Govt might dangle $500mn sops to develop ‘niche’ batteries

The production-linked incentive (PLI) scheme will be launched soon, one of the two officials said, adding that discussions have been underway between the government and NITI Aayog for some time.

“A new PLI is coming on niche advanced chemistry cell. The documents would be put in public domain soon," the official said, seeking anonymity.

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Another official familiar with the developments said that, unlike other PLI schemes where the focus is on manufacturing, this scheme is likely to provide sops for research and development of newer chemistries, along with production.

Queries sent to the spokespeople for NITI Aayog and the Union ministry of heavy industries remained unanswered till press time.

The new PLI is also expected to provide additional incentives to manufacturing firms, compared with the existing incentive scheme for advanced chemistry cells. Under the PLI scheme for advanced chemistry cell battery storage, the cash subsidy has been capped at 20% of the effective price (net of GST) or the effective sales turnover.

The government had come up with the PLI scheme, ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’, in June last year to achieve a manufacturing capacity of 50 Giga watt-hour of ACC. In March, the heavy industries ministry selected Reliance New Energy Solar Ltd, Ola Electric Mobility Pvt. Ltd, among others, for the ₹18,100 crore PLI scheme for ACC battery storage.

The plan to boost new battery chemistries in the country comes at a time when the government is looking at attaining self-sufficiency in terms of battery supplies, given the energy transition targets.

Lithium iron phosphate, nickel manganese cobalt, and lithium titanium oxide batteries, which come under the category of lithium-ion batteries, are among the most commercially viable batteries.

The search for new technologies and battery chemistry comes against the backdrop of an acute shortage of lithium in India. The Centre is also making efforts to source lithium and cobalt from other major producers, including Australia and Argentina.

The efforts have gained momentum amid the government’s ambitious targets to combat climate change and also due to the strong focus on boosting domestic production of electric vehicles. Also, the recent fire incidents affecting electric scooters in the country have accentuated the need to look for safer chemistries.

Efforts are underway globally to produce newer chemistries of battery. “The government’s effort may be to look beyond lithium as minerals for battery production," said Amit Kumar, partner with PwC.

Sodium sulphide, vanadium batteries and flow batteries are other options on which research is underway globally, experts said.

Sector experts also suggest that a boost to local development of newer chemistries would put India at the forefront of catering to the global supply chain.

With the focus on achieving 500GW of renewable energy by 2030 and carbon neutrality by 2070, the push on battery manufacturing and battery storage has gained momentum in the country.

In the Union budget for FY23, too, the government said it would encourage the private sector to develop sustainable and innovative business models for ‘battery or energy as a service’.

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