IESA Recommendations for Budget 2022-23

IESA has been actively working in the space of energy storage, electric vehicle, renewable integration, microgrids & green hydrogen for the past 10+ years.

We have been continuously working with various GOI Ministries, state utilities & national labs to prioritize the pilot energy storage deployment, manufacturing and R&D initiatives. We have 160+ energy storage and e-mobility, green hydrogen, microgrid players from India and abroad (those are focusing on India market) as our esteemed members,

Here are the key suggestions from the industry listed below for your quick reference and detailed submissions in the document attached. The budget expectations are attributed to Debi Prasad Dash, Executive Director, India Energy Storage Alliance.

Recommendations towards Energy Storage Industry: Tax Holidays which will boost the investment in the industry, the exemptions on GST, Customs & Excise Duty for next 2-3 years till the domestic manufacturing picks up in India would result in a reduction of overall system cost immediately and the Tax incentives will support the industry for providing a reduced deployment cost in a long run with domestic manufacturing.

Recommendations towards E-mobility: Although GST rate on EV is reduced from 12% to 5%, GST for advanced batteries in EVs still on higher side ranging between 18% to 28%. Requested to bring down GST under 5% bracket in order to ensure affordability and smooth transition towards EVs from ICEs. Other recommendations including extending of Fame II incentivization towards Charging infrastructure and Battery Swapping.

Recommendations towards Manufacturing, ACC PLI Scheme, MSMEs & Startups, Skill Development etc:

a) It is requested to reduce Duties for supply chain components including raw materials as well as manufacturing equipment: reduced rate to 5% minimum from higher duties.

b) DHI bid for ACC PLI Scheme has received tremendous response from the National and International investors. A total of 10 bids with capacity ~ 130 Gwh , which is 2.6 times the manufacturing capacity to be awarded. In order to achieve Prime Ministers vision and utilize the interest from Investors, it is requested enhance the capacity of ACC manufacturing to 75 GWh under PLI scheme as well as increase the Financial Outlay Amount respectively. Similarly, it is also requested to consider increasing the capacity and financial outlay for planned Niche ACC program under PLI to support new and advanced battery technologies to leapfrog the global technology race.

c) It is requested to provide the Infrastructure Status to the Energy Storage projects (covering both manufacturing and deployment) to facilitate promotion of domestic manufacturing and checking the imports.

d) Support to Intermediate Material Manufacturers: We strongly recommend Ministry to consider specifically look in to export promotion investments. Government is requested to consider either consider capital Investment subsidy, 20% of investment which be capped at INR 100 Cr over period of 10 years or consider separate PLI scheme for intermediate material manufacturing.

e) Incentivize MSME sector and Start Up Eco system of Energy Storage and E-mobility: For faster growth of the manufacturing capabilities in India, it is requested to extended other benefits like affordable funding and easy access, common facility centres for manufacturing, Public procurement order etc to Micro, Small and Medium Enterprises (MSME). Dedicated fund to be allocated for the sector including Hardware Startups which needs commitment and funding.

f) Introducing Loan Guarantee Programs for High Risk Technology Programs

g) If the beneficiary firm in any accounting year shall fall short of the Subsistence Revenue as a result of any or all of Non-Political Event, Indirect Political Event and Political Event, as the case may be, the govt shall, upon request of the beneficiary firm, provide a loan for meeting such shortfall (the "Revenue Shortfall Loan") at an interest rate equal to 2% (two per cent) above the Bank Rate.

h) Government funding towards research and development energy storage, not just for lithium-ion but for a variety of technologies including flow batteries, sodium-based batteries, zinc-air batteries, metal air batteries, green hydrogen etc.

i) Skill development programs for senior level researchers as well as supervisory & junior level man power deployment

j) Need for incentive-based scrapping policy to encourage old vehicles' voluntary scrapping.