With the upshot and realization of environmental disfigurements like global warming, climate change, pollution, and depleting deposits fossil fuel every country is coming up with their own ways to abridge these damages and become future ready. According to the International Energy Agency report, the transportation sector is the 2nd largest source of CO2 emission contributing to 20% of Global greenhouse gas. British Petroleum’s annual report on proved global oil reserves says that as of the end of 2013, Earth has nearly 1.688 trillion barrels of crude, which will last 53.3 years at current rates of extraction, accordingly, in 2019 we have reserves for 47 more years only.
India too has been impacted intemperately by the high-level emissions of hydrocarbons on the burning of fossil fuel. India ranks to a low of 177 out of 180 countries in the Environmental Performance Index. A report published by WHO in 2018 based upon the presence of PM 2.5 pollutants mentioned that 14 out of 20 most polluted cities over the world are in India. To curb this, the Indian government has been contributing vividly towards eco-friendly techniques to cut off its carbon emission. The government’s proclamations to shift to bioethanol, bio-CNG, biodiesel and electric vehicles in automobile sector are one such step towards the change, of which electric vehicle is the most suitable one for India at this point.
The initiation of Electric vehicles in India was made by the Government in the year 2013 by the introduction of the National Electric Mobility Mission Plan (NEMMP) 2020. This plan was instituted by the government to address environmental and fuel security issues. It aimed to achieve a target of 6-7 million sales of hybrid and electric vehicles (EV) and to save a total of 9500 Million/Liters of crude oil over the 6 year period till 2020. To work for which the government have been providing monetary and fiscal support with investment around 14,000 crores in building infrastructures and promotion. The market has had sales of around 42,000 EV in the year 2012-2013 and 20,000 hybrids sold in 2013-2014, most of which were electric low-speed scooters.
To faster this pace the Ministry of Heavy Industries and Public Enterprises, came up with the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-I) scheme under the NEMMP plan, opening the production to all vehicle segment including two-wheelers, auto, four-wheeler, buses etc. The scheme includes technology like Strong Hybrid, Plug-in Hybrid, Mild Hybrid and Battery Electric vehicle. This green initiative project was designed to align with the Government’s ‘Make in India’ program to support the EV market to attain self-sustenance by the end of 2020. The key focus area of this initiative includes demand creation by upfront-reduced purchase price to enable wider adoption, technology development, pilot projects and charging infrastructure for EV. The first phase of the FAME-I scheme scheduled for two years from April 1, 2015 to March 31, 2017, which was extended to August 31, 2018 and later to 31st March 2019 or until the Notification of FAME-II. The total outlay of FAME-I scheme was raised from 795 crores to 895 crores comprising mainly on demand creation, electrification of public transport. The scheme has benefited a total of 226,557 vehicles until 2018.
On February 28, 2019, FAME-II was cleared by the Union Cabinet with the total outlay of Rs. 10,000 (ten thousand) crores. FAME-II is targeting to facilitate the purchase of 10 lakh electric two-wheelers, 5 lakh three-wheelers, 55,000 four wheelers and 7000 buses. The scheme also proposed to establish 2700 charging station in metro cities, 2-tier cities, smart cities and hilly regions. The target is to install at least one charging station in a grid of 3×3 km. The investment has been channelized to remove all uncertainty and to speed up the development of electric vehicles and infrastructure to achieve a target of 100% electrification of vehicles by 2030.
Significant opportunities & Suggestions
Despite such challenges, the Electric Vehicles are future and present a great opportunity for investors as:
- For providing charging solutions a separate electric vehicle charging electricity distribution network/ grid will be required with industry-specific required calibration of volts, ampere, watt etc.
- With separate electric vehicle charging electricity distribution network/ grid there is even the possibility of Electric Vehicle batteries being connected in vehicle-to-grid solutions to provide grid-balancing services.
- 3. Reducing the legislative restrictions on network operators would also facilitate the investment, the grid desperately needs.
- With US$90 billion global investment in Electric Vehicle research and development, India has the opportunity to progress commercial growth and academic prowess.
- Priority must, however, be given to strengthening energy infrastructure, which is already struggling to adjust to the integration of renewable generation schemes.
- Transport, energy and communications networks are becoming inextricably linked and a cohesive strategy to deliver a robust and future-proof energy infrastructure will be vital to meet society’s evolving transport needs.
Therefore, it would be not wrong to say that with such robust policy framework India could meet both environment and fuel security issues for sure.