Interview: Jasmeet Khurana

Jasmeet Khurana,
Manager-REMobility at World Business Council for Sustainable Development
 

“Please tell our readers about WBCSD in India & its role in Indian E-Mobility & Corporate Renewable PPA niche?”

WBCSD is a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world. Our member companies come from all business sectors and all major economies, representing a combined revenue of more than $8.5 trillion and with 19 million employees. Our mission is to accelerate the transition to a sustainable world by making more sustainable businesses more successful.

The WBCSD India provides members with a platform for greater insight, impact and advocacy in India and globally. WBCSD India is involved in areas such as new energy solutions by supporting members on India’s renewable policy and market landscape, transforming urban mobility by working on corporate adoption of electric vehicles and supporting our India-based members in the adoption of WBCSD/COSO guidelines for integrating ESG into enterprise risk management. WBCSD’s global program on Water is also run from the India office.

On electric mobility, the difference between a slow vs. a fast adoption in this decade will mean tens of millions of additional ICE vehicles on Indian roads. Therefore, we are working to avoid a slow transition scenario. Our REmobility project in India aims at accelerating business-led EV adoption in India. We have identified employee transport, ride hailing along with deliveries and urban freight as key use cases where businesses can lead the transition. Our project brings together companies with over 8 billion kms in annual mobility demand. These companies are working with India’s EV value chain along with other government and non-government stakeholders to accelerate EV adoption.

WBCSD also runs a Corporate Renewable PPA Forum in India under its REscale project. REscale enables 63 companies from across the renewables value chain globally to share insight and lessons learned with each other. REscale publications in India help corporate customers to navigate a complex and unfamiliar market.

“In recent times, corporates have been acknowledging renewable energy as one of the key investment areas. Please tell us more about this transition and how does this impact the energy market?”

Energy is no longer merely a cost for companies to manage. Energy is climbing up the corporate agenda due to sweeping environmental, social and business trends, including rising expectations about corporate environmental performance, innovations in energy-related business models and plummeting renewable energy prices. These trends bring new paths for value creation.

India has been the world’s second largest market for corporate renewable PPAs for the last two years in a row. The challenge is now to solve some of the regulatory bottlenecks to increase business procurement options for renewable power. We hope that amendments to India’s tariff policy and / or electricity act will solve some of the structural issues and then policy leadership at the state level can leverage low-cost renewable energy to make Indian industry more competitive.

“Please tell us about WBSCD’s recent report on PPAs in India: Market & Policy Update, 2019. What are the key trends as well as outcomes that have made it to the table in this report?”

WBCSD's recent report highlights several key market trends that have affected the growth of renewable energy over the past six months. These are:

The emergence of two northern states – Haryana and Uttar Pradesh – as important markets, with more than 1 GW of group captive solar projects approved.

Both Haryana and Uttar Pradesh are trying variations of a new approach for DISCOMs where they try and fulfil their RPO requirements by using corporate RE PPAs without entering into public procurement of power on their own. Such an approach can help DISCOMs meet their RPOs at little or no cost while significantly speeding up corporate renewable open access capacity addition. Other states emulating this approach will be a key trend to watch for in 2020.

The transition of the Indian corporate renewable PPA market from predominantly third-party PPA models to group captive PPA models, led by the withdrawal of open access waivers for new third party PPAs in most states.

Leadership of information technology (IT), automotive, electrical manufacturing, construction/infrastructure and metal companies in adopting corporate renewable PPAs.

Increased participation of specialized national developers in acquiring key corporate contracts as regional players cede ground.

Growth in the rooftop solar market for PPA projects in India continuing to dominate growth in projects based on captive installations.

Developers and corporate customers aligning project schedules to avoid paying a safeguard duty on solar panels.

“MNRE has set the target of 175 GW of RE generation by 2022. What are your thoughts on this? What role do you see the corporate PPAs playing in this?”

C&I is the largest power consuming segment in India and most of these customers can save on their electricity costs by opting for renewable power. Their role in helping meet India’s RE targets should be obvious. However, state power distribution companies also need to manage their transition to this new reality where markets need to be more flexible to absorb significant quantities of renewable power. As a country, India is trying to create market rules and business models for that to work. Hopefully, we will see structural power sector reforms soon that can enable the market rules for this transition.

“India is witnessing a transition towards E-Mobility. What are the key growth market drivers?”

The race is on to achieve the sustainable transition of India’s economy, to meet the needs of its young and fast-growing population. Mobility is one area where the opportunity for business growth and sustainable benefits are huge. For example, car ownership is expected to grow by an enormous 775% over the next two decades. While this growth will provide mobility solutions, it will also present significant challenges. The government has identified electrification of mobility as a necessary part of transforming to a clean, affordable and connected mobility system, with big benefits for a more efficient energy system too. But government action alone will not shift adoption of electric vehicles fast enough. WBCSD members are working together to accelerate the adoption of electric vehicles today, as a way to secure India’s electric mobility transition. Commercial fleets – for employee transport, ride-hailing, home deliveries and other commercial and industrial use cases - represent the fastest growing segment of vehicles on India\n roads. Electric vehicle options are already viable for many business-led use cases, and the economics are improving quickly.

Global EV adoption continues to grow rapidly. In 2018, the global electric car fleet exceeded 5.1 million, up 2 million from the previous year. The global stock of electric two-wheelers was 260 million and there were 460,000 electric buses. In freight transport, EVs were mostly deployed as small / light-commercial vehicles (SCV/LCVs), which reached 250,000 units in 2018, while medium electric truck sales were in the range of 1,000-2,000 in 2018. Globally, EVs on the road in 2018 saved 36 million tonnes of CO2, compared to an equivalent ICE fleet. Due to their lower running cost, most EVs are already economically viable at current market prices (which include recent subsidies and reduction in GST) for certain business applications. EVs achieve a TCO-parity to their ICE counterpart when their utilization per day is high enough, i.e., at about 100-120 kms for two wheelers, 100-120 kms for three wheelers, 200-220 kms for cars, 210-220 kms for buses and 250-260 kms for SCV/LCVs. Also, these parity thresholds are expected to incline in favor of EVs with plummeting costs and improving technology.

By 2026, EVs will cost the same as ICE vehicles to buy and will be much cheaper to run. In that scenario, a very rapid transition to EVs will be a given. It is what we do before that – that will create economic opportunities to fully leverage the coming transition.

An early EV adoption by businesses and fleets in the next 4-5 years will pave the way for an accelerated mass EV adoption in India, which, in turn, can set an example that other developing markets can follow.

“WBCSD’s repot on India Business Guide to EV Adoption, 2019 identifies a paradigm shift towards sustainable mobility in India. Please tell us more about the key findings of this report.”

WBCSD’s India Business Guide to EV Adoption focuses on how businesses can take lead on EV adoption.This guide is designed to provide businesses with:

a. The most up-to-date and geographically relevant information on EV adoption;
b. The clear steps to take in planning and adopting an EV fleet; and
c. An overview of best practices and learnings provided by companies who have already made the transition.

For this guide, we have identified three high-priority use cases for business EV adoption in India:

a. employee and customer transport;platform-based ride-hailing; and
b. last-mile urban freight and deliveries.

These use-cases exhibit the highest potential for early adoption. This has been established through consultation with the industry and the vehicle utilization potential of each use-case. Higher potentials for utilization will lead to ownership cost parity of EVs with ICE counterparts in each of these use-cases, making the transition easier and more viable.

“The Indian government has been aggressively promoting the adoption of E-Mobility under the FAME II scheme. With this kind of thrust, what business prospects as well future do you foresee for India’s E-Mobility transition?”

Forward-thinking businesses in India are already playing a leading role in electrifying transport. Companies such as Accenture, E&Y, Google, Adobe, TESCO and Wipro have deployed EVs for their employee transport requirement across major Indian cities. For ride hailing, EVs have been deployed or are being evaluated across several locations by established ride-sharing services such as Ola and Uber, as well as the new EV-only ride-hailing platforms such as BluSmart and Smart-E. EV adoption for urban freight distribution and e-commerce/food deliveries is also gaining traction. For instance, IKEA (an EV100 signatory) aims to run 60% of its home delivery fleet using EVs within three years of operation. Swiggy, a food delivery company, is piloting the use of EVs across 10 cities in India.

A strong government push, including creation of a public charging infrastructure will only fast-track adoption across these and other use cases in the near future – hopefully leading to a mass adoption by the middle of this decade.

Interview 24/02/2020 by News Bureau
 
 
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