Cabinet nod: Rs 18k-cr PLI push for ACC battery storage


The incentive amount will rise with increased specific energy density and cycles and increased local value addition.

The Cabinet on Wednesday approved a production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage, which would cost the exchequer Rs 18,100 crore over five years. Major battery-consuming sectors, including consumer electronics, electric vehicles, advanced electricity grids and solar rooftop, are expected to benefit from the move.

The PLI scheme will draw direct investments of around Rs 45,000 crore over five years and result in an annual import substitution of about Rs 20,000 crore, information and broadcasting minister Prakash Javadekar said after the Cabinet meeting.

The government also expects the scheme to potentially reduce the country’s oil import bill by Rs 2,00,000-2,50,000 crore (over five years), as increased ACC storage manufacturing will promote greater adoption of electric vehicles.

The latest programme is part of the 13 PLI schemes, proposed by the government in the wake of the Covid-19 pandemic last year, to lure mainly large corporations to expand manufacturing, bolster supply chains and boost exports.

The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles, stood at Rs 1.97 lakh crore over a five-year period.

The schemes, put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years.

Under the latest scheme, the government aims to create domestic capacity to manufacture as much as 50 giga-watt hour (GWh) of ACC and 5 GWh of “niche” ACC from almost negligible capacity now.

Eligible companies will be selected through a competitive bidding process, and they have to set up the manufacturing facility within two years. The incentive will be disbursed thereafter over five years, according to an official statement.

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

Moreover, the beneficiaries have to achieve a domestic value addition of at least 25% and incur the mandatory investment Rs 225 crore per GWh within two years (at the mother unit level). They have to raise the value addition to 60% within five years, either at the mother unit level (in-case of an integrated unit), or at the project Level (if it’s the so-called “hub & spoke” structure).

The scheme will also provide a fresh impetus to research & development in this space and help the government’s Atmanirbhar initiative, Javadekar said.

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