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Why switching to electric vehicles is fiscally imprudent?

Context:

  • Prem Shankar Jha writes: It would mean subsidising a small affluent section of the car-owning population, when there are better alternatives to fossil fuels available.

Relevance:

  • GS Paper 3: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Mains Questions:

  1. For India, gasification holds even greater promise because simple, air-blown gasifiers are already in use in food processing that can convert rice and wheat straw into a lean fuel gas that can generate electricity and provide guaranteed 24-hour power to cold storage in every village. Discuss .15 Marks

Dimensions of the Article:

  • About Electric Vehicles
  • National Electric Mobility Mission Plan (NEMMP) 2020
  • Challenges in setting Effective Charging Infrastructure in India
  • Measures

About Electric Vehicles:

  • The earlier guidelines and standards were issued by the Ministry of Power in December 2018 and will be superseded by the new guidelines.
  • Lack of charging infrastructure is one of the main reasons behind poor adoption of electric mobility in India.
  • According to a survey by the Economic Times in May 2019, with appropriate infrastructure is in place, 90% car owners in India are willing to switch to EVs.
  • Under the NEMMP 2020, there is an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles by the year 2020.
  • At present, EV market penetration is only 1% of total vehicle sales in India, and of that, 95% of sales are electric two-wheelers.

National Electric Mobility Mission Plan (NEMMP) 2020:

  • It is a National Mission document by Ministry of Heavy Industries & Public Enterprises providing the vision and the roadmap for the faster adoption of electric vehicles and their manufacturing in the country.
  • As part of the NEMMP 2020, Scheme named Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) was launched in the year 2015 to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth of the same.
  • The Phase-I of this Scheme (FAME I) was initially launched for a period of 2 years and was implemented through four focus areas:
    • Demand Creation,
    • Technology Platform,
    • Pilot Project
    • Charging Infrastructure.
  • FAME II
    • It was launched in March 2019 for a period of 3 years.
    • The main objective of the scheme is to encourage faster adoption of electric and hybrid vehicle by way of offering upfront incentive on purchase of electric vehicles and also by establishing the necessary charging infrastructure for electric vehicles.

Challenges in setting Effective Charging Infrastructure in India

  • Lack of Crucial Resources: India has very little known reserves of lithium; other crucial components such as nickel, cobalt and battery- grade graphite are also imported.
  • Lack of Skill: We still lack sufficient technical know-how in lithium battery manufacturing.
  • Time consuming: It still takes longer to charge an electric vehicle than it does to refuel a conventional car at the pump.
  • Sector Suitability: Heavy-duty truck transportation and aviation, will remain difficult to electrify without drastic advances in battery technology.
  • Disposal of Lithium ion batteries the policy mandate to have 30% of all vehicles as EVs by 2030, the demand for batteries will continue to rise. This translates to an exponentially growing stock pile of discarded batteries. Safe and environment friendly recycling of these batteries remains a challenge.
  • Power supply India will need reliable excess power supply to feed the charging stations. This is a big challenge considering the frequent power outages experienced in many parts of the country, especially during summer.

Measures

  • Location of public charging stations (PCS): at least one charging station should be available in a grid of 3 Km X 3 Km in the cities.
  • Phase wise installation in next 5 years on the basis of city size starting with the large cities.
  • Catering to the heavy duty vehicles with fast charging stations at every 100 Kms on the highways.
  • Promoting private participation through Private charging at residences/offices fascillitated by DISCOMs.
  • Ease of setting: Setting up of PCS shall be a de-licensed activity and any individual/entity is free to set up public charging stations.
  • Tariff:
    • In the case of PCS, tariff for the supply of electricity to PCS shall be determined by the appropriate commission in accordance with the tariff policy issued under section 3 of Electricity Act 2003
    • Domestic charging shall be akin to domestic consumption of electricity and shall be charged as such.
  • Service charges: The State Nodal Agency shall fix the ceiling of the Service Charges to be charged by the Public Charging Stations.
  • Nodal Agency: Bureau of Energy Efficiency (BEE), a statutory body under Ministry of Power has been nominated as the Central Nodal Agency. Further a provision for State Nodal Agency for the respective states has been provided for in the Guidelines.

Conclusion

Overall success in EV adoption will critically hinge upon the coordination between manufacturers, government policies and, most importantly — consumer ability to participate in this new age green revolution.

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October 2022
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