Policy thrust has to go beyond just electrics/hybrids to drive up competition among green options available
Northern India—Delhi, in particular—continues to be impacted by very adverse air quality, with particulate matter (PM) way beyond the National Ambient Air Quality Standards (NAAQS) safe limit almost round the year. Poor air quality also threatens a large number of other urban agglomerations in the country. A recent WHO report states 10 of the 20 most polluted cities in the world are in India. The Global Burden of Disease report estimates that 6.27 lakh Indians lost their lives due to air pollution in 2010, and the situation has only become more adverse since.
Besides the obvious public health issues, urban air pollution reaching “hazardous” levels takes the shine off the government’s pivot towards “Smart Cities”. With rapid urbanisation, the conditions arising due to air pollution call for an urgent response.
Transportation needs for a rapidly urbanising population are only going to grow. A more focused approach towards cleaner and sustainable public transport is a sine qua non for graduating to Smart Cities. Fortunately, technological advancements in the auto-sector suggest that such sustainable solutions will be possible if implemented as part of a comprehensive solution for public transport. Current electric and bio-fuel technologies are workable alternatives to our over-dependence on hydrocarbon fuels.
As in several other technology fields, California, in the US, pointed to the future by mandating use of either electrical or ethanol engines for all public transport several decades ago. Given the huge demand for public transport in our cities, we need an enabling policy framework to roll out both electric as well as bio-fuel solutions across cities. Public transport is primarily managed by state transport undertakings (STUs) and a few municipalities. Currently, there are over 1,50,000 city buses being operated by STUs, consuming over 7 million litres/day and emitting about 33,000 tons/day of CO2. Any increase in the number of pollution emitting public transport vehicles to serve rising requirement would be disastrous. Therefore, the number of diesel-engine public transport vehicles need to be urgently capped, and be gradually brought down, as part of a comprehensive action plan.
The principal impediment to a rapid roll-out of electric/bio-fuel public transport is the higher capital cost—all the more significant considering STUs’ poor financial health. The current state of technology for both alternatives suggest lower life-cycle cost vis-a-vis diesel, but STUs would require financial incentives to shift to these “green” technologies. Thus, adequate policy support, say, through tax-breaks and/or direct subsidy, may facilitate this shift and create the ecosystem to sustain these technologies.
The cost of a 12-meter, semi-low-floor diesel bus is currently about R60 lakh. A similar sized deluxe electric bus costs about R2.70 crore, reduced to about R1.75 crore after factoring in the subsidy under the government’s Faster Adoption and Manufacturing of Hybrid and Electric (FAME) initiative. As against this, the cost of an ultra-fast charging (10 minutes) battery-operated bus using the existing chassis is about R1.75 crore (without subsidy). After localisation and a 40% subsidy under FAME, it falls to around R90 lakh.
The bio-fuel alternative is more cost-effective, with the luxury version of the bio-fuel bus— imported in fully-built condition (with import duty)—costing about R1.70 crore. Adequate tax breaks, particularly during the initial localisation phase, could bring costs to about R90 lakh. The cost of a fully-built, imported ethanol bus is even lower—R1.30 crore. With corresponding tax-breaks, it falls to less than R90 lakh.
The economics of green technologies even out, if the total cost of ownership is taken into consideration (fuel/ maintenance/repairs) over a minimum 10-year life-cycle. Creating and maintaining the infrastructure for such transport solutions, apart from training drivers and transport staff—essential for successful implementation—will require managing implementation on a turn-key basis, and not just the fleet procurement some operators, including the Bangalore Municipal Corporation, are considering. STUs should consider only minimum-10-year, turn-key contracts, with outcomes that can be monitored. This will also provide a risk-assurance for the government’s investment on the subsidy.
The policy is currently skewed in favour of electrics/hybrids (FAME), and does not provide a level playing field for the country to benefit from all available green alternatives. To foster greater competition, the support framework should be secular with similar treatment for electrics and bio-fuel/ethanol alike.
A policy thrust on Make-in-India for battery-operated vehicle technology will help make it more affordable. The effort should be to drive down the cost of battery by appropriate selection of battery chemistry, tuned to match the selected range requirement. For example, if a system is designed such that the battery range is limited to 50 km, can be recharged within 10 minutes and can be operated for, say, three hours on AC load, matching the typical route configuration of public transport in Indian cities can significantly reduce battery cost. Similarly, safety of the battery technology is an equally important criteria, particularly for a fast-charging mode, with high temperatures and the rough road conditions of India also factored in.
Fortunately, ultra-fast charging lithium-ion battery technology meeting such criteria has been successfully used in China, the US and in Europe. Such safe, ultra-fast-charging technology drive down implementation costs and help scale up the programme rapidly.
The commercial viability of bio-fuel public transport solutions, on the other hand, is a function of the availability and pricing of bio-fuels. Bio-gas buses are an option for cities that have, or are likely to soon have, a gas distribution network accessible for the transport fleet. Delhi, Pune and Bangalore are prime examples of cities that have excellent gas-grids. Similarly, the ready availability of ethanol in cities like Nagpur suggests that ethanol-engine city buses can be scaled up in such locations. Scania’s pilot project in Nagpur is a clear pointer to the way forward
An early decision on the government-assistance framework for green transport options will help fast-track their roll-out. Such a subsidy framework should emphasise the need for comprehensive turn-key solutions, including the creation of requisite ecosystem and mandate Make-in-India as an essential eligibility requirement. Flexibility in policy, including permitting duty-free imports in the initial phase, linked to localised production, and fast-tracking of the homologation process should form a part of the comprehensive action plan for it to succeed.
Bhai Vijay Chibber
The author is a former secretary, government of India