PLI (Performance-linked Incentive) Scheme for Manufacturing Advanced Chemistry Cell (ACC)
India is committed & doing extremely well to become a leader in Electric Vehicle (EV) Market in the years to come. In the present scenario, the fastest-growing EV domain can be a boon to get rid of Pollution & our dependency on Non-Renewable Energy Sources (Fossil Fuels)
Government of India’s FAME Scheme & Various State’s EV Policies are giving a push to attract both the Consumers & Manufacturers towards Electric Vehicles
To further boost the Electric vehicle (EV) sector, on 12th May 2021 the Central Government Cabinet approved the proposal of the Ministry of Heavy Industry for implementation of the Production Linked Incentive (PLI) Scheme “National Programme on Advanced Chemistry Cell (ACC) Battery Storage“
What is Advanced Chemistry Cell (ACC) ?
Advanced Chemistry Cell (ACC) is the advanced storage technology that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required.
Here it is to be noted that ACC storage technology is not just limited to Electric Vehicles, but it also caters to Solar, Electricity Grids, Wind, Electronics, etc
Keypoints of Production Linked Incentive (PLI) Scheme for ACC
- The scheme envisages the 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 (Beneficiary Firm) that have been allocated ACC production capacity (with cumulative capacity capped at 50 GWh) under the said Programme through a transparent mechanism by inviting the Request for Proposal (RFP)
- The beneficiary firm will have to commit to set up minimum of 5 GWh of ACCs manufacturing facility
- The total annual cash subsidy to be disbursed by the Government will be capped at 20 GWh per beneficiary firm.
- In addition to 50 GWh of cumulative ACC capacity, 5GWh of cumulative capacity would be offered to “Niche” ACC technologies of higher performance with a minimum threshold capacity of 500 MWh. Only the higher performance parameters would be the pre requisite for being eligible.
- The manufacturing facility would have to be commissioned within a period of 2 years. The subsidy will be disbursed thereafter over a period of 5 years.
- The beneficiary have to achieve a domestic value addition of at least 25% (with mandatory investment of ₹225 Crore / GWh) within 2 Years and raise it to 60% domestic value addition within 5 Years
- 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.
Selection Criteria for Beneficiary Firm
The allocation to beneficiary firms shall be carried out through a transparent Quality and Cost Based Selection (“QCBS”) process after calling RFP
Incentive to the beneficiary Firms
- Incentive disbursement shall commence once the committed domestic value addition and actual sale of the ACCs begins
- The amount of subsidy to be disbursed would be calculated as follows: Applicable subsidy amount per kilowatt-hour X (multiplied) Percentage of value addition achieved during the period X (multiplied) Actual sale of Advanced Chemistry Cells (in KWh)
- The actual subsidy disbursement to the Beneficiary Firm shall be Capped at 20% of the ACC Sale Price (Net of GST) i.e of the effective total turnover (Net of GST) on account of sale of ACC’s manufactured and sold by the beneficiary firm during the subsidy disbursement period
Fund Allocation
The total incentive payout over the period of 5 years of the Scheme will be ₹18,100 Crores. The breakup for the same is as follows:
Monitoring of PLI Scheme
EGoS (Empowered Group of Secretaries) chaired by Cabinet Secretary will monitor the PLI scheme, undertake periodic review of the outgo under the scheme, and take appropriate action to ensure that the expenditure is within the prescribed outlay of ₹18,100 Crore
Expected Benefits from the Scheme
- Setting up of Giga 50 GWh of ACC manufacturing facilities in India
- Direct investment of around Rs.45,000 crore in ACC Battery storage manufacturing projects is expected
- Demand creation for battery storage in India
- Facilitate Make-ln-lndia (Aatmanirbharbharat)
- Very Big Savings on account of Oil Import Bills due to EV adoption during this period
- Significant Reduction in Air Pollution
- ACC program will be a key contributing factor to reduce India’s Green House Gas (GHG) emissions which will be in line with India’s commitment to combat climate change
- Focussed Research & Development to achieve higher specific energy density and cycles in ACC.
- Promote newer and niche cell technologies
- Significant Contribution to Country’s GDP
- Job Creation
The Gist
The main hurdle in the adoption of Electric Vehicles by Customers widely is Price & Driving Range which is Directly associated with the Battery & its architecture
This PLI policy (for manufacturing ACC) with a great vision will definitely remove the hurdles associated with the adoption of EV & will boost India’s EV Ecosystem in the years to come
The Gazette Notification for PLI Scheme for manufacturing of ACC was published on 9th June 2021
