The Union Cabinet recently gave the green light to a Rs. 18,100-crore Production Linked Incentive (PLI) scheme. This initiative is specifically targeted at manufacturers of Advanced Chemistry Cell (ACC) battery storage, with the aim to curb imports. The scheme falls under the purview of the Ministry of Heavy Industries & Public Enterprises and is officially known as the National Programme on Advanced Chemistry Cell Battery Storage (NPACC).
About the PLI Scheme
The main objective of the PLI Scheme is to offer incentives to companies based on incremental sales from locally manufactured products. While it welcomes international businesses to set up units in India, it also encourages domestic enterprises to establish or enhance their existing manufacturing capacities. The PLI Scheme has garnered approval for several industries, including automobiles, pharmaceuticals, IT hardware, mobile phones, telecom equipment, white goods, chemical cells, textiles, and more.
Understanding Advanced Chemistry Cell (ACC)
ACCs represent a new generation of sophisticated storage technologies capable of storing electric energy either as electrochemical or chemical energy and transforming it back to electric energy when necessary. These battery storages are designed to serve not just electric vehicles, but also consumer electronics and power grids.
Details of the NPACC Scheme
Under the NPACC Scheme, there are plans to establish a 50 gigawatt hour (GWh) manufacturing capacity for ACC batteries, by inviting investments totaling Rs. 45,000 crores. This scheme requires every chosen ACC battery Storage manufacturer to build an ACC manufacturing facility with a minimum capacity of 5 GWh, achieve a domestic value addition of at least 25%, and make mandatory investments amounting to Rs. 225 crores/GWh within two years.
Additionally, the beneficiary companies should ensure a minimum domestic value addition of 60% at the project level within five years. The incentive is planned to be disbursed across five years, based on parameters such as sales, energy efficiency, battery life cycle, and localisation levels.
Anticipated Benefits from the NPACC Scheme
The NPACC Scheme is predicted to bring significant benefits such as promoting demand for battery storage in India, supporting the ‘Make-in-India’ and ‘Atmanirbhar Bharat’ initiatives, increasing the demand for Electric Vehicles (EVs) which are less polluting, and playing a key role in reducing India’s GreenHouse Gas (GHG) emissions.
This scheme could also lead to an import substitution of approximately Rs. 20,000 crores annually. Moreover, it is expected to provide an impetus for Research & Development aiming to achieve higher specific energy density and cycles in ACC, while promoting newer and niche cell technologies.