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Mini-grids may end rural India's power woes: CSE

 

Posted on 27 Jun 2014

Last updated 06 Jul 2016

  Rural Power Need, India, Renewable Energy
Energy access in rural India has been a development priority for the government for many decades. But 45 per cent of rural households still lack access to electricity even though power generation in the country has grown at a rate of 7 per cent between 2002 and 2013.

HNF Correspondent

 

Mini-grid or decentralised generation of power offers exciting possibilities of reducing India’s energy poverty, said the think-tank NGO Centre for Science and Environment (CSE), during a discussion on “Sustainable Mini-Grid for Energy Access” in Delhi. The discussion was part of a workshop organized by CSE and participated by stakeholders and experts to throw light on developing sustainable mini-grids to provide energy access to millions in India.

Energy access in rural India has been a development priority for the government for many decades. But 45 per cent of rural households still lack access to electricity even though power generation in the country has grown at a rate of 7 per cent between 2002 and 2013.

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 CSE.

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.

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