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Report | 2022

Need for Advanced Chemistry Cell Energy Storage in India

Part III of III

By  NITI AayogRMI IndiaRMI
Download the report below

Battery energy storage will play a critical role in India’s push toward accelerating electricity and transportation decarbonization. The recently finalized $2.5 billion Production Linked Incentive (PLI) Scheme on advanced cell chemistry (ACC) battery storage has signaled India’s intent to meet the need for batteries through domestic manufacturing. With the announcement of the bid winners for the scheme, the momentum has finally shifted from planning to actions on the ground.

Within this background, this report is the last of a three-report series designed to create a shared understanding among stakeholders of the status and future trends that are emerging in ACC batteries. This report outlines the contour of the PLI Scheme, looks at key leverage points for maximizing the success of the scheme, and explores long-term sustainable growth of a domestic battery manufacturing sector.

Beyond the central and state incentives, the report analyzes complementing steps that can be taken to build investor confidence within the sector. The principles of public-private partnership can ensure an optimal sharing of risk between the beneficiary firm and the government, while demand creation initiatives and a circular economic framework will be crucial. India has the perfect opportunity to pave the way for battery manufacturers to invest in India and could guide the sector toward breakthrough technologies.

As with any new technology, there are numerous risks associated with setting up battery manufacturing plants in India. Establishing the entire value chain presents a challenge, given the steep learning curve associated with rapidly evolving battery technologies and the investment risks associated with adapting to new technologies and manufacturing processes.

Figure 1: Risk Allocation Across Stakeholders

Understanding and mitigating these risks will be critical to the success of the scheme and India’s battery manufacturing ambition. It will allow for optimal strategies to mitigate potential roadblocks and establish India as a center for cutting-edge research and innovation, boost its manufacturing capabilities, create new jobs, and foster economic growth.