Govt notifies Rs 18,100 crore-PLI scheme for promoting manufacturing of ACC batteries

Production linked incentives for manufacturing advanced chemistry cell batteries will be offered only to those firms that have been allocated the production capacity under the national programme on ACC battery storage through a transparent mechanism.

According to a notification issued by the Department of Heavy Industry, the incentives will not be offered to conventional battery pack segment of the industry as such manufacturing activities are already happening in the country.

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In May, the government approved the PLI (Production Linked Incentives) scheme for manufacturing ACC (Advanced Chemistry Cell) batteries at an estimated outlay of Rs 18,100 crore.

ACCs are the new generation advanced energy 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.

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

As per the notification, the beneficiary firm will have to commit to set up a minimum of five GWh (Gigawatt hours) of ACCs manufacturing facility.

The total annual cash subsidy to be disbursed by the government will be capped at 20 GWh per beneficiary firm.

The scheme envisages setting up of a cumulative ACC manufacturing capacity of 50 GWh for ACCs and an additional cumulative capacity of 5 GWh for niche ACC technologies.

"Incentives will be offered only to those firms that have been allocated ACC production capacity (with cumulative capacity for all beneficiary firms combined together 50 GWh) under the said programme through a transparent mechanism by inviting the Request for Proposal," the notification said.

The programme refers to the national programme on ACC Battery storage.

Further, the beneficiary has to ensure a domestic value addition of at least 25 per cent and incur the mandatory investment (Rs 225 crore /GWh) within two years. The domestic value addition has to be increased to 60 per cent within five years, either at mother unit, in-case of an integrated unit, or at the project level, in-case of 'Hub & Spoke' structure.

"To ensure a single-window mechanism for the potential investors, a state-level grand challenge will be initiated, including provision for encumbrance-free land, trunk infrastructure facilities, power at rationale rate to the potential investors for attracting the projects in their states," it said.

Incentive disbursement would commence once the committed domestic value addition and actual sale of the ACCs begins.

An Empowered Group of Secretaries chaired by the Cabinet Secretary will monitor the PLI scheme, undertake periodic review of the outgo, and take appropriate action to ensure that the expenditure is within the prescribed outlay.