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Half of the world’s population currently lives in cities, and this is expected to go up to 66% by 2050. By that time, 60% of India’s population will be living in cities. While cities occupy only 2% of the world’s landmass, in terms of climate impact, they leave an enormous footprint—consuming over two-thirds of the world’s energy and accounting for more than 70% of global CO2 emissions.. Given India’s 1.3 billion population and its expansive landscape, mobility remains a challenge. The country’s vehicle population is set to see a dramatic surge, from the existing 160 million units to over 550 million by 2030. With India heavily import-reliant for oil—over 80% of its oil demand is met spending over $235 million on daily crude imports—how will these cities ensure sustainable living and basic quality of life ?
Cleaner transportation and electrification in the mobility space holds immense potential for enhancing India’s energy security, reducing greenhouse gases, offering a sustainable progress path, and a conducive environment for the future inhabitants of the planet. Battery and plug-in hybrid electric vehicles (EVs) are becoming a vital component of the transportation landscape, offering clear environmental, economic, and energy benefits.
The anticipated growth in the EV segment creates the need to facilitate and encourage the development of a consistent and accessible network of EV charging infrastructure (electric vehicle supply equipment, or EVSE)—at home, streets, and elsewhere in the urban landscape. EVs are gaining traction as battery prices fall and the awareness about the benefits of EVs increases. As cities look to capitalise on the EV-opportunity—from lower maintenance costs to better air quality—they also must lay the groundwork for becoming ‘EV ready’.
Forward thinking cities and nations are already electrifying buses, car pools, and taxis. Top electric vehicle markets and associated local utilities are deploying public charging infrastructure as well as promoting such infrastructure development by the private sector by requiring buildings and parking facilities to support EVs. The lead market remains China, where substantial industrial policy motives are driving battery and EV technology forward.
China leads the world in terms of new sales, with 142,445 electric vehicles purchased in the first quarter of 2018, a 154% increase over the first three months of 2017. Meanwhile, Norway’s share of registered electric vehicles—the country is another early EV adopter—rose to an astonishing 48%, up from 35% last year. In total, 16,181 were purchased between January and March. Sales of electric cars in the UK have risen 11% over last year. Preferential access is being provided to EVs for parking and access to bus lanes, carpool lanes, and toll roads. Some countries and cities with the most pervasive air quality problems are beginning to authoritatively exercise their control over access to their areas.
Even with approximately 30% penetration across two-wheelers and four-wheelers in India by 2030, EVs may need only 3-4% of today’s power generation capacity. We need to identify any concerns emerging from additional requirements on existing grids. For instance, short-range vehicles like personal cars could predominantly be charged at home, which will require a stable power supply. Proactive analysis and planning could help prevent issues with the network infrastructure.
According to NITI Aayog, India’s revamped Planning Commission, India can save 64% of anticipated passenger road-based mobility-related energy demand and 37% of carbon emissions in 2030 by pursuing a shared, electric, and connected mobility future. This would result in a reduction of 156 million tonnes of oil equivalent in diesel and petrol consumption for that year. At $52/bbl of crude, this would imply a net saving of roughly `3.9 lakh crore (approximately, $60 billion) in 2030.
According to a study by National Renewable Energy Laboratory (NREL), Indian cities will need 4,900 Direct Current Fast Charging (DCFC) stations while interstate corridors will only need 400 DCFC stations. Cities must build a seamless network of charging stations for encouraging EV adoption. A case in point is Mumbai, which is truly getting future ready: The city is embracing the EV wave by setting up charging stations at strategic locations, including popular retail malls, business hubs, highways and neighbourhoods. The chargers can also monitor the car battery charging status and the units consumed while charging a car.
Such robust charging infrastructure could be the key to ramping up EV sales in India. In 2016, India had fewer than 500 EV charging stations, spanning major metropolitan cities like Delhi, Mumbai, Bengaluru and Kolkata. But, by 2030, a city like Delhi could require around 300,000 fast chargers, presuming a 30% EV penetration into an estimated car parc of 10 million. Around 12% of these would be taxis—the primary users of fast chargers.
Meeting this infrastructure need could call for an investment of around $1-1.5 billion. However, the current TCO economics in India are not profitable for a fast charging infrastructure provider. In addition to the standard business costs like investments in fixed assets and operating costs, the continuous evolution in battery cost, driving range, charging technology, and charger costs drive the economics of the fast charging infrastructure business. While global EV sales remain low, examples from other countries indicate that a mix of push and pull could determine the pace of EV penetration in India.
This includes a “supportive government ecosystem” that also establishes strict regulations on carbon emissions and regulations, driven by strategic intent (for example, reducing the current account deficit and geographic dependence driven by crude oil). Easy and affordable access to charging infrastructure—both standard AC charging as well as rapid DC charging—is a key to meeting customer needs.
By laying down a foundation of support, innovating on business models (leasing of batteries, swapping infrastructure, deploying fast chargers), making the economics of (fast) charging infrastructure work, providing stable power supply and grid stability, power companies can enable easy and rapid charging and drive EV adoption. Creating a pull among customers by creating an economical cost proposition will be crucial in encouraging customers to invest in EVs. Likewise, the automotive industry can play a crucial role in catalysing this by changing the product and component mix, bringing EV components and vehicles to life, building the right talent pool and skill set, improving the performance of batteries and EVs, and building scale.
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