Renewable Energy Programs for Rural Electrification: Experience and Lessons from India Debajit Palit#1, Gopal K Sarangi*2 #
The Energy & Resources Institute (TERI) IHC Complex, Lodhi Road, New Delhi, India 1
[email protected] *
TERI University Vasant Kunj Institutional Area, New Delhi, India 2
[email protected]
Abstract —Grid electrification has been the predominant mode for electrification covering almost 94.5% of the inhabited area in India. However, renewable energy based off-grid technologies have also been disseminated extensively in the country. This paper attempts to capture the development of off-grid rural electrification through renewable energy in India and analyses the experiences and lessons, which can contribute for the better program designing and policy making. Keywords— Rural Electrification, Solar PV, India
I. INTRODUCTION Statistics from the Census of India 2011 indicate that almost 77 million households in India were living without electricity in 2011 [1]. Despite efforts by the Central and various State Governments in India to improve electricity services during the last five decades, household electrification level and electricity availability continues to lag behind the world average. While the world average for electrification rate in 2010 was around 81.5%, the average electrification rate for India stood at about 75% with rural area having only 67% electrification rate [2]. The lower electrification level reflects the fact that historically the electrification rate has been measured as a percentage of electrified villages (and not as percentage of connected households) with grid extension to any point within the revenue boundary of a village, irrespective of whether any household is getting connected or not. However, since 2004 the definition has been changed by introducing criteria such as requirement of village electricity infrastructure, minimum 10% household coverage etc. for a village to be considered as electrified.
Fig 1: Trend of village electrification in India
While grid based electrification has been the predominant mode for electrification, covering almost 94.5% of the inhabited area in India, renewable energy based off-grid technologies have also been disseminated in areas which are either inaccessible for grid connectivity or hamlets having not recognized as villages as per the national census record [3]. Renewable energy based decentralised technologies, such as solar home systems (SHS), solar charging stations (SCS) etc. have also been deployed in grid connected areas, where availability of reliable and adequate electricity has been a concern. Recent trends also indicate that off-grid distributed energy sector is also increasingly emerging as a potential business venture for the private enterprises. Studies estimating the annual market potential of off-grid energy services in India indicate that it could be as high as $2 billion [4]. Adequate policy space has also been created over the last decade to accelerate power production and distribution through renewable energy-both for enhancing electricity access in offgrid areas and for augmenting supply in the grid connected areas. This paper attempts to capture the development of off-grid rural electrification through renewable energy in India and analyses the experiences and lessons, which can contribute for the better program designing and policy making. The paper used exploratory research approach with the analysis drawing from review of recent literature supplemented by the authors’ visits to some of the project sites and interacting with the various project proponents, implementing agencies including village energy committees, end users and other key stakeholders. The paper starts by briefly describing some of the key renewable energy programs for rural electrification in India. Section III shares experiences from such programs by analysing and discussing various aspects of project operation and management such as technical designs, delivery models, operation and maintenance aspects, etc. The paper then highlights some specific challenges in enhancing electricity access through renewable energy in off-grid mode. Finally, the Lessons Learnt and Conclusion section summarizes the study from the wide range of experiences and suggests take way points for improving the rural electricity access level through renewable energy to compliment the grid electrification efforts.
II. RENEWABLE ENERGY PROGRAMS FOR RURAL ELECTRIFICATION IN INDIA
Some of the major renewable energy programs for rural electrification in India are described below: A. Remote Village Electrification Program (RVEP) The RVEP is implemented by the Ministry of New and Renewable Energy (MNRE) for enhancing electricity access, through off-grid renewable energy technologies such as SHS, PV power plants, small hydropower plants and biomass gasification, in areas where extension of the central grid has not been feasible. The RVEP was initiated in 2001 for provision of basic lighting facilities in un-electrified census villages without reference to the fact whether these villages would likely to receive grid connectivity or not. However, the scheme was subsequently modified to cover only those unelectrified census villages that were not likely to receive grid connectivity. In addition to domestic use, the scheme provides energy services for community facilities, pumping for drinking water supply or irrigation, as well as for economic and income-generating activities in the village. As of June 2013, the RVEP has covered 11,727 villages and hamlets [5]. While the program was meant to consider all forms of renewable energy technologies, it is observed that the vast majority of the villages taken up for electrification under RVEP were provided with SHS or PV plants [6]. Central financial assistance upto 90% of the project cost is provided as grant with specific benchmarks in respect of the technologies adopted for electrification, with balance 10% cost of projects to be met by the beneficiaries and/or the state governments B. Village Energy Security Program (VESP) The VESP was conceptualized by MNRE as a step forward to the RVEP and attempted to addresses the “total energy” need for the community, i.e. electricity, cooking and motive power, in off-grid remote villages through use of the locally available biomass. The program has been quite innovative and novel as it tried to solve ‘3E-trilemma’ of maintaining Energy resources; sustaining Economic development and preventing Environment degradation. Appropriately for such a pioneering and unprecedented program, the initial phase of VESP was intended as test phase to prove the concept and capacity of various institutions to deliver energy to remote communities. A total of 79 VESP test projects have been sanctioned by MNRE in 9 states as of 30 January 2011[7]. In all, around 700 kW of electricity generation equipment have been installed in the test phase, of which, nearly 90% are based on biomass gasification technology [8]. The test phase, however, met with a limited success and most of the test projects could not be sustained for a variety of factors. VESP was thus discontinued and no new test projects was sanctioned since 2010 [7]. C. Jawaharlal Nehru National Solar Mission (JNNSM) MNRE is also implementing the JNNSM, one of the eight National Missions comprising India's National Action Plan on Climate Change. Though the Mission has not been established to foster rural electrification per se, it does mention the use of
solar energy for enhancing electricity access in rural areas. The Mission aims to incentivize the installation of 22,000 MW of on- and off-grid solar power, using both PV and concentrating solar power technologies by 2022, which can directly and indirectly enhance the availability of electricity in the rural areas and bring more households under the ambit of electrification. The first phase (upto 2013) focussed on promoting off-grid systems to serve populations without access to energy as well as on adding capacity to grid-based systems. As on March 2013, a cumulative capacity of 1236.48 MWp in grid connected mode and 42.157 KWp of stand-alone power plants have been implemented. In addition, about 2 million SHS and solar lanterns have also been disseminated – both through direct subsidy as well as part subsidy and partly bank financing route [5]. D. Decentralised distributed generation(DDG) program One of the important components of national rural electrification program i.e. Rajiv Gandhi Grameen Vidyutikaran Yojana, is electrification through decentralised distributed generation (DDG) mode. Under this scheme, villages are provided with electricity where it is neither technologically feasible nor cost-effective to do so through grid-based modalities. Under this scheme, villages with more than one hundred persons can be considered. The DDG projects are implemented by state renewable energy development agencies and state electricity utilities or by the selected Central Public Sector Utilities, in villages where grid connectivity is not foreseen in next five years, with the ownership vested in the State Governments. There is also emphasis on cluster-based approaches to compound the benefits. The DDG program considers technology with the lowest marginal cost and extends subsidy of 90% of the project cost and some operational subsidies. The subsidy is released on annuitized basis based on performance of the system for five years. Under the scheme, 647 un-electrified villages & hamlets in seven states (Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, West Bengal, Uttarakhand, and Uttar.Pradesh) has reportedly been approved till date for electrification using various renewable energy technologies. III. ANALYSIS OF THE RURAL ELECTRIFICATION PROGRAMS A. Coverage and management As mentioned in the previous section, the off-grid electrification program in India has primarily been carried out under RVEP, VESP and also as part of the Technology Demonstration Program, all administered by the MNRE, and implemented primarily through state renewable energy development agencies (SREDA). In addition, various village organisations and NGOs have also been attempting to enhance electricity access through off-grid options with funding support from MNRE, bilateral and multilateral aid agencies. Among the PV technologies, SHS and solar lanterns have primarily been implemented. Apart from these, mini-grids based on solar PV, biomass gasification and micro hydro have also been implemented. While states such as Assam, Jharkhand, Madhya Pradesh and Odisha have primarily
implemented SHS under RVEP, solar mini-grids shave been implemented mainly in Chhattisgarh, Meghalaya, West Bengal and Lakshadweep Islands [8]. The biomass gasifiers based mini-grids have been tried out mostly under VESP. The small hydro projects have been deployed mainly in the hilly states of Uttarakhand and north-eastern region while pico hydro projects have been implemented at selected hilly locations of Karnataka and Uttarakhand. The most successful states for enhancing electricity access through off-grid options are Assam, Chhattisgarh, Odisha and West Bengal. CREDA (Chhattisgarh Renewable Energy Development Agency) has electrified around 35,000 households spread across 1000 villages/hamlets with solar mini-grids. WBREDA (West Bengal Renewable Energy Development Agency) has more than 15 functional solar power plants with aggregate capacity of more than 1 MWp capacity, supplying stable and reliable electricity to around 10,000 households [6]. In Assam and Odisha, more than 2500 villages have been covered under the RVEP using SHS [5]. The NGOs and small solar companies have also been complimenting government efforts to augment electricity access. For example, TERI has been implementing its “Lighting a Billion Lives” (LaBL) program since 2008 and has till date covered around 2300 villages with solar charging stations impacting around 100,000 households. For a project of this nature that supports the base of pyramid population, social inclusion becomes an essential component. The initiative has thus focussed on the remotest and most inaccessible areas, covering tribal belts and difficult terrains. SELCO India has installed more than 0.1 million SHS in the country. In addition, rural banks such as Aryabrat Grameen Bank, Prathama Grameen Bank, Gurgaon Grammen Bank etc. have also been promoting SHS both in grid connected areas with poor electricity supply and off-grid areas. The mini-grid model has also been adopted by the private sector. Husk Power Systems (HPS) has electrified around eighty villages in Bihar, benefitting nearly 25,000 households. It has plans to expand to around 2000 villages by 2014. HPS promoted mini-grid systems largely use rice husks, which are amply available in the state, in gasifiers for power generation. Mera Gao Power (MGP) is setting up solar DC micro grids in Sitapur and Barabanki districts in the state of Uttar Pradesh to provide lighting service using energy efficient LEDs. It has reportedly connected 10,000 households spread across 500 villages & hamlets and aims to impact 1 million people by 2017. Other private sector companies who have recently initiated extending electricity services in poorly electrified villages either through solar AC/DC mini-grids are Kuvam Energy, Sun Edison, Minda NextGen Tech, Gram Power etc. B. Technical design and sizing In case of SHS, the typical size consists of a 37 Wp solar panel, 40Ah tubular plate lead acid battery and two CFLs of 79 Watt each. Though, MNRE also supports SHS with 18 Wp module and one CFL light, it was hardly found to be implemented in any of the villages. Mini-grids, which provide electricity supply of 220 V 50 Hz single or three phase AC electricity to a localized
community, vary in capacity, typically between 1 kWp and 200 kWp, with different agencies adopting different sizing and models depending on their local requirements. While minigrids in Chhattisgarh are based on micro-solar PV plants (< 6 kW capacity) and biomass gasifiers (~10 kW), the solar minigrids in Sunderbans and Lakshadweep are of much higher capacity (> 100 kW). While these mini-grids have been using state-of-the-art inverters and storage systems of the time, changes have also been made to the capacity and technological platforms, pursuant to technological advancement and shifts in communities’ needs and requirements. For example, until the year 2000, solar minigrids in the capacity range of 25 - 26 kWp were implemented by WBREDA. Larger capacity schemes were not commissioned as there was at that time a lack of acceptance of the concept and the technology had not yet been proven. With technological advancements and acceptance of the concept coupled with growth in demand from communities, WBREDA started building power plants of larger capacity (>100 kWp). In some places they also installed additional generating units using other forms of renewable energy sources, such as small wind-generators and biomass gasifiers. This hybridisation helped WBREDA to optimise the various renewable energy technologies based on local weather conditions. In Chhattisgarh, the mini-grid capacity has been standardized for ease of O&M with only 6 capacities of minigrids viz. 1, 2, 3, 4, 5 & 6 kWp being implemented with two rating of inverters (2 kVA for 1-3 kWp & 5 kVA for 4-5 kWp). On the other hand, biomass gasifier-based, independent mini-grids implemented under VESP and private initiatives such as HPS and DESI Power are mostly connected to 10 - 50 kW generators. The biomass gasifier plants by HPS, for example, are of 33 kW on average and serve around 300-400 households in a village Here also innovation has been brought about by the private sector initiatives. For instance, HPS has been able to cut down its costs by introducing smart meters and fabricating the gasifiers locally at their own initiative. Low voltage solar DC micro-grids are also being deployed by private initiatives. These micro-grids are designed to generate DC electricity from solar panels and the power is distributed over a short distance, to minimize the loss, from the battery banks to cluster of households and shops. They usually supply at 24V DC and provide lighting services for 5– 7 hours using 1-3 W LED lamps. Minimal smartness have also been tried out by providing auto switch on/off facilities and auto connect-disconnect provision by use of micro-chips. C. Service delivery models Different service delivery models have been adopted for implementing the renewable energy based rural electrification projects. In case of individual SHS, partial subsidy, leasing and consumer financing have been attempted. Private agencies like SELCO and the rural banks (mentioned in section IIIA) have used the consumer financing model to disseminate SHS [3] in grid connected areas, while the state renewable energy development agencies have been disseminating SHS in remote off-grid areas with subsidy ranging from 50% to 90% of the
MNRE benchmark costs, depending on the remoteness of the location and the Ministry’s criteria for support. Most of the mini-grids implemented under the RVEP or VESP are structured around community-based models. Here, the service-delivery model followed involves the formation of a VEC by the Project Implementing Agency (PIA) – usually the SREDA or a NGO – with representations from villagers and the local governing body. The PIA sets up the energy production systems and hands over to the VEC for day-to-day operation and management (O&M). The VEC thus acts as custodian of the energy production system and is responsible for its O&M. The electricity generated is distributed to the community through a local mini-grid. Often the tariff is set by the VEC in consultation with the PIA in such a way that it takes care of the fuel and O&M costs. The VEC is also responsible for arranging the fuel (in case of biomass or biofuel projects), either as a contribution from the project beneficiaries on a rotation basis or through purchase from collecting agents. The VEC also sets up energy plantations in village forests or community land to ensure the sustainable supply of biomass. User charges are collected by the VEC to meet the operational expenses of the projects. Further, in many cases a village energy fund is also created, initially with beneficiary contributions, for the O&M of the project. The monthly user charges are deposited into this account. CREDA and WBREDA, however, evolved their own service delivery model and directly take care of the O&M through a multi-tier system of maintenance to ensure trouble free working of the mini-grids. However, they also form a beneficiary or village energy committee which is responsible mainly for local oversight and acts as a grievance redressal forum and not involved directly in the technical O&M. In addition to the community led mini-grid models, the private sector has increasingly been venturing into this sector. The models followed by these private operators are purely service driven. For example, HPS follow BOOM (built, own, operate and maintain), BOM (built, own, maintain) and BM (built and maintain) model for implementing biomass gasifier systems for providing electricity services. In the second and third case, a local entrepreneur is motivated and trained to own and or operate the system. To some extent these private operators also involve local stakeholders to help with social organisation and to achieve better community responses. TERI has been extending clean lighting under the LaBL program using the fee-for-service model. Essentially, LaBL provides a entrepreneurship based energy service delivery model where local entrepreneurs in un-electrified and poorly electrified villages are trained to operate and manage solar charging station (SCS) and/or solar DC micro-grids to provide lighting services to rural community at an affordable fee. The fee-for-service model has ensured that the base of pyramid population get access to clean energy at an affordable price. While the capital cost of setting up the SCS & micro-grids in the village is raised through government agencies, corporate support, donations, and also through equity contribution from users, the O&M cost is borne from the rent that users pay to the operator of the SCS/micro-grids. This has ensured that the
communities afford clean technologies like solar and shift from polluting kerosene lamps to clean and bright solar lamps. D. Tariffs In case of SHS, provided under the RVEP on 90% subsidy, monthly service charges are usually levied by the implementing agencies towards meeting the battery replacement expense and minor maintenance. This service charge is collected by designated local person and deposited in a bank account for future use. For example, in Assam, Rs 70 is monthly paid by beneficiaries of which Rs 20 is towards the technician’s salary and Rs 50 is saved in recurring deposit in bank, so that the money can be used by them to replace the battery after 5 years of warranty. On the other hand, for SHS procured using bank finance and part subsidy, the monthly instalment (usually Rs 250 for 5 years) is designed such that it covers the bank repayment and also the maintenance charges. In case of LaBL, the lanterns are rented out to users at a daily usage fee of Rs 2-3/-, whereas the users usually pay a daily fee of Rs 5/- for 2 light points connected to a DC microgrids. In some cases, an additional Rs1/- is also charged if the lanterns are delivered by the operator to the households. The monthly charges being levied by various private sector operators for DC micro-grids varies between Rs 100 to 200/per month or Rs 25-Rs30/- per week (for ease of collection), depending on the locations and number and type of luminaire. For mini-grids, tariff structure for consumers was found to follow a non-uniform pattern. The tariff is usually based on flat rate ranging from Rs 30-150 per connection per month. For example, the solar mini-grids in Sunderban has a tariff of Rs 100 – Rs 150 per month for 3-5 light points and 5 hours of supply, whereas Husk Power charges Rs 150 per month for 2 light points and 5 hours of supply. CREDA levies only Rs 30 per connection per month of which Rs 25 is contributed as tariff subsidy by the state government. Since, the number of light points and time of supply in the mini-grids are fixed and the socio-economic dynamics are also similar in remote villages, the fixed tariff was found to be much easier to administer as compared to metered tariff for such low consumption. The difference in tariff for government agency promoted mini-grids vis-à-vis private ones can be attributed to the fact that a major part of the project cost in case of private initiative is borne through financing from banks/investors and company’s equity and the cost is recovered through tariff. E. Operation and management O&M being a critical determinant of the success of the mini-grid model, most projects have evolved their own mechanisms for the smooth and uninterrupted operation of the plants. While operation of mini-grids has been traditionally managed by local level operators who are trained for the job, the operator in most cases has also been tasked with the maintenance in most of the VEC managed projects. This model seems to have not worked in many places, especially for the biomass gasifier projects, where maintenance requirement is relatively higher than solar PV projects. For example, in case of VESP, managing technologies was found to be one of the most critical factors for the poor project
performance [7]. Technical reasons for non-operation were found more to do with poor technical knowledge of the operators than to do with the technology per se. Added to this, the inadequate post-installation maintenance network of the suppliers (who are also very limited in numbers) was also found to contribute to a longer lead time for fault rectification. WBREDA and CREDA have, however, involved qualified technicians as third parties for local O&M of systems. Either the technicians are from the equipment supplier or the task is contracted to local service providers who engage trained personnel for the job. For instance, in the case of Sunderbans, AMCs are agreed for the plant O&M and low tension line maintenance. The maintenance contract is usually given to a local contractor thus building local entrepreneurship, which at the same time ensures quick and reliable service. CREDA went a step further and developed a cluster approach for maintenance to reduce transaction costs, since their power plants are located in very remote areas in the state. Each cluster, consisting of 10-15 villages, has one cluster technician, one assistant to the master technician and operators. The cluster technician is responsible for visiting each village once a month to do preventive maintenance and is further responsible for resolving any breakdowns. In both the above cases, the maintenance framework was developed in a more structured and organised way with responsibilities fixed for different stakeholders across the service value chain. Further, the VEC’s role was limited to acting as local oversight and informing the implementing agencies of any operational and maintenance related issues. TERI’s experience in implementing LaBL also corroborates the need for organised maintenance model for technical sustainability of systems. Here, TERI facilitates setting up of Energy Enterprises or TRCs (Technology Resource Centres), manned by local youths trained by TERI, covering cluster of SCS and DC micro-grids. These TRCs provide the required after-sales service to the remote stations where the reach of the equipment suppliers are sometimes difficult. Taking advantage of the model, the suppliers now also involve the energy enterprises during installation of the systems and allow them to repair the systems during the warranty period as well as beyond, thereby ensuring a responsive post installation maintenance services created and managed at the local level. IV. SPECIFIC CHALLENGES Despite different technology, institutional and financial models have been used to improved electricity access there are still hurdles that hinder the scaling-up of renewables-based electricity generation and distribution systems [3]. Some of the specific challenges are discussed below: Institutional: Institutional and organizational shortcomings seems to act as one of the major deterrents for the successful operation of many projects. Reference [10] argues that even economically viable projects fail because the importance of appropriate organizational structure and institutional arrangements of these projects are not adequately appreciated. The Indian experience (such as CREDA, WBREDA etc.) clearly demonstrates that project have been successful where
they have been implemented and managed through an organised approach with clarity in roles and responsibilities of different stakeholders and differentiated responsibilities for O&M. On the other hand, in case of VESP, there has been lack of clarity on the roles among the different stakeholders: PIAs, SREDAs and VECs, which resulted in sub-optimal community participation and failure of most of the projects. Financing: Access to financing has been a major deterrent for up-scaling of off-grid programs. Since these projects are deployed in remote and socio-economically backward areas, access to credit from formal financial institutions is limited. Another related challenge is the financing of the capital cost, especially for mini-grids, which is beyond the capacity of rural consumers. While subsidy from MNRE exists, the generation of remaining capital at a lower cost of capital and/ or without any collateral is difficult in the absence of any risk guarantee mechanism. In case of very small system, such as SHS with LEDs or solar lantern, rural banks do not prefer to finance as transaction cost for them is high. Also financing from MFIs increases overall cost of the system as interest rate is high. Accessing alternative financing from carbon funds is also difficult given the small size of these projects. After-sales Service: One of the sustainability challenges for the sector emerges from the provision related to after-sales services. In majority of individual based systems like SHSs and solar lanterns, there has hardly been any provision for after-sales service. However, in case of mini-grids, the services has been proved to be the central for the sustainable operation of the projects and has been emphasized by the project proponents and developers For instance, in case of government agencies such as WBREDA and CREDA and private initiatives such as LaBL, MGP or HPS, proper cluster based mechanism has been developed to take care of the after sales services. Interestingly, it seems that at the program level, there has been an increasing recognition of the importance of services from the experiences of past projects such as VESP. Policy: In spite of the policy push over the years in India, it is argued that the full potential of the renewable energy to enhance electricity access in remote areas cannot be realized under existing conditions. For example, current policy frameworks and interconnection standards do not fully allow feeding of excess generation from mini-grid system to the conventional grid at the lower voltage level. Further, the remoteness of the off-grid projects increases their capital and O&M costs and hence the cost of generation and supply. The poor capacity of rural consumers to pay is an additional challenge. As a result, projects sometimes fail to operate after few months of operation, as has been observed in the case of VESP [10]. In terms of the legal framework, the benefits of cross-subsidization are limited to the grid-supplied consumers and the off-grid systems consumers do not get this benefit. Off-grid sector is entirely free of licensing and regulation leaving retail tariffs to be determined by market forces or through negotiation. The cross-subsidization benefit could have helped the financial viability of mini-grids in remote areas where user payments are insufficient. V. LESSONS LEARNED AND CONCLUSIONS
Many of the renewable energy projects, especially under RVEP & VESP, were implemented with the premise that the community (through the VEC) will own the project and will take care of overall project management and run the system sustainably. This model may be suitable for those remote areas where the strength of local governance is medium to good, potential for group activity exists and there is social cohesiveness in the village. However, as discussed in previous sections, the VEC was found to be weak in many cases and group activity is minimal in most of the projects. Thus instead of VEC model, alternative service delivery models involving Energy Service Provider (ESP) or BOOM and BOM models could be tried out for projects. The ESP could play the role of stand-alone power producer, distributor and supplier of electricity and manages the revenue through payment collection from electricity users and the VEC can act as a regulator to negotiate the tariff, biomass prices and resolves disputes between (or any grievances of) the consumer & service provider. This model will also be appropriate for ‘not so remote’ villages covering large number of consumers - both domestic and commercial - to ensure financial viability. The power sector being regulated where the regulator sets the tariff, the mini-grid projects are not viable as they can’t compete with neighbourhood tariff prevailing in grid connected villages (which are cross-subsidised through regulation). Thus, appropriate regulatory framework will have to be developed for the off-grid projects, wherein the service provider can be assured of getting results based aid or crosssubsidy to ensure viability of the projects [10]. Further, to augment the supply situation in grid connected areas and also for achieving better operational efficiency, twinning distributed power generation, utilizing locally available renewable energy resources, with a suitably structured rural distribution delivery model can result in better utilization of the installed rural electricity distribution infrastructure and in greater economic and social development. As the grid supply situation improves and also the electricity demand, these operators can become franchisees of distribution utilities and continue to serve the areas, partly with local generation and partly from the grid supply at weighted average cost of supply. As off-grid projects are smaller in capacity, concentrating energy loads or bundling can assist in increasing the market size. Off-grid projects could be identified in clusters, to ensure economies of scale and scope, which would help to manage them sustainably. For example, CREDA and LaBL have been successfully running the projects in remote areas, mainly because of the cluster approach followed for operation and maintenance. The approach is also corroborated by the hugely successful SHS program in Bangladesh, where the institutional development grant provided by IDCOL have been used by the implementing organisations to develop local capacity for responsive after sales service of the installed SHS and also promote sale of new SHS using the same channel developed for providing the after sales service [6]. Though it is user’s choice to procure a lighting product, the seemingly endless amount of LED lamps that are available or introduced at different prices seems to be spoiling the market
place. The LED products need several of its components such as light and charging source, energy storage and electronics, to be selected and designed appropriately to avoid performance reliability issues. Because the LEDs are supposed to have a very high life, it is essential that all peripheral systems and components are equally having long life for optimum product performance over its lifetime. There is thus an immediate requirement to bring in nationally recognized industry standards and star rating for ensuring that different LED lighting products being disseminated are of standard quality. Lastly, for the renewable energy sector to reach a scale, companies need to remove barriers to supply, demand and scalability and also adopt standard processes and metrics, which will also help them to attract the necessary level of investment from financial institutions and venture capitalists supporting ‘green’ programs. The strengthening of the financing including availability of low cost and patient capital, distribution and after-sales spares supply and service chain by facilitating the development of local capabilities to microfinance, assemble, supply and service will not only facilitate enterprise development on the supply side, it could potentially enhance livelihood activities. The opportunities have to be seen not only from the rural electrification opportunities but in the larger context of enhancing energy security of the nation. ACKNOWLEDGMENT This chapter is based on the research carried out on rural electrification efforts in India, conducted as part of a multiconsortium research project titled ‘Decentralized off-grid electricity generation in developing countries: business models for off-grid electricity supply’, supported by the Engineering and Physical Sciences Research Council/ Department for International Development research grant from the Research Council United Kingdom Energy Program. REFERENCES [1] [2] [3] [4] [5] [6] [7] [8] [9] [10]
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