The Indian government aims to significantly increase electric vehicle (EV) penetration by 2030. However, without adequate charging infrastructure, the scales will not tilt in the favor of EVs. According to the Federation of Automobile Dealers Associations (FADA), EV adoption has witnessed a significant rise between FY20 and FY22, with sales rising by 155 per cent year-on-year. The quantity of operational public charging stations has increased by 77 per cent, as per the Ministry of Power. However, it stood at only 1,640 in terms of absolute numbers as of February 2022. However, it is estimated that India would need ~400,000 public charging stations to support ~2 million EVs by 2026.
Setting up a high-power EV charging infrastructure, however, is a chicken and egg problem. On one hand, EV uptake is constrained due to lack of widely available public charging infrastructure, but on the other hand, low utilization is proving to be a hurdle for investments in charging infrastructure. Therefore, EV uptake and charging infrastructure need to move in tandem. Once the basic infrastructure is in place, EV demand will follow.
While the government is working to create a sustainable EV ecosystem, questions remain – who will lay the charging infrastructure for EVs? Will it be separate charge point operators or energy utility companies? What will be the revenue model? What will be the tariff structure?
To enable large scale creation of charging infrastructure, government needs to focus on conquering three major challenges:
Unavailability of adequate real estate:
- Finding the ideal location for setting up charging stations is burning a hole in the pockets of EV infrastructure companies. Moreover, only some EVs use public charging stations, which is aggravating the problem. As charging takes longer than filling petrol, diesel or CNG, there needs to be enough space around charging centres for EVs to wait. Real estate is expensive and supply in many areas is still a constraint. Hence, a mechanism needs to be designed to allot suitable land to developers for building charging infrastructure.
- Availability of charging infrastructure at residential & commercial buildings, airports, hotels, and others would catalyse EV adoption in the country. For installing adequate number of EV charging stations and for development of EV charging ecosystem at city level, consultation with relevant stakeholders such as RWAs, hotel associations, real estate companies, etc. is necessary.
- To address this challenge and to provide concessional land for installation of public EV charging stations, Ministry of Power in its January 2022 guidelines introduced the revenue sharing model for provision of Government land at promotional rates for public EV charging stations. However, to ensure adequate availability of EV charging stations and further develop a holistic ecosystem at different locations of Point of Interest (PoI) including private land, a similar approach would be required.
Void in seamless electricity distribution:
- EV charging stations need reliable power supply. Although Central Electricity Authority (CEA) data from 2016 shows that India is power surplus, power outages and load shedding are common, with some parts of the country getting power for less than eight hours a day. Hence, EV charging points need to have reliable 24×7 access to quality power. This could even be from open access sources now that consumers that use less than 100 kw are allowed to buy green energy. On a larger scale, utility companies will need to get the grid EV-ready by optimizing the power that is already there on the grid for smart charging technology.
- Using renewable energy (RE) to power the EV charging stations could make the overall EV ecosystem emission free. To encourage RE based EV charging, Ministry of Power recently allowed discounts for charging EVs during solar hours, which could even help in stabilizing the power grid.
- Additionally, in digital communications-enabled EV chargers or smart chargers, it is possible to control the rate of charging externally by the power utility companies or the network operator. When implemented on large scale, this can help to delay the upgradation of the Electricity Distribution grid.
Fast chargers are a prerequisite:
- Providing fast chargers at public charging stations where multiple vehicles can be charged is crucial as long charging cycles adversely affects the EV driver experience.
- To conquer this challenge, government has proposed several measures to support the EV industry, including implementing a battery swapping policy, formalizing interoperability standards, creating special mobility zones for EVs, and reducing customs duty on nickel ore. Many states have also announced concessional power tariffs for EV charging, significantly reducing the cost of charging.
- Additionally, new battery chemistries, such as sodium-ion and lithium-ion phosphate (LFP) batteries, which is cobalt free and high performing and the new Lithium-Sulphur batteries, which promise a 4X improved energy density while weighing lighter than the erstwhile Lithium-ion batteries will also witness incremental momentum. Such niche battery technology backed by their fast-charging capabilities, and enhanced thermal stability, could make EVs as mainstream in coming years. This is in line with Production Linked Incentive Scheme for Advanced Chemistry Cell (ACC) Battery Storage announced by Government of India. The scheme seeks setting up of a cumulative ACC manufacturing capacity of fifty (50) GWh for ACCs and additional 5.0 GWh for niche ACC Technologies.
- For charging, the advent of faster and smart chargers is revolutionizing the market. Many nations are already deploying fast and superfast chargers. However, the invention of the Megawatt Charging System could change the scenario forever, as it can support charging speeds up to 3,750 kW, thus reducing the charging times substantially.
While the development of high-capacity chargers for catering to heavy duty vehicles, these chargers could strain the grid. With the use of smart charging technology, utility companies can control and optimize the EV chargers remotely via a data connection to shift charging times to off-peak periods. India is also likely to witness V2G (Vehicle to Grid) allowing exporting energy stored in a vehicle’s battery to the grid during times of high demand.
The government is inclined toward fostering a robust EV ecosystem, but a lot still needs to be done on the ground. Favorable policies for automotive companies to manufacture EVs, instilling trust in customers to adopt EVs, and having a reliable mechanism to build high-power charging stations are some of the initial steps that the government and policymakers need to take at the earliest. Further, development of complete ecosystem for EV chargers can be achieved through capacity building of relevant stakeholders involved, both at public and private sectors.
[This article was authored exclusively for ETEnergyworld By Somesh Kumar, Partner & Leader- Power, EY India]
