Developing and emerging economies face a complex challenge when it comes to their energy infrastructure: they must meet the needs of growing populations that still lack access to basic services like water and electricity but – the climate crisis front and centre – they must also be part of the solution by answering the global climate emergency through innovative efforts to ensure a low-carbon future.
This article is part of Friends of Europe’s “Energy for Development” discussion paper. Beginning on the day of the UN Secretary-General Summit on Climate Action and ending at the time of COP 25 in Santiago, Friends of Europe will release such articles online on a weekly basis. The full publication will be launched in December and its insights and recommendations aim to demonstrate that it is possible to achieve SDG 7 well before 2030, and inform the next EU mandate on actions to take.
In 2015, Sustainable Development Goal 7 was set, calling for universal access to sustainable energy by 2030. In 2019, India widely outperformed this target, achieving near-universal electrification a whole 10 years ahead of schedule. Only a few hundred households are still in need of an electricity connection, while around half a billion people have gained access to electricity in India during the last decade. Given India’s geographical size and diversity of terrain, this is a remarkable achievement. There are clearly some lessons to be learned.
The blueprint for electrifying India dates back to the early 1940s. Since then, the electrification of rural areas was taken up by successive governments. However, it gained impetus after the passage of the Electricity Act in 2003. For the first time, the act obligated both the federal and provincial governments to enable rural electrification. To speed up the rural electrification efforts as a ‘political goal’, the then-government declared the objective of ‘Power for All by 2012’.
As part of this large-scale electrification effort, 2005 saw the launch of the ‘Rajiv Gandhi Grameen Vidyutikaran Yojana’ (RGGVY). This programme sought to create electricity infrastructure in all villages and provide free connections to households below the poverty line. In terms of financing, RGGVY provided a mix of grant and concessional financing to the states. It moved away from the traditional execution model towards turnkey project execution, including involving the central sector power enterprises. This approach aimed to provide faster delivery and prevent other departmental implementation issues. Distributed renewable energy (DRE) was included to cover villages where extension of central grid was economically daunting.
The RGGVY programme clearly helped speed up electrification, as more than 120,000 villages were connected to the national grid. However, while villages were being electrified, the percentage of electrified rural households did not increase at the same pace. It only saw a slight increase from 43% in 2005 to around 60% in 2014.
In 2014, a new government come to power in India. Regardless, the rate of household electrification continued to lag. Nearly 30mn households still lacked access to electricity connections in 2017. The government responded to this deficiency by launching ‘Saubhagya’, a scheme meant to connect all un-electrified households by 2019. Saubhagya was a well-conceptualised, first-of–its-kind initiative, focusing exclusively on household electrification on a large scale and had some important features worth noting.
While Saubhagya was able to achieve near-universal electrification, the next step would be to ensure that all households also get a reliable, round-the-clock power supply in the most affordable manner
First, the scheme expanded subsidies for electrification to include not only below poverty line households, but also other households that were identified using the 2011 socio-economic and caste census (SECC) data. It provided free connections to households having at least one ‘deprivation’ (out of the seven listed under SECC). This was significant as the definition of ‘deprivation’ encompassed several criteria, including parameters such as female-headed households, scheduled caste and tribal households, among other factors.
Second, households that were not eligible for subsidies per SECC data were also connected, but on the condition that they pay a nominal amount of INR 500 to the electricity distribution companies (DISCOMs) in 10 on-bill instalments.
Third, Saubhagya made a provision of solar home systems of 200-300Wp capacity for the households in extremely remote areas. Although most of the earlier programmes had provisions for solar home systems, these were limited to meeting basic lighting needs only.
While Saubhagya was able to achieve near-universal electrification, the next step would be to ensure that all households also get a reliable, round-the-clock power supply in the most affordable manner. The perennial supply-side challenges have been resolved to a large extent, and new capacities, especially based on grid-integrated renewable energy sources, including solar rooftops, are being added to the system. This fits with the national goal of having 40% of cumulative electric power capacity generated from non-fossil fuels by 2030, in line with India’s nationally determined contribution, that was submitted to the United Nations Framework Convention on Climate Change as part of the Paris Agreement in 2015.
DISCOMs need to move from purely ‘administration’ to a mode of ‘entreprisation’ in decision-making and governance
The task for providing a continuous supply of electricity primarily falls on the state-run DISCOMs. They not only have to ensure that they produce/buy and supply electricity, but also that they do so in the most sustainable and efficient manner possible, while recovering revenues. Until such time, DRE systems, such as solar home systems and micro-grids being implemented in many areas, will find favour.
The reliability of electricity in the evening peak hours in rural areas still remains poor in many states. The metering, billing and collection and network maintenance services are also weak. Most villagers have to resort to multiple coping strategies to meet their home lighting needs. This set of access-gap consumers are the potential users of DRE solutions. Whether electricity is from the grid or from DRE systems, it does not matter to them. What matters most is that it should be readily available when it is required, and that is reliable and affordable. The DISCOMs further need to solarise feeders, starting with agriculture feeders, for increased contribution of renewable energy and improving supply quality and revenues.
What is also required is considerably improving the operational efficiency of the DISCOMs by undertaking change management programmes as well as strengthening the electric sub-stations and sub-transmission network. While accrued debt of the DISCOMs has been reduced under the ‘UDAY programme’ and many DISCOMs are increasingly using IT-based systems for robust monitoring and implementing smart pre-paid meters for revenue sustainability, change management programmes will help to develop the working culture. Furthermore, DISCOMs need to move from purely ‘administration’ to a mode of ‘entreprisation’ in decision-making and governance. They also need to go from providing ‘public service’ to a ‘customer-centric service’ model. At the same time, electricity must be priced rationally so that DISCOMs find it viable to serve.
While developments in the sector are positive, what is needed to build a new India is to ensure that the remaining challenges are prioritised to achieve round-the-clock power for all in a sustainable manner by 2022, the 75th year of India’s Independence.