Centre gears up for second round of bidding to boost battery storage capacity
The Indian government is set to invite tenders for the advanced chemistry cells (ACC) production-linked incentive (PLI) scheme with a capacity of 20-GWh by December. This move presents an opportunity for applicants who didn’t qualify in the initial round or missed the chance to avail incentives for creating battery storage capacity in India. The Ministry of Heavy Industries is expected to conclude consultations with the Ministry of New and Renewable Energy by December, after which the application process for new bids will commence.
First Round of Awards and Subsequent Developments
In the first round of awards, three companies secured incentives under the ACC PLI scheme. Ola Electric qualified for 20GWh lithium-ion cell manufacturing, Reliance New Energy for 5GWh sodium-ion cell manufacturing, and Rajesh Exports for 5GWh lithium-ion cells. These companies pledged a total investment of ₹27,000 crore for the scheme. However, the 20 GWh capacity initially awarded to a Hyundai company was later deemed not bona fide, leading to a new round of bidding.
Criteria and Expectations for the Second Round
The upcoming round of bidding is not expected to relax the criteria surrounding localization of cell manufacturing and domestic value addition. The criteria will start at 25% in the first year of manufacturing and increase to 60% in the fifth year of production. The minimum capacity for bidding is likely to remain at 5GWh. The government anticipates greater participation in this round, with over 15 applicants expected. The inclusion of global lithium-ion battery firms such as Panasonic, Samsung, and LG Chem, who did not participate in the first round, is also anticipated.
Potential Participants and Interest
Suzuki Motor Co. and Tata Motors, who have committed significant investments in cell manufacturing units in Gujarat, are likely to participate in the second phase of bidding if there are changes in the localization criteria or penalty provisions. Other potential participants include global battery firms and domestic battery manufacturers such as Amara Raja and Exide, who were wait-listed in the previous round. Their interest in applying for the scheme once bids are invited is expected.
Addressing India’s Dependence on Imports
India currently relies heavily on foreign markets for lithium-ion cell imports for its electric vehicles, as there are no existing facilities in the country. The majority of cells are imported from China, as well as South Korea, Germany, and Japan. Under the ACC PLI scheme, the Ministry received 10 bids from firms with a manufacturing capacity of 128 GWh in the previous round.
Conclusion:
The Indian government’s decision to invite tenders for the ACC PLI scheme with a 20-GWh capacity marks a significant step towards boosting battery storage capacity in the country. With stricter criteria and expectations for localization, the government aims to encourage domestic manufacturing and reduce dependence on imports. The participation of global battery firms and domestic manufacturers, along with the potential inclusion of niche chemistries in future PLI schemes, further strengthens India’s position in the global battery market. As the second round of bidding unfolds, the nation eagerly awaits the outcomes that will shape its future in the renewable energy sector.
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