The National Democratic Alliance (NDA) government is set to put in place liberal rules for charging stations to power electric vehicles, seeking to facilitate rapid expansion of the infrastructure needed to support its ambition of an all-electric fleet on Indian roads by 2030.
For instance, the norms under preparation will not require government and private institutions that set up charging stations for captive use to possess an electricity retailing licence.
Only entities that get into the business of charging stations and retail electricity to third-party vehicles will require such a licence, two persons familiar with the development said on condition of anonymity.
The Central Electricity Regulatory Commission is working on these norms.
The idea behind a liberal framework for charging stations is to accelerate the expansion of the use of electric vehicles, which could bring economies of scale and could push prices down.
The government is now procuring 10,000 electric vehicles, the competitive bids for which resulted in a 25% reduction in the price of the contracted vehicles from their prevailing market price.
Energy Efficiency Services Ltd (EESL), which is procuring these vehicles, follows a business model of making upfront investments in energy-efficient equipment, which it recovers from customers over a period from the savings they make in energy consumption.
“In the case of government vehicles (which EESL is procuring), charging stations are used for captive consumption of electricity. There is no sale of electricity. Hence it is a good idea not to require such infrastructure to have a power distribution licence. The same rationale would hold true for a charging station set up by a private institution for captive use as well,” said EESL managing director Saurabh Kumar.
Tata Motors Ltd won the EESL contract for supplying 10,000 vehicles, the power ministry said in a statement on 29 September.
Mint had reported on 5 October that Mahindra and Mahindra Ltd matched the bid made by Tata Motors, winning 30% of the marquee order. Mahindra will accordingly supply 150 of the 500 electric vehicles to be delivered in the first phase.
“The industry is eagerly waiting for an integrated electric mobility policy, which would include a policy on charging stations,” said Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers.
Mathur said clarity on setting up charging stations would be helpful. The government, in consultation with the industry has prepared technical standards for slow charging stations while the same for fast chargers need to be worked out, he added.
India has set a target of making a complete shift to electric mobility by 2030. A ministerial panel is currently working on evolving a project that could help achieve this goal. India has set a climate change goal of reducing the carbon emissions intensity of its gross domestic product by 33-35% by 2030 from 2005 levels.
The potential of the electric mobility sector has caught the attention of conventional oil and gas companies too.
While announcing a Rs40,000 crore investment in India’s energy sector on 15 June, BP Plc’s group chief executive officer Bob Dudley said the company’s partnership with Reliance Industries Ltd will also explore unconventional mobility solutions and advanced low carbon energy businesses in India.
The promotion of electric vehicles is a strategic goal for the NDA government, which is keen to cut India’s oil imports. An increase in electric vehicles is also expected to boost electricity demand, helping underutilized thermal power plants as well as the surging number of clean energy projects in the country.
“The electric mobility ecosystem will take time to develop and will need all possible encouragement at the beginning. The norms covering infrastructure such as charging stations should be fully liberalized, with existing utilities giving open access to the electricity network without any restriction and without loading any existing surcharges,” said Debasish Mishra, partner at Deloitte India.
“In the current (power) demand-starved situation indicated by a plant load factor (capacity utilization) of around 60% for coal plants in FY17, any sign of growth in electricity demand will provide hope to energy generators,” said India Ratings and Research in a note on electric vehicles earlier this month.