With systematic and advance planning, DISCOMs can profit from the acceleration of EVs and support the growth of charging infrastructure

The future of transport electrification is looking bright in India and market trends predict that by 2030, at least 5 crore (50 million) EVs could be driving on Indian roads. As the penetration of electric vehicles and charging infrastructure increases, the role of power generation and distribution companies will become increasingly important to ensure clean and consistent electricity supply for EVs, as well as to support the growth of charging infrastructure in the country.

Distribution companies (DISCOMS) in particular have a key role to play as they will have to identify and predict EV loads, control charging time for better grid management, upgrade sanctioned loads, cables, wiring, metering and other electrical infrastructure. This requires high capital investment which India’s cash trapped DISCOMs are not incentivised to undertake. However, this growth in electric vehicles is a huge opportunity for them as every EV owner will become a new customer.

DISCOMs have a lot to gain from electric vehicle growth in India

By 2030, a report by ASSOCHAM and EY predicts that DISCOMs could earn up to $11 billion in revenue from the increased use of electricity by EVs, which would grow to roughly 69.6TWh. Further, evidence suggests that in India, 80% of EV charging happens at home, with only 10 - 15% happening at public charging stations, mostly for “top-up” charging. This is an opportunity for DISCOMs to significantly grow their consumer base as every EV sold will be a new customer. For example, a premium electric car needs at least 20 times the energy consumed by a typical refrigerator. Given that this car would be charged at home 80% of the time, DISCOMs can profit from the increased electricity use in the long run if they invest in the infrastructure needed to upgrade the domestic household consumption load that enables home charging for the EV customer.

“It is time that DISCOMs change their mindset and view EVs as a resource. This is surety of business for them. If this opportunity is not grabbed, they will lose it to public charging infrastructure providers. DISCOMs already have the advantage of serving existing customers. By ensuring timely support for setting up home chargers and load upgrades, and incentivising customers to charge only when they are in energy surplus, DISCOMs can encourage EV users to charge at home, and help in grid load management. Since EVs are still at a nascent stage in India, DISCOMs have the advantage of experimenting with different technologies and be future ready by acting now.” said Shri Anil Kaushik, AGM, E-mobility, NTPC Vidyut Vyapar Nigam Limited, speaking at an event in Hyderabad.

Fig 1: Nearly 80% of charging in India happens at home, making every EV owner a potential customer for DISCOMs

Further, with the right vehicle grid integration strategies, DISCOMs can address the biggest upcoming challenge of grid stability and reliability of power. EVs can essentially act as decentralised battery storage units, and several can be rigged together to feed power back to the grid during peak power demand, which is the main premise of Vehicle to Grid projects (V2G). Further, customers perceive them as a trustworthy source of information, placing them in a unique position to influence behaviour by educating customers on the best practices for charging EVs, including when, where and how to charge. This would be critical to manage and balance grid loads in the future.

Fig 2: The growth of EVs is an opportunity to experiment with Vehicle to Grid pilot projects for DISCOMS Source: AEEE

A good example of the proactive role of DISCOMs comes from Delhi, which has the highest number of EVs in India. Mr. Pradeep Aggarwal, Manager (E-Mobility), Delhi BSES Rajdhani Power Ltd., says “We see EV users as customers and are devising ways to address their needs. EV customers want hassle free installation of private chargers at their homes, a separate EV connection, net metering, and promotional tariffs. For this, we have completely digitised everything related to EV charging - procedures for application of charging points, government regulations, safety guidelines - it is a single window for customers. We have no fixed charges or incremental tariffs for units used for EVs. We apply Time of Day tariffs, with a 20% surcharge during peak hours and a 20% discount during off peak hours. This incentivises users to charge EVs only during lean periods, which helps us manage the load.”

Government support and incentives can help DISCOMs play a stronger role in India’s e-mobility journey

Globally, DISCOMs are already playing a key role in increasing charging infrastructure. China, which has the largest charging network in the world with a ratio of 2.55 vehicles per charging point, achieved this through dedicated policies aimed to build charging infrastructure. Close to 60% of its EV charging happens through public chargers and 40% at home. Around 2015, the country released various stand alone national and provincial policies and implementation rules regarding charging infrastructure development, including a directive to incorporate construction and upgrading of distribution grids into local planning. This ensured that grid companies were future ready to provide power supply for the growing demand from EVs. They were directed to ensure all “make-ready” requirements for home charging were implemented for free and cost recovery was achieved through electricity tariffs. Today, close to 20% of public charging stations in China are operated by China State Grid and China Southern Grid, and many are implementing V2G pilot projects as well.

For India’s DISCOMs, the high capital investment needed to upgrade their grids seems like an insurmountable hurdle. “In the US, some studies estimate that the cost of grid upgradation in the next 10 years is close to $1,700 - 5,700 per electric vehicle. Such a study has not been done in India, but this shows the level of investments needed. The Indian government and DISCOMs will have to find innovative financing mechanisms to support this transition” says Shri Ajay Mishra (IAS Retd.), Former Special Chief Secretary, Energy Department, Government of Telangana.

With the national and various state governments aiming for a significant shift to e-mobility, EV policies could also include financial provisions, incentives and directives for DISCOMs to ramp up grid infrastructure and develop technological solutions. “Any investment of public funds going towards EV charging reaps 6X more adoption in EVs than providing subsidies. Our state and national level policies should think about how to maximise the results from their investments. Supporting DISCOMs in building charging infrastructure and grid management is the need of the hour.” highlights Ms. Pramoda Gode, Consultant, E-mobility.

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