Policy Working Group

Committee

05.01.2021

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VISION

To make Indian energy grid & transportation sector morecompetitive by providing a knowledge sharing platform forcreating awareness about advanced energy storage ande-mobility solutions.

MISSIONEnabling India to become a global leader in research,manufacturing and adoption of advanced energy storage,microgrid and e-mobility technologies by 2022.

Founding Partners of: Global Initiative

05-01-2021 © India Energy Storage Alliance 2019 2

IESA: THE ALLIANCE

OUR MEMBERS

STRATEGIC PARTNERS

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❑ Review of the progress towards Policy Priorities set up in the year 2020. Review the priorities and Planning for 2021 policy targets

❑ Meeting with Shri S K Chatterjee, Chief (Regulatory Affairs), Forum of Regulators – request to reinitiate discussions at CERC & FOR

❑ Letter to Power Ministry requesting to define energy storage deployment targets❑ Recommendations submitted to NITI Aayog on ACC Battery Manufacturing Model Bid Documents❑ Letter to PMO - Thanking letter for announcement of PLI Scheme for ACC Battery Manufacturing❑ Discussion on the proposal for including raw materials under PMP program❑ Policy/Regulatory updates of the month.❑ IESA -ASCI Training Program

Discussion Points

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Policy Priority Tracker

Green – In progress/active

Yellow – Slightly slow progress

Red – yet to start/no progress

2020 Highlights

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❖ Cabinet has approved PLI Scheme for ACC Battery Manufacturing Scheme, Niti Aayog has released model bid documents –Submission of inputs to Niti Aayog in drafting bid documents, Representations to PMO and other ministries on behalf of membercompanies, collation support from Industry associations, Submission of suggestions to Niti Aayog on bid documents

❖World Energy Storage Day: Message from Hon’ble Prime Minister

❖ Amendments: Competitive Bidding Process for Procurement of RTC Power from Grid Connected RE Power Projects. The clausenow amended as supply of RTC power RE Sources complimented with any sources including Storage.

❖ Telangana EV Policy - suggestions incorporated in final policy, letter submitted to chief minister with support of ASCI

❖MEDA Solar Wind Hybrid Policies - inputs related to storage submitted, Edge of finalization

❖ IESA Round table on Battery Swapping Road Map for India and outcome of these discussions submitted to MOP,MNRE, MHI,MoEFCc, DHI etc

❖ IESA round table on AtmaNirbhar Bharat and submission of report to Niti Ayyog on Energy Storage Manufacturing Roadmap forIndia Roundtable Discussion

❖ Comments on Draft Electricity Act (Amendment Bill), 2020 submitted to Ministry.

❖ Submission of comments/suggestions on BWMR,2020

❖ IESA recommendations to Niti Aayog on the Energy Sector structural reforms for strategizing post-COVID-19 Impact

❖ IESA joined Renewable Energy Standardization Cell in MNRE

❖ IESA representations to SECI on concept paper of Wind Solar Hybrid Projects, request to tender out more hybrid projects, timelyimplementation of awarded projects

Production-linked incentives schemes for ACC battery and other keysectors – Atmanirbhar Bharat

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IESA Efforts towards launch of this Scheme:

❖ IESA being actively working in the space of Energy Storage & ElectricVehicle, has put lot of efforts over past 3 years in generating interestamongst Technology Companies & Investors after the launch of NESMand NMTM&BS.

❖ IESA has submitted inputs on the discussion points for Advanced BatteryManufacturing in India in the month of May’2019.

❖ Since then we are in constant communication with Niti Aaayog and othergovt department. Supported Dept with the information required andupdating our members with the progress

❖ IESA has written multiple letters in the year 2020 ((3rd Mar’2020, 10thJuly 2020, 22nd Sept’2020, 6th November 2020) requesting to expediatethe launch of the mission explaining with the consequences/threats dueto delay in the launch and missing of Investment opportunities to othercountries.

❖ Recent letter on 6th Nov was submitted with the support of Industryassociations like IEEMA, ISGF, ELCINA and MAIT.

❖ Apart from the letters, many webinars has held and attended by bothGovt & developers –this helped to voice out industry opinions to Govt

Niti Aayog Draft Model Bid Documents

❖ Subsequent to announcement of PLI Scheme by Centre, Niti Aayog has releaseddraft model bid Documents including the Request for Proposal (“RFP”), theProgramme Agreement and a Tripartite State Support Agreement

❖ Key Features:

1. The cash subsidy shall be offered on output, i.e. the volume of cellsmanufactured and sold by the beneficiaries

2. It’s a technology agnostic initiative, whereby only cells with higherperformance specifications (i.e., Energy Density & Cycle Life) shall be eligibleto avail the incentives. While the subsidy benchmarks shall be determined ina manner that cells with better quality or performance characteristicsattract higher subsidy, thereby encouraging manufacturers to invest intoResearch & Development and to Manufacture such cells in India.

3. ‘QCBS’ (i.e., Value Weighted) based bidding process on prospectivecommitment criteria shall be followed. The participants shall be ranked onthe basis of their submissions, and capacities shall be allocated in the orderof their ranking,

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Recommendations submitted to NITI Aayog on ACC Battery Manufacturing Model Bid Documents

❖ Clarity required on “definition of Value Addition” mean to the manufacturing activity. Localcontent/ domestic value addition can be captured based on the Bill of Material (BoM)sourced from domestic manufacturers.

❖Many companies may set up R&D units at their corporate R&D centres or at 3rd partylocation to accelerate R&D to support the upcoming giga factories. This should beencouraged, and this investment should be considered as part of the investment in themother unit.

❖ Clarification should be made not to penalize manufacturer in case the production is lowerthan the plant capacity invested in. Also, consider at least a 3 year moratorium before suchpenalties are considered given the uncertainties on demand and supply chain that themanufacturers have to address.

❖ Consider maintaining the 5% YOY discounting of the subsidy amount throughout the 10 year

period

❖ Inclusion of Revenue Shortfall loan clauses, similar structures are already facilitated by

government in PPP projects, Green field projects, Highways etc

❖ Performance Security can be reduced after completion of sale of every 1 GWh of cells and

availing the subsidy for the corresponding sale (as there is provision of replenishment of

Performance Security under Clause 7.2)9

DAY TOPIC Discussion Points SPEAKERS

18th Jan

Application Procedure –

NATIONAL PROGRAMME

ON ACC BATTERY STORAGE

a. Overview of the ACC Program and bidding documentb. Application Must Have’s and expectation, eligibility criteriac. Evaluation Process and timelinesd. Clarifications – Q&A

Representatives from NITI Aayog/

DHI/ IESA

19th JanCentral Government

Connect

a. Post Bidding requirements – approvals, subsidies and capital expenditure.

b. Discussion on Tripartite Agreement.c. Complimenting the Programme with other policies/ schemes.d. Overview of existing demand and its possible offtake.

e. Federal Cooperativeness among different ministries and ease of doing business.

Representatives from DHI, MoRTH,

MNRE, MoP, MEITY, DST, Ministry of

Mines, MoEFCC, MSME.

20th JanState Government

Connect

a. Overview of the existing state policies for EV and energy storage manufacturing.

b. Comparative analysis of Ease of Doing business in respective states.

c. Possibility of additional subsidy under the Tripartite agreement.d. Other related laws – labour; land; environmental.e. State level Cooperativeness among different departments

and ease of doing business.

Representatives from Telangana,

Andhra Pradesh, Gujarat, Tamil

Nadu, Uttar Pradesh, Karnataka,

Maharashtra.

21st Jan Industry Connect

a. Overview of the Leading Indian companies b. Overview of the International counterpartsc. Discussion on collaboration possibility d. Action pointers to initiate the dialogue (moderated by IESA)

Senior leadership of select

Industries

22nd

JanMarket Opportunities

Market outlook –

a. Market Potential, Key market drivers & challengesb. Electric Vehicle and Charging Infrastructurec. Stationary Energy Storage (Grid & RE Integration, BTM

Representatives from IESA, other

think tanks & Industry Associations

Manufacturing opportunity in Energy storage - India Connect Programme18-22nd January 2021 || For Registration email us at contact@indiaesa.info

Letter to PMO – PLI Scheme for ACC Battery Manufacturing

❖ Thank you Letter on behalf of Industry members has been submitted to PMO

towards announcement of Production Linked Incentives (PLI) Scheme to key

sectors including Advanced Chemistry Cell Battery Manufacturing.

❖ IESA has submitted 4 representations till date to PMO, last one with collation

support from other industry associations with a request to expedite the

launch of National Programme on Advanced Chemistry Cell Giga Factory

Manufacturing Plan and benefits thereafter

❖ Requested PMO to ensure timely implementation of this program by NITI

Aayog & MHI will help India in the revival of the economy and becoming

Atmanirbhar in both renewable energy and emobility sector.

❖ Urged them to ensure timely and consistent activities related to demand

creation through MNRE and MHI for stationary storage and emobility demand

generation.

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Meeting with Dr.S.K.Chatterjee, Chief (Regulatory Affairs), CERC

❖Meeting held with Dr.S.K.Chatterjee, Chief (Regulatory Affairs), CERC on Policy & Regulatory recommendations related to storage at CERCand developments at CERC/FOR in recent times

❖Working group with key States has been formulated for conducting the detailed resource adequacy studies in the wake of RE expansion,assess the impact on thermal assets, and create a regulatory framework around energy storage.

❖ Stressed on the importance of setting up of storage targets in India

❖ Based on the discussions, following has been sought from IESA

➢ Detailed list of CERC regulations where in Storage clauses can be defined/included

➢ Summary of USA orders

➢ 2 pager note on role of Storage in transmission deferral

➢ Storage Target rationale12

Proposal for including Raw Materials under PMP program

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❖While country is witnessing rapid growth of EVs in coming years, extensive usage of batteries in electric vehicles, coupled with

high demand in energy storage applications, is anticipated to drive growth of the raw materials of batteries.

❖ The pricing and supply of raw materials plays a very important role in battery manufacturing value chain. Currently majority of

the raw materials are imported to a large extent. With the latest policy announcements and encouragement from the

government, it successfully grabbed the interest of industry/investors towards manufacturing of such materials indigenously.

❖ Hence at this point it is highly important to consider reduction of custom duties and taxes of Raw Materials such as Lithium,

lithium hydroxide, lithium carbonate, Spodumene, Graphite materials, Cathode Materials etc.

❖ The reduction of taxes and duties can be linked with within Phased Manufacturing Program (PMP) Scheme with a significant

timeline which shall encourage the manufacturers to focus on indigenous manufacturing

❖ Hence, seeking inclusion of battery raw materials / components, under the Phased Manufacturing Programme (PMP) and

provision of necessary relief.

ASCI – IESA Certification Program

❖ Five-days online training course on “Energy Storage and its Importancewith Renewable Integration, Grid Stability & Electric Vehicles”, from18th to 22nd January, 2021.

❖ Objective is to strengthen skills and capacities of candidates who wouldpotentially work in the field of energy storage/ renewable integration/electric vehicle and the prospective policymakers to develop a betterunderstanding of the role of energy storage across sectors.

❖ Undertaken by renown experts and offers the flexibility for theparticipants to study at their own pace.

❖ Program to cover all aspects of technology, policy and market – Indiaand Global overview. Also, includes appropriate case studies,presentations, and videos.

❖ Key Takeaways – Indian Power sector Scenario; Energy StorageTechnologies; Need for Energy Storage in India; Storage and REIntegration; Energy Storage and Electric Vehicles.

❖ On-line registration is now open until January 15, 2021 through thelink https://ces.asci.org.in/iesa/

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Budget 2021-2022

❖ Taxes and duty structure

❖ Restricted import of items where we have adequate manufacturing

❖ Support for the MSMEs in the energy storage sector

❖ Government funds for R&D Initiatives in India-

❖ Tax benefits for Hybrid storage projects

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