Opinion
How the Delhi model for EV chargers is worthy of emulation
Summary
The capital’s PPP approach to creating a network for cheap EV charging could serve others well too
This year, 2022, is being touted as the year of electric vehicles (EVs) globally. With advancements in technology and concerted action to tackle climate change, EVs have come of age. If there is one factor, however, that separates cities and countries that have lived up to their promise and which haven’t, it has been their ability to fix the Achilles heel of EV adoption—public charging infrastructure.
India’s EV march too has been marred by slow traction in setting up large-scale public charging stations. Relying largely on public sector units (PSUs) to set these up, central and state governments across India have failed to leverage the private sector to invest in charging networks at scale. In this context, Delhi’s approach of setting up 500 charging points at 100 locations in private-public partnership (PPP) mode with a tariff as low as ₹2 per unit could offer a model to emulate.
Typically, EV charging across the world follows four models: utility-led, automakers-led (with ‘walled gardens’ of chargers), PSU-led and business-led (independent entities offering customers a charging service). In contrast, Delhi has put forward a PPP model which is unique in its structure, the process of developing it, and the criteria used for bidding. There are five aspects that make the ‘Delhi Model’ of EV-charging novel.
Land aggregation and placing of EV charging stations: In Delhi, the government took the responsibility of putting together land parcels from different agencies to be rented out on a concessional basis to private players. Land being a scare resource, this overcame one of the biggest impediments to such a network. The aggregation process also ensured good spatial planning, with sites spread across Delhi, including in underserved areas. Additionally, rigorous feasibility analysis for each site and their clubbing into packages ensured high attractiveness for the private sector.
Sound understanding of EV charging business models: As EV charging stations do not earn profits in the initial years, the Delhi government defrayed costs associated with upstream electrical infrastructure on each site and linked lease rentals to revenue, addressing two major costs that impede the business viability of charging stations. The Delhi government also looked beyond charging as a standalone business and encouraged the participation of stakeholders whose core business is aided by operating charging stations, such as fleet operators, power discoms, battery-swapping operators, and vehicle and battery manufacturers.
Flexibility in charger-combination calls: Since the economic and technical feasibility of operating charging stations is site specific, the Delhi government offered the private sector flexibility in determining the charger combinations on 70% of the space in each package. This mitigates the risk of today’s rapidly evolving charging technology getting obsolete in the near future.
Service charges as a bidding criterion: Typically, the criteria for bidding is decided with revenue maximization in mind. In contrast, Delhi kept the service charge for the end consumer as a criterion for bidding. The high appeal of the land parcels aggregated by the government, combined with a model conducive to business success, resulted in strong competition among private bidders to quote a low service charge. As a result, the Delhi government received negative service charge bids and Delhi’s EV users will be able to charge vehicles at just ₹2 per unit, perhaps cheaper than anywhere else in the world.
The development process of Delhi’s EV charging strategy: Back in early 2020, the Delhi government set up a high-level working group for the accelerated rollout of charging infrastructure. It comprised the heads of all relevant Delhi government departments, municipal corporations, discoms and external experts, and was chaired by the Dialogue and Development Commission (DDC), the government’s think-tank. This group led the process of developing a holistic EV-charging strategy for Delhi and proactively resolved any issues pertaining to the coordinated roll-out of charging stations in the city.
How the Delhi Model can inform national thinking on EV charging: The model is already influencing the Indian agenda on EV charging, with the Niti Aayog advising all states to form state charging infrastructure committees whose outlined functions read like a copy of the Delhi government’s order for constituting the working group. Additionally, the Government of India has recommended the linking of lease rentals for charging stations to revenue, and the use of public funds for electrical infrastructure augmentation for EV charging stations, both approaches first adopted in Delhi.
Driven by the commitment of Chief Minister Arvind Kejriwal to tackle air pollution, Delhi could emerge as a leader in EV adoption. Since March 2020, EV sales in Delhi have gone up by about 600% and their share among new vehicles has exceeded that in California and Europe. This can be attributed to a governance model with a people-centric approach that’s guided by progressive policies and focused on embracing innovation along its climate-action journey. The Delhi Model of EV-charging is one of many strides Delhi has taken towards becoming the EV capital of India.
Jasmine Shah & Shijoy Varughese are, respectively, vice-chairperson of the Dialogue and Development Commission of Delhi; and a consultant with RMI India who is a member of the state’s EV cell, GNCTD.
