EV Adoption Could Generate $11 Billion for DISCOMs: ASSOCHAM-EY
The study has also called for a national regulated rate to be applied to all EV charging stations
Distribution companies (DISCOMs) in India are likely to witness to a windfall once mass adoption of electric vehicles (EVs) begins across the country, predicted a new study titled, Electrifying India: Building Blocks for a Sustainable EV Ecosystem.
“The overall EV demand is expected to help utilities earn an estimated $11 billion (~₹700 billion) in revenue by 2030,” according to the study which was jointly conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Ernst & Young LLP (EY).
The overall electricity demand from EVs in India is projected to be around 79.9 GWh by 2020 and is expected to reach 69.6 TWh by 2030. The report added that increasing adoption of EVs across India will be instrumental in transforming the country’s power sector.
The surge in electricity demand from EVs will help recover the slow demand growth, the report noted.
To make the most of the shift towards EVs, DISCOMs need to develop smart grid capabilities such as smart metering and vehicle to grid charging, offer special time-of use rates for charging, explore innovative business models such as pay per use and set up independent lines for charging stations.
The arrival of electric mobility is expected to help the power and utilities sector realize net cost and revenue benefits from both demand and the supply side. By 2030, EVs are expected to reduce emissions by 40-50 percent, compared to internal combustion engine vehicles in an aggressive renewable energy scenario, the study also predicted.
The ASSOCHAM-EY study has also called for a national regulated rate that can be applicable to all charging stations across India. The government is already in discussion to standardize charging infrastructure development in India, but are still in the planning stage.
Additionally, EV charging tariffs are regulated at some locations, while tariffs are not fixed at other locations. It is also recommended that in order to meet the rising demand of charging stations the government will have to quickly facilitate standardization of charging infrastructure and incentivize R&D for advanced charging technologies.
Recently, the Ministry of Power issued a clarification stating that no license is required to operate EV charging stations in India. This is positive news for the sector and is expected to boost the participation of more private players in the creation of EV charging stations across the country. “We expect the government to take active measures to streamline regulatory challenges and provide further policy impetus to drive the uptake of EVs.” It also said that while the success of India’s EV mission depends on the development and proliferation of domestic manufacturing ecosystem, the absence of an EV supply chain in the country demands an urgent investment in research and development (R&D) and local manufacturing capabilities.
This decision to remove the requirement of a license for EV charging station will help in faster acceptance of EVs by the public in India. As of now, only select offices and cities have EV charging stations.
In the previous joint study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and global advisory firm EY, it was noted that EV sales in the country are expected to grow in the double digits until the year 2020.
The EV market is expected to gain momentum in the coming years as stricter emission norms are implemented on petrol and diesel vehicles. Moreover, the gradual reduction in the prices of EVs and increasing awareness among the consumers will continue to drive India’s EV market forward, the ASSOCHAM-EY report stated.
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