Electric Vehicles and Economy: How will it Help India?

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Hydrogen is regarded as one of the most environmentally friendly fuels of the future. When you burn it, you obtain water vapour with no residue or negative influence on the environment. It has been recognised for decades that it holds great promise. However, recent developments allow us to go from hype to hope. This is due to a combination of factors like falling costs, technological advancements, and carbon levies, as has happened with other renewables.

The Prime Minister outlined five significant objectives in his Independence Day speech, the first of which is Mission Hydrogen.

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He described a goal of becoming a global leader while also enabling a significant domestic hydrogen economy. Hydrogen has the potential to turn India from an energy-scarce to an energy-rich nation. It has the potential to turn India into a net energy exporter.

When power is produced with a zero-carbon footprint (e.g., solar or wind), the main feature of ‘green’ hydrogen is defeated. All other processes that do not require electrolysis to break a water molecule create hydrogen as a byproduct or through a carbon-burning process. Fortunately, India has year-round sunshine. Solar-to-hydrogen also overcomes an intermittent problem by replacing the need for battery storage.

The present global output of hydrogen is approximately 80 million metric tonnes, and it is virtually entirely produced from fossil fuels. It consumes 6% of global natural gas and 2% of global coal, and emits a whooping 830 million tonnes of CO2. As a result, this path to hydrogen is a non-starter. Things are changing as the world undergoes a significant energy transition toward renewables. This will be supported by emerging high carbon taxes, of which the European Union has already declared a significant “adjustment import tax” (EU). In the future years, there may be an inflexion phenomenon that catapults hydrogen from the fringe to the mainstream.

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It’s not as though such drastic developments haven’t occurred in India. According to Raghunath Mashelkar, India’s pre-eminent scientist, the roll-out of Jan Dhan Yojana no-frills bank accounts reached 400 million in just a few years. In terms of data usage, India has quickly risen from the bottom to the top of the worldwide rankings.

In terms of LED usage, India’s market has grown 130 times in five years, from 5 million LED bulbs sold annually in 2014 to 670 million in 2018. In these examples, the exponential scale effect has had a substantial impact on lowering unit costs. In five years, the price of an LED light, for example, has plummeted by approximately 85 percent. The huge decline in data prices in India is also well documented. As a result, a similar snowball effect in hydrogen is possible.

The primary pathway appears to be via electrolyzers (although there are several competing technologies). According to a McKinsey research, 70 gigatonnes of electrolyzer capacity projects have been announced in the last two years. This is a 20-fold increase. With this kind of velocity and scale, capital costs per kilowatt for electrolyzers might reduce by 65%.

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India has taken aggressive steps to meet its Paris Climate Change (COP21) pledges and to exponentially increase renewable energy capacity. India has now achieved a 28 percent reduction in emissions above 2005 levels, compared to the 35 percent reduction objective set in its NDC for 2030. (nationally determined contributions). By 2050, India expects renewable energy to meet 80-85 percent of the country’s electrical consumption. India currently ranks fifth in the world in terms of installed solar capacity. Renewable energy sources account for one-fourth of total capacity locally.

Climate change is a major worldwide occurrence with local implications. The recent floods, earthquakes, and variable rainfall demonstrate the unpredictability of the harm to human lives, enterprises, and private and public properties. The government has pursued an aggressive strategy to gradually transition away from reliance on fossil fuels and toward renewable sources. Economic operations that use greener energy sources will help to protect the environment and reduce the chaos caused by climate change.

To boost the ante and make renewable sources fuel the country’s economy, India would seek international financial assistance and technological transfer. Despite tremendous improvements, moving forward will necessitate a more equitable distribution of resources among many stakeholders. During a visit, US Special Presidential Envoy on Climate John Kerry stated that the US would support India’s climate ambitions by allowing cheap access to green technologies and the necessary money.

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Development of electric vehicles in India will aid in the revival of the economy. The government has set a target of 30% electric vehicle deployment by 2030, with subsidies to make in-country component manufacture commercially viable. The FAME 2 (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) initiative has provided policy stability, but state-level programmes will be required to make the central government’s plan a reality. The administration intends to register 500,000 new vehicles by 2024 and will provide financial incentives in addition to the central government’s existing income tax refunds for acquiring electric vehicles.