EV Demand to Help Power Utilities Earn $11-bn in Revenue

The overall electricity demand from electric vehicles (EVs) in India is projected to be around 79.9-GWh (gigawatt hours) by 2020 and is expected to reach 69.6-TWh (terawatt hours) by 2030, according to a recent ASSOCHAM-EY joint study.

“The overall EV demand is expected to help utilities earn an estimated US$11 billion in revenue by 2030,” according to the study titled, ‘Electrifying India: building blocks for a sustainable EV ecosystem,’ jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Ernst & Young LLP (EY).

The report added that increasing adoption of EVs across India will be instrumental in transforming the country’s power sector. “The surge in electricity demand from EVs will help recover the slow demand growth.”

It also said that arrival of electric mobility is expected to help the P&U (power and utilities) sector realize net cost and revenue benefits from both demand and the supply side.

Further highlighting the impact of EVs on Indian power sector, the report noted that it would help the country in achieving carbon emission reduction targets. “By 2030, EVs are expected to reduce emissions by 40-50 per cent, compared to ICE (internal combustion engine) vehicles in an aggressive renewable energy scenario,” it said. However, the report added that even if the grid continues to be coal heavy, emissions are likely to reduce by 20-30%.

National regulated rates

The study has suggested a national regulated rate applicable to all charging stations across India considering that government is in discussion to standardise charging infrastructure. It is also recommended that in order to meet the rising demand of charging stations the government will have to quickly facilitate standardisation of charging infrastructure and incentivize R&D for advanced charging technologies.

“We expect the government to take active measures to streamline regulatory challenges and provide further policy impetus to drive uptake of EVs.”

It also said that while success of India’s EV mission depends upon development and proliferation of domestic manufacturing ecosystem, however, absence of an EV supply chain in the country demands an urgent investment in research and development (R&D) and local manufacturing capabilities.

Further, the report noted that clear policy guidelines are essential for EV market to take-off, given the huge capital investments involved.