Cabinet approves Rs 18,000-cr PLI scheme for battery manufacturing

The Centre hopes to create direct investment of Rs 45,000 cr in ACC Battery storage projects

Topics

PLI scheme | Battery makers | Union Cabinet


Shreya Jai 

The Union Cabinet on Wednesday approved the proposal of the department of heavy industries for executing the ‘Production Linked Incentive’ (PLI) scheme in domestic battery manufacturing.

Under the PLI scheme floated by the Central government, the Cabinet in November 2020 had approved Rs 18,000 crore for domestic manufacturing of Advanced Chemistry Cell (ACC) Battery Storage and reduce import dependence.

Currently, country’s ACC demand is being met through imports.

The nodal ministry thereafter proposed a National Programme on ACC Battery Storage’ for achieving manufacturing capacity of 50) GigaWatt-Hour (Gwh) of ACC and 5 GWh of “Niche” ACC. This was approved by the Cabinet on Wednesday.

Each selected ACC battery Storage manufacturer would have to commit to set-up an ACC manufacturing facility of minimum 5 GWh capacity and ensure a minimum 60 per cent domestic value addition at the project level within five years, said the policy note by the Cabinet.

“The beneficiary firms would have to achieve a domestic value addition of at least 25 per cent and incur the mandatory investment Rs 225 crore/GWh within 2 Years (at the Mother Unit Level) and raise it to 60 per cent domestic value addition within 5 Years, either at Mother Unit, in-case of an Integrated Unit, or at the Project Level, in-case of “Hub & Spoke” structure,” the Cabinet statement said.

The Centre is expecting to create direct investment to the tune of Rs 45,000 crore in ACC Battery storage manufacturing projects, it said in its statement.

The government is expecting demand for battery storage to primarily come from consumer electronics, electric vehicles, advanced electricity grids, solar rooftop sectors.

The Centre is also expecting a boost to the electric vehicle market with the domestic battery storage manufacturing. The Cabinet statement said it will lead to “Net savings of Indian Rs 2,00,000 crore to Rs 2,50,000 crore on account of oil import bill reduction during the period of this Programme due to electric vehicle adoption as ACCs manufactured under the programme is expected to accelerate EV adoption.”

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