The plan, National Programme on Advanced Chemistry Cell Battery Storage, put forward by the department of heavy industry, proposes to create a battery storage manufacturing industry.
The Cabinet’s approval to a ₹18,100 crore production-linked incentive (PLI) scheme for setting up big units to manufacture advanced batteries for electrical storage is a welcome development. Whether for electric vehicles or storage of renewable power, batteries will play an important role in a decarbonised future. Like its commitment to increasing renewable energy generation capacity and the national hydrogen mission, this incentive scheme for setting up battery storage manufacturing units is an unequivocal signal that India is serious about the transition to a decarbonised economy.
India depends on imports for battery storage. But the scheme is not just about clean energy. It is a clear demonstration that transitioning the economy away from fossil fuels, while difficult especially for low middle-income countries such as India, is not without economic opportunities. The plan, National Programme on Advanced Chemistry Cell Battery Storage, put forward by the department of heavy industry, proposes to create a battery storage manufacturing industry. The proposal is to set up 50 GWh manufacturing capacity for advance chemistry cell batteries by attracting investments totalling ₹45,000 crore. It requires each selected manufacturer to set up a production unit with a minimum of 5 GWh capacity, achieve a domestic value addition of at least 25%, and make the mandatory investment of ₹225 crore per GWh within two years and ensure a minimum 60% domestic value addition at the project level within five years. The incentive will be paid out on the basis of sales, energy efficiency, battery life cycle and localisation levels.
The plan also provides an impetus to R&D to achieve higher specific energy density and cycles in advanced chemistry cell. Without shifting away from the dominant lithium-ion technology, it is doubtful if the domestic value addition norms can be met. Solid state batteries promise to be all the rage in the near term, while new materials for the anode fascinate current innovators. The PLI scheme must incentivise battery R&D.