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Unlike many other countries in the west, India is still highly reliant on fossil fuel for many of its needs. However, in the race of finding better sources of energy, India does not want to be left behind and that’s why the Central Government has just passed a sanction of ₹18,110 Crore, as a production-linked incentive (PLI) scheme with the aim to create giga factories, à la Tesla-style in the country, fpr the production of batteries with advanced storage. These will be used to power anything and everything, from electric vehicles to houses.

The move comes as the country grapples with the growing problem of pollution and oil imports becoming costly, and the Government tries to shift the focus towards electric-powered vehicles.

The scheme is being called the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, and is being implemented under the Department of Heavy Industry. It falls under the schemes that the government announced for 13 sectors last year, which total a budget of ₹ 1.97 trillion.  One of the long-term goals is to make the country more compliant with the environmental guidelines and regulations.

The Government said in its statement announcing the scheme, “Each selected ACC battery storage manufacturer would have to commit to set up an ACC manufacturing facility of minimum 5GWh capacity and ensure a minimum 60% domestic value addition at the project level within five years.”

For now, the sanction will be used to set up powering units with a capacity of 50 Giga Watt hour (GWh), to develop batteries making used of advanced chemistry cells. Investments totaling ₹45,000 crore will also be attracted.

50 Giga Watt hour is very high in terms of energy supply. The sheer degree of this can be understood when one considers the fact that 1 million homes can receive electricity for an hour from energy worth a capacity of 1 Giga Watt hour. Apart from supplying energy to the automobile industry for creating electric-powered vehicles, focus will also be on providing energy to the consumer electronics industry, along with powering electricity grids for domestic and industrial needs. This could become the key in tackling the problems caused by the intermittent nature of the power that is generated using conventional sources.

As said in the statement, “All the demand of the ACCs is being met through imports in India. The National Programme on ACC Battery Storage will reduce import dependence. It will also support the Atmanirbhar Bharat initiative. ACC battery storage manufacturers will be selected through a transparent competitive bidding process.”

The news that such a sanction would be made soon was doing the rounds back in September last year. With this scheme, the Government hopes to attract investors looking for a China-plus-one strategy for battery production, and also to make battery manufacturers in the country at par with international standards. Incentives for production will be given out, keeping in mind the sales, energy efficiency, localisation levels, and battery life cycles. The statement further added, “The beneficiary firms have to achieve a domestic value addition of at least 25% and make the mandatory investment of ₹225 crore /GWh within 2 years (at the mother unit level) and raise it to 60% domestic value addition within 5 years.”