Ministry of Heavy Industries Tenders for 50 GWh of ACC Batteries

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The Indian Ministry of Heavy Industries has floated a global tender for setting up 50 GWh of Advance Chemistry Cell (ACC) battery cell manufacturing unit under the production linked incentive (PLI) scheme.

The last date to submit the bid is 31 December, 2021.

The government has set a subsidy limit at Rs 2,000 per kWh. The financial evaluation shall be done done based on the sought subsidy amount. Bids with subsidy amounts greater than Rs 2,000 will be turned down.

Qualifying for the subsidy the bidders must agree for setting up a minimum of 5 GWh of capacity within 5 years of selection and commit to adding minimum 25% value to the initiatives within 2 years of projected start date.

The winning bidders will be shortlisted on the basis of the technical evaluation and will be supported with fiscal benefits in the form of cash subsidies for production.

This year, the Cabinet had approved ₹18100 Crore PLI scheme for the implementation of giga-scale ACC manufacturing facilities in India.

As a part of the PLI scheme, the programme aims to involve companies to set up a total of 50 GWh manufacturing capacity with an anticipated investment of INR 45,000 Crore, wherein, each manufacturer would be committed to a minimum setup of 5 GWh, with a 60% value addition over the next 5 years. While the rider of financial investment of at least INR 225 Crore per GWh is a steep ask, the implied growth prospects within the policy, intending to assure economies of scale in the long run, is a benefit that will keep the incentivized public-private model entrants interested.

All incentives, promised to be paid over a 5 year period, after the commissioning of the plants in 2 years from allocation, shall be linked to performance on the basis of sales, energy production and efficiency, battery life cycle, etc.

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