Page 20 - Oasys South Asia Research Project - Towards Scaling Up of Electricity Access
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14 Towards Scaling up of Electricity Access
approach. The licensing approach or a concession approach tends to conform
to this idea. But this will be a costly option and should only be adopted where
benefits from the regulation outweigh the costs.
Also, the issue of self-regulation and co-regulation emerged as a new trend
(Sarangi et al. 2012), which could be traced in the operation and management of
off-grid energy systems in India on the face of growing enthusiasm among private
players in the field. While these entities operate within the broader mandate provided
by central and provincial authorities, over time, a lot of self-regulatory practices and
codes have evolved to regulate certain aspects of their business activity. For instance,
mandatory training programmes for operators, routine maintenances, sharing
knowledge about energy efficiency and energy conservation, and safety protocols are
areas where evolving practices have emerged as self-regulatory practices in the absence
of formalized regulatory schemes.
Bhattacharyya (2013) also indicates a number of regulatory challenges and issues:
55 Clarity about the service area: The area where authority is to carry out the off-grid
business is derived from a generic or specific licensing waiver, the off-grid area is
not dedicated to the operator and the jurisdiction overlaps with the service area
of the distribution and supply entity. In such a case, the most important challenge
that any off-grid service provider faces is the threat of grid extension. Any grid
extension soon after the installation of an off-grid system amounts to a loss of
business opportunity and the risk of non-recovery of the costs. Therefore, a close
co-ordination between the distribution utility and the off-grid service provider
is essential. Aggressive grid expansion after launching off-grid services has been
a common observation in many countries around the world. If the rural areas
where the incumbent utility has failed to provide access are excluded from its area
of service, and one or more off-grid service providers are granted exclusive rights
for a fixed period, the business uncertainty can be mitigated. However, as such, a
change often requires an amendment to the existing supplier’s service area. This
may not be easy and cannot be done without the consent of the incumbent utility.
The off-grid service provider may however be appointed as a concessionaire of
the grid company and can serve in remote areas as is practised in the Philippines
under the Qualified Third Party Programme.
55 Quality of service: Any off-grid service often aims to provide quality power for
a limited period of time depending on the designed capacity of the power plant.
Depending on the system used, the duration of supply and technical standards can
be quite different from a grid-based supply and it often makes sense to prescribe
different standards for the grid and off-grid services. Similarly, ensuring the
reliability of supply is one of the issues faced by most off-grid systems. There are
two levels of this problem: ensuring service reliability at present and maintaining a
approach. The licensing approach or a concession approach tends to conform
to this idea. But this will be a costly option and should only be adopted where
benefits from the regulation outweigh the costs.
Also, the issue of self-regulation and co-regulation emerged as a new trend
(Sarangi et al. 2012), which could be traced in the operation and management of
off-grid energy systems in India on the face of growing enthusiasm among private
players in the field. While these entities operate within the broader mandate provided
by central and provincial authorities, over time, a lot of self-regulatory practices and
codes have evolved to regulate certain aspects of their business activity. For instance,
mandatory training programmes for operators, routine maintenances, sharing
knowledge about energy efficiency and energy conservation, and safety protocols are
areas where evolving practices have emerged as self-regulatory practices in the absence
of formalized regulatory schemes.
Bhattacharyya (2013) also indicates a number of regulatory challenges and issues:
55 Clarity about the service area: The area where authority is to carry out the off-grid
business is derived from a generic or specific licensing waiver, the off-grid area is
not dedicated to the operator and the jurisdiction overlaps with the service area
of the distribution and supply entity. In such a case, the most important challenge
that any off-grid service provider faces is the threat of grid extension. Any grid
extension soon after the installation of an off-grid system amounts to a loss of
business opportunity and the risk of non-recovery of the costs. Therefore, a close
co-ordination between the distribution utility and the off-grid service provider
is essential. Aggressive grid expansion after launching off-grid services has been
a common observation in many countries around the world. If the rural areas
where the incumbent utility has failed to provide access are excluded from its area
of service, and one or more off-grid service providers are granted exclusive rights
for a fixed period, the business uncertainty can be mitigated. However, as such, a
change often requires an amendment to the existing supplier’s service area. This
may not be easy and cannot be done without the consent of the incumbent utility.
The off-grid service provider may however be appointed as a concessionaire of
the grid company and can serve in remote areas as is practised in the Philippines
under the Qualified Third Party Programme.
55 Quality of service: Any off-grid service often aims to provide quality power for
a limited period of time depending on the designed capacity of the power plant.
Depending on the system used, the duration of supply and technical standards can
be quite different from a grid-based supply and it often makes sense to prescribe
different standards for the grid and off-grid services. Similarly, ensuring the
reliability of supply is one of the issues faced by most off-grid systems. There are
two levels of this problem: ensuring service reliability at present and maintaining a
