The Union Cabinet chaired by Indian Prime Minister Narendra Modi has approved an extension of the national production-linked incentive (PLI) scheme to include advanced battery storage manufacturing.
The scheme, with an outlay of $2.5 billion, will incentivize global and domestic companies to build 50 GWh of cumulative advanced chemistry cell (ACC) capacity and 5 GWh of “niche” ACC production facilities in India. The fiscal incentives are proposed under the umbrella initiative of the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, which aims to reduce India’s ACC import dependence.
While several companies have already started investing in battery packs in India, there is still negligible investment in ACC manufacturing. As a result, India has to meet all of its ACC demand through imports.
Globally, manufacturers are investing in ACC battery storage technologies at a commercial scale, as demand for such batteries is expected to boom through 2030. This is due to the robust growth of electric vehicles, advanced electricity grids, and rooftop solar.
Under the PLI scheme, India will provide incentives to domestic and global companies setting up ACC battery manufacturing plants. The manufacturers will be selected through a transparent, competitive bidding process.
The selected bidders will have to commit to set up ACC manufacturing facilities of a minimum 5 GWh to 20 GWh. They will also need to ensure a minimum of 60% domestic value addition at the project level within five years. The manufacturing facilities will have to be commissioned within two years. The incentives will be disbursed after that over periods of five years.
