Government of India recently released a notification titled ‘Charging Infrastructure for Electric Vehicles – Guidelines and Standards -reg.’. Availability of adequate charging infrastructure is acknowledged as a key requirement for accelerated electric vehicle adoption in the country.
In accordance, setting up of Public Charging Stations (PCS) has been de-licensed and any individual/entity is free to set up public charging stations, provided the stations meet the technical as well as performance standards laid down.Any individual/entity setting up a PCS will need to have the following minimum infrastructure as described in the notification:
Each charging station is required to have a minimum of three fast chargers: a CCS, a CHAdeMo and a Type-2 AC. While the former two will be required to operate on 50kW/ 200-1000V, the Type-2 would be 22kW/ 380-480V. Additionally, the charging station will also have two slow charge points - a Bharat DC-001 (15 kW/ 72-200V) and a Bharat AC-001 (10 kW/ 230V).
A typical 50 kWh DCFC costs over Rs 1.5 million. Since present models of EVs sold in India cannot be charged above 1C rate and batteries are 11kWh to 25kWh capacity, investment in DCFC of over 25 kWh would yield unappealing returns, unless manufacturers roll out electric cars with batteries capable of fast charging with DC output in the range of 400-500V or higher. This will eventually increase the capacity utilization at PCS and enhance revenues for charging infrastructure providers, making investment in a public charging stations an attractive option.
Charging Standards Application:
The IS:17017-1 published by BIS in August 2018 recommends both CCS-2 and CHAdeMO. In 2017, a Committee constituted by Department of Heavy Industries (DHI) issued Bharat charger specifications for AC and DC chargers: Bharat EV Charger AC001 & DC001. These are slow chargers with DC output below 120 Volts. BIS has agreed to retain these standards which are supporting the EVs presently operating in India. These are expected to wither away as new EVs are rolled out with batteries capable of fast charging with DC output in the range of 400-500V or higher.
All standards will co-exist in India: CCS-2, CHAdeMO and the Bharat chargers. Tesla cars, according to recent reports will use CCS standard when launched in India.
The status can be summarized as:
Two wheelers come with small size batteries which in many cases can be pulled out and taken to homes/offices/shops and charged from normal wall sockets; or can be connected to any PCS.Two wheelers come with small size batteries which in many cases can be pulled out and taken to homes/offices/shops and charged from normal wall sockets; or can be connected to any PCS.Three wheelers are ideal candidates for battery swapping. In this scenario, batteries may Insightsbe charged in a large industrial scale facility and charged batteries are trucked to points of 3-wheeler concentration where a 3-wheeler driver can swap the used battery with a fully charged one. Alternatively technology proprietors may install swap stations at a PCS. 3-wheelers could also be charged at any PCS. Buses with battery sizes >100kWh would be sold with proprietary charging standards recommended by the battery manufacturer. These batteries will cost several million rupees and it is not advisable to charge from any PCS. Bus operators will install the charging devices supplied (or recommended) by the bus manufacturer at bus depots and bus depots as required.Present models of electric cars come with various sizes of batteries - 11kWh (Mahindra e20) to 40kWh (Nissan Leaf) to >90kWh (Tesla Model S). These EVs require DCFCs for fast charging. The whole issue of inter-operability of EVSE for different EV models is essentially limited to cars.In India so far only Mahindra Electric and Tata Motors have launched electric cars. The present batteries in these cars are not suitable for charging above 1C rate. The off take of electric cars may be slow as individual buyers might watch the space and move with caution as in other geographies. The initial push for electric cars is expected from taxi fleet operators, Government departments, public sector undertakings and large corporates.
Cost Estimates for a Typical Public Charging Station (PCS):
The Capex and Opex of a PCS comprising of minimum infrastructure required as per the GoI notification are estimated below:
*The cost of swap station is considered to be borne by the swap station technology proprietor. PCS provides space for a swap station in return of margin on sale of electricity.
**Land lease rental is assumed to be low as per Delhi EV policy guidelines on providing land at bare minimum lease rentals to charging infrastructure providers.
Revenue Projections from a Typical Public Charging Station (PCS)
Revenue projection from the PCS business is calculated in the next table based on the following assumptions:
- 20 hours of charging operations for 30 days/month1. 20 hours of charging operations for 30 days/month
- Capacity Utilization Factor (CUF) of PCS setup considered at 15% for Year-1, 25% for Year-2, 40% for Year-3, 65% for Year-4 and 85% for Year-5 (optimistic scenario)
- Electricity tariff to the DISCOM is considered as pass through to consumer
- A margin of Rs 2.5 on electricity tariff is considered in Scenario-A
- A margin of Rs 3 in first & second year, Rs 2.5 in third & fourth year and Rs 2 from fifth year on wards is considered in Scenario-B
- EVSE Management Software fee considered @10% of net margin on electricity tariff
As may be observed from Table 1 and 2, for an initial investment of Rs 2.95 million to setup a PCS, the net cumulative return in 5 years is Rs 1.77 million under Scenario-A and Rs 1.53 million under Scenario-B. In both the cases there is little or no incentive for third parties to setup and operate PCS. Levying a margin more than 3 rupees will make the EV tariff at par with commercial electricity tariff.
In the present scenario, PCS business is not viable for individuals/entities to invest. The government may fail to encourage third parties to set up public charging stations to accelerate electric mobility adoption. However, in case of Delhi, as per Delhi Electric Vehicle Policy, GNCTD will provide a capital subsidy covering cost of chargers and installation expenses. Considering the cost estimates in Table-1, if 100% cost of chargers is subsidized, the IRR on setting up a public charging station in Delhi makes it an attractive investment choice.
Table 3 - NPV & IRR of non subsidized PCS vs 100% charger cost subsidized:
Since business volumes in the initial years will be very low, attracting private investments for PCS network creation can prove to be a challenge in the country; unless capex cost is partly or fully subsidized. Also, it will be difficult to build EV charging network in India as a standalone business. Innovative business models to incentivize the public charging infrastructure (PCI) providers and government will be required.
Author: Nimesh Dilip Shah, MBA | Energy & Infrastructure | Business Strategy & Development | Marketing Management | Policy & Regulatory Analysis