In a recent memorandum issued by the Ministry of Heavy Industries (MHI), a pivotal decision regarding the allocation of Advanced Chemistry Cell (ACC) capacity has been addressed. The memorandum responds to a proposal from the Ministry of New & Renewable Energy (MNRE) to designate 10 GWh of the 20 GWh ACC capacity for Grid Scale Stationary Storage. MHI, in its response, underscores the significance of maintaining a technology and application-agnostic approach within the ACC Production Linked Incentive (PLI) scheme, which was designed to support various battery technologies and applications.
MHI conducted a comprehensive study to gauge the compatibility of various battery technologies with the ACC matrix. The findings of this study emphasize the flexibility of the ACC PLI scheme in accommodating a wide range of battery technologies. This inclusivity is pivotal in addressing the diverse needs of the Indian energy market.
One of the key points highlighted in the memorandum is the result of stakeholder consultations where 33% of potential bidders expressed interest in both the mobility and stationary storage markets. This significant overlap in market interest raises concerns that dedicating 10 GWh exclusively to grid-scale stationary storage might not align with the overarching principles of the ACC PLI scheme, which was intended to remain open to diverse applications.
Furthermore, the memorandum references a study conducted by NITI Aayog and the RMI[1], which predicts a robust demand for batteries in electric mobility, such as electric cars, as well as the stationary storage sectors. The data from this study underscores the importance of flexibility within the ACC allocation to meet the evolving needs of the market.
Another significant aspect of the memorandum is the mention of an existing beneficiary, Reliance New Energy Battery Storage Ltd., which is currently operating in both the mobility and stationary storage segments. This serves as a practical example of a company that successfully caters to multiple sectors and further bolsters MHI’s recommendation.
Consequently, MHI recommends that the 20 GWh ACC capacity bid should not be restricted to any specific end-use application. This approach aims to preserve the ACC scheme’s core tenet of remaining technology and application-agnostic. In doing so, it will enable a more competitive and open market environment, where companies can compete for the entire ACC capacity without limitations.
In conclusion, the Ministry of Heavy Industries firmly asserts that reserving 10 GWh exclusively for stationary storage goes against the fundamental principle of the ACC PLI scheme, which is designed to remain open to all potential applications. The data from the study indicates that a significant portion of India’s battery demand will emanate from electric cars and stationary storage, making it essential to adapt to this changing landscape. With an existing player operating successfully in both mobility and stationary storage markets, MHI’s recommendation to refrain from setting aside 10 GWh for any specific use is not only pragmatic but also aligns with the scheme’s broader vision of inclusivity and competitiveness.
[1] RMI India is an independent think tank. RMI India takes inspiration from and collaborates with RMI, a 40-year-old nongovernmental organisation. RMI India’s mission is to accelerate India’s transition to a clean, prosperous, and inclusive energy future.