Inside the race to decarbonize India’s transport

In 2019, Ahmedabad Janmarg Limited, which manages the rapid transit system, took this experiment further, aiming to make it the first Indian city to electrify its entire bus fleet.

“This constant experimentation in improving its bus systems is slowly paying off for Ahmedabad,” Sivananda Swami, director emeritus of CEPT University at the Center for Excellence-Urban Transport, Ahmedabad, told Mint in a recent interview. An economist and urban planner, Swamy has advised cities across the country to improve their public transport services over the past decade. “Over time, offering public transportation with electric buses on the OPEX model is cheaper than owning a fleet that uses internal combustion engines,” he said.

Using this model to buy the cost of diesel bus services today 60-70 km; An electric fleet in Ahmedabad, subsidized by the central and state governments, after accounting for the cost 54 km including the cost of electricity, Swamy said.

Gujarat is now replicating this model in Surat and Rajkot, offering its municipalities viability gap funding to rapidly electrify its fleet, tender and purchase new buses in large quantities and settle contracts. Doing so will punish the service provider for the violation.

In the last two years, other municipal corporations have started doing what Ahmedabad used a decade ago, but find themselves constrained by inadequate policy, lack of innovative vehicle models from automakers and even major lapses in funding. Huh.

With low rates of private ownership of motorized vehicles, more than 90% of Indians rely on state-run vehicles, private vehicles with carriage permits and shared mobility such as scooters, taxi cabs and rickshaws. This smorgasbord, which is India’s public transport service, consists of vintage buses, cars, jeeps, vans and three-wheelers of various sizes that run on a wide range of fuels from kerosene mixed with diesel to compressed natural gas (CNG). Huh.

However, the transport sector is the third largest emitter of greenhouse gases in India, after the electricity and manufacturing industries, contributing 15% of India’s carbon emissions today, tripling its carbon emissions in the three decades since 1990. Government estimates suggest that India’s urban population is expected to double by 2050. If public transport remains as bad, these emissions will only increase.

At the COP26 summit in Glasgow in November, Prime Minister Narendra Modi pledged to cut India’s total estimated carbon emissions by 1 billion tonnes and reduce the carbon intensity of the country’s economy by 45% by 2030, ultimately net-zero. Reduced carbon emissions. 2070. If the government intends to meet these goals, it needs to get the masses on an electric vehicle (EV) really quickly.

The current EV penetration in India is less than 1% across all categories. The government’s EV 30@30 campaign—electric vehicles account for 30% of all new auto sales by 2030—needs an urgent need to shift the focus from high-end models of passenger cars and scooters to buses and shared taxi cabs, rickshaws and vans. Not only by decarbonizing the existing capacity but also by expanding it is the backbone of India’s mobility.

Less use of FAME subsidies

In April 2015, the Ministry of Heavy Industries launched an EV promotion scheme titled Rapid Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) in India. In its first iteration, FAME provided a subsidy of 895 crore in demand incentives for electrification of two wheelers and three wheelers, passenger vehicles, light commercial vehicles and buses. Only about half of these funds were used when the scheme was scrapped after three years. In April 2019, FAME II was launched with a total outlay of 10,000 crore, of which Rs 8,600 crore was reserved in subsidy for 7,090 e-buses, 500,000 three-wheelers and one lakh electric two-wheelers. However, so far only 215,000 vehicles have been approved under both the schemes.

Shamsher Dewan, Group Head, Corporate Ratings at credit research agency ICRA, said, “While FAME has been underutilized so far, the current policy is primarily aimed at benefiting two-wheeler sales and the public transport segment (three-wheelers and buses). designed for.” , said.

There are two types of electric buses in the market – 9 meter and 12 meter. Most of the state transport corporations prefer a 9 meter bus, which costs Rs. 1-1.2 crore each, and receives a subsidy of 45 lakhs under the FAME scheme. As per VAHAN data, around 5,600 e-buses have been approved so far, but only about 1,900 have been registered.

“The FAME subsidy is applicable only under an aggregate cost contract basis (similar to the OPEX model of public transport), to which most municipal-run transport services are unfamiliar,” Dewan said. “Hence, most of the delay for states in issuing tenders had to do with the lack of standardized concession agreements for e-buses and the reluctance of the private sector to sign on to municipalities as counterparties,” he said.

NITI Aayog has recommended the creation of escrow accounts that prioritize payment of services from the rent collected to the private contractor; This is likely to speed up the tenders now.

“Nevertheless, the speed and efficiency of implementation varies widely. Uttar Pradesh is already running about 700 e-buses in Lucknow and Kanpur under the scheme; Delhi had floated a tender for 1,000 buses, Which was later cancelled.” ,

demand aggregation

Mahua Acharya, MD and CEO of Convergence Energy Services Ltd (CESL), an energy transition subsidiary of state-owned Energy Efficiency Services Ltd, is taking the initial steps towards creating an ecosystem for e-buses with a “grand challenge” . Demand from State Transport Corporations in Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat and Pune, standardization of contracts, and pooling together financial resources for aggregate cost contracts.

Acharya told Mint, “The collecting devil is in the contract details. Bus companies want to promise at least 70,000 km per year in the concession agreement; that is 195 km in a day. But in congested cities, such long routes are needed. It is difficult to offer. The maximum that is possible is 160-170 kms per day, in which case, the bid prices go up and municipalities cannot afford it. Now, we are moving towards a common settlement.”

Five out of nine cities have met their demand requirements in great challenge. Recently CESL has issued tender for this 5,500 crore for 5,580 e-buses.

Another issue is that there are two groups of players supplying e-buses – legacy companies such as Tata and Ashok Leyland and newcomers such as South Korea’s Edison. “New players either do not have the manufacturing capability that we need or their products are still in the testing phase. I hope this tender gives a strong enough indication that buses are the future,” said Acharya.

CESL also has other pilot projects. There is an overall demand for a low-end e-bike in Goa, which is expected to be popular among the tourists. Yet another is aggregate demand across states for commercial electric three-wheelers, often from the private sector for e-commerce delivery or for consignment or waste disposal with local municipalities. “We want to have a total demand of 150,000 vehicles in this category and use the FAME II subsidy to make it cost-effective for the user,” Acharya said.

low carbon + sharing

In fact, New Delhi has proven a use case for battery-powered rickshaws with green license plates that weave through congested lanes and last mile mobility in a quiet, smokeless manner. offer options. E-rickshaws are the largest category of EV sales in India today, and the Delhi government’s policy amendments in 2020 have boosted registrations despite the pandemic.

The Delhi-NCR market is also home to a very successful EV-based ride-hailing pilot. BlueSmart Mobility, which started in 2019, today claims to have around 40,000 unique users on a monthly basis.

Anmol Jaggi, co-founder and CEO, BlueSmart, said, “If we had only played the environmental card with customers, I don’t think BlueSmart succeeds that way.” For example, surge pricing does not. We offer standardized pricing and have a zero-cancellation policy as we see ourselves as part of the public transport ecosystem, which does not change the daily fares or the frequency of its services.”

Jaggi said state governments are offering tariffs 4.5 per unit of electricity for EV charging, per km cost for electric cabs is one-sixth of those running on diesel.

solving problems

Despite several public announcements, India’s EV policy is scattered across various programs with no set annual target that could lead to an increase in the stock of new combustion engine vehicles by 2029. If India registers high EV sales only in 2030, the target can be met. But nothing worthwhile is achieved.

“India is a signatory to the Clean Energy Ministerial 30@30 Initiative, but these initiatives lack concrete sales targets,” said Himani Jain, Senior Program Lead – Electric Mobility, Council for Energy, Environment and Water (CEEW), a think-tank Tank said. ,

FAME 2 expires in 2024, after which there is no clear roadmap from the government on EV adoption. On Tuesday, Finance Minister Nirmala Sitharaman in her budget speech talked about creating no-go zones for combustion engines in cities, but a statement is not a policy. Therefore, auto manufacturers are not motivated to set up new production lines. The lack of manufacturing capacity ensures that today tenders move slowly and charging depots are not set up fast enough.

This chicken-and-egg dilemma about policy, production and price makes the decarbonization project, at which point, most of the noise will have little substance.

Ahmedabad’s rapid transit system is one of the largest in India, but still covers only 13 routes of more than 90 km in 14 years, in contrast to the city’s municipal-owned fossil fuel-based public transport service, which covers 792 km. Covers more than 200 routes. The ridership of the former is still only a third of its older established counterpart. The city is now experimenting with an open bus prioritization system and integrating rapid transit with the older bus service to increase overall ridership.

In contrast, the all-India registration for new buses has steadily declined over the past eight years while the number of private vehicles has increased. E-bus registration touched its all-time high in 2021, and is only a tenth of the number of new buses so far.

The message is clear. State and city transport undertakings must move swiftly on the path of replacing their old bus fleet with clean energy buses. Or at least, press the accelerator on the pilots.

(Tanya Thomas is a freelance journalist based in Mumbai. Reporting of this story was supported by a grant from Earth Journalism Network.)