National Programme on Advanced Chemistry Cell Battery Storage (NPACC)

Background:

  • The Union Cabinet has approved the proposal of Rs. 18,100-crores to incentivize battery makers to manufacture locally i.e., to cut import dependence while giving boost to electric vehicle (EV) adoption. Currently, the country’s ACC demand is being met through imports.
  • ACCs are 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.

Features of the Scheme:

  • Each selected ACC battery Storage manufacturer would have to commit to set-up an ACC manufacturing facility of minimum five (5) GWh capacity and ensure a minimum 60% domestic value addition at the Project level within 5 years.
  • Furthermore, the beneficiary firms have to achieve a domestic value addition of at least 25% and incur the mandatory investment Rs.225 crore /GWh within 2 Years (at the Mother Unit Level) and 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 “Hub & Spoke” structure.
  • The scheme will help in achieving manufacturing capacity of Fifty (50) Giga Watt Hour (GWh) of ACC and 5 GWh of “Niche” ACC with an outlay of Rs.18,100 crores.
  • The incentive will be disbursed over a period of five years. It will be paid out on the basis of sales, energy efficiency, battery life cycle, and localization levels.

Selection of beneficiaries: ACC battery Storage manufacturers will be selected through a transparent competitive bidding process.

Incentive to the beneficiary Firms:

  • The amount of subsidy to be disbursed would be calculated as following: Applicable subsidy amount per kilowatt hour X (multiplied) Percentage of value addition achieved during the period X (multiplied) Actual sale of Advanced Chemistry Cells (in KWH).
  • Incentive disbursement shall commence once the committed domestic value addition and actual sale of the ACCs begins.
  • The amount of cash subsidy to be distributed to the beneficiary firm shall be disbursed quarterly.
  • The actual subsidy disbursement to the Beneficiary Firm shall be Capped at 20% of the ACC Sale Price (Net of GST).

Expected Benefits from NPACC Scheme:

  • Direct investment of around Rs. 45,000 crores in ACC Battery storage manufacturing projects.
  • Facilitate Make-in-India and Atmanirbhar Bharat i.e., reduction in import dependence
  • Facilitate demand creation for battery storage in India.
  • Facilitate demand for Electric Vehicles (EVs), which are proven to be significantly less polluting.

-Nakul Sharma, Audit Associate, SW