Making the Electric Vehicles (EV) dream possible for India.

ELECTRIC VEHICLES

Making the Electric Vehicles (EV) dream possible for India

 Dr. Rahul Walawalkar, Executive Director, India Energy Storage Alliance (IESA)

Given the current circumstances and progress speed, we might not be able to achieve 100% EV transition by 2030 as originally suggested. But, once we are able to put a rein on the herculean challenges that stand in the way of making the EV dream possible for India we will be able to make a significant shift towards the clean energy mobility. Time for this transition is now if India has to also benefit from the manufacturing opportunities associated with this transition

India has a significant market potential for Electric Vehicles (EVs). Although we are still in the infancy of adoption of EVs, with the changes in the technology landscape as well as clear vision set by the Indian government, IESA estimates that over 7 crore EVscould be sold in India till 2030.This transition of transportation sector from petroleum based internal combustion engines (ICEs) to EVs, would create a market of 750 GWh of advanced energy storage solutions over the next decade. The electrification of transport sector presents a huge opportunity for cleaning up the air quality and also improve national energy security by reducing petroleum import dependence. Given the domestic demand as well as export potential, India has an opportunity for becoming a global hub for R&D and manufacturing while achieving this transition.

The Government of India has laid downits plans and NITI Aayog is currently finalizing national EV policy for making this dream a reality. State Governmentslike Karnataka and Maharashtra havemade a promising move by announcing their own policies to promote the development of Electric Mobility Infrastructure and providing incentives for manufacturing of EVs and energy storage.Although, currently consumers have very limited choices on EVs in India, Indian automobile sector leaders havealready showcased their upcoming EVs which can hit the roads very soon. Procurement of 10,000 EVs by EESL as well as electric buses by state transportation departments is sending the right signals to manufacturers to invest in building the manufacturing base. The whole scenario seems very promising with the proactive contributions from all stakeholders, but there are still miles before the final destination.

Making electric mobility mainstream is not just required to combat the immediate issues caused by the automotive emissions, but it can also aid the transition of electric grid from thermal power generation to a larger share of renewable electricity in the supply mix.What is exciting is that in recent years, both solar and energy storage technologies have demonstrated significant cost reduction, so we are now on a natural path whereEVs can also become cost competitive in terms of upfront capital with ICE vehicles with in next 5-7 years.

Though the journey has begun on a positive note, there is a lot of ground work that needs to be laid down before this dream starts to take shape. Before the electric vehicles actually hit the road in numbersit is important that we sort out the most vital aspect ‘Energy Storage and Distribution Infrastructure’. Since the time the EV Policy of the Govt. has been proposed the industry has voiced its concern over two very major requirements –need to continue to reduce the cost of key components includingLithium-ion batteries and creation of a robust charging infrastructure.

Advanced energy storage technology costs are falling faster than that of solar cost reduction. In past decade, the Li-ion cell prices have fallen more than 80% -90 %. There is still further 20% - 30% cost reduction anticipated in next 3to 5 years. Key reason for this rapid cost reduction include technology improvements as well as scaling up of giga factories for Li-Ion batteries.  The new projected Li-ion battery manufacturing capacity around the globe for 2020 is now over 400 GWh based on latest projections by IESA research. India needs to target at least 5-10 GWh of manufacturing by 2020 and 50 GWh by 2025 for helping drive down the costs further and for national energy security.

To accelerate EV adoption we require policy support from the government. Over past 2 years, IESA is working with Department of Heavy Industries, Department of Science & Technology as well as Niti Aayog to provide inputs on the electric vehicles and associated ecosystem. Ministry of New and Renewable Energy (MNRE) has recently constituted expert committee to draft the National Energy Storage Mission and I’m part of the expert committee. The mission will cover aspects related to the charging infrastructure as well as battery requirements for EVs. Once this mission document is in place it will act as a guiding document.

One of the biggest difference that is seen in the commercial acceptance of old fuel vehicles versus electric vehicles inIndia is the costfactor.Right now electric vehicles are more costly in terms of upfront cost as compared to the current-day vehicles. But this is expected to change within next 5-7 years, with the rapid reduction of batteries as well as other key components for EVs. Even right now, for certain user segments such as commercial cab drivers, the total cost of ownership for EVs (including operating cost) is cheaper than ICE vehicles if they drive 150 km / day or more. With the reduction in capex in coming years, more and more users will find it economical to switch to EVs, and the increasing adoption will continue to accelerate scaling up of manufacturing and further cost reduction.

Apart from just the economics for transportation, EV transition could also have a greater benefit for the electricity grid. Depending on how the charging infrastructure is created and associated policies are developed, this may or may not require substantial new generation capacity. E.g. with 100 GW of anticipated solar capacity added by 2022, India is expected to have a net load curve which has sufficient capacity for taking additional load during the afternoon. If we can have sufficient public charging facilities which can be used for charging EVs during the day, then this can actually solve a problem of low net loads during the times when maximum solar energy is being produced.

Energy Storage is a key component of this and there are number of ways in which EV adoption could be transformative for the grid. With better tariff structures and use of right storage technologies in EVs, we could also use EVs as well as stationary storage associated with fast charging networks as distributed storage and provide grid balancing services. This transformation will not only help in greening the transportation fleet by reducing diesel / petrol consumption and associated emissions but will also help in greening the grid if EVs are used for better integration of renewable resources in grid.

The key to having an efficient charging infrastructure begins with a comprehensive planning. NITI Aayog has already proposed a consultation for EV charging. Similarly, standardization and interoperability is key to developing a pan-India charging infrastructure. The DHI Bharat charger standards already propose a common standard for both charging and payment mechanism. To ensure interoperability, standardization can be adopted in the range of battery size, plug technology, payment standards etc. without hampering the existing systems. If global trends are anindication, the software will play a major role for convenient charging, last mile connectivity and promote people to opt for plans that is compatible with multiple service providers. It will help utilities and service providers to map the supply-demand from EVs and provide suitable incentives.

India has a talent pool but lack on the R&D facilities for battery and cell manufacturing. There is a requirement for supply chain strategy. In the past 3 years, India has witnessed the creation of 100s of Accelerators / Incubators that are focusing on information technology/healthcare area. There is a need for a special incubator to nurture early stage electric vehicles and energy storage technology startups and provide them suitable facilities for accelerating their progress from lab to commercialization.

Given the current circumstances and progress speed, we might not be able to achieve 100% EV transitionby 2030 as originally suggested. But, once we are able to put a reinon the herculean challenges that stand in the way of making the EV dream possible for India we will be able to make a significant shift towards the clean energy mobility. Time for this transition is now if India has to also benefit from the manufacturing opportunities associated with this transition.