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UPSC » Daily News Analysis ‘Advanced Chemistry Cell (ACC) – Production Linked Incentive (PLI) Scheme’ : 24 January

Daily News Analysis ‘Advanced Chemistry Cell (ACC) – Production Linked Incentive (PLI) Scheme’ : 24 January

Table of Content

Why in News: 

  • Recent analytical reports indicate that the ACC-PLI scheme is lagging, with only 1.4 GWh of battery capacity commissioned against the 50 GWh target for 2026.

About the ACC-PLI Scheme

  • Implementing Agency: Managed by the Ministry of Heavy Industries (MHI) as part of the National Programme on Advanced Chemistry Cell (ACC) Battery Storage.
  • Core Objective: To enhance India’s manufacturing capabilities by setting up Giga-scale ACC and battery storage facilities, reducing strategic dependence on imports (primarily from China).
  • Defining ACC: These are new-generation advanced storage technologies that store energy electrochemically or chemically and convert it back to electricity; they are distinct from conventional lead-acid batteries.
  • Financial Outlay: The government has allocated ₹18,100 crore for the scheme to be disbursed over a five-year performance period after a two-year gestation period.
  • Capacity Targets: Aims to establish a cumulative manufacturing capacity of 50 GWh for ACC and an additional 5 GWh for “Niche” ACC technologies.
  • Domestic Value Addition (DVA): Beneficiary firms must achieve a minimum DVA of 25% within two years and scale it up to 60% within five years to qualify for incentives.
  • Investment Commitment: Requires a mandatory investment of ₹225 crore per GWh of committed capacity within the first two years.
  • Incentive Mechanism: Subsidies are performance-linked, based on the energy density, cycle life, and the actual quantity of cells sold by the manufacturers.

DO YOU KNOW?

Production Linked Incentive (PLI) Scheme

  • Mechanism: It provides financial incentives (typically 4%–6%) to companies based on incremental sales of goods manufactured in India, rewarded only after meeting specific investment and production targets.
  • Goal: Aimed at making India a global export hub, the scheme covers 14 key sectors (like electronics and pharma) to reduce import dependency and create “global champion” companies.