Advanced cell battery storage recognized as ‘Champion Sector’ as a part of 'self-reliant' India

Finance Minister Nirmala Sitharamanon May 16, announced governmentplans to launch an incentive schemefor the promotion of new "championsectors" with a focus on advancedcell battery storage and solarPV manufacturing in an efforttowards making 'Self-Reliant India'(Aatma Nirbhar Bharat).

The emphasis of this scheme ison cell manufacturing as it aims toreduce India's reliance on the importof battery cells and substitute it withdomestic manufacturing. The planis to come up with a suitable performance-linked fiscal incentiveprogram to incentivize advancedcell chemistry (ACC) manufacturingin India, said Aman Hans, PublicPrivate Partnership Consultant atthe NITI Aayog and Secretary of theACC Battery Storage Program.

The minimum size for individualfactory under the proposed missionis 5 GWh and the maximum is 20GWh. The performance-linkedincentive scheme is designedsuch that the government will begiving actual cash incentive to theACC manufacturers. The subsidydisbursement will be based on thelevels of performance specifications(i.e. cell cycle life and energy density)of ACC manufactured and the abilityof the firm to make actual sales inthe market.

NITI Aayog has also proposedto incentivize the entire nationalACC manufacturing by proposinga composite matrix of customs dutywhich will be imposed to facilitatetrade for upstream components likeraw materials and cell componentand there will be relaxation in termsof import duties. While for companiesimporting end component wherethe domestic value addition isvery minimal, there will be highercustom duty. In addition, for investorassurance, the government will beexecuting a composite agreementthat will ensure the bankability ofsuch projects.

The National Mission forTransformative Mobility and BatteryStorage will be the implementingagency for the scheme and theapplication process will be conductedthrough a transparent bidding process.

The government is in the finalstages of evaluating a 50GWh ACCmanufacturing proposal of NITIAayog and official program launchImage for representation only date is yet to be announced.