The Power Ministry recently issued clarification stating that companies setting up charging infrastructure for electric vehicles do not require any separate license for electricity transmission, distribution or trading.
Section 2 of the Act provides definitions for “consumer” for electricity, and “trading” of electricity. As per the definition, consumer means any persons who is supplied with electricity for his own use and includes any persons whose premises are for the time being connected for the purpose of receiving electricity whereas trading is defined as procurement of electricity for resale thereof.
The charging of battery essentially involves utilization of electrical energy for its conversion to chemical energy, which gets stored in the battery. Thus, the charging of battery of an electric vehicle by a charging station involves a service requiring consumption of electricity by the charging station and earning revenue for this purpose from the owner of the vehicle.
The ministry noted that the activity does not in any way include sale of electricity to any person as the electricity is consumed within the premises owned by the charging station, which may be connected to the distribution system or otherwise for receiving electricity. By the same logic, the activity does not involve further distribution or transmission of electricity.
“It is clarified that during the activity of charging of battery for use in electric vehicle, the charging station does not perform any of the activities namely transmission, distribution or trading of electricity, which require license under the provisions of the Act, hence the charging of batteries of electric vehicles through charging station does not require any license under the provisions of the Electricity Act, 2003,” the statement said.
However, we reached out to Industry experts to understand their views, Varun Chaturvedi, MD & CEO Tvesas Electric Solutions Pvt Ltd said- “This is really catalytic step for giving pace to EV charging infrastructure development. We were eagerly waiting for this to happen as you know in India changing any Government Act or rule is quite tedious and time taking.
But this step shows the Indian Government’s seriousness and zeal towards EV adoption. This could lead to fast adoption of EV in India as charging infrastructure is the basic need for the mass adoption of EVs.
Basic charging facility, technology advancement, extends range and comparable price to ICE are the key factor which are going shape up EV business.
The Government and all key players know that first step is to develop easily available charging infrastructure, otherwise the first question for any buyer is” Where should I charge my EV if I am not at home and going outside”
This Licensing rule made this sector limit bound but yes now we remove this bump and feel the ride will go smooth now for EV charging”.
Urban Mobility| E- Mobility Expert (preferred not to be named) said “Clarification on EV Infrastructure is a welcome move for the EV industry, should help the fence sitters now plan actual business models, good impetus.
WILL THIS OPEN GATEWAY FOR PRIVATE PLAYERS IN THE CHARGING BUSINESS?
When asked if this will open gateway for private players in the charging business Varun Chaturvedi said “Off course it is what many industry private player are waiting. This was a road block for Private players like Tvesas Electric whose main motive is to develop a sustainable and reliable charging infrastructure.
Otherwise this sector will have a narrow space to develop where only DISCOM and power companies are legally allowed to setup charging infrastructure. But now, within next few months you will see many good names as CPO (charge point operator) and E-mobility service provider.
Tvesas Electric will soon launch its EV charging network platform where we can provide the charging service in different state to EV owners.
It is going to make interest for many investor and market players. During my discussions with many investors and foreign players who are interested in Indian EV charging market, they all feel uncertain because of lots of bottleneck. They are very keen to work in India but due to lack of policy and rule amendment they feel risk at same time.
Now the EV charging market is open and hopefully we are going to see a good competition when many solution providers will be available. And this is a good indication where competition will be based on the attractive services and technology innovation & advancement. This will benefit the EV owner who will enjoy affordable and reliable EV charging facility.
In next 7 to 8 years when this complete eco system will be developed, you will see the same competition which is right now going in the telecom sector and other services”.
Urban Mobility| E- Mobility Expert said “yes it shall open gateway for private players who were reluctant to invest in this line of business, some believed private was never supposed to enter this segment”.
PROPEL THE SEGMENT THAT IS STILL WATCHING HOPEFULLY AT THE GOVERNMENT FOR POLICY
Speaking on if the power ministry’s clarification propels the segment, Varun Chaturvedi, MD & CEO Tvesas Electric Solutions Pvt Ltd said “it is going increase the confidence of this segment, we have seen lots of flip-flop related to policy in last few months. Now it is clear that nothing is going to pull this segment backward. I believe one by one we will overcome all the issues, we cannot expect the whole transition to happen in just one or two years.
He added Government have to make a road map with ease of rules and effective policies. With proper road map the market will move in right direction and at last it will drive the customer to adopt EV.
Many European countries where EV is now gaining momentum, it took 7 to 8 years for this transition with proper collective support and co-operation of Government, Automobile sector and Charging service provider. Same way in India this industry will also take shape, with time rules, amendments will be a milestone achieved towards the EV adoption and the ambitious Goal of Zero Emission Mobility”.
On the other hand Urban Mobility| E- Mobility Expert have different opinion , he said “I guess few more legislations making amends to building bye laws for minimum parking space to be provisioned with EV charging Infrastructure. Similarly for the vehicle adoption some consideration and mandatory mixture of 70/30 needs to be also enacted”.