Production Linked Scheme (PLI) for manufacturing of Advance Chemistry Cell (ACC)

• The Government has approved the Production Linked Scheme (PLI) for the manufacturing of Advance Chemistry Cell (ACC) in the country to reduce import dependence on ACC Battery.
• The global demand for lithium is expected to be more than double at 117,400 mt by 2024 from an estimated 47,300 mt in 2020 due to likely increase in electric vehicle battery production.

Key points:

• The quantity and value of export and import by India of Lithium-ion and Lithium (primary cells and batteries) has decreased in 2020-21 from 2019-20.
• During FSP 2016- 17 to FSP 2020-21, the Geological Survey of India (GSI) carried out 14 projects on Lithium and associated elements in Bihar, Chhattisgarh, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Madhya Pradesh, Meghalaya, Karnataka and Rajasthan.
• During the current FSP 2021-22, GSI has taken up 7 projects on Lithium in Arunachal Pradesh, Andhra Pradesh, Chhattisgarh, Jharkhand, Jammu & Kashmir and Rajasthan.
• However, the resource of Lithium has not yet been augmented by GSI.
• Atomic Minerals Directorate for Exploration and Research (AMD), a constituent unit of the Department Atomic Energy (DAE), is carrying out exploration for Lithium in potential geological domains in parts of Karnataka and Rajasthan. AMD is carrying out subsurface exploration in Marlagalla area, Mandya district, Karnataka.
• Preliminary surveys on surface and limited subsurface exploration by AMD have shown presence of Lithium resources of 1,600 tonnes (inferred category) in the pegmatites of Marlagalla – Allapatna area, Mandya district, Karnataka.

National Programme on Advanced Chemistry Cell (ACC) Battery Storage:

• The Cabinet has approved the proposal of the Department of Heavy Industry in May 2021 for implementation of the Production Linked Incentive (PLI) Scheme 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage’.
• It was launched to achieve a manufacturing capacity of Fifty (50) Giga Watt Hour (GWh) of ACC and 5 GWh of "Niche" ACC with an outlay of Rs.18,100 crore.

Features:

• The incentive amount will increase with increased specific energy density & cycles and increased local value addition.
• Each selected ACC battery Storage manufacturer would have to commit to set-up an ACC manufacturing facility of a minimum of five (5) GWh capacities and ensure a minimum 60% domestic value addition at the Project level within five years.
• The beneficiary firms have to achieve a domestic value addition of atleast 25% and incur the mandatory investment Rs.225 crore /GWh within 2 Years.
• It will raise it to 60% domestic value addition within 5 Years, either at Mother Unit, in case of an Integrated Unit, or at the Project Level, in case of the ""Hub & Spoke"" structure.

Benefits expected from the scheme:

• Setup a cumulative 50 GWh of ACC manufacturing facilities in India under the Programme.
• Direct investment of around Rs.45,000 crore in ACC Battery storage manufacturing projects.
• Facilitate demand creation for battery storage in India.
• Facilitate Make-ln-India
• Net savings of Indian Rs. 2,00,000 crore to Rs.2,50,000 crore on account of oil import bill reduction during the period of this Programme due to EV adoption, as ACCs manufactured under the Programme is expected to accelerate EV adoption.
• The manufacturing of ACCs will facilitate demand for EVs, which are proven to be significantly less polluting.
• Import substitution of around Rs.20,000 crore every year.
• The impetus to Research & Development to achieve higher specific energy density and cycles in ACC.
• Promote newer and niche cell technologies.
• Reduce India's Green House Gas emissions which will be in line with India's commitment to combat climate change.

Advanced Chemistry Cell:

• It is the new generation of advanced storage technologies that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required.
• It is a high-voltage lithium ion rechargeable battery.
• Consumer electronics, electric vehicles, advanced electricity grids, solar rooftops etc. which are major battery consuming sectors are expected to achieve robust growth in the coming years.

PLI Scheme:

• The PLI Scheme was launched as a part of the National Policy on Electronics, now it has extended to many sectors.
• The scheme aims to give companies incentives on incremental sales from products manufactured in domestic units.
• Apart from inviting foreign companies to set shop in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.