Transformation of rural ecosystems: Potential impact of renewable energy and electric vehicle convergence
“With rapidly evolving technologies and business models, there is need to adopt new and fundamentally different pathways to provide clean, cost-effective, and efficient mobility services” said Arvind Panagariya the former Vice Chairman of NITI Aayog in a 2017 report titled India Leaps Ahead: Transformative mobility solutions for all.
Panagriya’s statement above touches on two intriguing themes, evolving business models and adopting new pathways to provide clean mobility. The statement assumes greater importance in the wake of India’s clean energy movement, supported by the government’s target of achieving 175 GW of renewable energy (100 GW of this from solar sources) by 2022 and ending dependence on fossil-fuel driven passenger transport by 2030. The multipronged effort indicates a promising future for the urban centres, however, the convergence of solar energy and electric vehicles may have the potential to have an even deeper impact on the development of rural geographies.
If we take a step back to reflect, the challenges associated with improving the condition of rural mobility and viability of solar mini-grids may find a common solution through the advent of electric vehicles (EVs) in the rural areas. Although, the National Electric Mobility Mission Plan (NEMMP) was launched in 2013 to promote hybrid and EV’s in India, Indian cities got introduced to EV’s with the launch of 2-seater mini passenger vehicle, REVA in 2001 and electric “rickshaws” in 2008.
While most of the EV development efforts till now have been geared towards the four-wheeler passenger segment, a new category of EV’s is emerging, including two and three wheelers, mini-vans that can cater to the demand of the rural markets. The charging infrastructure for these EV’s present a high potential option as a productive load for the mini-grids. Furthermore, mini-grid developers can themselves support the deployment of such vehicles through rental models and create alternate livelihood opportunities for rural entrepreneurs. It will however be important to assess the cost-benefit for a rural entrepreneur to operate an electric vehicle, but with the pace of improvement in technology and declining costs, it is poised to rapidly become more profitable.
Such models can also help in attracting investments in the mini-grid sector from EV manufacturers looking to expand into the rural markets. In fact, enabling last mile mobility has the potential to open a completely new partnership ecosystem for mini grid developers. This can include rural supply chain owners such as the FMCG players and healthcare solution providers who may use the EV’s powered by local mini-grids to reach the most remote rural regions. Moreover, these interventions can seamlessly dovetail with the incentive schemes for rural livelihoods and EV’s.
Overall, there is enough merit for mini-grid developers to implement a pilot with EV’s and possibly prove a tenable case for rural hubs actually being the first to be transformed through the solar and electric vehicle movement.
Ankur Seth is Senior Consultant, Intellecap Mumbai.