The country's energy projects could face difficulties with officials demanding...
A steady momentum has been building up in India on the clean and renewable energy front. The government has been working to affect a radical shift in our energy production and consumption patterns to reduce the dependence on fossil fuels. According to last year’s third National Electricity Plan (NEP3) forecast, India will exceed, ahead of schedule, the renewable energy target of 40% total electrical capacity for non-fossils by 2030, established at the Paris Climate Conference in 2015.
To reinforce its commitments, the government intends for all vehicles sold in India to be electric by 2030. Given that the electric vehicle (EV) industry has been struggling with adoption since its launch in India almost a decade ago, this might seem like a quixotic goal. However, the recently released NITI Aayog report on mobility transformation outlines a feasible and phased approach to achieve this goal. Developed in partnership with the Rocky Mountain Institute, it presents governments’ vision of a shared, electric and connected mobility paradigm, where mobility is a service based on an electric fleet, enabled by the convergence of low-cost technologies, smart designs, innovation and supportive policies.
India is leading by example by committing to go all electric for government-use
Among the states, Karnataka has taken the lead in formulating the country’s first comprehensive EV policy supporting complete ecosystem from manufacturing to deployment of charging stations.
This multi-pronged approach aims to fix the challenges of traffic congestion, pollution and soaring fuel costs by developing an ecosystem revolving around EVs.
The main reasons behind poor adoption of EVs in India are range anxiety, high capital costs and long charging time. Consumers are worried about paying much more upfront than traditional vehicles, and then having to worry about whether the EV will run out of juice at an inconvenient place with no access to a plug point, since there is practically no recharging infrastructure.
These perceived downsides overshadow the benefits of very low running costs and zero tailpipe emissions.
Although it has increased significantly in the last few decades, India still has a relatively low rate of vehicle ownership. We are a country that relies heavily on public transport, and the government plans to cultivate this familiarity by making public transport more convenient and environment-friendly, by expanding the electric bus fleet.
However, the current generation of electric buses with traditional battery technology are prohibitively expensive—at 4-5 times the cost of a diesel bus. The Himachal Pradesh government recently bought 25 electric buses from Goldstone Infratech, manufactured in tie-up with BYD Auto of China, for Rs 2 crore per bus. Some other states and city transport corporations are also considering buying electric buses, but costs are prohibitively high.
Battery swapping the way forward
To bring down the capital cost of an electric bus and handle the long distances of bus routes, among the various solutions being looked at, reports are recommending two—reducing the battery size and adopting swappable battery technology. The industry seems to be working in this direction, as it is particularly relevant for state transport agencies, because without much expenditure they can create indigenous green fleets.
Coming to smaller EVs, the popularity of ride hailing and sharing services like Ola and Uber is evidence that people living in congested urban centres are fed up with driving and maintaining vehicles under stressful conditions. Incentives for communal EVs like auto-rickshaws, cabs and buses are meant to encourage usership rather than ownership. The economies of EVs are such that there is a good return for high-mileage use, making them better suited for commercial use.
The new swappable batteries can go a long way in addressing most adoption issues, including cost. The government is proposing standardisation, allowing manufacturers to have standard products that will allow mobility providers to be able to buy multiple platforms of vehicles with similar energy sources. This will give the operator a much wider platform of vehicles to use with common infrastructure and energy costs.
The government’s agenda also focuses on developing an ecosystem to support the EV industry—helping stakeholders to stay connected—enabling a high-functioning EV-driven public transport system. For example, an electric bus heading for the last-mile stop can signal to EV taxis in the area about how many passengers it will be offloading. This ensures optimum onward journey options for disembarking passengers. Or EVs can communicate with refuelling stations about battery requirements, so there is never any danger of being stranded. Such connected vehicles are also a step towards the inevitable progression to autonomous vehicles.
Further, a well-connected ecosystem helps develop effective and real-time big data analysis for continuous integration and improvement. As states invest in Smart Cities, they must incorporate the infrastructure necessary to help make the EV vision a reality. A convenient network of recharging and swapping stations, and car parks and bus depots that provide charging points and batteries for swapping, will benefit the nation economically and environmentally.
The auto industry is flourishing and India is becoming an export hub for small and medium-sized cars. This makes the industry well-poised to go all out on electric, especially with policies that enable entrepreneurial environment. It’s time for the auto/EV industry to collaborate with technology and mobility solution providers and OEMs to capitalise on this potential and make the move to electric. In fact, I would say it is an imperative that the industry move quickly to get ahead of this inevitable disruption and reap the rewards.
The author is non-resident scholar at Carnegie India, a global think tank, responsible for technology policy initiatives
Exuding confidence that energy consumption will rise over 4 times Power Minister R K Singh today urged investors to invest in renewables saying the equipment prices will come down further. The country will require USD 100 billion investment to achieve the target of 175 GW reneweable energy by 2022, as per the government estimates. “Our per capita consumption of energy is about one 6th of Europe and one 12th of USA. Energy consumption is not going to double or triple but it will be over four times. That is how the rate of growth of energy consumption will be (in India,” Singh said while addressing a press conference on the 2nd edition of the Global Renewable Energy (RE) Investors Meet and Expo (RE-INVEST 2017).
The 2nd RE-INVEST 2017 is scheduled to be held on December 7-9, 2017 at the India Expo Centre, Greater Noida and National Capital Region of Delhi. Stressing that 40 per cent of India’s energy requirement would be met through renewables, Singh said, “I dont see any big opportunity as big as it is there. It also makes economic sense. Solar bids yielded tariff of 3.5 or 4 cents per unit (Rs 2.44)”. The minister said the prices of equipment would further come down with expansion of manufacturing of solar cells and modules as the world expands to use of solar energy. He was of the view that fossil fuels will left behind not because those are bad for the world, but because it also makes sense economically to go in for solar or renewables.
He said,”This is matter of worry for those who produce coal or oil. But, this (movement to shift to renewable) can not be stopped because it makes economic sense”. The efficiency of solar panels has already increased to 30 per cent and price will come down due increase in usage, the minister said. On the occasion, Renewable Energy Secretary Anand Kumar said that out of the commitments of about Rs 4 lakh crore funding from finical institution, including public and private sector banks, during RE-INVEST 2015, around Rs 1.37 lakh crore has been disbursed. On the sidelines of the conference, he also told reporter that state-owned Indian Renewable Energy Development Agency Ltd (IREDA) will raise USD 300 million through Masala bonds this fiscal.
Kumar also said India has set an ambitious target of having 175 GW of renewable energy and has already operational clean energy capacity of 60GW. He also said India will need an investment of around USD 100 billion to meet the target of having 175 GW renewable energy capacity by 2022. A new website for RE-INVEST 2017 (re-invest.in) was also launched on this occasion, in presence of French Ambassador to India, Alexandre Ziegler.
France will be partner country for the event. Minister for Infrastructure and Sustainable Development, Republic of Kiribati Ruateki Tekaiara signed the Framework Agreement of International Solar Alliance (ISA) during the event. Kiribati becomes the 41st country to sign the agreement.
RE-INVEST 2017 will provide a platform for reviewing the commitments made in RE-INVEST 2015 by industry, banks, manufacturers etc. The industry and developers had committed for 293 GW of renewables and against this, 39.3 GW capacity is commissioned/under implementation. On the sidelines of the RE- INVEST 2017, the founding ceremony of the ISA and Solar Summit has been scheduled on December 8-9, 2017. The Prime Minister of India, President of France, and the Secretary General of United Nations are likely to grace the ISA Founding Ceremony. “The founding ceremony will firmly establish the ISA and demonstrate our joint commitment to harness solar energy potential. All prospective member countries of the ISA have been invited to participate in these events,” said an official statement.
Hero Future Energies, a Delhi-based renewable energy firm, is in talks with investment bankers to explore the possibilities of tapping the dollar bond market to raise funds, sources aware of the matter have confirmed with FE.
According to sources, the firm might be eyeing close to $400-500 million dollars.
“The tenure of the bond is likely to be close to five years. If the issuance goes through, it will be a debut issue by the firm in the overseas bond market. The issue is likely to be a high yield one,” said an investment banker.
Sources also indicated that the firm might issue the bonds via an overseas entity. This could not be independently verified by FE. An email sent to Hero Future Energies seeking confirmation of the story and further details remained unanswered till the time of going to press.
In January 2017, the company reportedly secured a $125 million funding from International Finance Corporation for building 1.5 GW of green power capacity in India.
Clean energy firms have been active this year in tapping the foreign currency bond market to raise funds. Greenko Dutch BV raised $1 billion, ReNew Power Ventures raised $475 million, while Azure Power raised $500 million.
Issuances from India have received significant responses from investors considering the limited supply from the country relative to global volumes.Indian firms and banks have raised a record $12 billion in 2017 via foreign currency bonds. The last major foreign currency bond issue was from Export-Import Bank of India which priced its Formosa bonds at 100 basis points over the three-month dollar Libor.
A Formosa bond is a bond issued in Taiwan denominated in a currency other than the Taiwan dollar.
In the remaining three months of this year, a few banks and low-rated firms are likely to approach the market, according to investment bankers. These include large size private and state run banks as well as first time low-rated issuers.
India’s free trade pacts with copper producing nations have posed a threat to the domestic industry, state-owned Hindustan Copper (HCL) has said, asking the industry to be innovative to meet future challenges. “Import of finished copper is increasing over the years. Free trade agreements with copper-producing countries have posed a challenge to the Indian copper industry,” Hindustan Copper Ltd (HCL) said in Annual Report 2016-17.
The copper market in India, the report said, is likely to remain positive with strong growth in key user segments, including power and construction. On the back of improved economic activity in India, the demand of the metal is likely to grow at 6-7 per cent in coming years.
Such high demand, the company said, is an offshoot of increasing urbanisation, development of industrial corridors, smart city project, housing for all by 2022, national highway development and rail projects.
The defence production policy to encourage indigenous manufacturing and ambitious green energy plans of the government are also seen to drive the metal demand.
“In addition to this, there is a plan for green energy corridor for transmission of renewable energy,” Hindustan Copper said.
The per capita copper consumption in the country is expected to rise to 1 kg by 2025, from the current 0.5 kg.
The consumption figure for China currently is 6 kg and the world average is 2.7 kg. Import of finished copper is on the increase over the years.
Three major players dominate the Indian copper scene — HCL from the public sector and Hindalco and Sterlite Industries from the private space.
HCL is the only vertically integrated copper producer in the country. Hindalco and Sterlite Industries have set up port-based smelting and refining plants at Dahej in Gujarat and Tuticorin in Tamil Nadu, respectively.
India has a total installed capacity of 9.9 lakh tonnes of refined copper production per annum.
Last fiscal, the mine ore production of HCL was 3.85 million tonnes (mt) compared to 3.9 mt in 2015-16. To increase output, HCL has chalked out an expansion plan to ramp up mine production to 12.4 mtpa by 2018-19, from 3.2 mtpa.