Current distress

Current distress

Residents of Manki village, barely 10 kilometres from “diamond city” Panna in Madhya Pradesh, saw a bulb switch on for the first time in March this year. Sixty-nine years after India achieved Independence, electricity had finally reached the village. But their excitement was short-lived. In less than four days, the village plunged into darkness. Two months later, power returned on May 29, but again stayed for hardly two days. Since then, Manki—where 95 per cent of the households are connected to the electrical grid—has been forced to go back to using kerosene lamps for lighting.

Despite such bumpy progress, Union finance minister Arun Jaitley announced during his Budget speech this year that the government would achieve 100 per cent village electrification by May 1, 2018. After the Budget speech, Union power minister Piyush Goyal went one step ahead and told a news channel that electricity would reach all remaining unelectrified villages “possibly by the end of 2017 itself”. Such ambitious targets involve rapid expansion of grids and taking power connections to villages in the most remote parts of the country. But the experience of villages like Manki shows that being connected to an electrical grid does not mean having electricity.

Policy misses

Take a look at what is considered an electrified village, for instance. According to a revision in the definition given in the Electricity Act, 2003, an electrified village is one where all public places such as schools, health centres and panchayat offices, and 10 per cent of all households are connected to the grid. This means only one in 10 households needs to have electricity supply for the village to be considered officially “electrified”.

In April 2005, the United Progressive Alliance (UPA) government launched the Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY) which provided 90 per cent capital subsidy to local contractors for installing infrastructure such as distribution transformers and lines for providing electricity. As a result, the electricity distribution network reached almost 98 per cent of all unelectrified villages. But since the definition was as narrow as to include only 10 per cent of all households, the scheme failed to ensure complete access to electricity in most villages. Instead, villages struggled to get electricity supply for more than six hours a day and the voltage was too low to power even lights and fans properly.

In August 2006, the government introduced the Rural Electrification Policy, 2006, which attempted to expand the meaning of electrification. It aimed at providing quality power supply to all households by 2009. It also guaranteed minimum one unit of consumption per household per day by 2012. And yet, the target is far from being achieved. According to Census 2011, only 55.3 per cent of all rural households had access to electricity. The majority of the households without electricity are in six states—Uttar Pradesh, Bihar, Jharkhand, Odisha, West Bengal and Assam. The National Democratic Alliance (NDA) government rode to power in 2014, changing the course of rural electrification and promising 24x7 electricity for all by 2019. Grid expansion and the role of renewable energy have taken centre stage. The government absorbed RGGVY into the new Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) with the intention of providing a separate feeder (distribution wire) to rural households and agricultural consumers to ensure regular supply of electricity. In the past two years, most of the Rs 1,123 crore released under this programme has been used for grid expansion.

Round-the-clock electricity for all is, however, a daunting task, considering that around 34 per cent of the population was still using kerosene lamps in 2011. Even metros like Delhi and Bengaluru face power cuts every day. According to the Union power ministry, 8,995 villages were still unelectrified as of July 18 this year. Even if grids are expanding at breakneck speed, the quality of energy access in rural areas remains low. To evaluate current efforts by the government to electrify villages, Down To Earth visited six districts in Assam, Bihar, Jharkhand, Madhya Pradesh, Odisha and Uttar Pradesh and found several impediments.

Inconsistent supply

The topic of electricity evokes angry reactions among residents of Alu Para village in Dhemaji district of Assam. Almost all of the village’s 73 families have electric supply. But it is as good as not having electricity at all, they say, bec-ause there is usually no power till 9 every night. “There is no electricity when we have dinner or want to read something. The supply is inconsistent throughout the day. One doesn’t even get to watch an entire movie,” says 20-year-old Manin, a resident of the village. Low voltage is also a problem.

Cooking and studying is still done by the light of the kerosene lamp in all homes. “Our kerosene consumption has not decreased even after getting the connection. We took electricity connection to get rid of the dark after sunset but the problem continues,” says Parvati Parajuli, another resident. People spend Rs 100-200 on kerosene every month, in addition to around Rs 250 in electricity bills here.

Residents of Dara Nagar village in Badaun district of Uttar Pradesh first hoped for power when electric poles were raised near the house of Janaki Devi 25 years ago. A Dalit by caste, 85-year-old Janaki Devi lives on the edge of the village. She thought that as soon as the wiring would be done, her house would be among the first in the village to see an illuminated bulb. But the poles were not connected for several years and Janaki Devi lost her vision to cataract before she could fulfil her wish.

Tired of waiting for the government to do its job, the village began arranging diesel generators. The generators provide three hours of guaranteed electric supply every evening for Rs 100 a month. A few months ago, Dara Nagar was officially electrified with 35 of 350 households getting electricity from the government. But residents prefer their private arrangements. “When we require electricity, it doesn’t come. The private generator is reliable. It comes on time and goes on time,” says Swaraj Mal Arya of the village.

Faulty metering and charges

Installation charges vary widely in different states. Sometimes, these charges differ from one village to another within the same district. While people paid Rs 875 per connection in some villages of Bihar, the charge was as high as Rs 4,000 in Assam’s Dhemaji district. In Jharkhand, villages were charged in bulk from Rs 20,000 to Rs 40,000 in different places. Odisha was the only state where all five villages visited by Down To Earth reported free connections.

Many below-poverty-line (BPL) families in Aliaspur village of Bihar did not apply for connections because they claimed they were being charged for the application form. According to rules, BPL families are exempt from paying the one-time connection charge. In sharp contrast, families above the poverty line from the same village were not charged at all. In Assam’s Na Pam Kuli village, some households admitted to drawing electricity through illegal connections because they could not afford to pay the connection charge of Rs 3,500.

Problems in metering were also reported in many villages. In Adhupur village of Bihar, none of the houses has a meter and billing is at best ad-hoc. In Odisha, some people were sent electricity bills even though they did not have electricity connections.

“After several months, power bills were generated in the names of these residents. Those who were left out were being shown as beneficiaries of rural electrification,” alleges Manoranjan Pradhan of Agranee, a non-profit working in Mayurbhanj district.

Lack of accountability

In Jharkhand, the availability of the contractor and repairpersons determines if electrified households are satisfied with their energy access. For example, all households in Bijaiya and Chunglo villages are connected to the grid. They also report 12 hours of electricity per day, albeit erratic and unreliable. But when things go wrong, the residents are left to fend for themselves. In Bijaiya, people complain the contractor can never be found when needed. “Our wires are often cut by miscreants from nearby villages where several electricians live. We have spent more time without electricity than with it after installation,” says 70-year-old Radha Devi.

The condition of Chunglo is no better. The village paid a local contractor Rs 20,000 for installation of electrification infrastructure and had to plead with him to get the job done. But he left behind poorly installed poles and sub-standard wiring. The village is now vulnerable to power cuts during rains and thunderstorms. “We get no support from our local contractor. He has stopped answering our phone calls and the repairs have to be done locally at the villagers’ expense,” says Sanjay Mandal, a resident.

Data gaps

Down To Earth also found gaps in record-keeping of electrified and unelectrified villages. In Uttar Pradesh, Karanpur and Fateh Nagla are considered electrified when only eight per cent and six per cent of the households respectively get electricity. In contrast, 25 per cent of the households in Narottampur get electricity, but the village continues to be recorded as “unelectrified” by the government.

In Gurji village of Madhya Pradesh, some 30 households have been connected to the grid, but there is no supply of electricity from the government. The village depends instead on solar power provided by a Corporate Social Responsibility programme of Reliance Foundation. Despite no electricity from the grid, the village is marked as “electrified” in government records.

Inaccessibility challenge

Unelectrified villages in dense forests and in the mountains are proving to be a challlenge. Erecting electric poles and laying the wiring in such areas is difficult. Consider, for instance, the flood-prone villages of Assam where despite electricity connections, power cuts extend for several days in bad weather. Bihar’s Akilpur village, located on the banks of the Ganga, is cut off from the rest of the block and residents are not hopeful of seeing electricity in their homes anytime soon. “Government officials have been coming to survey the village for over two years now, but nothing has come out of it,” says Bacha Singh, brother of village head Vinod Singh. Akilpur is listed as an “under progress” unelectrified village in government records. Around 50 households manage to get electricity from solar panels for two to three hours a day. The remaining 900 households depend entirely on kerosene, some buying as much as 15 litres a month.

Odisha, on the other hand, presents the dual challenge of dense forests and scattered tribal hamlets. More than 3,500 villages and 16,000 small habitations had not been electrified either under the UPA’s RGGVY or the NDA’s DDUGJY by March this year.

However, the central monitoring system for rural electrification put the figure of unelectrified villages at 2,133 as of May 31, 2016. In Mayurbhanj district, where more than 39 per cent of the geographical area is hilly or covered by forests, electrification is moving at a slow pace. Power infrastructure in three hamlets near Nabakishorepur village is ready, but they are not yet connected to the grid. In Dileswar, a tribal village electrified under RGGVY, residents complain that power infrastructure was erected only along the main road of the village, leaving residents living along the outer edge deprived of energy access. Similipal Biosphere Reserve, which includes a wildlife sanctuary, a national park and a Project Tiger reserve, is home to 64 villages inside the sanctuary and about 1,200 villages on the periphery. Grid connection is almost impossible in case of some villages, whereas uninterrupted power supply in others is a difficult task. Such remote and inaccessible villages make a case for decentralised solutions.

In the past, the lack of reliable returns from supplying electricity to rural parts was a matter of concern for power distribution companies. Rural consumers expected free power from the government just like the agriculture sector which got virtually free electricity. But things have changed. The Down To Earth survey shows that rural consumers are capable of and willing to pay for electricity. They are already bearing the cost of kerosene because of erratic power supply. If villages were to get reliable and good quality power, they would willingly foot the bill.

Read Full Coverage

Rethinking rural electrification

People-centred and decentralised mini-grids based on renewable energy hold the key


Rural electrification in India has suffered not from a lack of efforts, but for want of well-planned efforts in the right direction. No wonder a basic service like access to electricity has remained a favourite poll promise of every major political party for decades. This time, the government is focusing on two major sectors—grid expansion and renewable energy.

Successive governments have proposed using renewable energy to bridge the rural electrification gap since the 1980s. Renewable energy was also seen as a way of creating local employment and boosting local economy. Most of all, it had the potential to ensure that electricity supply in villages is independent of, or at least less dependent on, large electrical grids.

However, jurisdiction of the Union Ministry of New and Renewable Energy (MNRE) has been limited to only those villages the grid will never reach. After Census 2001, MNRE launched a scheme called Remote Village Electrification Programme (RVEP) to cover 18,000 villages. Its aim was to provide basic lighting services in these villages using off-grid renewable technology by 2012. But the UPA government saw that the home lighting concept was limited in scope and provided only temporary relief. The scheme was discontinued in the 12th Five Year Plan when the Modi government came to power.

The Union Ministry of Power introduced a scheme called Decentralized Distributed Generation (DDG) under RGGVY in 2009 with the aim of providing one unit of power to every household in villages where grid expansion was not feasible. But with new ambitions and sanctioned projects of the ministry, DDG was relegated to the bottom of the pile. In seven years, the scheme has commissioned only 12 per cent of projects sanctioned by the ministry.

The Jawaharlal Nehru National Solar Mission (JNNSM), launched in 2010, also promoted off-grid solar-based decentralised distribution systems. The scheme offered a capital subsidy of 30 per cent and an interest subsidy of 50 per cent on the project cost. On the face of it, the scheme exceeded its target of 200 MW by achieving 252 MW by the end of 2013. But a closer look reveals that only 27.5 per cent of the target was allocated to the rural population. More than 40 per cent of the projects were directed at institutions and the remaining was allocated to projects located in urban and semi-urban areas.

All these schemes had some major drawbacks: they could provide only lighting services or only a few hours of electricity or were designed only for institutional set-ups. They were flawed in their conceptualisation or implementation. More importantly, even when all these schemes were put together, they were insufficient to provide electricity to more than 200 million Indians.

Finally in June 2016, MNRE introduced a new draft policy called “National Policy for Renewable Energy-based Micro and Mini-Grids”, marking the first step in transformation of energy access and supply. It targets setting up of at least 10,000 projects with a minimum capacity of 500 MW by 2021. It lays out all the options available to developers and the support the Centre can provide to develop this sector. It contains a set of guidelines that states can use to draft their own policies depending on their regional and local circumstances. Unlike existing mini-grids in India, which provide a few hours of electricity at high costs to people who don’t have any option, the draft policy proposes to extend energy services beyond lighting. By introducing the concept of mini-grids for productive and commercial purposes, the policy emphasises the importance of a diversified customer base for the developer and differentiated tariffs for different kind of loads.

Despite these positive features, many obstacles remain in the growth of mini-grids, of which finance is the main concern. The capital subsidy regime, in which MNRE offers up to 30 per cent and MOP offers up to 90 per cent subsidy, has failed to enable access to electricity. This is because the government wants to give subsidy in a staggered manner based on project development and performance while mini-grid developers want the entire subsidy upfront to avoid bureaucratic delays. But giving in to the developers’ demand may not be feasible as it was observed that after receiving the entire subsidy, some developers either abandoned their work or were found wanting in the maintenance of mini-grids.

Lending by banks to mini-grid developers is also virtually non-existent. The reluctance of bankers stems from poor recovery of loans from developers. The developers, in turn, are unable to recover dues from rural customers who often fail to pay on time due to irregular incomes and the high cost of electricity supplied by mini-grids.

To address such challenges and facilitate the implementation of the national mini-grid policy, Delhi-based non-profit Centre for Science and Environment (CSE) has developed a business model which recommends finding alternate ways to finance mini-grids. CSE proposes bringing mini-grids under regulation and support projects through feed-in tariff (FiT) or generation-based incentive (GBI). In FiT, power distribution companies pay developers a higher rate for every unit of electricity supplied to a grid. In cases where a mini-grid developer provides electricity directly to customers, CSE suggests that the developer should be paid for all of the electricity generated from renewable energy as GBI instead of passing the cost on to the customers. Better recovery of dues would make these projects attractive to lenders.

CSE also says that mini-grids must be included in the Reserve Bank of India’s (RBI) priority-sector lending list. Currently, the RBI supports off-grid solar home lighting systems for individual households. Mini-grids can qualify for long-term finance at subsidised rates of three to four per cent as they are rural infrastructure development projects with long gestation periods. Guarantee for finance can also be secured from other sources:

• DDUGJY: The programme has been allocated an amount of Rs 35,447 crore in the 12th Five Year Plan. Out of this, only Rs 900 crore has been allocated to the DDG scheme.
• Clean Environment Fund: Launched as the National Clean Energy Fund (NCEF) in 2010-11, the scheme introduced a carbon tax on the sale of every tonne of lignite or coal. In 2016-17, the coal cess has been increased to Rs 400 per tonne and the fund has been renamed the Clean Environment Fund. In 2016-17, the fund is expected to rise to Rs 8756 crore
• Diversion of kerosene subsidy: The government spent Rs 20,415 crore on kerosene subsidy in financial year 2014–15. With increased electrification, there would be reduction in expenditure on kerosene, making diversion of the subsidy possible.
• Green Climate Fund (GCF): The United Nations Framework Convention on Climate Change (UNFCCC) has set up the Green Cli-mate Fund (GCF) to support programmes and policies of developing nations. As the development of mini-grids can enable India to shift from dirty fossil fuels to clean energy, a sizeable portion of GCF should be used to support mini-grids through FiT and GBI. A total amount of US $10.3 billion has been pledged to the fund so far.

With expansion of mini-grids, the cost of renewable energy is expected to decline, along with a rise in the purchasing power of consumers. The future of power is modern, distributed, people-centred and decentralised renewable energy secured from a large range of sources. Such a model is more likely to result in successful rural electrification.