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PM-ebus Seva: Ambitious Plan to Boost E-Bus Adoption despite challenges
Industry News- Dec 19,23
The Crisil Ratings report emphasises the government's commitment to overall decarbonisation, with a primary emphasis on public transport as a key facilitator.
The PM-ebus Seva initiative seeks to roll out 10,000 e-buses in 169 cities, accompanied by charging infrastructure in 181 cities. Despite persistent challenges such as counterparty risks and insufficient charging stations, a report predicts that the share of electric buses (e-buses) will double to 8% in the next fiscal year. This growth is attributed to supportive policies, cost-effective ownership, and the government's focus on decarbonisation, particularly in public transport.
The Crisil Ratings report emphasises the government's commitment to overall decarbonisation, with a primary emphasis on public transport as a key facilitator. It anticipates that this commitment, coupled with favourable total cost of ownership, will drive e-bus sales to constitute 8% of new bus sales in the upcoming fiscal year, up from approximately 4% in the current fiscal year.
The report acknowledges ongoing efforts to deploy e-buses through tenders awarded under initiatives like the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (Fame) scheme and the National Electric Bus Programme (NEBP). Favourable total cost of ownership, attributed to lower operating costs and decreasing initial acquisition costs, is a key factor driving the adoption of e-buses.
Under the Fame and NEBP programs, state transportation agencies have initiated e-bus procurements through gross cost contracts and outright purchases. A total of 5,760 e-buses have been delivered to date, with plans to deploy 10,000 more in the current and next fiscal years. The report credits the adoption success to favourable contracting terms under the gross cost contract model.
Sushant Sarode, a director with the agency, highlights the favourable ownership economics, estimating a 15-20% lower cost over a 15-year lifespan compared to petrol/diesel or CNG buses. He notes that although the initial acquisition cost of an e-bus is higher, it is expected to decrease as original equipment manufacturers improve operational efficiency, scale, localisation, and battery costs decrease.
Despite the positive outlook, challenges remain, including high counterparty risks and inadequate battery charging infrastructure. The PM-e-bus Seva scheme aims to address payment security issues and enhance charging infrastructure. The proposed scheme includes setting up a Payment Security Mechanism (PSM) to secure receivables for Original Equipment Manufacturers (OEMs) in case of delays by state transport undertakings.
The report underscores the need for a policy framework to encourage private sector participation, which currently constitutes about 90% of the bus fleet. The success of the PM-ebus Seva scheme and the overall penetration of e-buses hinge on addressing these challenges and fostering private sector involvement in adopting electric buses.
Source: Business Standard
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