Expert Speak Terra Nova
Published on Apr 21, 2020
Post covid stimulus for clean energy: Govt must focus on developing an EV ecosystem The unprecedented and unforeseen coronavirus crisis will have ramifications on numerous industries and segments. With knee jerk reactions expected from governments for economic recovery post the crisis, the climate change and clean energy sector will expectantly take a hit. However, as the world waits for these troubled times to pass, we must ensure that our clean energy efforts do not slip back. In India, and globally, there has been a call from industry experts and players for a stimulus package for the clean energy sector to overcome the setback of the COVID-19 pandemic. Known for its resilience and adaptability, India must take this opportunity to ensure that the massive clean energy efforts that it has taken owing to ambitious target setting, industry support and economies of scale are not pushed back. This calls for a targeted stimulus package to the sector. A key recipient of the stimulus in the clean energy sector will have to be the Electric Vehicles (EV) segment, as it is in its nascent stage and will still need a big push to come out of the economic difficulties that might arise due to the pandemic. This also presents an opportunity to steer the EV sector in a more clear and effective direction. Known for its resilience and adaptability, India must take this opportunity to ensure that the massive clean energy efforts that it has taken owing to ambitious target setting, industry support and economies of scale are not pushed back The jury is still out on India’s readiness and approach to adopt EVs, but there is not much debate regarding the necessity to invest in this path. It is a merely a question of how and when. Keeping this in mind, the current times with disrupted supply chains and altered targets call for an even stronger impetus of the EV sector. The Indian government must have a long-term vision by keeping sustainability at the center of any stimulus package it announces. For instance, the government has had long term plans to bring in more EVs in India, and has also set ambitious targets to that effect, but funding till now has not been in sync despite the consideration of the funds earmarked under FAME II. With a clearly laid out stimulus package, the government can seize the opportunity to develop under focused areas in the EV value chain, especially distribution and networking. To allow for a more efficient adoption of the EV, it is imperative that a complete ecosystem across the value chain is created. There are concerns on the manufacturing front regarding the procurement of raw material and import dependence, but efforts for more economical manufacturing are ongoing. Government stimulus should now focus on tapping into the charging infrastructure space especially considering the benefits it can bring about to small businesses and startups. Further, there is a need to explore innovative areas such as smart charging and solar charging. The stimulus can be used to initiate a few pilot programs, such as a franchise model or battery swapping schemes, for identifying a longer-term supply chain for charging infrastructure. Efforts should also be made to develop infrastructure for the end of life (ELV) vehicle management. This could include material recycling which can further boost manufacturing. The ongoing pandemic plagued times also present an opportunity for reskilling of labour, as the nationwide lockdown might unfortunately result in many informal workers without any stable stream of work for the near future. The government should provide these workers with an opportunity to engage in learning skills more relevant for the EV ecosystem. This will not only assist the workers financially but also enable them to be equipped for jobs of the future. The government should provide these workers with an opportunity to engage in learning skills more relevant for the EV ecosystem. This will not only assist the workers financially but also enable them to be equipped for jobs of the future. These difficult times also call for an increased cooperation among nations. Even though the unfolding of the COVID-19 health crisis at the outset appears to make countries circumscribed, time is a testament that we will emerge out of this pandemic stronger, closer and better connected. Cooperation amongst governments will be even more crucial at the end of this crisis. India is commendably already collaborating on emergency relief measures with various countries. India should also use this time to identify its comparative advantage in the EV sector and work with its Asian counterparts, especially BIMSTEC, to enhance their EV adoption as well. India has taken a lead in smaller and lighter EVs especially electrically powered rickshaws so much so that prices of EV in India are expected to become competitive with ICE vehicles by 2023, seven years earlier than the US<1>. Three wheelers are a popular mode of transport in all of the South Asian and South East Asian countries and India can hand hold its BIMSTEC counterparts with lessons from its e-rickshaw boon. In the longer run, India can also collaborate with BIMSTEC on reorienting the automobile sector and reskilling of workers for aftermarket service and support. Cooperation for developing a stronger value chain and EV ecosystem will prove beneficial in the long term. India must also explore charging stations, EV conversion kits, and other such crucial elements. It is important that any monetary packages announced by the government right now serve to ensure emergency responses, preparing a robust health architecture and providing relief measures for the vulnerable. In the meantime, relevant sections of the government can also plan and perhaps conduct stakeholder consultations to assess the expected impact of the pandemic on the clean energy sector in India. This can help in being prepared with a more targeted, optimized and clear plan for bringing the sector back to track once the pandemic is over.
<1> https://qz.com/india/1741296/e-rickshaws-give-india-an-edge-over-the-us-in-ev-pricing/
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Purva Jain

Purva Jain

Purva Jain has over eight years of experience in policy advocacy and research in the development sector. Her areas of policy interest include renewable energy ...

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