Does Renewables Hold The Answer To Rural?

Deepak John

“Energy is the golden thread that connects economic growth, social equity, and environmental sustainability”. This is how ex- Secretary General Ban Ki Moon described energy in an event address at Washington DC.  This single statement reflects how access to energy can be vital in bringing positive change to lives especially for the marginalized. Studies have shown a strong correlation between rural poverty and access to electricity. But what is the point if electricity doesn’t reach the intended group? This is the harsh truth for the masses in 14,796 remote villages where the electricity hasn’t reached yet.  The gravity of the issue can be understood when the definition of ‘electrified’ is scoped further. According to the criteria used by the power ministry, a village is considered electrified if electricity is provided in public places and at least 10% of households. A village can be considered electrified even if 90% of its households do not have electricity. Although currently, the electrification rate is high and growing (96%), 244 million or 19% of population still do not have access to electricity as of 2016. Other than this, there are other questions raised on the quality of energy supply, individual connectivity and the duration.  So, do the answer to rural energy security lie in renewables? Do renewables have enough firepower to sustain and empower the rural economy? There is no simple answer yet.

If the same questions were to be raised a decade earlier, the answer would have been a definitive ‘No’. But over the years, this definiteness is fading as renewed vigour in research and development have paved way for more affordable and accessible renewable technologies.  This is especially in the case of solar technology. As per the World Bank report, the cost of electricity from solar photovoltaic (PV) is currently a quarter of what it was in 2009 and is set to fall another 66% by 2040. That means, a dollar will buy 2.3 times as much solar energy in 2040 than it does today. Favouring its adoption even more is the fact that India is in a fortuitous position to tap solar energy with the country receiving 300 days of sunshine throughout the year. A major thrust has been put in to develop a conducive environment for the growth of Solar sector in the country.   In the international arena, India even scored a diplomatic win by pioneering International Solar Alliance (ISA) and rallying the cause for affordable and accessible solar energy. But what does all this hullabaloo around renewables mean to the people of the villages?

Sustaining rural economy

A rural renewable project not only raises productivity but also provides a host of socio-economic benefits. Apart from freeing up time from monotonous chores and gaining access to better electricity services, it also helps develop a self-sustaining micro-economy. A Rockefeller foundation initiative called “Smart power for rural development” based on renewable power in Bihar and Uttar Pradesh is showing positive results in uplifting and rejuvenating the local economy. In the village of Kamlapur in Uttar Pradesh, a local entrepreneur set up a new business to manufacture garments with the use of electric sewing machines. After a two-month training, 50 local women were employed from the community, resulting in increased incomes for families that traditionally depended on agricultural wages. Like these, scores of other encouraging stories of empowerment for women, girls and youth has shown that renewable power can be an agent of social transformation too.  It also has the potential to bring positive changes in the mainstay of rural economy- agriculture. Adopting a renewable route to agri-power makes economic sense as major subsidy to farmers can be drastically reduced. Not only this, the operations and maintenance (O&M) of such energy assets itself will require a team of semi-skilled workforce wherein the rural youth can be meaningfully engaged. But the question remains whether we are ready to fully harness the renewable energy at the grassroots. There are some challenges.

What’s holding back renewables?

Renewable energy has a unique quality that the raw material is available at the site itself and no external supply is required- be it wind, solar or small hydro. Being constraint in resources and in delivery mechanism, it makes sense to go for an off-grid model which leverages this quality. This is a not a new concept as government has been already toying with concept of decentralized renewable energy (DRE) based rural electrification for years now. However, the implementation and application has been met with limited success owing to many factors. One of the major impediment is the financial viability.  It includes both up-front installation cost and high operation and maintenance expense. It further leads to prohibitive tariffs structure that is a barrier to low-income rural population. There is high disparity between grid-connected and off-grid tariff structure. This is where government and private players have to step in. It is a state imperative to devise creative financial instruments that hedge the risks for private players, even out tariff iniquities and at the same time ease the access to financial capital for the local community. Currently, there is no robust finance mechanism for supporting DRE projects in the start-up or in the initial phase except for capital subsidies. Thus, a cohesive partnership between government, private players and local stakeholders is needed and the grey areas in capital finance and tariff structure will have to be cleared.

Now, there is a clear policy bias towards grid extension rather than on off-grid model as preferred mode of electrification. Consequently, the government has been reluctant to heavily invest in off-grid options for rural electrification, barring remote villages. This adverse policy environment is hindering the growth of an ecosystem that is essential for developing off-grid villages in remote areas. Developing an off-grid village should not be seen as costly and complex exercise but rather also account for its extended socio-economic benefits in terms of women empowerment, enhancing organizational capacity of rural masses and social dignity.