The government on Thursday selected Reliance New Energy Solar, Hyundai Global Motors, Ola Electric Mobility and Rajesh Exports for investment under the Rs 18,100-crore production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage. Reliance New Energy Solar is a subsidiary of Reliance Industries (RIL).
Hyundai and Ola Electric will get incentives to create a capacity of 20 gigawatt hours (GWh) each, while Reliance and Rajesh Exports will receive support for 5 GWh each, the department of heavy industries said.
Since the scheme had generated unusual interest and received proposals from 10 companies that had pledged to add a total of 130 GWh in capacity, way above the 50 GWh that was to be awarded under the scheme, five of them have now been kept on the “wait list”. These contenders — Larsen & Toubro, Mahindra & Mahindra, Amara Raja Batteries, Exide Industries and India Power Corp — had applied to create 43 GWh in capacity. One applicant didn’t meet the eligibility criteria. Reliance, too, had applied for 20 GWh but has to be content with only 5 GWh, with 15 GWh kept on the “wait list”. The wait-listed companies may be given a chance if the government decides to expand the PLI scheme with a greater outlay.
Heavy industries minister Mahendra Nath Pandey said big players have shown interest in the scheme, and the “increase in demand for electric vehicles due to a favorable regulatory framework has mainly attracted investment in this sector”.
Under the PLI scheme, the manufacturing facility would have to be set up within a period of two years. The incentive will be disbursed thereafter over a period of five years on the sale of batteries manufactured in India.
Under the scheme, the government seeks to boost local manufacturing of advanced chemistry cell to bring down prices of battery in the country, which will reduce the cost of electric vehicles as well. It is expected to ultimately lead to a potential drop in crude oil imports and also raise the share of renewable energy at the national grid level, according to the heavy industries ministry.
The scheme will not just boost domestic capacity but also spur battery storage demand for both electric vehicles and stationary storage. It will also help develop a complete domestic supply chain in the ACC battery segment.
This PLI scheme is expected to accelerate electric vehicle adoption as well, which will translate into net savings of `2-2.5 trillion (over five years) in the form of lower oil import bill, the ministry said.