“This is in comparison to the actual electricity supply of 1,433 BU, including captive supply of 197 BU in 2016-17 as per Central Electricity Authority (CEA),” the report said. The agency arrived at the estimated electricity requirement for EVs using diesel and petrol consumption data for FY17 and the share of fuel usage across vehicle categories provided by the Petroleum Planning & Analysis Cell in its reports, Industry Performance Review of March 2017 and All India Study on Sectoral Demand of Diesel and Petrol 2013.
Around a third of the 500 BU of the estimated energy for road transportation in FY17 is attributable to two wheelers and cars, had all of them been electric, the report stated. It added the electricity requirement for road transport in the next decade will depend on the extent of adoption of EVs.
“Ind-Ra observes the government’s repeated focus on reducing oil imports and believes that this focus on oil replacement is likely to continue in the long term. Niti Aayog’s draft three-year energy policy highlights the potential for electrification in transportation (EVs), cooking, agriculture and industries,” the report said.
In the current demand-starved situation, indicated by a plant load factor of around 60 per cent for coal plants in FY17, any sign of growth in electricity demand will provide hope to energy generators, the report noted. Currently, the government incentivises purchase of electric and hybrid vehicles under the scheme Faster Adoption and Manufacturing of Hybrid and EVs (FAME). As per the government’s figures, 148,275 electric or hybrid vehicles had received support under this scheme by June 2017.
EV penetration depends upon multiple factors including battery cost, battery life & infrastructure for charging, battery swapping and battery disposal. Rapidly dropping battery costs have led to increased adoption of EVs in China and the US, the report added.
Ind-Ra also expects the cost of EVs to reduce with an increase in production. This comes at a time Energy Efficiency Services Limited (EESL) has finalised suppliers through the tendering process for 10,000 EVs to replace a portion of government-owned vehicles. “The lowest purchase price of these EVs inclusive of Goods and Services Tax was quoted at Rs 1.12 million,” the report said.
EVs may also provide a boost to the solar rooftop sector, particularly domestic customers, who may be incentivised to secure energy for transportation, the report said. Also, the agency believes that the EV segment would open-up an opportunity for a new kind of public-private partnership such as building infrastructure for charging points.
Source: 12 October 2017, E-vehicles to boost electricity demand for road transport over next decade: India Ratings