Nepal’s electric transport future is here

Residents of Kathmandu by now know that they breathe some of the dirtiest air in the world. But unlike elsewhere, that awareness has not created the public opinion pressure to force politicians to act.

Up to 35,000 Nepalis lose their lives annually due to diseases caused by air pollution. One in every 10 people in Kathmandu suffers from chronic lung diseases like COPD, bronchitis and emphysema. The average life expectancy of Nepalis is reduced by over two and one-half years because of air pollution.

“We have seen that electric public transportation can improve public health by reducing pollution,” says Sajha Yatayat Executive Director Bhushan Tuladhar. “Recent advances in electric transport provide the solution. What is sorely lacking in Nepal is political will, long-term commitment and strategic planning for electric mobility.”

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Indeed, Nepal’s policy makers no longer have an excuse to do nothing about air pollution: they can follow the example of China and India and announce a national campaign to switch to electric public transport.

India is rolling out 7,000 electric buses this year. The Delhi Metro is now powered by solar energy and plans to go fully solar by 2021.

All 16,000 public buses in Shenzhen are electric. China has replaced all its petrol two-wheelers with electric motorcycles and scooters.

Global demand for electric vehicles is rising rapidly, and manufacturers are having a hard time meeting demand, mainly because of the shortage of lithium ion batteries. The sale of electric vehicles overtook fossil-fuel cars in Norway last month.

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Here in Nepal, electric cars now make up 10% all of all new sales. The first 40 Hyundai Kona EV sold out as soon as they arrived, and the next batch of 40 are already booked. In fact, Hyundai launched Kona in Nepal before it did so in Australia and the US. The Korean car-maker listed Nepal as a top priority market in the Asia- Pacific because of tax breaks for electric vehicles here.

“We were able to convince the manufacturers that Nepal was ready to go electric because of our hydropower potential and the tax difference between electric and non-electric vehicles that showed a strong government commitment,” explained Nirakar Shrestha of Laxmi InterContinental, which represents Hyundai in Nepal.

While the retail price of petrol and diesel reaches up to 261% above the cost price, electric vehicles carry just a 10% tax on the purchase price.  Electric cars are exempt from road tax, which can be Rs30-50,000 per year for fossil-fuel cars. Nepal is the only country in the world with such a huge relative tax difference.

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However, there are still challenges to overcome before electric vehicles gain greater public acceptance, including the lack of charging stations, undependable electricity supply, and inadequate parking lots. A fast-charge electric station costs a minimum of $30,000 and can charge only 25 vehicles a day. Establishing one requires a government subsidy as well as a regulator to permit the charging of different EV models.

Kathmandu Valley alone has 750,000 motorcycles, which are a major source of toxic gases like carbon monoxide and ozone. Introducing tax incentives for bikes and scooters similar to those for private cars could be a pivotal move. Also, at the moment there is no registration policy on electric two-wheelers, discouraging buyers.

In October last year, Prime Minister KP Oli unveiled an electric mobility action plan, proposed to transform at least 20% of the fleet of public vehicles into battery-operated ones by 2020. Amidst much fanfare he inaugurated the first five Chinese, BYD electric buses inducted by Sajha Yatayat. President Bidya Devi Bhandari herself has a BYD electric limousine.

Last year, Kathmandu Valley’s 18 mayors gathered for a workshop organised by ICIMOD to discuss an air pollution reduction strategy. Since then, beyond lip service little has been done to establish electric public transport and make emission tests for fossil vehicles more effective.

Local and provincial governments have shown an interest in providing financial support to develop electric public transport, but the plans are sketchy and ad hoc. A case in point is the confusing and conflicting proposals for electric bus rapid transit, monorail and light rail transit along the Ring Road. The proposals are restricted to speeches and slogans, but nothing concrete has been done.

One reason is the high investment cost of electric public transport, which requires government to step in with subsidies.

Over the years, revenue from the Petroleum Tax has grown to a whopping Rs5.2 billion. Some of this could be invested in a clean-energy electric transportation strategy.

The Seoul-based Global Green Growth Institute (GGGI) has been helping the central government with just such a strategy on electric mobility, and to find potential investors. General Director Frank Rijsberman was in Kathmandu last week to sign an agreement to implement e-mobility in Nepal. GGGI is keen to help Nepal with its first purchase of 300 electric buses for cities across Nepal.  (See interview below)

“Operating an electric transport fleet is more complex, requires higher initial investment and more infrastructure than traditional buses, but in the longer-term, renewable energy sources are not only ecologically but also economically viable,” said Rijsberman. “We believe that it is not only the right thing to do but also the best way of growing in the 21st century. In the coming years we hope to see a breakthrough and electric buses on the streets of Kathmandu.”

Electric vehicles are now a necessity, not just an environmental statement. Neighbouring India and China have committed to manufacturing only electric automobiles by the year 2030. This means Nepal will be forced to go electric since most vehicle imports are from those two countries.

Said Bhushan Tuladhar of Sajha Yatayat: “Like it or not, Nepal will have to go all electric in about a decade. So we may as well start planning for it. That way, the transition will be much smoother, efficient and advantageous.”

Investing in renewables

Frank Rijsberman of the Korea-based Global Green Growth Institute was recently in town to sign an agreement with the government and Sajha Yatayat on electric mobility. Nepali Times asked him about the future of electric public transport globally and in Nepal.

Nepali Times: Why is your Global Green Growth Institute so involved in electric mobility around the world?

Frank Rijsberman: We are a young intergovernmental organisation set up in 2012 with 32 member countries and 20 more in the process of becoming members, like Nepal. We help governments plan green growth, a model of economic development that is both more environmentally sustainable and socially inclusive. In Nepal, we helped the government develop a national electric mobility strategy, and we have also helped members mobilise $1 billion in climate finance.

We are also working to make cities greener by managing water, sanitation and solid waste. I met with Nepal’s minister of forests and environment and he asked us if we could start working on forests as our next priority. We have done similar work in Indonesia and Myanmar, and that is likely to be our next priority here.

Do you see Asian countries moving towards renewable energy?

It is challenging to switch from big investments in coal and nuclear energy, because all those investments have become stranded assets. China and India are making enormous progress in renewable energy. Many other Asian countries are a bit behind — Vietnam is still planning to build 25 new coal fire power plants. We are working with governments to introduce large-scale renewable energy sources. The private sector will invest only if the government has the right policy, so we work with governments for that.

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How can Nepal mitigate on carbon, while adapting to climate change?

Adaptation is still very much the number one priority for Nepal but it must grow to middle-income status by 2030, without increasing emissions, by investing in renewable energy. This is now the cheapest form of energy and decentralised solar energy is a much easier way to reach remote communities that were very poorly served by a centralised grid.

So I would call it adaptation with mitigation co-benefits. It may well be possible to trade those emissions with countries that should reduce more but cannot on their own. You can have mitigation measures too, but the first priority for countries like Nepal that rely on agriculture is to make sure that society is no longer vulnerable and is more resilient to climate change.

Also, many governments still want growth. But the quality of growth really matters; it should be environmentally sustainable. It used to be the right thing to do, but being sustainable is also commercially attractive.

What progress are other Asian countries making to become low-carbon economies?

China has become a real leader in electric transport. Shenzhen is the first city in the world with an all-electric fleet of buses. Beijing has also taken big steps in curbing air pollution. India has also made considerable progress in renewable energy. The next big thing will be energy efficiency in buildings.

What are the prospects for electric public transport in Nepal?

We have done electric bus projects in a number of countries and while it is more expensive initially, and also for infrastructure like charging stations and batteries, its operational cost is much cheaper. We are helping the Nepal Government find interested investors, and hope to see a breakthrough in coming years with electric buses on the streets of Kathmandu.