This Proposal solves the 'Punarjanma' Problem !

It’s Time for Branded, Certified ‘Green CC’ Power

Prasad Rao, MTech, PhD PennState

Director, AltKuznets Sustainability Advisors

gprasadrao@altkuznetsadvisors.com

altkuznetsadvisors.com

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The Electricity Sector is an overwhelmingly large entity with innumerable Renewable and Non-Renewable Generators, Transmission & Distribution Networks, and indeed the last-mile, customer-centric Power Retailers that serve Consumers, be they Households, Government and Commercial entities or Businesses. Gone are the days of Monopoly. Regulators the world over, backed with legislative intent, have enforced divestment of large Power Utilities in to smaller, competitive Generators and Distributions. These divestments have created large regional networks administered and operated either by quasi-regulatory entities, or elsewhere, by a consortium of Suppliers and Consumers. Today, the Electricity Market is significantly more competitive and dynamic, and permits agile generators and their strategists, the opportunity to bid away various segments of the Demand curve, whether through public competition or private contracts.

The advent of EVs has only upped the ante in the Power market. Transportation is recognized as a high priority, high WTP convenience to all sectors of the society. It has been universally the focus of Durables Producers and Consumable Marketers seeking rents from the provision of a highly-prized service to a mass-market. Prominent among firms leaning on Transportation are suppliers of Consumables, particularly, Tire and Fuel suppliers. The penetration of EVs in to the Transportation sector, largely with the support of the Government’s Technology and Climate Change policy, has opened the market for its Consumables, particularly the supply of Fuel. Whereas, Gasoline and Diesel held a virtual monopoly on the Vehicular Fuel market, EVs – whether equipped with rechargeable, fixed Batteries, or ‘Drop-n-Forget’ Batteries, have cut in to that market, and loom large on non-renewables Fuel suppliers as Climate Change anxieties force Governments to band together globally and legislate Climate-friendly transportation policies that interact with the promotion of EVs as well.

However, as I have pointed out in an earlier blog**, EVs are not synonymous with Green Power. In fact, there are reasons to worry to the obverse. Coal, by and large absent from the Road Transport, has particular reason to celebrate the Government’s EV Policy. Cushioned by economies of scale, even scope (Cogen Power), Thermal generators, particularly Generators who own, or have contracted with Super Thermal Power stations, and who have amortized their fixed costs, find margins associated with supplying low KVA (Slow-charge) Home power to their innumerable Household customers, and high KV (quick-charge) Power to impatient Vehicle owners at Gas Stations, quite compatible with their bottom lines. The blunt, almost horse-blinded EV Policy promulgated by the Government changed the Competition space in Surface Transportation overnight, and turned Coal-sourced Thermal Power a heads-on competitor to non-renewable liquid fuels. Overnight, Refiners adjusting pennies on fuel prices, took cognizance of not just the CiF price of Coal at Thermal stations, but labor unrest at the Coal mines. Put another way, Government policy for EVs turned a hotly-competed market for non-renewables between two Resource Goliaths. Consequently, and contrary to expectations associated with new technologies, the advent of EVs did not herald a Green revolution; it even turned the Climate Clock back and enlarged the market space for Thermal power. The Bottom line? The Power charging your EV, as you sip your Coffee beside the Charging station, could be from the geothermal plant within the Precinct, or supplied by a pithead Monster of a Thermal plant from across the border. Does it then, in the context of the global nature of Climate Change, make any sense to subsidize EVs when they draw upon conventional Coal-sourced power, and increment the scale economies and profits of Thermal plant ‘cross the border? True EVs cause Pollution at the pump, and less Pollution on the road. But that comes at a price, in fact a global Climate price due the incremental Climate Change emissions associated with an expansion of Thermal power generation. Does it mean Government subsidies for EVs in the Billions of Dollars are effectively siphoned away by climate-exacerbating Thermal Plants and Coal Mines? Do Government subsidies for EVs end up perpetuating Transportation externalities and exacerbating Climate Change? Yes, and Yes. How then should we confront this naked, painful, cold truth at COP26 come this November? Gulp hard?

The answer, as simple as it might seem, is the AltKuz-proposed entry of BRANDED, CERTIFIED GREEN-CC POWER SUPPLIERS2. One bright spot from the deregulation of the Power sector has been the facilitation of entry of multiple Retail Power Distribution firms. Such firms, with innovative Sourcing and Customer Plans & Tariffs, compete with those that were erstwhile Precinct Distribution Monopolies. Recent entrants to Retail Power Distribution now have a unique, global opportunity to re-brand their businesses, and exclusively supply Green CC Power to their Policy-incentivized Automotive Consumers, advance the goals of the UNFCCC, and turn the Transportation Sector COP-friendly. Policy-incentivized EV Owners who contract to ‘Green-charge’ their EVs with Green CC Power, would be advantaged with both, Monetary subsidies at EV purchase, and non-pecuniary advantages such as preferential access to Parking, and Fast lanes3. The increment to its Subscriber-Base would permit re-branded certified Green Power Suppliers the opportunity to negotiate contracts with Renewable firms and Utility-scale (Green Power) Storage firms to supply Green-CC Charging Power, to Households owning EVs, and to its Green-charging Customers at EV-charging Stations.

With EV-Owners offered a Green-CC alternative to conventional power at the Charging station, the Government could re-configure EV Subsidies, turn them dynamic and two-tiered: a Lumpsum at Purchase that favoured EV-Seekers with modest Incomes relative the Wealthy, and a formula-calibrated4 variable, end-of-year Annual subsidy thereafter to the extent pre-contracted EV Owners ‘green charged’ their miles with Green CC Power. The structure of the end-of-year Variable Monetary Incentive – a formulaic Subsidy computed from ‘publicly-certified’ Environmental and Technological Battery characteristics, and digitally-recorded Driving and Power-charging data, would incentivize EV Owners who bought high-end EVs with Recyclable Batteries and who Green-charged their driving. The Subsidy-influenced Purchase and In-Use decisions of such Customers, would differentially impact Demand for EVs – stimulating EV Brands that marketed Vehicles with environmentally-recyclable5 Batteries bundled to Green-charged Power contracts, relative other EV brands that preferred to market EVs exclusively with privately-sought attributes. Branded Green-CC Power Retail firms would find a ready market for their Green- or Closed-cycle sourced power from EV Owners who do not mind the Tax-graduated, Variable end-of-year Subsidy. These Green CC Power Retail firms wold expand their EV-charging network, and add to the Climate-resilience of the Transportation sector.

A Green Transportation Sector is the backbone of a healthy infrastructure so vital to sovereign economic growth and global sustainability. Thus modified, the EV-subsidy would yet incentivize EV technology, and pre-empt the substitution from Gasoline and Diesel to Climate-change exacerbating Coal Power. Instead, the two-tiered Subsidy strategy broached here would jumpstart ‘Green-charging’ by EV-owners, and justify the Government its legitimate claim to abating Climate Change, and returning Humanity back to Sustainability. AltKuznets Advisors can help design a better EV subsidy that is tax-strategic, stimulates adoption of EVs, incentivizes high-technology, environmentally-sustainable Batteries and fast-forwards the prospects of Green-CC Power Retailing firms.

**Lets celebrate the Coal 'Punarjanma'