Convergence Energy Services Limited (CESL), a wholly owned subsidiary of Energy Efficiency Services Limited (EESL), announced prices discovered for the biggest non-subsidized demand for 6465 electric buses. This unified tender constitutes demand for electric buses from six Indian states & UTs – Delhi, Telangana, Haryana, Surat (Gujarat), Kerala & Arunachal Pradesh.
This is the first tender under the National Electric Bus Programme (NEBP). The lowest price discovered for a 12-meter bus (intra-city) is Rs. 54.3/km, & 12-meter bus (inter-city) is Rs. 39.8/km. For a 9-meter bus, price discovered is Rs. 54.46/km and a 7-meter bus is Rs. 61.92/km. The prices do not include a subsidy and are 29% lower than what it costs to operate diesel buses.
Electric buses will be deployed both within city limits and on intercity routes, with the latter being able to do 325 kms on a single charge. This contract will benefit from terms and conditions standardized through the Grand Challenge process and will be eligible to gain from a payment security fund currently under consideration by the Government of India.
The value of the tender is over Rs. 30,800 crores. The buses are expected to operate around 5718 million kilometers over twelve years, saving 1842 million liters of fossil fuel. This will result in 4.62 million tonnes of CO2e from tailpipe emissions, a major step towards mitigating climate change. Under the Gross Cost Contract (GCC) model, the private operator brings the bus and operates it for a period of 10 and 12 years against pre-determined conditions as set out in the tender. STUs on their part pay a fee for the bus service.
Announcing the discovered prices, Mahua Acharya, MD & CEO, CESL said “As always, I really appreciate the participation of so many players in this tender, and the leadership shown by the states to deploy electric buses. This is a remarkable step in helping to transform our state transport authorities and build out a new market for electric mobility in India. Of course, a tender such as this is also witness to the commitment of the country in achieving the goals set by the Honorable Prime Minister to mitigate climate change and better the quality of life of our citizens.”
She further added, “This tender is a part of the central government’s vision to deploy 50,000 electric buses on the roads in the next few years, whilst strengthening, modernizing and greening public transport in India.”
National Electric Bus Programme, which aims to effect the deployment of 50,000 e-buses across the country, is envisioned to aggregate demand, support state transport undertakings to integrate electric buses into their operations, and work with states and DISCOMs alike to support the creation of charging infrastructure at their depots.
Prices realized set a benchmark for public transport, the price point for which may encourage even the smaller cities to adopt electric vehicles. This price discovery represents electric mobility as a “service”, a relatively new and emerging business model that makes it affordable for state transport undertakings to adopt electric buses.
CESL was mandated by NITI Aayog under the then CEO, Amitabh Kant, to implement a national programme of 50,000 eBuses. The mandate came after CESL managed a ten-month long process that gave rise to a unified tender of 5450 e-buses – The Grand Challenge with homogenized terms and conditions under the FAME-II subsidy programme and discovered prices that were 27% and 25% lower than diesel and CNG respectively, without considering the subsidy.
The process of homogenization started in July 2021, following a Gazette of India notification dated 11th June 2021 issued by the Ministry of Heavy Industries.