug intermediaries & active pharmaceutical ingredients

3) Manufacturing of medical devices 

4) Automobiles and auto components

5) Pharmaceuticals

6) Specialty steel

7) Telecom and networking products

8) Electronic/technology products

9) White goods (ACs and LEDs)

10) Food products

11) Textile products: man-made fibre (MMF) segment and technical textiles

12) High efficiency solar PV modules

13) Advanced Chemistry Cell (ACC) battery.

• The objectives of PLI schemes are to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies.

• It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains. 

• The schemes are expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

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