Electric buses in India: To be or not to be?

Transport corporations in India are gradually junking rickety old buses that spew blankets of thick black smoke, to make an ambitious and direct leap to cleaner and sophisticated electric buses. However, experts are divided on whether the country is ready to make the shift.

Despite forming a minuscule percentage of the total vehicular population, diesel buses contribute substantially to air pollution as well as carbon emissions in Indian cities. In Delhi, for example, buses form only 2.5 percent of the city’s vehicle population but contribute to over 65 percent of the city’s air pollution as well as fuel consumption, according to a recent report from Niti Ayog. Experts from research organisations say this number can be extrapolated to the country as well.

To make the shift from diesel to electric, bus corporations need to find a way to finance these new technologies. Cash-strapped transport corporations across the country are looking at different financial models to bring in electric buses, including leasing from private players as well as making outright purchases using central government schemes. According to a report from Niti Ayog, the department of heavy industries has received at least 47 proposals from 44 cities in 21 states, asking for 3,144 e-buses. Recently, 40 electric buses were rolled out in Lucknow, which, according to news reports, is part of an order of 255 e-buses that Tata Motors is to supply to six State Transport Undertakings (STUs) in the country.

However, a new report – titled Shifting Currents: Opportunities For Low-Carbon Electric Cities In The Global South – from World Resources Institute (WRI) says that India is better off without electric buses at the moment – both financially and in the fight against climate change. India now generates more than the threshold level of 600 tonnes of carbon-equivalent for every gigawatt hour of energy it produces, the report found out, making this a primary reason why electric buses are not a good investment to dent the country’s carbon emissions.

One of the co-authors of the WRI report, Michael Westphal, told Mongabay-India: “With regards to India, our main point is that if India electrified now (e.g. transport) it would actually result in higher CO2 emissions. So, India should definitely prioritise greening its electricity network over electrification. That being said, India has embarked on a great march towards renewables. It is set to reach its 2020 goal of installing 100 GW of solar by 2020. As it greens its electrical grid, India should put in place the enabling conditions for electrification.  Of course, as we point out, there may be other factors to consider, such as local air pollution,” he said.

“As India makes progress on its nationally determined contributions (NDC) goal of generating 40 percent of its electricity from fossil-free energy sources by 2030, the carbon intensity of its electricity will fall below 600 tCO2/GWh.  How quickly this happens will depend on the rate of change in the electricity sector,” he added.

Financing for e-buses remains a major hurdle

Despite Bengaluru being the first city in the country to conduct trial runs of e-buses, the Bangalore Metropolitan Transport Corporation (BMTC) is still not sure about how to finance these buses. The prohibitive initial costs made the corporation look for leasing options. However, earlier this month, the corporation decided to cancel its tender to lease buses. It now plans to make an outright purchase of 80 electric buses, each costing between Rs. 15 million (1.5 crores) and Rs. 20 million (2 crores).

WRI report noted that electric buses are not yet competitive with diesel buses in India. “In Bengaluru, while electric buses were estimated to generate greater profits per day ($170 vs. $93) on a per kilometre (km) basis, the price of an electric bus is about three-and-a-half times that of a diesel bus, which means a payback period of eight years compared to four years for a diesel bus,” read the report.

“On the operational side, however, battery electric buses are 80 percent cheaper than diesel (0.15 vs. 0.8 $/km). Infrastructure and maintenance costs associated with each bus type were factored in to calculate a total cost of ownership that ranged from 2.61 $/km for diesel buses to 6.83 $/km for battery electric buses,” the report further said. The report also estimated that the cost for electric buses will drop by 30 percent to 50 percent by 2030, making them competitive with diesel and compressed natural gas models.

Experts from other research organisations, however, disagree that India is not ready for electric buses. Both the greening of the grid and electrifying public transport need to happen in parallel, said Chandra Bhushan, the deputy director general of Centre For Science and Environment (CSE), a research and advocacy based in New Delhi.

“Our electricity is getting decarbonised rapidly. Last year, some 10 percent of the electricity generated came from wind and solar alone. The shift to electric buses need to happen as the grid goes green,” he said. While the initial costs of electric buses are higher, he reiterated that operational costs are highly competitive.

Speaking to Mongabay-India, officials from transport corporations in Bengaluru and Tamil Nadu agreed that the shift will be slow and difficult despite the seemingly lower cost of operation of electric buses. These corporations are struggling to find the finances for the initial investment.

While electric buses were tested on the roads back in 2014, they are still not operational. Backing the corporation’s decision to consider the outright purchase of 80 buses, N.A. Haris, chairman BMTC, said it is natural for the initial costs to be high. “Electric buses are the future. Eventually, 100 percent of our fleet will be electric. Given this, we need to invest not just in the buses, but also in training our staff – which is around 34,000. From technical staff to drivers, everyone needs to be trained. The initial 80 buses will be a pilot project,” said Haris, who took over as BMTC chairman last month.

The newly-appointed transport secretary for Tamil Nadu, J. Radhakrishnan, however, expressed concerns regarding procuring new electric buses. “We need to think about our staff and their training while buying these buses,” he told Mongabay-India.

With Tamil Nadu’s state transport corporation crumbling under its own weight, it simply cannot afford to invest in new electric buses. It was, however, the first state to sign a ‘Clean Bus Declaration’ with the C40 Cities Climate Leadership Group, a global network of 90 cities, committed to addressing climate change. The announcement came a few weeks after representatives of C40 visited Chennai and its bus depots to look at the city’s potential.

“This government will implement a project to procure 12,000 new BS-VI buses and 2,000 new electric buses at an outlay of Rs. 5,890 crore (Rs. 58.9 billion) with loan assistance from German bilateral financing agency KfW,” Tamil Nadu’s deputy chief minister O. Panneerselvam said in his budget speech.

To procure buses, the government is knocking on the doors of the central government as well as finance agencies like KfW. The state government sent a detailed project plan to the union ministry of heavy industries and public enterprises, which through its FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) scheme, supports state governments in procuring electric buses. Tamil Nadu’s proposal is to purchase 70 buses at a cost of Rs. 1.4 billion (Rs. 140 crores), of which it expects Rs. 1.05 billion (Rs. 105 crores) from the central government, including Rs. 150 million (Rs. 15 crores) for installing charging infrastructure. The transport secretary said he is looking at all options for a line of credit. “I have meetings planned with different sources, including meetings to secure funds for the buses,” he told Mongabay-India.

Other experts say it is fundamentally flawed to look at only the initial costs of electric buses. “Transport corporations in India cannot afford to buy even diesel buses. State governments need to look at the life cycle costs of buses. By the end of their life cycles, electric buses are at least 25 percent cheaper than diesel buses,” said Daniel Robinson, Chennai city director, C40 Cities, Climate Leadership Group, adding that electric buses have a longer life as they do not have moving parts and are not prone to structural fatigue. “In states like Tamil Nadu, electric buses make more sense as 35 percent of their power comes from renewables. By 2023, this will go up to 44 percent,” he added.

Banner image: An electric bus in Bengaluru. Photo by Ramesh NG/Wikimedia Commons.