Govt To Float Tenders For Advanced Chemistry Cells PLI Scheme By Dec 2023

New Delhi, Nov 24 (KNN) The central government is set to open tenders for the advanced chemistry cells (ACC) production-linked incentive scheme with a 20-GWh capacity by December, reported Mint citing an official.

The move offers an opportunity for applicants who did not qualify in the initial round, or couldn’t apply to avail the incentives for creating battery storage capacity in India.

As per reports, the heavy industries ministry is likely to conclude consultations with the ministry of new and renewable energy by December. The application process for new bids will begin thereafter.

In the first round of awards, three firms had secured incentives. Ola Electric qualified for the 20GWh lithium-ion cell manufacturing, Reliance New Energy for 5GWh sodium-ion cell manufacturing and Rajesh Exports for 5GWh lithium-ion cells. The companies committed a cumulative investment of Rs 27,000 crore for the scheme.

However, 20 GWh capacity, initially awarded to a Hyundai company, was subsequently deemed not bona fide, triggering a new round of bidding.

In this upcoming round, the Centre is not likely to relax the criteria around localization of cell manufacturing (or domestic value addition), starting at 25 per cent in the first year of manufacturing, and going up to 60 per cent in the fifth year of production. The minimum capacity for bidding is also likely to remain at 5GWh. The Centre expects greater participation than last time with over 15 applicants, a government official said.

The government is also planning to sanction additional incentives for a new PLI scheme for niche chemistries such as solid state, zinc-based, and iron-air batteries. A capacity of G5Wh will be approved for incentives next year.

However, Suzuki Motor Co. and Tata Motors that committed Rs 7,300 crore and Rs 13,000 crore, respectively in cell manufacturing units in Gujarat, are likely to participate in the second phase of bidding if there was change in localization criteria or penalty provision.

At present, India has high dependence on foreign markets for lithium-ion cell importing for its electric vehicles, considering that there are no existing facilities in the country. It imports cells primarily from China, as well as South Korea, Germany and Japan.

KNN Bureau