While 77.5 million households in India still
depend on kerosene for lighting, 93.6 per cent of them belong to rural India.
Showcasing a mini-grid model CSE released its
recommendations on policy reforms emphasising the need to scale up mini-grid
development in the country. CSE also demanded clarity in mini-grid definition.
Though generation capacity (mostly coal based) is
growing in the country at 7 per cent, consumption grows even faster due to rapid
infrastructure growth in urban and semi-urban areas. Therefore, grid powers from
large-scale coal-based power plants (for that matter, other renewable energy
based large scale power plants too) are unlikely to reach rural India to provide
energy on demand. On the other hand, renewable energy based mini-grids can be a
possible solution to meet the electricity demand of vast rural population of
India while simultaneously addressing climate change issues as well.
The renewable based mini-grid models emerged in
India exemplifies how mini-grids can end energy poverty in India. But mini-grids
developed so far in the country are facing several challenges due to high
capital and operating costs, high tariff, inconsistent revenue collection, low
demand in the villages and bureaucratic delays etc.
Tariff mechanisms for mini-grids
In order to make energy access through mini-grid a
reality, “we need a simple but robust model to provide reliable electricity to
villagers,” said Nayanjyoti Goswami, director of renewable energy programme at
Suggesting for policy changes, CSE proposed a
model to make the operation of mini-grids sustainable while dividing the energy
poor into two categories such as, Grid connected rural areas (not receiving at
least twelve hours of electricity in a day) and remote villages and hamlets not
connected to the grid.
As per the CSE Model, the mini-grid has to
co-exist with the main grid in the grid connected villages, so that the
villagers receive reliable power on demand. Mini-grids in such situations must
act like a franchise to the DISCOM or the electricity distributor. Using reverse
bidding, renewable energy based mini-grids would be set up for a cluster of
villages to ensure minimum supply of twelve hours of electricity. The developers
will receive feed-in tariff (FiT) and the villagers will pay a minimal rate for
the power they use. The choice of technology can be left to the developer. The
idea is to develop a mini-grid of large scale that can act as a tail end
generator. The developer can export the surplus power back to the national grid.
Keeping the remote villages out of the purview of
DISCOMs under normal circumstances, CSE Model suggested for generation based
incentives (GBIs) on the basis of the number of units generated or viability gap
funding (VGF) for developing mini-grids in this region.
One of the key issues that emerged in the workshop
was, what happens when the grid reaches the village. In this regard, “We suggest
that when the grid reaches the mini-grid in a remote village, they can become
interactive with each other. The consumer can pay the tariff of conventional
energy and the difference can be paid as feed-in tariff by the discoms. The
money for the feed-in tariff can come from sources like the National Clean
Energy Fund,” said Chandra Bhushan, deputy director general, CSE.