The Government of India has set aspirations of improving the energy situation in the country by increasing focus on clean energy sources and reducing reliance on imported oil. Some of the most polluted urban areas in the World are in India. To reduce reliance on thermal energy and mitigate air pollution, the Hon'ble Prime Minister of India, Mr. Narendra Modi at COP26 UN Climate Summit has announced a target of 500 GW of non-fossil capacity of and 50% share of energy needs from renewable energy sources by 2030. Given the increase in the RE portfolio, coupled with the intermittent nature of electricity generation from these sources, it is important to integrate battery storage solutions to ensure firm supply. In addition, India is also transitioning towards cleaner modes of mobility to reduce the carbon footprint and reduce the dependence on conventional fuels, whereby storage solutions will have a role to offer.
In order to incentivize domestic manufacturing of battery and reduce dependence on imports, the Cabinet, in May 2021, chaired by the Hon’ble PM, Mr. Modi , approved the implementation of the Production Linked Incentive (PLI) Scheme - 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage’. The scheme aims to achieve a manufacturing capacity of 50 GWh of ACC and 5 GWh of "Niche" ACC with an outlay of INR 18,100 crore (about Euros 2 Billion). This will provide incentives in the form of subsidies to manufacturers, linked with the output to help lower the selling price of cells and become globally competitive.
In order to avail the benefits offered by the scheme, the Ministry of Heavy Industries (MHI), Government of India floated world’s one of the largest tenders in October 2021 for setting up manufacturing facilities for National Programme on Advanced Chemistry Cell (ACC) Battery Storage in India. The scheme will be instrumental in putting India on the World map in advanced chemistry storage manufacturing. In order to avail the benefits of the scheme, the beneficiary firms will be required to set up an ACC manufacturing facility of minimum 5GWh capacity, with a minimum 60% domestic value addition at the project level within five years. Furthermore, the beneficiary firms have to achieve a domestic value addition of at least 25% and incur the mandatory investment INR 225 crore /GWh (about Euros 25 Million/GWh) within 2 Years (at the Mother Unit Level) and raise it to 60% domestic value addition within 5 Years, either at Mother Unit, in-case of an Integrated Unit, or at the Project Level, in-case of "Hub & Spoke" structure. The amount of subsidy quoted by the beneficiary firm would be subject to a ceiling of INR 2,000 (about Euros 23) per kWh. The tender will help India setup giga scale factories and provide an opportunity to the domestic industry to compete globally.
In this context, the EU, in collaboration with the Ministry of Heavy Industries and NITI Aayog, organised a webinar on December 16, 2021 to offer opportunities to the relevant EU players to get a better understanding of the Indian market, the policy and regulatory landscape and possible investment considerations. The webinar also offered opportunities for the EU players to learn more about the 50 GWh storage tender that the Government of India has floated to help them make informed decisions for engaging in the scheme, given the submission is due for December 31, 2021.
The webinar also presented an opportunity for key stakeholders in India to learn more about the expertise available within the EU, to explore potential partnerships and collaborations.