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Interaction | June 2018

Right policies are key to India's EV revolution

For India's ambitious electric vehicle (EV) plan to really take off, the country needs to complete the groundwork on electricity tariff, charging protocol and business viability, while advances in storage systems technology will help in cutting costs, says <span style="font-weight: bold;">Amit Kumar, Partner, GRID, Energy &amp; Utilities, PwC.<br /> <br /> What is the potential for EV ecosystem in India?</span><br /> EV is the most talked about topic in the energy industry today, because two energy sectors are involved - electric supply and oil and gas. On the supply ecosystem, the government is working on a policy as to who should be responsible for setting up the charging infrastructure. Of course, power distribution companies in cities and states have to be involved, but since the government declared recently that a charging station would not be considered as a sale of power but a service, that means a third party can also set up such infrastructure. But before that happens, the government will have to define the standard or protocol on which a charging station would be established.<br /> <br /> Secondly, some kind of visibility has to be provided as to the number of vehicles that will be coming to the charging station. Tariff, charging protocol and visibility in terms of business that these entities can generate will determine the spread of this ecosystem.<br /> <br /> For now, the government is in the process of asking certain public sector undertakings to take the lead and establish charging stations in those cities and states that have shown an inclination for EVs. <br /> <br /> <span style="font-weight: bold;">Are preparations on track for electric mobility?</span><br /> These are initial days. Energy Efficiency Services (EESL) has been looking after the procurement of EVs and they came out with a tender for procurement of 10,000 vehicles. And as we are all aware, Mahindra &amp; Mahindra and Tata Motors won the tender for the supply of these vehicles. Meanwhile, even as these are being supplied, EESL has floated another tender for a similar number. It is also collating and compiling demand from governments at the centre and state level for the supply of these cars.<br /> The challenge, as we just discussed, is to establish the charging infrastructure or ecosystem. Some states like Delhi have expressed the intent to procure 1,000 e-buses. Other states are also in the process of identifying their needs, and EESL has been approached by states for procurement of e-buses. That is the visibility as far as the overall near-term demand is concerned. <br /> <br /> <span style="font-weight: bold;">There is also intense debate on the charging regime that the country needs to go in for. Give us your perspective on the issue.</span><br /> There are two charging protocols, Charge de Move (CHAdeMO) and Combined Charging System (CCS). There are pros and cons for both protocols, but except for Japan, most other countries use CCS as the primary standard. The government of India through its various departments and agencies such as the Bureau of Indian Standards (BIS), the Department of Heavy Industry and NITI Aayog is in the process of identifying, and framing standards and guidelines for the right protocol. It looks like India would keep the standards open and market driven.<br /> <br /> <span style="font-weight: bold;">What has been the global experience in terms of putting in place the right kind of charging infrastructure?</span><br /> In most developed countries, the charging infrastructure was established first, and this has helped in expanding the penetration or revolution in terms of ownership of EVs. In India, since both things have commenced parallel, we are in the process of identifying the total number of charging stations required, their locations, the most appropriate business model, protocol, etc. For example, in the ESSL tender for procurement of cars, these will be utilised by government departments. Therefore, the charging stations are being established in the parking lots of government offices for day and night charging. But going forward, as private consumers also opt for EVs, this will get spread out to other places. In this context, the oil companies are now open to utilising the available space near oil vending stations for charging. Similarly, charging stations will also be established at convenience stores, malls, and other public and commercial spaces where possible. <br /> <br /> <span style="font-weight: bold;">It has been suggested that the country would have truly arrived in electric mobility only when there is sufficient infrastructure for storing power generated by renewable energy to fuel EVs. What is your take?</span><br /> Several things are interconnected on this issue, including the storage part of it. Since the battery is going to play an important role in the evolution of EVs and mainstreaming of renewable energy into the grid, advances in storage technology and favourable pricing are going to ensure that more and more storage gets utilised for these two purposes. I will cite an example from Delhi. During summers, electricity consumption peaks in the city around 3 o'clock because students switch on the air-conditioning on returning home. And that is also the time when the sun is also at its peak as an energy source. Therefore, there is both demand and supply at that point in time. But we will still need storage, because that will help in mainstreaming of renewable energy.<br /> <br /> The arrival of EVs is going to create a demand and it is quite possible that the government will work on a business model where there is an incentive on the utilisation of renewable energy for charging. A supplier in Delhi who gets his electricity from a solar farm in Rajasthan would be able to utilise that power to charge EVs with wheeling and transmission charges. That's a strong possibility and it will also reduce the cost of charging. But it will take some time before the scheme is finalised.<br /> <br /> <span style="font-weight: bold;">Do you see the proposed expansion in electric mobility stressing the electric utilities in any manner?</span><br /> In fact, this will be a huge positive for electric utilities! The reason is that India is facing a situation where supply is likely to increase but the demand might not keep pace with the supply. In such a situation, we will struggle to find sectors that can help drive up the demand. With EVs, the demand for electricity is likely to significantly fill that gap and give a fillip to demand.<br /> <br /> Secondly, and most importantly, this will obviate the need for more oil imports, which is a drain on the country's foreign exchange reserves. Part of the money saved on oil imports will get used to generate electricity to power EVs and that will be a big positive for the country as well as <br /> the economy.<br /> <br /> <span style="font-weight: bold;">- Manish Pant</span><br />
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