By Prasoon Agarwal, GGGI Country Representiative in Nepal, and Siddarthan Balasubramania, former GGGI Country Representative of India, with inputs and contributions from consultants Rohit Pathania and Swati Lal.
India is on track to become the third largest road transportation market by 2020, driven by strong economic growth and rapid urbanization. In the next 20 years, steady economic growth, a larger working population, and longer trips due to urban sprawl will lead to a four-fold increase in the demand for urban transport, nearly tripling the demand for passenger transport as a whole. The growth in the transportation sector has resulted in higher oil imports (more than 75% of oil is imported), higher Green House Gases (GHGs) emissions and Particulate Matter (PM10 and PM2.5), increased noise pollution and congestion.
The Global Green Growth Institute (GGGI) in conjunction with a consortium of partners, produced sub-national Green Growth Strategies for Karnataka and Himachal Pradesh, and supported the two state governments to integrate green growth objectives into their development plans. The strategies identified a prioritized set of green growth interventions, capable of impacting both economy and environment, one of which is electric transportation. Within the context of increasing transportation needs and the growing number of private vehicles, electric buses provide an environment friendly solution for high quality transport.
Electric buses offer several advantages over conventional petrol/diesel buses. Electric buses deliver superior torque to power output at low speeds, enable regenerative braking mechanism and experience lower wear and tear due to the elimination of a mechanical drive train, leading to lower operational and maintenance costs. They can significantly impact the environmental quality since they have zero tail pipe emissions and 30% lower noise levels, leading to less pollution and GHG emissions. Also, they reduce drivers’ fatigue and increase road safety due to a shift from the clutch gear system on a conventional diesel bus to an automatic electric drive. Moreover, electric buses can help improve transport affordability for the poor by reducing user costs, and support direct and indirect job creation through local manufacturing. While ensuring high energy security due to lower energy consumption, electric buses can bring down the fuel import bill and significantly reduce the operating costs.
Karnataka is the fifth most industrialized state in India, with a contribution of 5.46% to India’s Gross Domestic Product (GDP), and a population of over 60 million people. Public transport accounts for about 50% of the total urban transport demand of the state. Bengaluru, which accommodates over 40% of the vehicles in the state, is expected to account for a significant share of urban transport demand in the state. Bengaluru has the second highest registered motor vehicles in the country after Delhi. By 2030, more than half of Karnataka’s 72 million people will live in cities. Despite the ongoing efforts to build metro trains and expand bus networks, the number of vehicles on road is likely to grow by over three times to reach 20 million, thereby worsening congestion, road safety and air quality.
On the other hand, Himachal Pradesh (HP), a hill state in North India, has rapidly evolved in terms of economic growth and holds the promise of great progress owing to its rich resources, such as hydropower, horticulture, forestry etc. HP is, however, confronted with several challenges, such as increasing water and energy demand, degradation of forests, threat to biodiversity, waste management, and unsustainable transport. There has been a growing number of private registered vehicles in the state (~10% increase per year) and an influx of tourist vehicles, causing a surge in traffic parking and congestion problems and associated adverse impacts on the environment, including air and noise pollution and increased GHG emissions.
GGGI supported the two states with a techno-economic feasibility assessment for deployment of battery powered electric buses for public transport. GGGI’s analyses established a business case for the applicability of electric mobility in the states by analyzing the requirement and eventually formulating financing opportunities for electric buses. As per GGGI’s analyses, Karnataka, with one of the largest intra-city public transport networks, is best positioned to take lead in introducing electric buses in their public transport system. Similarly, the unique policy and environmental challenges of HP make it another ideal state that can adopt electric buses. Moreover, the surplus of cheap hydro-electric power in HP can be readily deployed for charging buses, thereby offsetting high fuel costs.
Based on GGGI recommendations, several fiscal incentives have been announced for electric vehicles by the state governments of Karnataka and HP. While Karnataka announced complete waiver of all taxes on electric vehicles, HP announced exemption from token tax, registration charges and Value Added Tax (VAT) on all electric vehicles for five years. Further, convinced by GGGI’s innovative analyses employing a suite of tools, Karnataka and HP have taken steps toward the adoption of electric buses in their public transport fleet. The financing proposal developed by GGGI for electric buses in HP became the first successful initiative by any state government in India to secure a national grant of USD 5.5 million for procuring 25 electric buses under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme. Also, the Bangalore Metropolitan Transport Corporation has recently given in-principle clearance to induct 150 electric buses in its fleet.
The experience of the two Indian states clearly shows that the proliferation of electric vehicles needs policy support, especially in the initial stages of its adoption and implementation. The government could induct electric vehicles in its fleet of vehicles to increase awareness, expand product range and demonstrate commitment. Regulatory and fiscal incentives, such as tax benefits and subsidies, can also play a critical role in creating a market for electric vehicles.
Countries with similar green growth challenges can work together to catalyze policy and financing solutions for electric mobility through knowledge sharing and capacity building.
Prasoon Agarwal GGGI’s Country Representative in Nepal. Prior to taking up this role in January, 2017, he served as a Senior Advisor with GGGI’s India team
Siddarthan Balasubramania was GGGI’s Country Representative in India from 2013 to 2016.
Rohit Pathania was a Consultant with the GGGI India team.
Swati Lal was a Consultant with the GGGI India team.