New Delhi: On a chilly morning, 26-year-old Deepak Vaishnav took his first-ever ride in an electric bus in his hometown of Shimla. The hilly capital of Himachal Pradesh, which once was the summer capital of the British Raj, had just inducted one the country’s first e-buses.
The roads of the city had always been filled with old private and public diesel buses that spewed smoke onto the city’s pristine Himalayan slopes. In 2014, India’s green court National Green Tribunal (NGT) directed the Himachal government to switch its buses to CNG or electric buses in order to promote eco-tourism.
The e-buses are clean and silent, Vaishnav said. “There was no smoke coming from the tailpipe. I was so proud to see my city making headway into electric buses, which were not even running in Delhi,” Vaishnav said, reminiscing on that morning in July 2019.
In the last two years, the Himachal Road Transport Corporation (HRTC) has deployed 75 e-buses in different parts of the state, including on the iconic stretch from Manali up to the snowy Rohtang pass.
A similar transformation is awaited across India, as climate change and urban air pollution force governments to consider switching vehicles to non-polluting fuels like electricity. India has a stated goal of having 30% of its vehicles as electric vehicles (EV) by 2030. Experts say that electrifying public transport like Shimla’s buses can help reap bigger gains to society than the more well-known electrification of cars and bikes.
But the shift to e-buses is hobbled by a number of challenges, including poor financial support from the government, lack of manufacturing capacity, and challenges on charging infrastructure.
But with these challenges unaddressed, as far as e-buses go the government appears to be missing the bus.
Why are electric buses necessary?
There are about 1.9 million registered buses in India which carry 85% of all road transport passengers. That works out to 0.5-1 buses for every 1,000 Indians.
To keep up with demand, India would need to procure 250,000 more buses by 2030, as per an estimate by the World Resources Institute-India, a think-tank.
A recent study by the Council On Energy, Environment And Water (CEEW), a Delhi-based think-tank, said that India would achieve “greatest gains” from the EV transition when mobility is dominated by public transport.
The study was based on developing future scenarios in which the 30% EV target would make a dent in the number of vehicles on the road and the consequent energy demand. It looked at three scenarios in 2030, a business-as-usual scenario (BAU), high public transport scenario (High PT), high private vehicle scenario (High PV), and a shared mobility scenario (Shared).
The study found that the high PT scenario would result in 57% fewer vehicles on road than the high PV scenario. As a result, energy demand is also the lowest in the high PT scenario. “Introducing EVs in such a paradigm results in the greatest gains from an EV transition,” said the study.
Table:1 Vehicles on the Road in Different Scenarios
Table 2: Energy demand under different scenarios
Source: Council on Energy, Environment and Water, 2020
In 2015, the government of India’s department of heavy industries (DHI) brought into force its policy to promote EVs in India. The scheme, called Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles or FAME-India, ran in its first phase until March 2019 at an outlay of Rs 895 crore.
But it supported just 500 e-buses in this phase. About 90% of the vehicles produced during the phase were electric scooters with outdated lead-acid batteries instead of lithium-ion ones. Large vehicle manufacturers stayed away from the policy.
The second phase of FAME-India has been running since April 2019 and ends in March 2022. Its subsidy outlay was 10 times higher at Rs 10,000 crore.
This phase will support just 7,090 e-buses or not even 1% of the buses currently on road in India. Even if all these buses are bought, the proportion of e-buses on road in 2022 would be just 0.4% of the 1.9 million total registered buses in India – which itself is inadequate against the demand.
It has concentrated about 85% of the outlay on passenger transport with about 35% going to e-buses. Under the policy, Rs 3,545 crore have been allotted to subsidise the purchase of e-buses. It has allotted a nearly equal sum for electric cars and three-wheelers for commercial use (Rs 551 crore for 55,000 electric/hybrid-cars and Rs 2,500 crore for 500,000 three-wheelers). It has set aside Rs 1,000 crore for e-vehicle charging stations.
As a result, some states are trying to pitch in to the policy’s subsidies. Delhi, for instance, has a policy to have 25% of all new vehicle registrations electric by 2024. For this it is coming up with incentives above what is provided by FAME.
By March 2020, different states have issued tenders for about 4,520 buses out of which 2,450 buses, about 54% of the tendered capacity, have been approved for subsidy under FAME.
The FAME policy targets only government procurement of buses. But only 7% of the buses registered in India are operated by state road transport corporations. The government still has to figure out a system to deal with buses owned by private players.
E-bus ecosystem is insufficient
Even if states and private companies begin to add e-buses to their fleets there would be not enough supply.
One of the big challenges of operationalising these tenders is the limited capacity of the vendors to provide the e-buses we need. The vendors or manufacturers are numbered, said Amit Bhatt, executive director-integrated transport at World Resources Institute India (WRI India).
Private financiers are unwilling to fund e-bus manufacturers because the sector is too new. As a result there are not enough manufacturers of e-buses, who are hobbled by limited manufacturing capacity. Crucial questions over the availability of charging infrastructure for e-buses in cities and on highways have not been answered by the FAME policy or the government.
The bus manufacturers need finance to build these buses, which is not available.
Financiers point of view is that the e-bus technology is not mature enough, thus the money involved is associated with a lot of risk. So bus manufacturers are putting up their own capital.
After FAME a lot of state governments are reaching out to these three-four manufacturers to provide these buses but the vendors are unable to meet the demand, said Charu Lata, lead consultant – electric mobility and clean energy, Natural Resources Defense Council (NRDC), a global advocacy.
The need for finance is only going to grow in the future. A cumulative investment of over $180 billion (around Rs 12.5 trillion) in vehicle production and charging infrastructure would be required until 2030 to meet India’s electric vehicle (EV) ambitions, according to a recent study by CEEW’s Centre for Energy Finance (CEEW-CEF).
These figures do not even include the cost of building charging infrastructure across India, which includes procuring land in cities and upgrading electricity infrastructure.
In January 2020, Indian government sanctioned about 2,636 new charging stations across states under FAME. Of these, 1,633 will be fast-charging (DC) stations and 1,003 will be slow-charging (AC).
In November 2020, the government revealed its plan of establishing charging kiosks at 69,000 petrol pumps across India. The government did not specify whether these charging points would be AC or DC. It is unlikely if they would support the e-bus fleet given they would need to be parked for longer hours and there is always a rush of vehicles on pumps.
That is because even on the 50-watt fast charging mode, a full size 12-meter long e-bus takes six to eight hours to charge. To charge these buses faster you need to get chargers with higher configurations, which have not yet been developed, Charu Lata of NRDC said.
Fast charging stations of high capacity will have to be established at depots, and less capacity stations can be set up along the bus routes that serve other electric vehicles such as cars, she said.
Charging stations would also require plenty of land – enough to accommodate multiple buses with a turning radius for them to move around. This would require large chunks of lands, and in metropolitan cities these lands would be very costly, Charu Lata said.
Charging depots or spots would also need electricity connections powerful enough to charge multiple buses at a time. Some cities have had to invest crores of rupees to install new electricity sub-stations to support charging for their 20-30 e-buses. Most bus stations and depots might need to upgrade their electricity infrastructures to accommodate e-buses.
Electricity distribution companies and transport departments would have to come together to figure out the places across the cities where the grid is strong enough to support the load of these additional e-bus charging points, at the lowest cost possible.
Hope from the GCC policy
Even as financing and budget concerns remain, there is hope from a new e-bus purchase policy introduced under the FAME policy.
Under the FAME scheme, the department of heavy industry has approved two model methods for state road transport corporations to buy e-buses.
The first is for the corporations to buy e-buses from manufacturers and maintain them by themselves. More than 70% of about 500 e-buses that are running across India, were secured by SRTCs through the outright purchase model.
The second is called gross cost contract (GCC), and it has been made compulsory to avail subsidy under the second phase of FAME.
In GCC, an SRTC engages operators or suppliers to purchase e-buses and take care of their operation/maintenance. The SRTC pays a fixed per kilometer cost to operators. Cash-strapped corporations can get a large number of e-buses running on the road this way instead of buying and running the buses.
The concern is that under the GCC model, assets bought from taxpayer money (through subsidies) remain in control of private operators. Experts, however, say that most SRTCs are in losses; the GCC model allows the government to ensure better services for the public without thinking of operational difficulties including EV-specific issues like rapidly changing technology and maintenance.
SRTCs can also avoid investments in capacity building to operate and maintain e-buses. So the GCC model provides them the flexibility to get rid of these issues, said Abhinav Soman, an electric mobility expert at CEEW.
“Tomorrow, you could have a bus that is much cheaper to run compared to today. And instead of sitting and evaluating these things, they can just issue the GCC contract,” Soman said. This way, it is up to the suppliers to figure out the best available technology in order to bid for the lowest rupees per kilometer.
“Government can play the role of regulators in this case and make sure that the service provision happens. That is anyway the primary objective and not owning assets,” he said.
Bhasker Tripathi is a climate change research fellow at Land Conflict Watch.
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