2018-09-03
₹1,000 crore subsidy likely for EV charging infrastructure

The Union government plans to provide ₹1,000 crore as subsidy for building a nationwide charging infrastructure for electric vehicles as it seeks to expedite the roll-out of India’s ambitious EV programme, said two people aware of the development on condition of anonymity.

The ministry of heavy industries (MHI) is drafting a cabinet note on the ways and means to set up the infrastructure as the government seeks to allay consumer concerns on how to charge such vehicles especially on cross-country highways. According to the draft reviewed by Mint, the government plans to have 1,000 charging stations across the country especially on major highways such as Delhi-Chandigarh, Delhi-Mumbai, and Mumbai-Surat-Pune stretch.

A charging station will be installed at every 25km on these highways, according to the note prepared by the Department of Heavy Industry. There will be additional focus on cities with population exceeding 4 million.

A DHI spokesperson didn’t immediately respond to emailed queries seeking comment.

India unveiled its National Electric Mobility Mission Plan in 2013 but it has since gone slow on its targets as the government realised the need for adequate infrastructure. Lack of charging stations is a key factor behind the delay in deployment of electric vehicles procured by state-run Energy Efficiency Services Ltd, a joint venture between NTPC Ltd, Power Finance Corp. Ltd, Rural Electrification Corp. Ltd and Power Grid Corp. of India Ltd. The procurement is to be done for 10,000 EVs in two phases.

The ₹1,000 crore corpus may be earmarked in the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicle Scheme (FAME). The government plans to deploy about 5000 electric buses in the second phase of the FAME scheme which will expire in 2023.

FAME, launched in fiscal 2015, was meant to run for two years until March 2017. The scheme was subsequently extended three times till end-September 2018.

Last Friday, an inter-ministerial meeting decided that the government will spend ₹5,500 crore on electric mobility under the second phase of the FAME scheme.

According to the documents reviewed by Mint, the Department of Heavy Industry expects total investment of about ₹2,000 crore to establish adequate number of charging stations, wherein the ministry would contribute ₹1,000 crore, with the rest of the investment coming from private participation. This amount will be disbursed over a period of five years wherein ₹50 crore will be invested in the first year and ₹200 crore in the second. Over the subsequent three years, DHI will spend ₹250 crore each. The local EV industry welcomed the move.

“Electric vehicles and charging stations go hand in hand and neither can really take off without the other. It is great to see the government supporting the growth of charging infra as well since the state level policies which assign subsidies do not really exist on the ground,” said Maxson Lewis, managing director at Magenta Power, an EV charging infrastructure provider.

“Currently, the business case for setting up charging stations is not strong and any infusion and support will make it possible for us to build the network. We are sure this will only open up the EV market and the corridors and more EV enthusiasts will take to the EV highways,” added Lewis.

Any shift to EVs will help India’s strategy for achieving its climate change commitments. This assumes significance in a country that is now the biggest emitter of greenhouse gases after the US and China, and which is among the countries most vulnerable to climate change. India plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.

Source- Mint