A number of initiatives, targets and timelines were announced in the state budget for the current fiscal year with the aim of developing Himachal Pradesh as a green energy state by March 31, 2026. While the focus is on “green mobility” to make Himachal Pradesh a model state for electric vehicles (EVs), hydro and solar power generation are also being promoted.
Transport is one of the main sectors responsible for air pollution in the state, given the high vehicular growth. As Himachal Pradesh is an energy-surplus state, with abundant hydropower generation, there is both the potential and the need to decarbonise the transport sector through the adoption of electric mobility.
Although Himachal Pradesh was one of the first states to introduce e-buses in bulk in the tourist town of Manali way back in 2017, progress has been slow over the years. Currently, the Himachal Road Transport Corporation (HRTC) operates 75 e-buses and 50 e-taxis out of its fleet of over 3,100, with no private e-buses registered in the state as of now. The government aims to promote green energy in this sector through collaboration between private and public utilities.
The state government has approached the centre for a 40 per cent subsidy for the purchase of e-buses under the capex model and a 80-100 per cent subsidy for setting up upstream electric and civil infrastructure. The plan is to replace 1,500 HRTC buses with e-buses in a phased manner, with a proposed budget allocation of Rs 10 billion. Six national and state highways within the state have been identified for conversion into green corridors for EVs. In the first phase, the existing Shimla local bus depot will be converted into an e-bus depot, and a new e-bus depot will be set up at Nadaun, which is over 170 km from the capital city. All government departments are expected to transition to EVs in phases. The Transport Department already has a fleet of 19 EVs.
Incentives for buying EVs
In addition to the funds earmarked for replacing diesel buses with electric ones, private bus operators will be eligible for a 50 per cent subsidy with an upper limit of Rs 5 million. Truck operators will also receive a 50 per cent subsidy, up to Rs 5 million, for the purchase of e-trucks. In addition, private operators will be given a 50 per cent subsidy for setting up charging stations.
Permits will also be issued for operating EVs on 500 identified bus routes in 2023-24 under a self-employment scheme. Eligible sections will receive a 50 per cent subsidy for buying e-taxis. In another initiative, a subsidy of Rs 25,000 will be provided to each of 20,000 meritorious women students above 18 years of age for buying electric scooties. This will encourage higher education among girls and promote green energy.
As per the Himachal Pradesh Electric Vehicle Policy, 2022, which was notified a few months ago, EVs will be exempt from road tax (token) in the state. Further, EVs registered in Himachal Pradesh and other states will be exempt from paying toll tax on highways for the duration of the policy.
The stated goal of the policy is to install at least one charging station on each side of the road every 25 km on state highways, and at least one charging point on each side every 50 km on busy national highways in the state. In addition, there should be at least one charging station or charging point within a 1 km grid of each of the four towns of Shimla, Dharamshala, Mandi and Baddi.
According to the transport department, 600 sites have been identified for actual verification and evaluation, and 55 of the petrol and diesel stations already have charging points. Despite the challenges, the Director of Himachal Pradesh Transport Department, Anupam Kashyap, is determined to achieve the set targets for transitioning to green transportation.
A charging station can cost anywhere between Rs 3 million and Rs 8 million, or even more, depending on several factors such as expenditure on land development in terms of transformers required for electricity. The cost also depends on whether it is a fast or slow charging point. Charging time depends on the capacity of the charger, ranging from 45 minutes to one-and-a-half hours for fast charging, and 4 to 12 hours for slow charging. The distance that the buses can cover after charging depends on their battery capacity, typically ranging from 150 km to 350 km. E-buses designed for hilly terrain have an operational cost of Rs 12-Rs 13 per km while those operating in the plains cost Rs 6-Rs 7 per km, according to HRTC sources. This is in contrast to diesel buses, which cost Rs 30 per km. However, the initial cost of e-buses is much higher, ranging from Rs 12.50 million to Rs 20 million, as compared to diesel buses.
A total of 7,000 buses are registered in Himachal Pradesh and the HRTC consumes 80 million litres of diesel annually to run its fleet. The total diesel consumption for public transport could be nearly double this amount. By reducing dependence on fossil fuels and transitioning to electric mobility, the cost of running buses can be significantly reduced while also bringing down carbon emissions.
Solar power uptake
In the budget, steps have been outlined to augment solar energy capacity in the state. The target for the current financial year is to set up new solar energy projects with a total capacity of 500 MW. This includes the development of 200 MW of solar projects by Himachal Pradesh Power Corporation Limited (HPPCL), 200 MW by SJVN Limited and 100 MW by HIMURJA. Currently, the state’s grid-connected solar power capacity stands 56 MW.
In another first-of-its-kind initiative, two panchayats in each of the 12 districts of the state will be developed as green panchayats on a pilot basis. According to the CEO of Himurja, Rahul Kumar, the district commissioners have been asked to identify these panchayats within a time frame of approximately one month. Solar power plants with a capacity of 500 kW each will be set up in each of the panchayats by the end of December 2023, according to Kumar. These grid-connected small panchayats will meet the power requirements of the villages with solar energy and the surplus power will be sold to Himachal Pradesh Power Corporation Limited. About 1 hectare of land will be identified in each panchayat for setting up the plants. The funding for the pilot project will be provided by the World Bank, and a total of 12 MW of solar power will be generated through these plants. “The idea is not only to develop model green panchayats but also to earn revenue for Himurja,” says Kumar.
As an incentive for the youth to set up power projects, a 40 per cent subsidy will be given for solar power projects with capacities ranging from 250 kW to 2 MW built owned or leased land. The electricity generated from these projects will be purchased by the state electricity board. This will allow the youth to earn while generating solar power. Financial assistance will also be extended for the installation of solar power projects up to 1 MW under the self-employment scheme.
Developments in the hydropower space
Himachal Pradesh generates surplus electricity with a hydropower potential of about 24,567 MW, of which 11,138 MW has already been harnessed. A target of completing hydropower projects with a total capacity of 1,000 MW has been set for the current financial year. Three hydropower projects with a capacity of 628 MW are under construction by HPPCL, while 10 projects with 1,325 MW of capacity are at various stages of investigation and pre-construction clearance. Further, six projects with a capacity of 927 MW are at the pre-feasibility stage.
The state department of energy, which is the nodal agency for both government and private projects, had floated tenders thrice for 25 projects (with capacities ranging from 6.2 MW to 104 MW) with a total capacity of 590.4 MW, but there were no takers. Further, out of the 655 allotted hydropower projects with capacities up to 5 MW under Himurja, less than 10 per cent have been commissioned while the remaining are pending at various stages for periods ranging from eight to over 20 years.
The lack of interest from investors and delays in the completion of hydropower projects can be attributed to factors such as lack of financial viability, lengthy clearance processes, weather vagaries, and landslides and other topographical hazards. Taking this into consideration, the state government has expressed its intention to formulate a policy to attract private sector investment in hydropower exploitation. Recently, a meeting was held with hydropower developers to seek suggestions in this regard.
The Rs 20 billion in funding to be provided by the World Bank for power sector development includes provisions for the construction of 200 MW of solar power projects as well as 11 substations and two distribution lines serving13 towns in the state. Discussions regarding signing the project and loan agreements with the World Bank are in their final stages and the signing of the MoU is expected to take place soon.
Green hydrogen policy
The government is also planning to introduce a green hydrogen policy. NHPC Limited will be involved in the development of a green hydrogen project in Himachal Pradesh. Under this, a 300 kW solar plant will be set up for the purpose of electrolysis of water to generate green hydrogen. Recently, HLC Green Energy also signed an MoU for green hydrogen and green ammonia projects at an investment of more than Rs 40 billion, generating direct and indirect employment for nearly 2,500 people. The company aims to produce 0.3 million metric tonnes of green hydrogen and 1.5 million metric tonnes of green ammonia.
Net, net, the groundwork is being laid at various levels but there are several challenges that need to be overcome to develop Himachal Pradesh as a green energy state within the next three years.
By Sarita Brara