Rural electrification: Challenges and the way ahead

01 Apr 2015

Rural electrification is often considered to be the backbone of the rural economy. Rural energy needs include energy for a) Cooking b) Basic lighting c) Irrigation d) Communication e) Water heating f) 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.

Development of rural electrification

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

  1. Setting up of rural electricity infrastructure
  2. Providing connectivity to households
  3. Adequate supply of desired quality of power
  4. Supply of electricity at affordable rates
  5. 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.

In spite of launching of ambitious schemes to achieve 100% rural electrification, India has achieved only 67.3% overall electrification (urban and rural together). More than 75 million households (45% of the total rural households) are yet to be electrified (Census of India, 201a). As per latest data, about 19,909 villages are yet to be electrified (Progress re¬port of village electrification as on 31-01-2015 as per 2011). However, not all electrified villages are getting quality power and it is estimated that nearly 33% of the population may be facing under-electrification, accessing less than 50kWh of electricity per month/household.

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)

  1. Rural electrification under Minimum Needs Programme launched in 1974
  2. Kutir Jyoti Yojana to provide single point light to below poverty level (BPL) families in rural India launched in 1988.
  3. Pradhan Mantri Gramodaya Yojana to electrify un-electrified villages as per prevailing definition of electrification launched in 2003
  4. 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
  5. Accelerated Rural Electrification Programme in 2003
  6. Accelerated electrification of one lakh villages and one crore households launched in 2004
  7. 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
  8. 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
  9. In December 2014, current government announced Deendayal Upadhyay Gram Jyoti Yojana (DDUGJY) with major modifications in RGGVY.
It aims at
  • Separation of agriculture and non-agriculture feeders
  • Strengthening and augmentation of sub-transmission and distribution infrastructure in rural areas including metering of distribution transformers feeders/consumers
  • Rural electrification as per CCEA approval dated 1 August 2013 for completion of the targets laid down under RGGVY for 12th and 13th Plan

The Electricity Act 2003 (EA 2003), National Electricity Policy 2005 (Power, National electricity policy), National Tariff Policy 2006 and Rural Electri fication Policy2006 are some of the major policy and regulatory initiatives supporting rural electrification programmes.

Rural Electrification Policy aims at:

  • Provision of access to electricity to all households by year 2009.
  • Quality and reliable power supply at reasonable rates.
  • Minimum lifeline consumption of 1 unit per household per day as a merit good by year 2012.

However, as can be seen from the data these targets are yet to be achieved.

Rural Electrification Policy (REP) also changed the definition of electrified villages. According to the REP, a village would be classified as electrified based on a Certificate issued by the Gram Panchayat, certifying that - a) Basic infrastructure such as distribution transformer and distribution lines are provided in the inhabited locality as well as a minimum of one Dalit Basti / hamlet where it exists; and b) Electricity is provided to public places like schools, panchayat office, health centres, dispensaries, community centres etc.; and c) The number of households electrified are at least 10% of the total number of households in the village.

Current government has announced 24X 7 Power for All by 2019. Comprehensive state-specific action plans for 24x7 power to all homes is being prepared in partnership with respective states, encompass¬ing generation, transmission and distribution. The power ministry has signed a memorandum of un¬derstanding with the Andhra Pradesh government under its 'Power for all' initiative that aims to cover the entire state by October 2016. Plans for Delhi & Rajasthan are already complete and ready for implementation and for other states plans are being readied (Power).

For rural electrification to be achieved in a sustainable way, we need a massive focus on creation of income generation activities to boost the 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

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. However, barring few examples, these models are yet to become commercially viable and sustainable. Isolation of commercial viability from the threat of subsidised tariffs is one of the major challenges which need to be addressed, for distributed generation.

Recently announced enhanced targets for renewable energy programmes by MNRE (175 GW by 2022) are expected to bring in new investments and give impetus for rural electrification through renewable energy.

The way forward

  • 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.
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