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Arunabha Ghosh: Put off-grid on radar

Arunabha Ghosh 

Arunabha Ghosh

A year ago, Prime Minister Narendra Modi promised that 18,452 villages would be electrified within 1,000 days. The government has strongly pushed ahead and claims that electricity has now reached 10,049 villages. For cooking energy, the direct benefit transfer scheme for LPG subsidies has been complemented this year with the Ujjwala scheme, which aims to give free initial LPG connections to 50 million households. In this flurry of large central schemes driving energy access, does decentralised energy have a future? Energy access is multidimensional. A transmission wire to a village does not translate to wires in each household or, for that matter, current flowing through each wire. Households care about the capacity of connections, duration, reliability, quality and affordability of electricity. Measured this way, the largest survey on energy access in India, which the Council on Energy, Enviroment and Water (CEEW) and the Columbia University conducted last year, revealed that only 37 per cent of rural households in the six most energy-deprived states crossed a basic threshold for electricity access. Most households have no electricity at all; or if they have a connection, power is available for less than four hours a day, with five or more blackout days a month. Clearly, electrified villages are not the same as universal access. Cooking energy is also measured on multiple metrics of health and safety, availability, quality, affordability and convenience. But only five per cent of rural households exclusively use LPG for cooking. There are massive challenges in delivering modern fuels reliably to households. The government's ambitions - and actions - are laudable but they will be insufficient to comprehensively overcome India's energy access deficits within the timelines specified. Elsewhere, hundreds of small firms are operating across the country, offering decentralised clean energy (DCE) solutions to the rural and urban poor. By one count, about 400 such firms exist. To be sure, DCE does not only mean "off-grid". These entrepreneurs offer a range of services: household solar systems, pay-per-use leasing models, microgrids, community biogas plants, small hydro systems, and remote monitoring and software for optimum energy management. Not all are profitable, not all scalable, and not all deserve support. But many are innovative, replicable, affordable (compared to existing options), and can significantly complement the government's ambitions for energy access. At a practitioners' workshop, organised on the sidelines of last week's India Energy Access Summit, the demand was simple: involve DCE entrepreneurs in the policymaking process; and make DCE part of plans for 24x7 energy access. How can DCE realise its potential and how can policymakers support firms without getting locked in? First, avoid romanticising decentralised energy. No serious DCE entrepreneur pretends that a few bulbs and a fan is the end-game for energy access. Donors and investors should not market it as the solution to all of India's energy problems.

Conversely, those ideologically opposed to DCE do a disservice by comparing apples and oranges, or expensive off-grid power with fully reliable grid-connected supply. The real comparison must be between expensive energy and even more expensive alternatives such as kerosene. Hard-nosed calculations will reveal the payback periods for investment, as long as policies are consistent. Secondly, be clear about subsidies. Entrepreneurs are the first to be wary of hinging their business models on subsidy programmes. If suddenly removed, their energy solutions vanish as fads. If maintained too long, subsidies can crowd out competitive firms. Subsidies for end-users (for lighting or cooking services) are still needed in India. Various government programmes now aim at better subsidy targeting, whether using direct transfers or Aadhaar-based identification. Combining them with a road map for energy subsidies and consulting with entrepreneurs to impose quality and service delivery standards would greatly stabilise the market. Thirdly, recognise experience but don't stifle innovation. The government has an important role in empanelling firms, which can support programmes or claim benefits. But it is important not to make the barriers to entry too high. The government could consider empanelling younger enterprises with a short track record but with demonstrated field presence. Venture investment funds, supported by the Indian and other governments or philanthropists, can support innovation by underwriting risks. The International Solar Alliance can become a platform to support DCE entrepreneurs across many countries. Fourthly, encourage applications across ministries. My colleagues, Abhishek Jain and Aditya Ramji, argue that DCE can be a force multiplier for many government programmes: Access for distant or discriminated hamlets; National Health Mission, if DCE could power primary health centres or help in vaccine and blood storage; Green India mission, by reducing deforestation; kerosene-free villages; Skill India, if transferable skills were integrated into curricula of vocational institutes; powering primary schools (54 per cent of which remain un-electrified); rural entrepreneurship through productive energy applications (solar-based irrigation, cold storage, sewing machines, refrigerators, milk chilling); even financial inclusion (solar ATMs). Energy systems of the future will look different from the past. Policy, investment and collaborative platforms can overcome inertia in scaling or replicating successful DCE business models, fight ignorance about its role in energy access, and nudge innovation towards greater levels of consumptive and productive use of modern and clean energy sources. The writer is CEO, Council on Energy, Enviroment and Water (http://ceew.in) and a founding board member of the Clean Energy Access Network (CLEAN). He is, most recently, co-author of Energizing India (SAGE, 2016). Twitter: @GhoshArunabha

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First Published: Mon, August 15 2016. 21:48 IST
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