The recent policy push for electrifying mobility in India has spurred a host of national and sub-national policies, private sector investment in technology and infrastructure, and business models piloted or deployed in the electric vehicles (EV) segment. Many plans are based on targets or manufacturing, and there are few conversations about holistic views of EVs, including the grid.
Brookings India organised a roundtable discussion in Bengaluru on May 7, 2018, where experts from industry, academia, non-governmental organisations, and utilities, along with government were present (including the additional chief secretaries of energy and of industry, Government of Karnataka).
To accommodate EVs into the system, advanced planning and targeted interventions are required at urban development, manufacturing, technology investment, and consumer behaviour levels. Brookings India has a paper on the problem in the specific context of implications for the electricity grid in case of large scale EV transition. Karnataka has specifically led this space in terms of manufacturing and employment, innovative start-ups offering EV taxi services to service clusters, procurement of electric buses and being the first state to have an EV policy in India.
To accommodate EVs into the system, advanced planning and targeted interventions are required at urban development, manufacturing, technology investment, and consumer behaviour levels.
At the roundtable we also presented and discussed our findings in the form of a paper from our ongoing study on the impact of EVs on the grid at the national level. A few key points from the paper include:
- The electricity grid impact of EVs has two dimensions that need to be understood separately: the energy requirement (expressed in kilo-watt hours (kWh) or higher) and the instantaneous demand (kilo-watt (kW) or higher) at any given point of time. Even with 100 per cent EV sales across private and fleet vehicular categories, electricity demand on account of inter-state travel will be around 100 billion kWh by 2030, which is about 4 per cent of the projected electricity demand. On the other hand, the instantaneous impact on the power grid can be tens of times higher, depending on when the users plug in and the use of fast-charging technologies.
- While generation capacity at a national level may be present, many bottlenecks will be local, especially at the feeder or distribution transformer level.
- There are broader ecosystem issues that need further study, including grid-signalling (including time-of-day pricing for electricity), valuing pollution reduction, charging infrastructure, and finances. More than half the retail cost of petrol is taxes, which would need to be covered via other means if we move to EVs. It is unlikely one can (or should) tax electricity at the same rate.
Identifying opportunities and bottlenecks
The Brookings India discussion in Bengaluru focused on three main threads: manufacturing, systems-level issues, and future unknowns and risks.
At a risk of over-simplification, there are three parts to an EV: the battery, the electronics and electrical systems, and the rest of the vehicle. India already has significant manufacturing skills and capacity for the rest of the vehicle. Batteries are a tough challenge since India today lacks the resources supply chain for specialised materials, including lithium and cobalt, and China is a world leader in this space, not necessarily based on state-of-the-art but on the scale of manufacturing. A competitive solution to this may take time to emerge. This leaves the electrical and electronics portion for innovation and scaling. One possible new option is the creation of modular platforms, which can separate the battery from other components, all of which could be mixed and matched. This has the additional benefit of allowing not just customisation but the possibility to achieve scale without necessarily having a single mega-sized facility. This could even allow for a larger number of small- to medium-scale factories across India.
A lot of effort needs to focus on early adopters, especially fleet vehicles, as well as understanding future technologies and change. Much of tomorrow’s infrastructure is yet to be built and digital systems are growing rapidly. Transitioning from niche to mass-markets are a function of consumer preferences and availability of options that meet their needs and expectations.
Experience in ‘budget’ electric two-wheeler and car segments has shown how under-powered and lower range vehicles hurt long-run market growth as they don’t necessarily cater to the basic aspirations of the buyers. Financing of EVs is still a bottleneck as since they are a new item on the list of the book-keepers, their depreciation and residual value are not well established like conventional vehicles.
Such issues will resolve over time, and are second order to the broader challenge of providing a cost-effective and quality product with a reasonable payback period.
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