India is the fourth largest renewable energy market in the world and the fifth largest producer of automobiles, as well as the third largest importer of oil in the world. By transitioning to electric vehicles powered by renewable energy, the country can save billions of dollars in energy imports, greatly improve air quality in Indian cities, and at the same time respond to the climate crisis. that has affected millions of Indians. The key policies enacted now can have a profound impact on opening the country to the clean transportation era.
India has one of the lowest auto penetration rates among the major economies and has a unique opportunity to establish a sustainable electrified transportation system. Electric vehicles (EVs) have grown steadily in Indian cities and have brought multiple benefits: improving air pollution, reducing the cost of oil imports and improving the demand situation in the troubled energy industry of India. India. In addition, according to an estimate, renewable energy and electric vehicles are also large-scale employment opportunities in the future, and 13.8 million clean jobs may be created by 2030.
The Indian government led by NITI Aayog has been actively formulating strong policy measures since 2018 to promote the development of India’s electric vehicle ecosystem. Now, as the government seeks to amend the Electricity Law and the National Electricity Policy, now is the right time to think about the green grid and the subsequent transportation sector futuristic.
The following three policy levers can help unlock opportunities worth billions of dollars to power electric vehicles through renewable energy.
makes it easier for electric vehicle charging suppliers to purchase renewable energy: The current electricity regulations in most states in India require that the minimum threshold for signing an electricity contract through open access is 1 MW of backup electricity. This minimum power demand threshold is problematic for electric vehicle power operators who install charging stations.
The establishment of a dense network of battery charging or exchange stations means that its energy demand will remain distributed. This is why allowing demand aggregation will encourage energy operators to purchase renewable energy to power electric vehicles, as tested in Delhi. In addition, the policy currently allows open access to renewable energy only from the state, and after paying part of the cost to the distribution company (DISCOM) established by the State Electricity Regulatory Commission (SERC). Relaxing or canceling this instance clause may lead to competitive market-driven pricing and improve system efficiency.
Encourage interstate commerce and renewable energy transmission, especially for electric vehicles: India’s Ministry of Electricity (MoP) has extended the fee waiver for interstate renewable energy transmission until June 30, 2025. Only applicable to electricity sold to entities with renewable energy purchase obligations. The regulations generally exclude energy operators who provide charging facilities for electric vehicles.
Since these transmission costs and transmission losses represent the self-insured renewable energy producers of the group energy operators (group self-insurance is an agreement for developers to establish energy projects, collective use by multiple industrial or commercial consumers), expand the use of Renewable energy incentives to power electric vehicles can go a long way in providing comprehensive solutions to decarbonize the energy and transportation sectors.
Provide power bank facilities for energy operators: In the electricity market, “banking” is an accounting clause
that allows “depositing renewable energy production facilities for later use”
The electricity supplier that produced is not used, or if it cannot be produced for a specified duration (ranging from 15 minutes to a year), it “borrows” the energy it needs to sell to the buyer.
Currently, bank charges and their standards vary from state to state in India, ranging from 2% to 10% of the electricity injected into the grid by renewable energy producers or extracted by consumers. In order to encourage electric vehicle energy operators to establish exclusive renewable energy facilities, more friendly policies may consider limiting these costs to a lower range (preferably 2% of the energy extracted), and establishing consistency among various SERCs s frame.
In addition, energy operators can obtain a one-year energy bank service at a minimum fee through DISCOMS to encourage the use of renewable energy to power electric vehicles.
India’s transition to electric vehicles is an excellent opportunity to accelerate the economy, stimulate job growth, improve air quality, and reduce carbon emissions. Although electric vehicles are cleaner even if they use traditional grid electricity, combining them with renewable energy can accelerate India’s decarbonization efforts.
Nitish Arora is an electric vehicle and clean energy expert, serving as a consultant for the NRDC India program.