UNIVERSAL ENERGY ACCESS AND SAUBHAGYA SCHEME: Connecting the Unconnected in India
A little more than six years ago, the Sustainable Energy for All (SE4All) was launched in September 2011. We are now a third of the way to 2030, the year by which universal electrification for all has been targeted. In line with the global target to achieve universal electrification, the Indian government launched a new scheme, Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), in September 2017 to achieve universal electrification for urban and rural households in India by March 31, 2019, which is 10 years ahead of the global target. Since then much of the attention has been on the viability and implementation of such an ambitious goal. The new goal is certainly challenging (if not impossible) within the given timeframe. However, Saubhagya did achieve some important advances worth noting.
The scheme estimates that about 25 million rural households remain to be electrified or are not covered under the broader rural electrification programme, Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY). According to the scheme, around 10 million rural below poverty line (BPL) households will be covered under the DDUGJY. Additionally, there are 5 million urban unelectrified households who will be covered under Saubhagya.
While the national rural electrification programme has been functioning since 2005, this is for the first time during the last decade Government of India recognized that there may be unelectrified households in urban slums and has devised a scheme to connect these households with electricity. Saubhagya will run parallel to DDUGJY, and any unfinished task of the scheme will continue concurrently with the DDUGJY till 2021/22. The total cost outlay for Saubhagya has been estimated at `16,320 crore, including a gross budgetary support of `12,320 crore from the Government of India.
SAUBHAGYA: CONNECTING THE UNCONNECTED IN INDIA
Three areas distinguish Saubhagya compared to previous efforts towards rural electrification in India.
First, besides expanding subsidies for electrification to include BPL households, it will now identify beneficiary households using the 2011 socio-economic and caste census (SECC) data and provide free connections to unelectrified households having at least one ‘deprivation’ (out of the seven identified under SECC). This is significant as the deprivation criteria are more encompassing and include parameters such as female-headed households, scheduled caste and tribal households, landless households, and so on.
Second, households not found eligible to get subsidy as per SECC data can choose to be connected by paying `500, which shall be recovered by the respective electricity distribution companies (DISCOMs) in 10 instalments along with their electricity bills. Based on the evaluation of the previous Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), The Energy and Resources Institute (TERI) had previously recommended such a micro-lending scheme to enhance household connection rate. Many non-BPL households have not taken connections (for a variety of reasons), thereby creating a huge gap between the number of grid-connected villages and the number of households actually connected. Despite a huge amount of money spent on creating electricity infrastructure for around 108,000 villages over the decade from 2004, the percentage of rural households electrified showed a marginal increase from 43% to around 60% as of March 2014.
Third, Saubhagya made a provision for solar power systems of 200–300 Wp capacity for the 0.5 million households in extremely remote areas. Most of the earlier programmes such as Remote Village Electrification Programme, though had the provision for solar home systems, were limited to meeting only basic lighting needs. With the advent of energy-efficient LEDs and other efficient appliances, a 300 Wp panel can now easily power lighting for a number of rooms, as well as energy-efficient fans and televisions and/or other communication devices.
While implementation will have a number of challenges, Saubhagya should be credited with tackling these previous shortcomings and aiming to provide universal access in such a short period of time. There is also an additional opportunity, which if tapped properly can assist in the creation of a large number of rural jobs. As the large number of electricity connections will also need electrical wiring in the houses and their maintenance, this can provide opportunities to the rural youth to train as electricians and provide the services.
And while the Saubhagya goals seem unrealistic to some, there is a precedent in India. For instance, West Bengal’s rural electrification rate more than doubled from 40% in 2011 to 95% in 2016, connecting an additional 7.8 million households. This was done primarily by the state DISCOM easing the process of connection, organizing camps, and reducing the connection cost to just `379. This also assisted in substantially bringing down the power theft.
More than 99% of people who have gained access in India since the year 2000 have done so as a result of grid extension, which has been the focus of government measures. At the same time, those who cannot be reached via grid expansion were covered via solar mini-grids and stand-alone solar home systems under the decentralized distributed generation component of DDUGJY. The major states with a large number of unelectrified households (e.g., Assam, Bihar, Jharkhand, Odisha, Madhya Pradesh, and Rajasthan) each have less than 6 million unconnected households, with the exception of only Uttar Pradesh, which has around 14.6 million unconnected households.
The recent International Energy Agency (IEA) publication Energy Access Outlook clearly credits India’s achievement on electricity access: half a billion people have gained access to electricity since 2000, with electricity now reaching 82% of the population, up from 43% in 2000. The IEA further opines that if the pace is maintained, India will achieve universal access in the early 2020s and achieve one of the largest successes in the history of electrification. That the Government of India’s target date and IEA estimated date for achieving universal access in India is almost the same further points that that the Saubhagya objective is achievable within the coming 2 years.
EVOLUTION OF RURAL ELECTRIFICATION IN INDIA: FROM VILLAGE TO HOUSEHOLDS
While the ultimate aim is to provide reliable and affordable 24×7 power supply to all households, we also need to appreciate that this can be done progressively and not overnight. Since 2002, progressive steps have been taken by the Government of India to extend rural electrification and to make both the centre and states obligated to universal access. For example, the then government recognized the importance of rural electrification for country’s development and initiated the Rural Electricity Supply Technology Mission with the aim to electrify all villages and households progressively by the year 2012 through grid and off-grid options.Thereafter, the Electricity Act was enacted in 2003, which made both the centre and states obligated towards universal rural electrification. The Indian government launched the RGGVY in April 2005 and successfully created electricity infrastructure in more than 108,000 villages in less than a decade.
The current Indian government has progressed further, with 99% of Indian villages now provided with electricity infrastructure. The next logical step to the Saubhagya scheme would be to ensure that all villages and households, once provided with electricity connection, should also get 24×7 power supply in the most reliable and affordable manner. The electricity supply-side challenges that have persisted for a long time have been resolved to a large extent, and new capacities (especially based on grid-integrated renewable energy sources, including rooftop solar and mini-grids) are being added to the network at a fast pace, with the national goal to have 40% of the cumulative electric power installed capacity from non-fossil fuels by 2030.
24×7 POWER SUPPLY IN VILLAGES: THE CHALLENGES AHEAD
While the central government has been steering the sector towards a better scenario, the task for providing electricity supply round-the-clock primarily falls on DISCOMs, which are mostly state-run. DISCOMs not only have to ensure that they produce/buy and supply electricity to rural areas, but also do it in the most efficient manner possible and recover the revenues for long-term sustainability. Until such time, stand-alone solar photovoltaic (SPV) systems and micro-grids will continue to be favoured by many rural households as a coping measure.
Considerable improvement in the operational efficiency of DISCOMs is also required through extensive and intensive change management and capacity-building programmes as well as strengthening the electricity sub-stations and sub-transmission network. While the accrued debt of DISCOMs has been reduced to a large extent because of different measures taken by the central government, such as the Ujwal DISCOM Assurance Yojana (UDAY), change management programmes will help to develop the needed working culture in DISCOMs. Further, DISCOMs need to move from purely ‘administration’ to a mode of ‘enterprisation’ in decision making and management and from providing ‘public service’ to a ‘customercentric service’ model.
At the same time, electricity delivered to the rural areas must be priced rationally and the tariff structure is simplified for the consumers so that the consumers easily understand the bill and their willingness to pay increases and at the same time it is financially viable for the DISCOMs to serve. For efficient management of local power distribution, the government should also reactivate the rural electricity distribution franchise system, once change management programmes are initiated. The franchise system was operational in many states during the late 2000s and produced positive results towards revenue sustainability and efficient delivery of service as various TERI studies have found. However, the system was discontinued from 2012/13 in many states due to internal DISCOM issues. The franchise system can be operationalized by engaging local franchise entrepreneurs, including mini-grid operators (acting as independent electricity service providers), using their own generation and balance procuring at a wholesale price from DISCOMs, and then selling electricity at a weighted price. However, this may require some changes in the current regulation. These franchisees could be linked with the Skill India mission for building capacity on techno-managerial aspects and then supported with low-interest loans from the Micro Units Development and Refinance Agency (MUDRA) and others.
ELECTRICITY ACCESS ACHIEVEMENTS: BEYOND INDIA
While India has achieved considerable success in the last decade to connect the unconnected, the pace is also accelerating globally: The number of people gaining access has risen from 28 million per year between 2000 and 2012 to 41 million people per year in 2016. The World Energy Outlook (WEO) special report titled, ‘Energy Access Outlook 2017: From Poverty to Prosperity’ indicates that the number of people without access to electricity fell to 1.1 billion in 2016 from 1.7 billion in 2000. The access situation is on track to decline to 674 million by 2030 under the business-as-usual scenario. In Asia, China has already covered its entire population with electricity network, while 100 million people in Indonesia and 90 million in Bangladesh gained access during the last decade. Most of the developing countries in Asia are well on track to reach universal access by 2030 with many countries, such as India, Indonesia, and Bangladesh are expected to achieve the number well ahead of the target date.
Though electrification efforts in subSaharan Africa outpaced population growth for the first time in 2014, leading to a decrease in the number of people without access in the region, the electrification rate in sub-Saharan Africa currently is still less than 50%. The WEO special report further states that while several countries in sub-Saharan Africa, including Ethiopia, Gabon, Ghana, and Kenya, have reached or are on track to reach universal electricity access by 2030, progress across the region as a whole is uneven, and the number gaining access fails to keep pace with population growth. Thus, proactive efforts, including innovative business models and financing, would be needed for connecting the unconnected in most of the sub-Saharan African countries.
Although the new connections worldwide, similar to India, are mostly through a central grid, with power generation mostly from fossil fuels, the positive trend is that during the last 5 years, renewables have started to gain ground. While grid connectivity is feasible in countries such as India and Bangladesh because of the higher density of population, the same may not be the case for most of sub-Saharan African countries, which are sparsely populated. Thus, minigrids and stand-alone off-grid solutions will be the key to achieve the universal access in such countries. The WEO special report estimates that by 2030, renewable energy sources will power more than 60% of new access, and off-grid and mini-grid systems will provide the means for almost half of the new access. The technologies used to provide access have started to shift, with renewables providing 34% of new connections since 2012, and off-grid and mini-grid systems accounting for 6%. The pace is going to further improve with new technological advancement especially in metering and control systems and reducing prices of solar panels and storage systems.
Another noteworthy development is the formation of the International Solar Alliance (ISA) at the United Nations Climate Change Conference in Paris on 30 November 2015. India took the lead in forming the alliance, consisting of 121 countries, to collaborate on increasing solar energy use around the world. The alliance is working with respective countries and trying to aggregate demand from various member countries to considerably reduce the cost of finance and technology and provide the required support for increasing the use of solar energy, including providing electricity access via mini-grids and off-grid options.
While the developments are positive, what is needed is to ensure that the challenges are addressed on priority and partnership models—both south–south cooperation and pro-poor public–private partnership models—are developed and operationalized to achieve universal electricity access and round-the-clock power for all by 2030 to build a new world paradigm.
Mr Debajit Palit is Associate Director and Senior Fellow in TERI, New Delhi. The views expressed in this article are personal.