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DHI releases RFP inviting bidders for PLI scheme on ACC battery storage

IESA expects at least 5-10 giga factories to come up in the next five years under the PLI scheme on ACC battery storage, with more than 10 of its member companies showing keen interest and 30-plus members ready to be part of the manufacturing and supply chain ecosystem.

In a latest development on the National Programme on Advanced Chemistry Cell (ACC) Battery Storage notified earlier, the Ministry of Heavy Industries (MHI) has issued a Request for Proposal (RFP) to invite bidders for setting up greenfield manufacturing facilities under the production-linked incentive (PLI) scheme to promote ACC manufacturing in the country.

The programme offers fiscal benefits in the form of cash subsidies to selected bidders, who commit to setting up an ACC manufacturing facility of a minimum 5 GWh capacity. Also, these projects must witness a minimum value-addition of 25 percent within 2 years and 60 percent within 5 years from the appointed date, either at the mother unit level in case of an integrated unit or at the project level through indigenous manufacturers, in a hub and spoke structure.

The PLI scheme envisages setting up a cumulative manufacturing capacity of 50 GWh for ACCs and an additional cumulative capacity of 5 GWh for niche ACC technologies with a minimum threshold capacity of 500 MWh. It embraces a technology-agnostic approach to promote ACC manufacturing, with emphasis on maximum value addition, quality output, and achieving pre-committed capacity levels within a pre-defined time period. The scheme excludes the conventional battery pack segment of the industry, as such manufacturing is already established in the country.

"We are excited about the release of RFP for PLI on ACC battery manufacturing, which will kick start the advanced chemistry cell manufacturing industry in India. The industry has been waiting for this eagerly, and we are confident that the PLI will be oversubscribed", said Dr. Rahul Walawalkar, President, India Energy Storage Alliance. 

He observed that there is a global race for setting up giga factories, and the scheme will give our domestic industry a great chance to be part of the global ecosystem.

He stressed the need to develop an upstream supply chain, especially in chemical processing and component manufacturing. "One of the biggest challenges will be skill development to meet the growing needs of this emerging industry, which we are addressing through IESA Academy. IESA is looking forward to supporting DHI and NITI Aayog to make India a global hub for R&D and manufacturing of advanced energy storage systems", he added.

We are excited about the release of RFP for PLI on ACC battery manufacturing, which will kick start the advanced chemistry cell manufacturing industry in India. The industry has been waiting for this eagerly, and we are confident that the PLI will be oversubscribed

Dr. Rahul Walawalkar, President, India Energy Storage Alliance (IESA)

To qualify for the scheme, bidders shall have a minimum net worth of INR 225 crore per GWh, as per the capacity specified in its technical bid for the financial year preceding the date of submission of the bid. A bidder may submit for any capacity in case of meeting total net worth criteria of at least INR 1,500 crore. All bids must be submitted before the due date of 31st December this year. A pre-bid conference of the interested parties to seek clarifications and make suggestions to the government is scheduled on 12th November.

Qualified bidders will be short-listed for financial evaluation in the second stage, with each price bid assigned a financial score (SF). Bidders will be ranked and accordingly allocate their approved capacities. MHI has clarified that the amount of subsidy quoted by the bidder is subject to a ceiling of INR 2,000 per KWh, and the allocation shall be subject to a minimum of 5 GWh and a maximum cumulative allocation of 20 GWh to a single bidder, in blocks of 1 GWh.

While thanking the Union government for bringing this critical PLI scheme on ACC battery storage, Mr. Debi Prasad Dash, Executive Director of IESA, observed that this proposal will bring at least 5-10 giga-factories in the next five years. "More than 10 member companies of IESA have shown interest in applying for this proposal, and over 30 other members will be part of the ecosystem through component, equipment, and raw material supply chain, technology partnership, and chemical processing", he said. He noted out that IESA has been working since 2016 to create India as one of the leading global manufacturing hubs for energy storage and create an appropriate policy framework to support indigenous manufacturing, and has given its inputs and suggestions to various governmental departments, including NITI Aayog, Department of Heavy Industries (DHI), MEITY, Ministry of Power and various state governments in this regard.

"We encourage all relevant players to apply for this proposal and be part of this rising manufacturing ecosystem", he added. IESA has organized multiple roundtables, one-on-one meetings, facilitated business exchange and technology partnerships in past years. Mr. Dash also mentioned that IESA team is planning to organize various activities, including a roundtable with state and central government officials, Technology Exchange Program, Battery Manufacturing Supply Chain Forum, Battery Manufacturing Equipment, and Components Forum, India connect program, and Battery PLI Proposal Application Workshop in the next three months to support the players in setting-up battery giga-factories and develop a robust supply-chain ecosystem in India.

Author : Dhiyanesh Ravichandran
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