With the government of India pushing hard to electrify its automobile market, what impact will that shift have on the country's utilities and the grid?

Union Minister Nitin Gadkari recently said they are looking towards promoting use of cost effective, import substitute, pollution free and indigenous technology "as such thrust is being laid upon use of electric vehicles and green fuel like ethanol." Improving the condition and promoting use of public transport is also a priority, and according to the official, the government is planning to introduce a fleet of double-decker, air-conditioned, luxury buses that will run on alternative fuel, which will connect cities like Delhi-Jaipur, Delhi-Chandigarh, Delhi-Shimla and Delhi-Ludhiana.

By 2030, electric car sales in India are forecast to reach 10 million a year—if all new sales in that year were EVs, according to scientists at the Lawrence Berkeley National Laboratory. Total EV fleet, including two-wheelers, is expected to grow to 144 million from under 1 million.

Powering all those electric vehicles, however, would have a relatively minor impact on electricity demand, researchers found, adding 6% of the projected peak load in 2030.

₹74,794.32 crore added revenue for utilities

Using detailed transportation and electricity sector models, researchers found that added electric demand from EVs could bring India's financially strapped power utilities ₹74,794.32 crore ($11 billion) a year in revenue, enough to cut the sector's financial deficit by at least half. Meanwhile, the added power demand could also help smooth the transition toward renewable energy as the country strives to add 100GW of solar and 60GW of wind by 2022.

"Renewable energy and electric vehicles are quite complementary to each other in India," said lead author Nikit Abhyankar of Berkeley Lab's International Energy Studies Group. "A renewable energy-powered grid will reduce electric vehicle emissions, and electric vehicles, in return, can help the grid absorb all that renewable energy."

The team found that an EV scale-up would reduce per-mile carbon dioxide emissions by a fifth or more, even on a coal-heavy grid.

Meanwhile, the grid impact of scaling up electric cars to such a degree—orders of magnitude more than the few hundred thousand on India's roads today—was surprisingly low, the researchers found.

A few factors explain EVs' 6% share of peak load in 2030. First, other sources of electricity demand—particularly air conditioners—will be dominant over the next 15 to 20 years. Second, two-wheelers that require less energy than cars will account for a majority (32 million a year versus 10 million for cars) of the EV penetration. Finally, overall vehicle ownership will be lower in India than in other industrialized economies.

"Despite that being a small load," said Abhyankar of EVs' share, "it's also a well-paying load." He noted that because EVs will be adopted initially in urban areas with higher electricity rates and by middle- to upper- middle class drivers, they will provide an attractive customer base and source of revenue to utilities.

"Most Indian utilities are under severe financial distress," Abhyankar added. "EVs could be a very good way for them to fetch additional revenue from paying customers."

India currently depends on foreign imports for more than 80% of its crude oil supply. Switching to electric cars would substantially lessen that dependence, reducing consumption by 360 million barrels annually, or 15% of the total, by 2030. That translates to an annual savings of ₹47,596.38 crore ($7 billion) a year, assuming a conservative crude oil price of ₹2,719.79 ($40) per barrel.

If India converts to 100% electric vehicles and retires older gasoline and diesel-powered vehicles by the mid-2040s, the paper says, the avoided oil consumption grows to 60% of the total at an annual savings of ₹6.80 lakh crore ($100 billion).

To realise these benefits, researchers said India will need to build out its charging infrastructure, which would be capital intensive, but could be financed using the additional revenue from charging. They also note that the charging load could affect local distribution networks, a problem that could require significant upgrades.

Smart charging is key

Smart charging, or shifting the charging load to different times of day depending on overall demand, will be key if EVs are to be a truly useful accessory to renewables. If charging can take place mostly during the day, or is adjusted to tackle the intermittency in generation, drivers can take advantage of solar generation when it's strongest, preventing curtailments or inefficient operation of thermal power plants.

Future research will focus on the opportunities to electrify vehicles used by India’s booming ridesharing market and on the deployment of charging infrastructure needed to support large volumes of EVs, Abhyankar said. India's ambitious electrification plan is attainable, particularly given dropping costs for lithium ion batteries, according to the report, but further analysis can help determine the best path forward.