National Programme on Advanced Chemistry Cell Battery Storage

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    Cabinet has approved the implementation of the National Programme on Advanced Chemistry Cell (ACC) Battery Storage Production Linked Incentive (PLI) Scheme.

    About

    • The Government of India (GoI), through the Department of Heavy Industry, intends to ensure overall energy security for the nation in the long run.
    • A budget allocation of Rs. 18,100 crores was made for targeting manufacturing capacity of 50 GigaWattHour (GWh) of ACC and 5 GWh of niche ACC.
    • It will encourage the manufacturers to invest into Research & Development and to manufacture such cells in India. 

    Key Features of Scheme

    • The cash subsidy will be offered on output, i.e. the volume of cells manufactured and sold by the beneficiaries. 
    • It’s a technology agnostic initiative, whereby only cells with higher performance specifications (i.e., Energy Density & Cycle Life) will be eligible to avail the incentives. 
    • The incentive framework has been fused with the principles of Public Private Partnership (“PPP”). There is an optimal sharing of risk between the beneficiary firm and the Government, and thus will bolster investors’ confidence and make India a leader on the world map in ACC manufacturing.
    • The subsidy support will be limited to a cumulative 50 GWh of ACC manufacturing capacity in India, with a single beneficiary not allowed more than 20 GWh cell manufacturing facility. 
    • Furthermore, to encourage economies of scale, minimum bid may be restricted to 5 GWh capacity, which may be developed in phases over a five-year window. 

    Benefits of Scheme

    • Mixing of best attributes of Government i.e, facilitating and private i.e, qualitative and time bound delivery of services will help yield best product in energy storage.
    • Suitable Basic Custom Duty, with the intent to promote phased manufacturing of ACCs and its components in India, will be imposed.
    • It will give a boost to the Make in India Programme and attract global investments into setting-up of ‘Gigafactories’ here.
    • Help in making better energy infrastructures and having better dependence on this other source of energy.
    • Direct investment of around Rs.45,000 crore in ACC Battery storage manufacturing projects.
    • Promote newer and niche cell technologies.
    • The manufacturing of ACCs will facilitate production and use of Electric Vehicles.
    • Exploitation of non renewable resources will reduce.
    • Dependance on oil imports will reduce, which currently stands at 80%. Import substitution of around Rs.20,000 crore every year.
    • 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
    • It will assist in reducing emissions and hence enabling us to achieve our INDCs.
    • Impetus to Research & Development to achieve higher specific energy density and cycles in ACC.

    Conclusion

    • The major battery consuming sectors are expected to achieve robust growth through this programme in the coming years such as:
    • Consumer electronics;
    • Electric vehicles;
    • Advanced electronic grids; 
    • Solar rooftops etc.
    • Currently almost all of the demand for ACC is met by imports only. With this scheme, imports are bound to reduce together with the country taking another step towards becoming Atmanirbhar.
    • Batteries will serve as a cornerstone in the transition to a next-generation clean energy economy

    Advanced Chemistry Cell (ACC)

    • It is the next generation advanced level storage technology
    • These cells store electrical energy in the form of either electrochemical or chemical energy and convert them into electrical energy as and when required.

    Nationally Determined Contribution (NDC)

    • A part of the Paris Agreement under the United Nations Framework Convention on Climate Change to which India is a signatory.
    • India has three quantitative climate change goals viz. 
      • reduction in the emissions intensity of Gross Domestic Product (GDP) by 33 to 35 percent by 2030 from 2005 level
      • achieving about 40 percent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030 and 
      • creating an additional carbon sink of 2.5 to 3 billion tonnes of carbon dioxide equivalent through additional forest and tree cover by 2030.

    Source: PIB