India: A huge electrification milestone with big questions — 10 industry leaders weigh in
By the start of May 2018, the government is expected to announce that it has successfully “electrified” 100% of India’s villages. No doubt a massive accomplishment, yet many questions remain. Here are perspectives from industry leaders on the significance of the development, and how new thinking is still required to truly achieve universal access to energy
The government’s current definition of village electrification is that a transmission line from the grid reaches a transformer in each village. But only 10% of homes need to receive power for the village to qualify as “electrified”. That definition is in process of being updated to 100% of homes, with a goal of 24/7 power by 2022. According to official data on the rural electrification website, Grameen Vidyutikaran, however, only 1,301 of India’s 18,452 villages, or 7.1 percent of the total, have 100% household connectivity.
Jaideep Mukherji, Smart Power India — “In India, the government has taken significant steps towards improving electric grid infrastructure in rural areas. However, the goal of extending the electric grid to India’s villages has eclipsed the need to provide the quality of access and service to the rural customers. Smart Power India (SPI), by supporting more than 140 rural mini-grids and impacting more than 56,000 people, has supplied evidence that providing reliable supply and service not just leads to higher electricity consumption and positive payment behavior, but also spurs village level micro-enterprises. At present, ‘electrified’ villages in India do not receive the quality of access that is required to see improvements in their lives. ‘Total’ village electrification should mean a significant progress in the aspects of — the number of village connections; the reliability of electricity supply; the quality of electricity supply; and most importantly, customer service. Currently, SPI is partnering with the government, as-well-as the state electricity distribution companies in developing models and constructs that leverage the electric grid infrastructure to provide quality access, reliable supply and service.”
Anjali Garg, IFC — “Though India has put rural electrification in a sharper focus over the last few years and there is indeed an improvement in the supply, distribution, and reach of electricity, its reliability is the most critical issue. Upgradation of local distribution infrastructure, including metering and billing, will determine whether the schemes launched for total village electrification bear the desired results and lead to true 100% household electrification. It is likely that the synergetic and symbiotic relationship between solar off-grid lighting and grid-based electric supply will continue to exist, at least in the short to medium term.”
Debajit Palit, TERI — “The achievement of extending electricity infrastructure to all villages happened because of the importance given to the sector by successive central governments, especially after the passing of the Electricity Act in 2003, which obligated the Center and the States towards universal electrification. Taking the electrification efforts forward, the Government has also launched the Saubhagya scheme during the last year to cover all households with electricity connection. With electricity infrastructure created in all villages, going forward, the Government should now work towards provision of reliable and affordable 24x7 electricity for all households and also define ‘Power for All’. Unless we set benchmarks/define ‘Power for All’, there will be no way to monitor whether the country is achieving the defined goal. We need to know which province or distribution company (DISCOM) in India is actually achieving what level of electricity access and whether the electricity is provided on a sustained basis not just for basic needs but also for appliance and productive use as well as to public places. Further, in several villages, the main habitation has only been electrified and their hamlet(s) do not have electric poles and lines or has limited infrastructure. However, in Government record it is shown as if the whole village has been electrified. There also appears to be some discrepancy in the data uploaded in Saubhagya portal and the actual ground situation about the number of electrified households and/or electricity infrastructure in a village. DISCOMs have to be pushed to carry out a robust ground survey to back the data and their claims.”
Vibhuti Garg, IISD — “India is embarking on a journey from village to household electrification. While this is laudable, the key question is whether rural consumers are getting quality supply of power when they need it. Given that the fixed costs of such consumers is high and that DISCOMs are increasing the variable cost, the question is whether grid-connected power is the most cost effective solution. Also, given high aggregate technical & commercial (AT&C) losses, is grid-connected power the most cost effective solution from the DISCOM’s perspective, given their poor financial health? Distributed renewables will have a crucial role to play and provide electrification for not only lighting needs but also for meeting requirements from productive loads. A distribution franchisee model is the way forward, and the decision to how best meet demand (centralized or decentralized) should be left to the franchisee.”
Paul Needham, Simpa Networks — “Village electrification is not the same as household electrification, which is way behind. 70–90% of our customers (depending on the region) are connected to the grid. They are using solar as a reliable backup for the 4–18 hours of blackouts that they experience every day. Many of our customers in Odisha state have new connections, but these connections are metered. Many customers are saying that they prefer to use solar, even when the grid electricity is on. That’s because metered grid electricity feels like an expenditure, but payments for their solar home system are payments towards ownership. Solar electricity is free, and it’s hard to compete with that. I think the industry would benefit from some real research on these questions. We have a lot of anecdotes, but it would be nice to have evidence and deeper understanding.”
Viraj Gada, GOGLA — “We congratulate the Government of India for their commendable feat of being able to electrify all villages. This is a great initial step for rural electrification and shows the Government’s strong intent towards providing energy access to all Indian citizens. This, however, does not provide an accurate metric for judging rural electrification as a village is considered to be ‘electrified’ if electricity was provided in public places such as schools, panchayat offices, health centres, dispensaries and community centres, and at least 10% of households in the village (this criteria was used by the power ministry since 1997 and can be found here). A better metric of the current situation of rural electrification can be gauged from Government of India’s Saubhagya dashboard, according to which more than 32 million households are yet to be electrified in India. Thus, GOGLA believes that decentralized solar energy sector has a vital role to play in the Government’s target of electrifying all households by end of 2019.”
Saksham Nijhawan, Forum for the Future — “Achieving 100% village electrification is a huge milestone on our journey to quality, affordable and sustainable energy access for every citizen of India. But it is just one of many milestones needed, as the government signals to some degree through the Saubhagaya scheme. One key next step is to be more outcomes focused in the provision of electricity. By considering the multitude of different outcomes desired from this electricity access, we can join up several areas of progress from health, education to economic value addition and skills development in a systemic manner — achieving multiple outcomes through orchestrated, aligned and complementary efforts. Access to electricity is truly a basic human right; part of the foundation for development, prosperity and enhanced quality of life. A next generation of policies and programs across sectors must be brought in which looks at solutions in a far more systemic manner.”
Vinay Rustagi, Bridge to India — “This is a major landmark for a large country such as India. But unfortunately, connection doesn’t always mean electricity. Reliability of electricity supply is likely to remain a dream for most consumers in India for years to come. The problem is (mostly) government-owned distribution companies (DISCOMs). They remain the weakest link in the power sector value chain and one of the biggest bottlenecks for modernising India’s power sector. Notwithstanding recent restructuring efforts of the Government of India, the DISCOMs are badly run and unable to invest in upkeep of the local distribution infrastructure.”
Kristina Skierka, Power for All — “As defined, ‘village electrification’ still leaves 90% of the people living in India’s 18,452 targeted villages without electricity. Decentralized renewable energy solutions such as mini-grids and rooftop solar are a critical part of the solution to go where the grid can’t reach or reliably serve.”
Atul Mudaliar, The Climate Group — “The Government’s big drive to electrify all villages and households promising round-the-clock power to millions of unserved Indians is laudable. The question however is by when can we achieve this landmark, ensure every household gets a connection or at least has a choice to having one, and that every household gets quality, adequate and reliable power? The answers lie in State’s policy and action such as ensuring easy access to connections, nurturing ambition for DISCOMs and capacities, developing robust local infrastructure and MBC mechanisms etc., and depends on consumer and political will too — all of which are hard to find together. Local problems will require local solutions such as decentralized energy, and capacities empowered by local partnership models. ESCOs can potentially manage the DISCOM grid if the State wants. It cuts the burden of operating and maintaining assets and PPP models such as franchising or rural utility licensing may be explored. The PPP paradigm, progressively seen as the future guardian of public investments and infrastructure across sectors, can be replicated. The partnership between a Rural ESCO and DISCOM holds the ability for us to achieve 100% electrification goals effectively and can be a fillip to rural incomes catalyzed through efficient delivery of energy services for farming and livelihoods.”
