Decarbonizing India’s Electric Bus Transport


Opinion piece by Shyamasis Das – Independent Practitioner – Power Utility & Electric Mobility

At a time when India is striving to reduce emission intensity of its Gross Domestic Product (GDP) by 45% by 2030 compared to the 2005 level and reach Net-Zero by the year 2070, it is no surprise electrification of public bus transport that is largely fueled by diesel at present is high on the country’s climate and sustainability agenda. The importance of this transition, from polluting conventional Internal Combustion Engine (ICE)-driven buses to the electric drivetrain, becomes all more evident from the fact that transport is the country’s third most greenhouse gas (GHG) emitting sector and about 90% of transportation-related emissions are possibly caused by road transport.

Figure 1: Three-pronged approach to mitigate GHG emissions from motorized road transport

With a three-pronged strategy (Figure 1), India can potentially realize significant abatement of GHG emissions from road transport. In recent times, the country has made significant efforts to bring electric bus (e-bus) fleets on the road. Initiatives like offering subsidies under the Faster Adoption and Manufacturing of (Hybrid and) Electric vehicles (FAME) scheme and bulk procurement of e-buses based on demand aggregation under the “Grand Challenge” model have helped State Road Transport Undertakings (SRTUs) and other transit agencies make early progress on e-bus adoption. 

With electric mobility gaining traction, a debate often pops up regarding the effectiveness of this technology shift to reduce GHG emissions. This question arises essentially because nearly all of the electric vehicle (EV) charging is currently served by electricity from DISCOMs in which case the consumers are hardly aware of the source(s) of the energy, while it is understood that fossil-fuel-based thermal power has the largest share in India’s electricity supply basket. This indicates that currently, the use of EVs including e-buses does have a carbon footprint. However, it would be unwise to opine that e-bus deployment has no climate benefit at present. This also does not mean that no effort should be made to supply renewable energy (RE) to charge the e-bus fleets. 

To realize low-carbon e-bus operation, national-level progress on decarbonizing the electricity supply is as important as adopting local-level solutions that help in RE offtake to power e-buses. There are mainly two broad ways to integrate e-bus charging with RE in India’s context —

(i) Onsite RE generation by installing solar PV systems at the depot/ terminal 

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(ii) Off-site sourcing of RE from generation plants located outside the premise via the utility network 

A hybrid of these two options can also be explored. However, it is easier said than done. Let’s see the opportunities and challenges in each of the cases.    

Onsite RE generation

Considering that a bus depot or a terminal is likely to be spread out that can be utilized to mount solar PV systems, grid-interactive onsite generation of solar energy to meet the electricity consumption of an e-bus fleet is a plausible option. This has a long-term cost advantage. However, there are three major challenges to making this work. A major difficulty is to coincide generation with the charging requirements — solar energy is available during the daytime whereas lion’s share of e-bus charging takes place during the evening. Although integrating Battery Energy Storage System (BESS) with the solar PV system is a potential solution, this confronts the second challenge which is high upfront costs. Adding the high cost of solar PV + BESS to the already capital-intensive e-bus deployment may potentially make the entire investment prohibitively expensive.    

The third challenge is the adequacy of space availability to install solar PV systems with the required capacity. It is highly unlikely that electricity generation from solar PV systems (taking into account the possible impact of the shadow effect from adjoining facilities like multi-storied buildings) will be sufficient to meet the energy requirement for e-bus charging. 

To overcome these challenges, the scope for energy arbitrage and “banking” leveraging the electricity grid should be explored. Applicable regulations have a critical role to play in this regard. State regulatory provisions like net metering, gross metering, net billing and other variants can potentially facilitate the arrangement, with varying degrees of cost-effectiveness, between the prosumer, i.e., the transit agency, and the serving DISCOM. These regulations could enable full utilization of the generated RE to charge the e-bus fleet and meet the energy deficit from the DISCOM-supplied electricity. While these regulations are not new in India’s power sector, there is a wide variation of their applicability from state to state. In a nutshell, it is recommended that the feasibility of onsite RE generation for e-bus charging should be evaluated on a case-by-case basis. 

Off-site RE sourcing

This primarily includes procuring RE through Open Access (OA). Large energy consumers generally prefer OA to meet their energy requirements from contracted renewable energy sources or providers due to its cost-effectiveness. Most states allow consumers to avail of OA facility provided their contracted power demand is a minimum of 1 MW. Since the power demand at a large e-bus depot, housing approximately more than 70 e-buses, may possibly exceed 1 MW, OA can be a suitable option for an SRTU. The recently notified Rules for “Green Energy Open Access” that have advocated reducing the eligibility condition to 100 kW can make even smaller bus depots qualify for OA. However, this also entails some IFs and BUTs. Many states levy a range of OA surcharges on the consumers in addition to charges for using the electricity network that could result in a substantial increase in the landed cost of OA electricity, potentially making it uncompetitive to retail energy price, especially if special EV tariff is available in the state. 

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Group Captive Model is another possible offsite sourcing mechanism. It is an arrangement in which a developer sets up a power project (which can be RE-based) for the collective use of multiple industrial or commercial consumers who should have at least 26% equity in the project and consume 51% of the electricity generated. This could be a reliable and cost-effective way to procure RE from offsite locations for one or multiple e-bus depots or terminals. Here, the consumer i.e., SRTU is exempted from paying the cross-subsidy surcharge. Unfortunately, only a handful of states have the provision for Group Captive Model.   

It is evident that a one-size-fits-all approach will not work to arrange offsite RE supply. As far as its economy is concerned, applicable retail electricity tariffs can be considered a decisive factor for investing in RE – EV integration. Even if it becomes financially attractive, one technical challenge may remain which is making RE available when there is substantial demand for e-bus charging i.e., during the night-time. A solar-wind-hydro hybrid supply arrangement can be a plausible solution to this, but the arrangement is hard to implement at scale.  

Gross cost contract, an added layer of complicacy

As stipulated by the FAME-II scheme, authorities are currently procuring e-bus services instead of vehicles based on Gross Cost Contract (GCC) model. The contract involves a bus operator as the service provider who largely takes care of e-bus deployment, charging, operation and maintenance, and may or may not be responsible for arranging the required power for e-bus charging depending on the contract terms and conditions. In the context of RE-based e-bus charging, the contract may add an extra layer of complication in the execution. The current GC contracts are found to be effective for a period of a maximum of 12 years whereas the useful life of a solar PV system is a minimum of 20 years. Not to mention, the solar PV system is not a plug-and-play solution that can be installed and relocated at wish. Moreover, the arrangement of RE from either onsite or offsite facility (including through OA) takes time, more than the span of a GC contract, to deliver a decent amount of cost-savings. Considering these factors, the operator is unlikely to be interested to sweat for RE supply. Plus, there are practical challenges – neither the land nor the property (bus depot) is owned by the operator, nor the electricity connection in the majority of the cases is in its name. Therefore, the applicable regulations are less likely to regard the operator as the “consumer” or the “prosumer” at the given location. In short, preferably the authority should take the onus of providing RE for e-bus charging. 

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To conclude, it may not be an easy proposition to realize zero-carbon e-bus transport in current circumstances given the challenges. Nevertheless, some baby steps can be considered even now starting with implementing a few lighthouse projects on the RE-based e-bus fleets to derive some valuable learnings. However, setbacks should not be a distraction to the ongoing efforts to electrify India’s bus transport. And let’s not ignore future opportunities like domestic carbon trading – one may be able to earn carbon credits on emission reduction or purchase to offset its emissions.

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