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E-bus to drive electrification of India’s public transport

Research has found that versus other transportation, buses emit just 10-25 percent of CO2. An e-bus will further reduce emission.

Enough has been said about environment and global warming - cities akin to gas chambers, a 2°C rise in global temperatures, rising sea levels, carbon reduction commitments and the rest. In the end it was the coronavirus that really forced the world to sit up and listen to Earth, it showed the world what needed to be done, how, and that it was possible.

PMPML e-buses at Pune Source: PMPML

Advantage e-bus 

So, the world has come to see that the e-bus is crucial to cutting tail-pipe emissions and that electric transit is no more an option but an obligation. Government of India is moving full throttle to fulfill this obligation through its FAME India Scheme and to bring e-buses onto Indian roads. Although implementation is on track, hurdles typical to a nascent venture define the industry at present – high cost of an e-bus, inadequate charging infrastructure, high battery cost, instability of batteries under high Indian temperatures, ongoing research to improve this; research in new chemistries for cathode and anode. All this, and more, is work-in-progress.

Demand/Requirement vs success 

India is expected to have more than 68 cities, each with over a million population by 2030, all requiring an efficient and electric public mobility system. An effective ratio for a transport system is between 100-200 buses per 100,000 people. India lags with just 50. For its population density, India would need 12,000 to 15,000 e-buses every year till 2030. A bus system is a very versatile intra-city transport system and can be easily scaled with the growth of the city. A massive return migration of rural workers in search of livelihood will flood Indian cities post pandemic. Together, with new working norms, the restructured cities would need to prioritize an adequate transit system. That the government is serious about this was stated by Union Heavy Industries Minister, Prakash Javadekar in September 2020 when he said, "Already 450 buses are plying in various cities. Now 670 e-buses are sanctioned. Maharashtra has got 240, Gujarat has got 250, Goa has got 100 and Chandigarh has got 80. Kerala and other States have also got e-charging stations because all those corporations who are completing the formalities, we are sanctioning e-buses for them."

Faster Adoption and Manufacturing of Electric Vehicles-Phase I & II 

Figure 1: E-bus tendering under FAME Scheme Source: CES

The FAME India Scheme Phase I launched till March 31, 2019 by the Ministry of Heavy Industry and Public Enterprises and operated by Department of Heavy Industry (DHI), increased the share of hybrid and EV passenger vehicles from zero in FY 2012-13 to 1.3 percent in the FY 2015-16. The EV industry sold 156,000 EVs during 2019-20.According to the Society of Manufacturers of Electric Vehicles (SMEV) the sale of EVs in India increased by 20 percent in 2019-20, mainly driven by rising sales of two-wheelers. As per a PIB posting, in this first phase about 2,80,987 hybrid and EVs were supported by ₹359 crore of demand incentive. DHI sanctioned 425 electric and hybrid buses to various cities at a cost of about ₹280 crore and 520 charging stations for around ₹43 crore in certain cities under FAME I.

DHI notified FAME II from 1st April 2019 for three years with a budget of ₹10,000 crore giving priority to public and commercial vehicle segments as well as demand incentives. The adoption of over 7,000 electric buses by State transport undertakings (STUs) by 2022 is supported by a sum of ₹3,545 crore as part of FAME-II's ₹10,000-crore budget. DHI sanctioned 5600 e-buses to various STU's under the scheme. The procurement process of 2500 buses, is already completed and approved for subsidy; further contracting is still underway.
DHI invited expression of interest under FAME II for electric city bus services on an operating expense basis, also known as the Gross Cost Contract (GCC) model. DHI sanctioned 5,595 e-buses to 64 cities in September 2019. Clear eligibility terms for sanction state that the selected City/STU has to initiate the process of procurement within a fixed timeframe for the buses sanctioned under FAME II criteria will be eligible for funding. It is stipulated that these e-buses are to run about four million kilometers during the contract period. By January 2020, about 30 cities were awarded contracts for 2,000 e-buses under the scheme, while another 20 cities were at various stages of finalization of contracts for about 1,900 e-buses.

As the scheme expired in January 2020, those subsidies allocated to cities which failed to procure around 1,500 electric buses under the scheme initiated in August 19, were reallocated. Nor were the cities allowed to participate in the reallocation bidding process, people aware of the development said. The Center reallocated subsidies of 18 cities to STUs. This measure ensures only serious players are allocated subsidies and that transparency is maintained. 

FAME-II success

Nitin Gadkari during the Hindustan Times Leadership Summit Source: HT Photo

 In January '20, DHI sanctioned 425 electric and hybrid buses to various cities at a cost of about ₹280 crore. As per a May 2020 report by SMEV, 600 e-buses were sold in India in FY-19-20 up from 400 the year previous. Inter-city travel also received 400 e-buses, and the first inter-city electric bus service with a range of 300km between Mumbai and Pune was inaugurated in February 2020. Maharashtra, Uttar Pradesh and Gujarat have been sanctioned 725, 600 and 550 e-buses respectively for the next 4-5 years, a 35 percent of total e-bus orders in India.

Union Minister of Road Transport and Highways, Nitin Gadkari reiterated the government's plans for EVs at the Hindustan Times Leadership Summit 2020.

"I am speaking about a transport model:" he said, "The expenditure of a BEST diesel bus in Mumbai is ₹115 per kilometer. In the latest tender in Pune with contracts for electric buses, the cost per kilometer is ₹50. We are already giving priority to the public transport system running on electricity and are developing special e-buses like cable or trolley buses as well as electric double-deckers. We are undertaking a pilot project to make the Delhi-Mumbai corridor into an e-highway."

Hurdles to achieving FAME

Certainly e-buses are now at the starting line of a swift take-off in India. However, at a micro level a number of speed breakers need to be removed. An effective and well thought out EV policy is a base requirement and industry is vociferously demanding a long-term roadmap with clear timelines to direct the conversion to e-mobility. Tenders are often unclear and should be formulated in dialogue with STUs in order to adequately meet local needs.

Withdrawal due to faulty tendering is rife; high bids are another problem; factoring in the higher cost of e-bus vs a CNG one and current high battery costs are all deterrents. Contracting of e-buses in India is new and many wrinkles need to be ironed out. For example, funding needs to be specifically calibrated to match battery life; tenure and payback timelines for operators - they require low and long-term funding and timely payment. The various departments should coordinate on responsibility for infrastructure for example, on route arrangements, staffing qualification, etc. One great positive has been cost optimization due to FAME II's condition for 50 percent localization - it has led to the successful manufacture of numerous e-bus components, battery packs, motors and inverters, AC systems and more.

At the macro level consideration should be allowed that the battery manufacturing industry faces a learning curve to manufacture reliable, road-tested products. Grid and charging infrastructure are also evolving technologies with limitations and stability challenges. Government institutions have to make the shift from rigid financial management-models to a risky new cost-structure, which is more expensive up front, but cheaper over time.

Electric wheels on the road

Despite potholes the rate of e-buses across different States has risen to over a thousand by end March 2020. By 2022 India could add almost 6500 e-buses. This rise in e-bus sales is largely due to aggressive governmental promotion through FAME India.

Pune became the first Indian city to convert a bus depot to all electric: The Pune Mahanagar Parivahan Mahamandal Limited (PMPML) now parks only e-buses there. As of November 2019, up to 133 EVs have been deployed across the city in the first phase of its e-bus program. PMPML has signed a GCC with the manufacturer, Olectra Greentech and its Chinese technical partner BYD. The e-buses are owned, operated and maintained by their manufacturer. PMPML schedules and tests the buses for their range, power consumption and charging times. FAME II is sanctioning the transit to e-buses under this scheme.

NTPC Vidyut Vyapar Nigam Ltd, a wholly-owned subsidiary of NTPC, which is India's largest power utility, has signed an agreement with the Department of Transport of Andaman & Nicobar Islands to deploy 20 air-conditioned e-buses in the Union Territory. The company is offering a complete transport solution, including collaborating to set up public charging infrastructure on the Island.

Glitches in FAME India scheme

The lack of a clearly defined Electric Vehicle Policy by the government has stunted the growth of e-mobility in the country and failed to take off in proportion to the expense incurred. The FAME I's attempt to incentivize the purchase of an unknown, expensive and almost unavailable e-car, the lack of infrastructure to charge it, the inability to travel long distance, was poorly conceptualized and premature. The second goal to setup charging infrastructure throughout the country, was a textbook case of chicken-and-egg casualty. This learning experience came at a cost outlay of `8.95 billion ($126.2 million).

EV as a whole is yet to pick up in the country, since in the initial planning the cart was placed before the bull. FAME II was notified with special focus on electrification of public and shared transportation. This aspect of the FAME Scheme should have been introduced first and targeted intra city. The promotion of the passenger segment under FAME I has brought the government under heavy pressure from an automotive industry in trouble, and which is additionally staring at competition from the upcoming EV sector.

FAME I could have promoted electric transit at the outset and it would have gone uncontested. With India's severe shortage of public transport, introduction of e-buses would have eased traffic-congestion and pollution in a single stroke. Fleets could take advantage of government support to help beat the high initial costs of e-buses. This would have enabled the e-bus to lead the way on the electrification of other commercial EV segments. The passenger segment could have made a delayed entry, giving the automobile sector time to balance its accounts as well as to research and develop electric car models. Growth in the two and three-wheeler segment startups - low-cost intra city transport - would have boomed from continuous support through FAME I and II.

Post pandemic move towards self-reliance

The dent that the pandemic inflicted on shared mobility has been significant but not obstructed the entry of the e-buses into the public transport system. India's severe shortage of public transport gives the FAME Scheme ample scope to support India's transit to electric. Market reports predict a healthy growth of around 40 percent in the Indian e-bus segment. With India looking at 30 percent emission cut by 2030, and Phase II's massive subsidy support, the country is an attractive investment destination for e-bus makers. The drive is also part of incentivizing the private bus manufacturing sector where local production is supported by the phased manufacturing program (PMP), which runs till 2024. It will build up India's supply chain, spurred by the Center's clear timelines for the localization of components.Although the reduction in Goods and Services Tax from 12 to 5 percent eases import of parts, it will be swiftly increased in the coming year. The newest support to self-reliant manufacture has been initiated through Production Linked Incentive, which has included advanced chemistry cell battery (ACC) in the energy storage sector with a financial outlay of ₹18,100 crore. It will provide a tremendous boost in promotion of EVs. The same PLI scheme has allocated ₹57,042 crore to automobiles and auto components. FAME II has also put forward the importance of setting up gigawatt scale manufacturing units.

Success sorties of India's top e-bus manufacturers

Figure 2: Market share of various Indian electric-bus brands. Source: CES

Urbanization in India is on the rise and will create a parallel demand for effectualcommuting options since half of the country's population uses public transportation. Participation in building up the country's public e-transport sector is open to the best bidder. India's ability to deliver in the e-bus department is demonstrated by a number of e-bus manufacturers that include JBM-Solaris Auto, Ashok Leyland, Tata Motors, Foton PMI, Goldstone Infratech, among others. Figure 2 illustrates control of market share of various e-bus manufacturers in India:

The case for electric public transport has gone global and the green-bus is the flavor of the future. Major growth in the e-4W segment will be from the e-bus, with electrification of road transport in top gear. After a severe COVID-induced dip, markets expect over 10 percent surge in the e-bus segment in 2021. Electric transit will be driven mainly through central government support as has been demonstrated by the FAME I and FAME II scheme, which have been the key drivers of the e-bus market in India.

Author : IESA Admin
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