Role of Indian power sector in electrification of automobiles

GLOBAL Electric Vehicles have recorded On the back of beneficial business case, the GoI

INDIAN
unprecedented penetration in USA and
European countries. Among Asian countries,
China is pioneering in the automobile
electrification technologies.
has launched several schemes to promote EVs
in India. However, industry response has
been lukewarm due to erratic policy decisions
w.r.t. implementation and incentive structure.

Cumulative Sales/Stock of EV
6,000,000
10300 In spite of the frequent
5,000,000

4,000,000
policy changes, growth
6800
3,000,000
forecast of EVs in India is
4800
2,000,000 still pretty much strong due
4350
1,000,000 3350
1227770
2306300 to the huge potential of
648770
0 312770
electrifying at least 300
2014 2015 2016 2017 2018

China USA Europe Others India

million vehicles.

Apparent benefits of EV include reduction of GHG emissions and savings on oil import bill.
However, the most understated benefit of EV is revival of power distribution sector in India.
Looming threat to revenues of power Discoms
Tariff rates in India are cross-subsidized where industrial and commercial consumers end up paying more
than INR 8 per KWh while domestic and agricultural consumes pay as low as INR 2 per KWh.

Comparison of category wise tariff across six Indian states

The average tariff for

Agricultural category is INR
4.19 per unit for 6 Indian
states. Commercial and
Industrial tariffs are 60% and
43% respectively higher than
agricultural tariffs.
Rajasthan Haryana Andhra Bihar Tamil Nadu Uttar
Pradesh Pradesh
Domestic Commercial Industrial Agriculture

 Power Discoms’ revenues are hit on two fronts, 1) industrial and commercial consumers are switching to
power market and captive generation, and 2) the Open Access charges that can be levied by Discoms
are limited by regulatory commission.
 Going forward, this scenario will adversely affect the financial viability of Discoms
 EV business case of Indian Discoms – Increase in electricity demand
A completely new category of consumers will be available for DISCOMs to serve which will possibly fill the
gap created by exodus of commercial and industrial consumers

Discom’s role will evolve with increasing penetration of EVs

Electricity Provider Charging Infra. Manager Deployment of Charging Infra.

Additional revenues from increased Management of charging infrastructure Development of charging infrastructure on
sale of electricity. Although, in addition to electricity provision will drive BOO model will bring unprecedented
distribution network augmentation indirect revenues – higher grid stability benefits through maximum control over
may be required through capex. and ancillary services charging times, V2G, dealer’s margin etc.

Case Study: Pilot EV charging program by Pepco, USA

Objective: Pepco initiated a residential managed EV charging pilot by placing 35 ClipperCreek chargers using an
ITRON smart charging architecture. When Pepco called a DR event, consumers reduced the chargers from Level 2 to
Level 1 rate of charge for an hour, while also providing opt-out capabilities for customers.
Results: Expenditure of USD 563,611 resulted in potential benefits of USD 104,000 per annum
 EV business case of Indian Discoms – Low cost energy storage
Battery capacity of EV can be utilized as low cost and efficient energy storage unit when EV are connected
to the charging points and made available by consumers for temporary usage by utilities

Aggregating a typical 5 KWh of large no. of EV batteries will

become a powerful energy storage resource

Distributed base loads Lower storage cost per KWh Battery second life

Better integration of solar peak Large scale adoption of EV will led to Discarded EV batteries can provide
generation through ramping up of EV the development of integrated battery cheaper storage for RE capacity for utilities
charging demand during off-peak hours supply chains, resulting in lowering of and reduce the overall lifetime cost of EV for
of typical demand-supply curve. storage costs. the consumer.

Case Study: OnStar Renewable Charging, USA

Objective: OnStar offered customers the option to have their vehicles charged during times when RE generation was
greatest. Based on current charging level, next driving time and charger type, OnStar would then optimize the charging
to maximize the use of RE using forecasted and RT information
Results: Expenditure of USD 563,611 resulted in potential benefits of USD 104,000 per annum
Way forward for Indian Discoms

• Specifically for Discoms, the business case of EV is very strong and utilities would gain the
majority of the revenue stream provided they choose to develop and manage the EV
charging infrastructure
• Problem of upfront investment can be easily circumvented by engaging private developers on
BOOT model

Discom need to explore synergies with other sectors

Real estate Road and transport

Integrating charging stations in multi-stored Building induction based EV

societies’ parking, shopping mall or charging roads and pathways etc.
commercial space’s parking