All You Need To Know About India’s Electric Push

All You Need To Know About India’s Electric Push


A total of 5,580 electric buses, including 130 double-decker buses, will be seen on the roads in major cities such as Delhi, Kolkata, Surat, Bengaluru and Hyderabad from July.

Convergence Energy Services (CESL), a wholly-owned subsidiary of Energy Efficiency Services (EESL), announced that it will roll out the electric buses under the ‘Grand Challenge’ initiative that aims to launch 5,450 single-decker and 130 double-decker electric buses in the cities, which will be covered in the programme’s first phase.

Meanwhile, the reports said the Delhi Transport Corporation (DTC) Board has given the CESL in-principle approval for deploying 1,500 electric buses in the national capital; 921 buses are under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles-II (FAME-II) scheme and 579 buses are under non-FAME-II category.

However, Mahua Acharya, the Managing Director and CEO of CESL, earlier said, “This is the biggest ever scheme in the world – and is based on an innovative, asset-light model that makes it possible for state transport utilities to deploy affordably and at scale.”

According to CESL, the benefits of participating in the Grand Challenge include lower prices realised due to aggregate demand, high quality benchmarked technology, access to FAME-II incentives, state incentives, air quality improvement, and access to domestic and international sources of finance, said CESL.

State Transmission Utilities (STUs), state governments, original equipment manufacturers (OEMs), NITI Aayog, and others were consulted by EESL through its wholly-owned subsidiary CESL to aggregate demand for electric buses for deployment on an operating expenses (OPEX) basis across nine major cities in India.

CESL chief executive Acharya earlier explained that “the real meaning of aggregation across cities under an OPEX model is actually homogenisation”.

What Is Opex Model

The transit authority buys the EV from fleet operators and pays for service on a per kilometre basis under the operating expense (OPEX) model. The authority or owner is in charge of fare collection, scheduling, routing, and service standards.

The operator is in charge of operations, as well as upkeep, and it bears financial, technological, and operational risks.

On the other hand, the transit authority bears revenue risk, whereas the operator bears financial, technological, and operational risks.

But there are drawbacks. The main disadvantage of this strategy is that it is dependent on the institutional capability and inter-agency collaboration, and therefore necessitates more technical help.

However, just a few years ago, in 2018, the NITI Aayog, the government research tank in charge of India’s EV drive, produced a Model Concessionaire Agreement (MCA).

In a document, released on January 9, 2019, it was said: “NITI Aayog, Government of India, has taken an initiative to provide a Model Concession Agreement for introducing Electric Buses in cities for Public Transportation on OPEX (per km basis) in Public-Private Partnership (PPP) mode.”

It was also stated that with the goal of delivering cleaner, more efficient, and inexpensive public transportation, the model paper was created based on international best practices.

It further said the concessionaire will be required to pay the necessary capex for the acquisition of electric buses as well as infrastructure for operation and maintenance (O&M), while the authority will incur operating expenses on a per-kilometre basis.

The goal is to offer the authority efficient O&M of the city bus fleet while also ensuring the project’s bankability in the private sector.

Why Electric Buses

During the Connect Karo-2021 conference, industry experts said transit agencies that have used electric buses have received mixed reviews. While some believe that the e-bus deployment is a success, others have found it difficult to operate them properly because of their restricted driving range. They also discovered that the on-road performance of electric buses is far lower than the promised ranges stated by electric bus manufacturers.

But the electric bus deployment was found to be more successful on low-frequency and less congested lines by numerous STUs.

However, according to experts at the conference, India has roughly 140,000 state-run buses for public transportation, of which, at least 22% are overage, that is, the buses are 12 years or older. Since electric buses have no carbon footprint, the Centre should utilise this as an opportunity to roll them out, experts added.

It will be worth noting that Phase II of the FAME Scheme has been authorised by the government, with a budget of Rs 10,000 crore for a three-year period from April 1, 2019.

According to the Ministry of Heavy Industries, about 86% of overall budgetary support has been set aside for the Demand Incentive, which aims to increase demand for xEVs, which could be EVs, Battery Electric Vehicles (BEVs) and Fuel Cell Hybrid Vehicles (FCHVs), throughout the country.

This phase will support 7000 e-buses, 5 lakh e-3 wheelers, 55,000 e-4 wheeler passenger cars (including Strong Hybrid), and 10 lakh e-2 wheelers in order to build demand.

However, according to the ministry, these figures may fluctuate based on the off-take of different categories of xEVs, as there is potential for inter and intra segment fungibility.

“With greater emphasis on providing affordable and environment-friendly public transportation options for the masses, the scheme will be applicable mainly to vehicles used for public transport or those registered for commercial purposes in e-3W, e-4W and e-bus segments. However, privately-owned registered-2W will also be covered under the scheme as a mass segment,” stated the ministry.

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Author: Shirley