Energy as a Service

In the last few weeks two big announcements caught my attention. Incidentally both of them happened to be Electric Vehicle (EV) charging stations. The first one garnered more attention because the union Minister for Roads inaugurated what was claimed to be ‘ The first public EV charging station’ in India (Nagpur). Following that, India’s largest power generating company NTPC announced its foray into EV charging stations.  Interestingly these are not the first EV charging stations, they are quite a few and in fact a website hosts a list of all such stations. Most of them are Mahindra showrooms considering they have the only 2 EV models manufactured in India.

Are we in a hurry or already late?- The missing gaps

The development in this space are encouraging but is this model sustainable or is it just a stop-gap arrangement tiding the wave of excitement in this sector? Before concluding on that here are a few open points:

• The Electricity Act (2003) doesn’t permit sale of electricity unless you are registered as a distribution licensee. In this case, the energy resale to charge batteries is categorically not allowed.
• Standards for charging stations are yet to be formalised. Public charging stations have to be compatible with a host of vehicles and chargers. Automotive Research Association of India (ARAI) has only recently finalised the standards for AC charging while the DC charging standards are yet to be announced.

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• Bharat Charger: The charger for India, a DHI initiative under the vision to get an all-electric fleet by 2030 has proposed a standard for charger. The initiative is laudable considering the grand vision but we are yet to have a final specification on that.

Energy as a Service (EaaS)

In spite of having a few gaps in the system both at the regulatory and technical front it is quite interesting to see the so called ‘public EV charging stations’ springing up in the country. As in any nascent market development it could be due to either of the two reasons; there is a significant demand for these or the businesses’ are keen to be front-runners in this space. I believe it is more of the latter and a little probe into these businesses have confirmed the same. While the developed world is trying to create a market for these, India has already begun what will be called ‘Energy as a Service (EaaS)’ business model.

How else does one account the amount of electricity dispensed at these stations to charge the batteries without being termed a ‘resale’? Only the ones being setup by Tata Power Delhi Distribution could escape being termed a resale. (However the 5 stations setup by them offers charging free of cost to Mahindra vehicles). The charging stations at Mahindra showrooms are as expected, ‘free’ with the costs in built in the sale. Similarly the charging station at Nagpur is an exclusive model developed in partnership with OLA.

The EV charging stations although not a perfect model for EaaS, is a good starting point. In due course, the charging stations would start differentiating in terms of the source of power, charging frequencies, time of charging etc. which would provide customers a wide range of choice, something we have been used too in other new-age services. However, in order to create a sustainable business model, the charging stations have be to be compliant within the regulatory and technical frameworks in due course.