Govt Seeks Bids For 10 GWh ACC Battery Production Under PLI Scheme

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A pre-bid meeting is scheduled for February 12, with the bidding process commencing on April 23.

Yesterday, the government initiated a call for proposals to establish giga-scale advanced chemistry cell (ACC) battery production facilities. This initiative, part of the production-linked incentive (PLI) scheme, aims for a combined capacity of 10 GWh with a maximum financial allocation of Rs 3,620 crore. This move follows the 2021 announcement of a Rs 18,100-crore PLI scheme aimed at creating ACC manufacturing facilities in India, targeting a total capacity of 50 GWh.

This 10 GWh capacity is a segment of the 20 GWh that remained unassigned after Hyundai Global Motors withdrew from the initial bidding round. The first round, which concluded in March 2022, resulted in 30 GWh capacity being awarded to Ola Cell Technologies Pvt Ltd, ACC Energy Storage Pvt Ltd, and Reliance New Energy Battery Storage Ltd.

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Developing battery cell manufacturing within India is anticipated to support electric vehicle production significantly and help localize the supply chain. One of the major obstacles in adopting electric vehicles in India has been the high acquisition cost, largely attributed to the expensive battery components.

Advanced chemistry cell batteries represent a cutting-edge category of storage technologies capable of storing electrical energy either as electrochemical or chemical energy and then reconverting it to electrical energy as required. These batteries are predominantly utilized in electric mobility.

The Ministry of Heavy Industries has announced that the tender documents for this 10 GWh capacity are now accessible, with a pre-bid conference scheduled for February 12. The bidding will commence on April 23 and be conducted online through a two-stage process. This process will be based on the Quality and Cost Based Selection mechanism, accessible via the Central Public Procurement portal.

Under the scheme’s guidelines, the selected company must ensure a minimum domestic value addition of 25%, which should increase to 60% over five years. Moreover, each firm is mandated to invest Rs 225 crore per GWh for the pledged capacity within a two-year timeframe.

Mahendra Nath Pandey, the Heavy Industries Minister, has previously stated that the manufacturing of advanced chemistry cell batteries under this scheme is expected to begin early this year.

Ola Electric Mobility, which is gearing up for an IPO, announced that its subsidiary, Ola Cell Technologies, plans to commence operations at its Giga factory in Tamil Nadu by March 2024. This facility will start with a capacity of 1.4 GWh, eventually expanding to 5 GWh by October.

In the first round, companies like Exide Industries, Amara Raja, and Mahindra & Mahindra submitted bids but were not selected. The upcoming round of bidding presents a new opportunity for these companies, including Exide Industries and Amara Raja, which are in the process of establishing cell manufacturing units, to secure incentives under this scheme potentially.

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