The Union Cabinet on Wednesday approved an ₹18,100-crore Production-Linked Incentive (PLI) scheme for battery storage. The National Programme on Advanced Chemistry Cell (ACC) Battery Storage aims to achieve ACC manufacturing capacity of 50GWh and niche ACC capacity of 5GWh.

“All the demand of the ACCs is currently being met through imports. The National Programme on Advanced Chemistry Cell (ACC) Battery Storage will reduce import dependence. It will also support the ‘Atmanirbhar Bharat’ initiative,” an official release said after the Cabinet meeting.

ACC battery-storage manufacturers will be selected through a transparent competitive bidding process, the statement said. The scheme will be overseen by the Department of Heavy Industry.

The manufacturing facility would have to be commissioned within two years, and the incentive will be disbursed thereafter over five years, the statement added. The incentive amount will increase with the rise in specific energy density and cycles and local value addition.

The maximum PLI amount is expected to be around ₹2,000 per KWh against a production cost that is generally around $120 per KWh (about ₹8,800), said Vikram Handa, Managing Director of Epsilon Advance Materials, a firm that manufactures anode material, most of which it exports.

“We are interacting with a few companies that have tied up with international battery technology leaders and want to increase localisation of raw materials to qualify under the scheme,” said Handa.

Each selected manufacturer will have to commit to set-up an ACC manufacturing facility of minimum 5GWh capacity and ensure a minimum 60 per cent domestic value addition at the project level within five years. Beneficiary firms also have to achieve a domestic value addition of at least 25 per cent and make the mandatory investment of ₹225 crore per GWh within two years at the level of the mother unit.

ACC is an advanced technology to store electric energy either as an electrochemical or as a chemical energy and convert it back to electric energy when required. The major users include consumer electronics, electric vehicles, advanced electricity grids, and the solar rooftop segment all of which are expected to achieve robust growth in the coming years.

“The PLI scheme will attract huge investments in the EV industry in the next 1-2 years,” said Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV). “Once we fully start battery manufacturing operations in the country, it will lead to the reduction of cost on purchase of electric vehicles owing to increased accessibility.”

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