Four years ago, India faced the most infamous grid collapse in the entire history. Different versions of cause and effect have been proposed to understand and inform the affected public. However, it is true and evident that India has been struggling with increasing energy demand in terms of capacity as well as operational challenges. Does it not obviously bring us to a grave question- has the infrastructure reached its tipping point and a new infrastructure is required or is there further scope for improving the efficiency of the existing system?
Looking closely at both these questions takes us to one common conclusion, grid alone cannot reach every household in India. With 300 million people without or limited access to electricity is a major challenge and it is an uphill task to provide reliable access to electricity to these people mostly living in rural and remote areas. Geographical challenges along with economic disparity are some of the impediments that have prevented 24 hours access to electricity for people in far flung areas.
Different solutions have been tried by the government and private sector but to no avail. Either the systems are not reliable, not sustainable or just not efficient and durable enough to augment the grid let alone replace the grid. It can easily be assumed that grid will never be replaced because in order to replace the grid, alternate technology/energy system need to make economic sense and need to be attractive to consumers from the perspectives of its utility. As on date, available alternate technologies have proven significantly expensive making very little business sense. Hence, opportunities are limited.
There are various models being followed in the off-grid space. Investors are striving hard to reach electricity-deprived rural India with attractive offers for the products and services. Encouragingly, consumer need is being created and the acceptability trend is upward. A lopsided energy policy for rural areas will certainly push the penetration of innovative product and models. Subsidies and incentives have not been very effective in doing so due to institutional and bureaucratic challenges. An entirely different approach towards technology and financing can connect a rural Indian villager to the world through electricity.
Given the limitation of the grid due to fluctuating conventional source’s availability and price to produce electricity, it can be augmented using local resources and appropriate technologies. A hybrid energy system can certainly be the need of the hour. Financial needs of such systems need to be met with innovative models through creation/promotion of additional dedicated debt/equity fund. Such funds will be required to mobilize and leverage local entrepreneurial opportunities. Focus of off-grid systems need to shift towards productivity such as job creation, value addition, in turn, creating more demand and opportunities. Electricity for mere lighting is the most basic need and the systems need to move beyond just lighting in terms of capacity and efficiency focussing on productive consumption.
In my recent visit to a village in Uttar Pradesh, I came across households that are connected to the grid but it has never experienced current flowing through the wires. People are looking at options as they need electricity for lighting, for entertainment, for agricultural activities, for their small businesses. They have tremendous opportunities but are helpless to leverage such opportunities. A private entrepreneur has made a mark in their lives through solar energy driven products although for limited applications. The company is financing the system to villagers for a fixed term with remotely controlled energy metering and consumption. It is quite an innovative approach, however, the profitability of such a business model is yet to be seen.
Jay C. Shiv is currently working as Program Manager with The Climate Group. He has nearly 10 years of experience collectively in the area of renewable energy, energy efficient clean technologies, climate change, rural energy access, and environmental impact assessment. He is a professional with techno-managerial skills in the RE space with an in-depth understanding of various RE technologies, resources, potential and best practices for deployment of RE technologies. For comments and feedback, he can be reached at jcshiv(at)gmail(dot)com
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