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Industry players divided over capacity, penalty issues for PLI-AAC bids

"The ministry is committed to finalizing the bidding documents and proceeding with the rebidding process at the earliest," government officials said

PLI scheme nodal agencies under watch as Centre readies for review

Nitin Kumar New Delhi

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The Union government on Monday facilitated a stakeholder consultation with industry representatives for their inputs and suggestions before the start of the re-bidding process of the remaining 20 Gwh capacity.

The pre-bid conference organised by the Ministry of heavy industries (MHI) for prospective bidders for the Advanced Chemistry Cell (ACC) production-linked incentive (PLI) scheme has received wide participation and interest from bidders with around 100 participants from about 40 companies.

IFCI and Deloitte facilitated the consultation. “The ministry is committed to finalising the bidding documents and proceeding with the rebidding process at the earliest,” government officials said.  

Though the government is confident of re-auctioning the 20 Gwh soon, industry players who participated in the consultation say that if industry concerns are not taken into account the scheme will not see serious battery manufacturers in the play.

“We have submitted our responses to the government. We are hopeful that the government would incorporate those changes. If it doesn't, more defaulters like Hyundai Global Motors would come,” said an industry source present at the meeting.

According to sources, the industry is divided on the maximum capacity for which a company can bid. During the previous bidding, a company was allowed to bid for a minimum of 5 Gwh of ACCs manufacturing facility which can go up to a maximum of 20 Gwh.

This time big players want that this clause should remain the same as they have plans to build huge gigafactories. On the other hand, smaller companies, want bids to start from 1 Gwh with a maximum cap of 5 Gwh.

The industry has also urged the government to remove the clause of penalty from the scheme. At present, in case of a shortfall in either value addition or committed capacity, a penalty is applicable. If a company fails on both the parameter the quantum of the penalty increases.

“Major battery producers in the country may refrain from the bids if the penalty is kept in the scheme,” another industry player present during the consultations said.

With this auctioning process, prospective applicants can submit their bids to set up a domestic manufacturing facility for advanced chemistry cells, which will help them qualify for incentives under the ACC PLI scheme.

During the first round of bids, out of the four companies that were declared bid winners, Rajesh Exports quoted an interest and got 5 Gwh capacity, followed by Hyundai Global Motors which was rewarded 20 Gwh of capacity.

The third player was Ola Electric which was awarded another 20 Gwh and the fourth was Reliance New Energy Solar which wanted 20 Gwh but received the remaining 5 Gwh.

ACCs are the new generation of advanced storage technologies that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required.

These have major applications in electric vehicles, maintaining grid stability, solar rooftop, consumer electronics, etc. With India's commitment toward renewable energy and achieving net zero by 2070, energy storage is expected to play a crucial role in the overall energy ecosystem.

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First Published: Jul 24 2023 | 11:43 PM IST

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