Prayas Energy Group, Pune Powering 1.2 billion people: Case of India’s Access Efforts Shantanu Dixit Prayas (Energy Group), Pune 23 th February, 2012, Washington DC World Bank Energy Days

‘Prayas’ means ‘Focused Effort’ Based at Pune, India Focus on protection of “Public Interest” in electricity sector Research based, policy advocacy Voluntary Org. About Prayas … Activities: Research & intervention (regulatory, policy) Civil Society training, awareness, and support 2

Outline Why access and what is access ? Case of India’s access efforts Concluding comments 3

Why access? Electricity – a versatile source of energy Equity and ethical imperative – reduce drudgery, improve safety – social infrastructure (health facilities, schools etc.) The economic imperative – avoids excessive expenditure for kerosene – increases productive working hours of the day – promotes small scale economic activity (industry/agriculture) 4

Electricity–HDI linkage 5

What is Access? Basic lighting Basic domestic appliances Social needs – schools, health facilities, street lighting Productive needs – small industries, shops, agriculture 6

India’s Access Efforts – Phase s and 1980s – Food crisis led to adoption of ‘green revolution’ – Need for increased irrigation and hence electrification of agricultural pumps – through grid extension – Household and village electrification a by-product of this productive load development – Village electrification definition “if electricity is being used within its revenue area.” (till Oct 1997) 7

India’s Access Efforts – Phase 1 8

India’s Access Efforts – Phase s and 2000s Several grid based schemes: Kutir Jyoti Yojana ( ); Pradhan Mantri Gramodaya Yojana ( ); Accelerated RE programme ( ) & Accelerated Electrification of 1 lakh Villages & 1 crore Households (HHs) ( ) Attention to restructuring and financial viability 9

India’s Access Efforts – Phase 2 10

India’s Access Efforts – Phase 3 Change in village electrification definition (2004): Electrified if basic infrastructure like Distribution Transformer and lines are provided in inhabited and dalit bastis; electricity is provided in public places like schools, PHCs etc and a minimum of 10% of HHs are electrified. National Electricity Policy 2005: “…the nation has set itself the target of providing access to all households in next five years.” – ensure minimum lifeline consumption 1 unit/household/day as a merit good by 2012 Challenge – Non-electrified population in India comparable to USA (> 300 Mil. people), 1/5 persons in world without electricity lives in India 11

RGGVY Scheme Overview …1  Launch of RGGVY (rural electrification program) – Merging of earlier electrification schemes Launched in 2005 and addresses two components rural electrification – developing distribution infrastructure (Distribution backbone with 33/11 kV or 66/11 kW substation and distribution transformer) in rural areas to meet electricity demand of all HHs – free connections to all Below Poverty Line (BPL HHs) 12

RGGVY Scheme Overview …2 Infrastructure investment – 90% grant by Govt. of India and 10% as loan by REC to the State Governments. – Total Investment: Rs. 70,000 cr (US $ 14 Billion); half spent. Critique and Concerns about RGGVY – Top down, One size fits all approach – Emphasis only on HH electrification – Above Poverty Line HHs connections lagging behind – Construction quality of network and delays in meeting target – Inability to supply adequate & affordable power 13

RGGVY Achievements Physical infrastructure – 100,917 villages electrified (90% of target) – 18 Million HHs electrified (78% of target) 14

Increase in rural HH electrification (%) through RGGVY 15

RGGVY – What about electricity? Hrs. of supply often < 6 hrs./ day PEG proposal for restructuring of RGGVY – Less hrs of supply due to structural disincentive (loss of US cents 8/kWh of sale to HH) – Central government to allocate low cost power to RGGVY consumers – Need 14 GW capacity to address structural disincentive (likely addition in next 5 yrs ~ 100 GW) (Refer Background Paper for Roundtable on Electricity for All : Challenges and Approaches, by PEG and PIC at Pune on 18 th Feb 2012) 16

What about ‘Green Access’ ? 17 Decreasing costs and increasing potential of RE Grid Connected RE Capacity (~24 GW) Generation (~ 50,000 MU)

18

Wind Potential Estimates (GW) for India 19

Green Grid ? Grid essential for harnessing large scale RE – Geographically un-equal distribution – Varying generation, needs balancing mechanism Enables large investments, better monitoring, less drain on government finances Grid connected RE target ~15% by 2020 (~ 250 TWh) Grid RE needed ( ) – 75 GW / 160 TWh – Equivalent to powering 100 mil. 100 units / month 20

Concluding Comments …1 Grid – Enables large scale access – Green grid is feasible Challenges – Reliable supply, structural disincentive – Grid O&M Off-grid – Suitable in specific situations – Distributed grid-interactive renewables Challenges – Equity in tariffs – High cost and O&M – Weak monitoring 21

Concluding Comments …2 Primary objective should be providing ‘quality access’ as soon as possible Not just techno-economic optimum solution but must consider ‘political economy’ and ‘governance’ framework. 22

23 Thank You Prayas Energy Group Shantanu Dixit Ashwin Gambhir Sreekumar N.

Off-grid approach …1 From 2000, Ministry and New and Renewable Energy (MRNE) programs for remote villages – Village Energy Security Program, Remote Village Energy Program Current installation (as on , source: MNRE): Remote villages/hamlets with DRE: 8846 nos Biomass gasifiers (rural):15.5 MW SPV systems (> 1 kW): 72.5 MW Water mills/micro hydel: 1818 nos RGGVY – Decentralized Distributed Generation (DDG): for hamlets where grid connectivity is not feasible / cost effective. Capital subsidy of $ 100 Million earmarked. 24

Off-grid approach …2 Total HHs (Million)259 HH Electrified by Central Grid (Million)191 (74%) Villages Electrified through Grid (31 st Jan 2012) (93%) Number of Villages/Hamlets with lighting service through DRE (as per MNRE) 8846 HHs (Million) with lighting (4-5 hours) through DRE, assuming 100 HHs/hamlet

Challenges for Off-grid Higher institutional capacity and community involvement need Limitations on provision of social and productive load in economical manner. In-equity in tariffs Maintenance and Operation issues (technical, fuel, costs, tariff collection etc) 26