Introduction

Energy is central to social and economic prosperity of civilisations. Electricity is the defining innovation in human history replacing muscle power, candles and wick with power. Still more than 40 % of India’s population does not have an access to electricity. The current status is largely due to adoption of centralised energy planning, which ignores energy needs of the rural areas and poor. Decentralised Energy Planning (DEP) is mechanism for meeting the rural and small scale energy needs in a reliable and affordable way.

Renewables have been consistently contributing to 14% growth in global electricity generation. They have a substantial potential to provide energy supply as an alternative to grid extension especially to remote un-electrified rural areas. Decentralised electricity generation signifies energy generated at or near the point of use.

Current Scenario

India’s substantial economic growth has been demanding energy resources enormously but the imbalance in demand and supply of the energy sources requires serious actions to augment energy supplies. Renewable energy is deemed as the future of energy in India and has the world’s largest programme for renewable energy. In 2010, renewable energy accounted for 17% of total energy consumption. The share of different renewables in Indian electricity grid varies with solar at 2.1% and biomass at 4.9 % of the total renewable energies.

Biomass Energy

Biomass contributes to over a third of primary energy in India. Energy Alternatives India (EAI) estimates that the potential in the short term for power from biomass in India varies from about 18,000 MW, when the scope of biomass is as traditionally defined, to a high of about 50,000 MW if one were to expand the scope of definition of biomass. Gasifier technology has penetrated the applications such as village electrification, captive power generation and process heat generation in industries producing biomass waste. Nearly 55 MW of grid connected biomass power capacity is commissioned and another 90 MW capacity is under construction. Potential availability of agro residues and wood processing waste in India can sustain 10,000 MW power.

Solar Energy

Solar photovoltaic for decentralised power supply are becoming widespread more rapidly in rural and remote areas. More than nearly 7,00,000 PV systems generating closely 44 MW power, have been ordained throughout this country. Under the water pumping programme more than 3000 systems have been instated so far and great potential for further utilisation of solar lighting and solar pumping exists.

Current Policy Mechanisms: Problems and Issues

‘The famous last-mile connectivity’ issue, while being acknowledged and a ‘Remote Village Electrification Programme’ through ‘Decentralised Renewable Energy’ finds mention in policy framework. The penetration of Decentralised Distributed Generation (DDG) has been extremely slow despite a budgetary allocation of Rs. 540 Cr in the 11th Five Year Plan for capital subsidies and viability gap funding to attract investments for that segment of generation.

In the case of such off-grid models, there are several bottlenecks or roadblocks in the schemes and polices which act as barriers to its implementation leading to lack of innovative service delivery models. A vicious circle is thus initiated; discouraging interest of both private and public entities in renewable energy based decentralised power projects.

The policy architecture in India pertaining to rural electrification and renewable energy has not been able to trigger confidence amongst service providers, technology suppliers and investors to venture beyond demonstration projects that have been supported with grant funding and soft lines of venture capital or credit. The Government of India has made efforts to explore the potentiality of these models to no avail.

The Ministry of Renewable Energy (MNRE) under its RVE (Rural Village Electrification) programme states consumer tariff for DRE projects should be in line with the existing tariffs in the neighbouring villages and those electrified through the grid. There is presently no policy or regulatory mechanism to de-link the projects financial viability with the high consumer tariffs being levied on the off-grid consumers to ensure adherence to such guidelines.

The stringent requirements have acted as a barrier to the uptake of this scheme by potential project developers such as the tariff of the Energy Service Company (ESCO) that has to match grid tariff and assets to be returned to the government after 5 years. Some proposed changes to the DDG scheme include the possibility of grid integration of such projects with excess electricity being fed into the grid and electricity being withdrawn from the grid in time of shortages. With the original provision of a DDG scheme in villages where grid connectivity is either not feasible or not cost effective, it was amended that subsidies can be provided for the electrification of villages that get less than 6 hours of electricity a day. Keeping these barriers in mind, in 2011 the DDG scheme was modified around the potential to feed in and draw from the grid but the scheme is yet to take off.

There is a need for a multidimensional push: technical, financial, policy and regulatory to ensure successful grid integration of DRE systems to complement the conventional grid based electricity supply. q

References