Challenges and

opportunities for rural

electrification of India
Assignment

Submitted to Submitted by:

Prof N K SHUKLA SHUBHAM
IIT BHU MA ENERGY ECO
 Introduction
Rural electrification is often considered to be the backbone of the rural economy.
Rural energy needs include energy for Cooking, Basic lighting, Irrigation,
Communication, Water heating, Cottage industry and so on. Rural electrification
can meet most of these and the impact can be seen on improved farm productivity,
improved health and education, improved communication and economic
development through creation of employment in rural areas which traditionally
depend on agriculture related income generation activities. Let's take a fresh look
at rural electrification initiatives in India since Independence and recent
developments, including aspects of integrating renewables in a major way in the
rural electrification process.

In today's context, rural electrification has five major facets

a) Setting up of rural electricity infrastructure

b) Providing connectivity to households

c) Adequate supply of desired quality of power

d) Supply of electricity at affordable rates

e) Providing clean, environmentally benign and sustainable power in efficient way

India has always had a rural economy and since independence successive
governments have tried to improve the rural infrastructure including energy
infrastructure. However, a lot is yet to be achieved to give a real impetus to rural
economy.

Challenges in Rural electrification

The grid extension based rural electrification promoted through RGGVY and other
programmes suffered major hurdles which include:-

High cost of grid extension and low recovery due to highly subsidised tariff, low
level of tariff collection resulting in negative return
Supply rationing due to non-availability of power

High operation and maintenance costs

2.Government initiatives in rural electrification

While the need for rural electrification was recognised in 1950s, the first major
initiative was the establishment of Rural Electric Corporation in 1969. Its main
objective is to finance and promote rural electrification all over the country. Apart
from providing loan assistance to SEBs/ state power utilities, equipment
manufacturers and so on it is also managing the rural electrification programmes of
the Ministry of Power (MoP).

Some other notable initiatives launched by the Gol (Government of India) include
(Chandra Bhushan,2014)

Rural electrification under Minimum Needs Programme launched in 1974

Kutir Jyoti Yojana to provide single point light to below poverty level (BPL)
families in rural India launched in 1988.

Pradhan Mantri Gramodaya Yojana to electrify un-electrified villages as per

prevailing definition of electrification launched in 2003

Remote Village Electrification Programme launched in 2001 by Ministry of New

and Renewable Energy (MNRE). This programme focused on electrifying remote
villages not connected to grid through use of renewable energy sources

Accelerated Rural Electrification Programme in 2003

Accelerated electrification of one lakh villages and one crore households launched
in 2004

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY): Launched in 2005, this

programme aimed at providing energy access to all by 2009 and at least one unit of
electricity per household per day by 2012 as envisaged in NEP (National
Electricity policy) 2005. All earlier programmes were merged in RGGVY
In 2009, MoP launched Decentralised Distributed Generation Scheme under
RGGVY to electrify un-electrified villages through mini grids. This also included
villages which receive less than six hours of electricity per day

In December 2014, current government announced Deendayal Upadhyay Gram

Jyoti Yojana (DDUGJY) with major modifications in RGGVY.

3. Electricity consumption inequality in India

Chart 1 shows that average urban consumption (at constant 2009-10 prices) has
been increasing much faster than rural consumption, and the latter, in fact, tapered
off in the most recent five-year period. The ratio of urban to rural consumption rose
from 1.79 in 1983 to 1.96 in 2009-10, with the most rapid widening of the gap
coming after 2004-05.

Indeed, there was hardly any change in per capita consumption between 2004-05
and 2009-10, not only for the lowest quintile of the population, but also for the
next 40 per cent and even for the following 30 per cent just below the top decile.
Within the rural areas, therefore, only the top decile benefited from the aggregate
income growth in a manner as to be able to increase their consumption appreciably.
The average consumption of the bottom 20 per cent in urban India has stagnated or
increased only marginally, even through the phase of high growth between 1993-94
and 2009-10, while the consumption of the top urban decile increased by more
than 30 per cent in the same period.

4. Hundred percent rural electrification announced by government

April 28, 2018 will remain etched in India’s history for a landmark achievement.
Almost 72 years after achieving independence from colonial rule, the country
achieved another historic moment – that of energy independence – with every
village in the country getting electrified.

The Hon’ble Prime Minister of India, Shri Narendra Modi announced this
remarkable accomplishment using his official twitter handle, shortly after the last
un-electrified village in the country located in a remote corner of the Indian state of
Manipur was officially connected to the electricity grid.

The announcement in April was received with both jubilation and criticism. While
almost everyone praised the nation for achieving ‘100 percent electrification’ after
years of attempts, the term ‘100 percent electrification’ has been subjected to
debate and discussion.

According to current government criteria, a village is considered electrified if:

 10 percent of households in the village have an electricity connection

  There is electric connection in public places such as schools, health
centres, medical dispensaries, panchayat buildings amongst others

Alternately, what this means is that even if a village has 90% households without
electricity access, it can be deemed as electrified. This definition of electrification
has led to criticism by some activists, policy think-tanks and socio-economic
organizations.

5. Redefining rural electrification: "Connection to all to Power for

all"

The lack of access to energy services in rural communities in developing countries

restricts educational opportunities, leads to negative public health and
environmental impacts, and inhibits economic growth. Inadequate access to
sustainable forms of energy in developing countries has devastating public health
and environmental effects and threatens global energy security. Sustainable
provision of energy services to rural communities can alleviate these negative
impacts, and encourage development and education

5.1 Challenges in Rural electrification

 High cost of grid extension and low recovery due to highly subsidised
tariff, low level of tariff collection resulting in negative return
 Supply rationing due to non-availability of power
 High operation and maintenance costs

6. Rural electrification through renewables

MNRE initiated rural electrification projects using renewables such as solar PV,
biomass, small hydro power since early 1980s. The initial thrust was on providing
street lights and solar lanterns. Evolution of renewable energy technologies and
products have now opened new frontiers for renewable energy based rural
electrification using pico solar lighting products, DC and Ac mini-grids, smart
micro grids, and eventually grid interactive micro and mini-grids which can
complement the grid extension program. Renewable energy' based decentralised
systems offer unique advantages which include:

Faster implementation which can create local employment and boost local
economy by providing access to electricity in reliable way

Utilisation of locally available resources bringing in energy security and energy

independence

Pollution free and sustainable

Reduce T & D losses

Many private companies like Mera Gaon Power, DESI Power, Gram Power, Husk
Power and so on have deployed mini-grids and micro grids in rural India. he
generation capacity in India (2012-13) is 225 GW, broken down thusly: 153 GW,
68 percent, thermal (including 132 GW from coal); 39.6 GW from hydro; 27.5 GW
from other renewables; and 4.8 GW from nuclear. Despite a significant growth in
capacity over the years, especially that of wind and solar in recent years, supply
has perpetually lagged behind demand. As a result, in the 2012/13 financial year
the country faced a peak and energy shortage of 9 and 8.7 percent, respectively.
The sourcewise installed capacity of India as of March 2014 is shown in Figure 2.
Figure 2. Sourcewise installed power capacity—India as of March 2014 [GREEN-
2014]

Until March 2014, India has been able to achieve only 12.95% of its renewable
energy potential. The untapped market potential for overall renewable energy in
India is 216,918.39 MW which shows huge growth potential for renewable energy.
As of March 31, 2014, the total installed capacity from renewable energy, both
grid-interactive and off-grid/captive power, was 32,270 MW. Thus the untapped
market potential for overall renewable energy in India is 215,922 MW.

The recent major cost decreases of RE is opening up market niches; utilizing the
full potential of these niches must be realized. Currently, the RE market in India is
over US$2.2 billion, and is growing at 15 per cent every year. Non-governmental
Organizations should be also utilized during RE project implementation and
public-private partnerships between governments and the private sector can link
policy changes with private financing to promote RE. International lending
organizations, such as the World Bank and the ADB assistance are still greatly
needed for RE implementation, particularly for off-grid. The Banks can help create
the right environment for the private sector to invest in RE technology,
implementation, and maintenance.

Conclusion

India is an agricultural nation, yet the farmers and the rural poor remain the
underserved. Klaus Toepfer, the former Executive Director of the United Nations
Environment Program, has once said, “These countries need greatly expanded
energy services to help in the fight against poverty and to power sustainable
development”. The benefits of RE in rural Indian communities are tremendous; RE
not only expands energy generation and greenhouse gas mitigation, but also
contributes to improvements in local environment, drought control, energy
conservation, employment generation, health and hygiene, social welfare, security
of drinking water, and increased agricultural yield . Implementing wind farms and
solar power in villages brings development in the form of infrastructure, efficient
agriculture, and an overall better quality of life for the rural people. Thus, the
broader developmental goals, such as poverty alleviation, sustainable development
and employment generation should be integrated into the RE programs while
seeking direct support under bilateral and multilateral cooperation. The GoI,
NGOs, the international community, private businesses, and the villagers
themselves all have a significant part to play in creating this better life, and must
work together in order to do so.

For faster, reliable and effective rural electrification a unified model for
implementation is necessary. An integrated policy framework would help in this
regards.

We also need regulatory framework to support min-grid based rural electrification

which can be sustainable in long term. Mini grids depend on small local consumers
which are mostly dependent on agriculture income. These groups are vulnerable to
loss of income from disturbances in agricultural activities resulting in loss of
revenue for micro-grids. Such practical difficulties need to be addressed on priority
basis.

Solar street lights/ lighting community places Introduced in early 1980s for village
electrification and providing light at community places.

 Solar lanterns / home lighting systems

Introduced in mid 1980s for providing basic light ing solutions to households, new
versions with LED lights and additional facilities like cell phone charging or
powering fans, TV

 Solar charging stations

Lantern charging stations which work on tee tor service principle, managed by
local entrepreneur

 Mini grids

Mini grids with variety of sizes based on solar, wind, small hydro or biomass
power. These are promising candidates for sustainable business model for rural
electrification

 Grid interactive grids

MW level RE powered grid with smart controllers and suitable energy storage
technologies. These grids can fulfill the need for reliable 24 x 7 power in rural
areas

Technology development in hybrid systems tor mini grids and energy storage
systems for balancing supply and demand in mini grids or distributed generation in
remote areas is essential.

Awareness, capacity building and creating quality consciousness among the players
is also an essential part of the process. Rural electrification is complex and
challenging however, an integrated approach of combining renewables with
conventional grid extension approach and proactive policies to resolve the
integration and tariff issues is one of the preferred ways to move ahead.