Plugging the Gaps

 Steps needed to encourage rural uptake of grid power

Electricity access has been a priority area for the government for decades. The country achieved a major milestone in April 2018, with every village having been electrified. However, 100 per cent village electrification, by definition, does not mean the provision of electricity connections to all households in a village. Hence, in order to provide electricity to every willing household in the country by March 2019, the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) was launched in October 2017. With more than 99.99 per cent “willing” households electrified since the scheme’s launch, Saubhagya has become one of the largest electrification programmes in the world.

Despite the positive intent and progress, the real picture in rural areas remains quite bleak with a large number of households remaining unconnected and classified as “unwilling”. Most of the consumers in these areas experience frequent and long power outages, which has led to lower electric grid adoption by commercial enterprises and households across villages. To understand the gaps in the rural electricity scenario, a study was carried out and a report published in February 2019. The report, titled “Rural Electrification in India: Customer Behaviour and Demand”, is a collaboration between Smart Power India (SPI), a subsidiary of the Rockefeller Foundation, and the Initiative for Sustainable Energy Policy (ISEP), an interdisciplinary research programme at the Johns Hopkins School of Advanced International Studies.

Renewable Watch presents a summary of the report…

Report methodology

The objective of the study was to present a rural customer’s perspective on electricity access, electricity adoption and its use for productive purposes. It puts emphasis on customer demand and satisfaction based on primary data. The analysis also provides an insight into the various electricity sources used by rural consumers and the power delivery models including public and private discoms as well as solar mini-grids. For this, 10,000 rural households and 2,000 rural enterprises were surveyed across four states – Bihar, Uttar Pradesh, Odisha and Rajasthan.

Rural electricity demand

In an average village, households account for a 52 per cent share of the total power demand of the village, while enterprises contribute 7 per cent. Pump sets used in irrigation contribute to the remaining 40 per cent of the power demand. However, the power supply is not adequate for meeting this power demand, compelling farmers to switch to diesel pumpsets.

But things are beginning to look up. With the government impetus to solar pumps and a line-up of schemes to make these attractive for farmers, many of them are migrating to solar pumps. Besides providing a clean alternative to fossil fuels and enabling the development of low-carbon irrigated agriculture, solar water pumps present an additional advantage for farmers. These enable farmers to utilise the surplus power from solar panels for meeting their lighting and other power requirements, or to even sell excess power to the grid.

Electricity demand for rural households is low, nearly half the national average for residential consumption. Similarly, electricity demand for commercial enterprises is low in rural areas. The low power consumption in rural areas is due to the use of fewer electrical appliances vis-à-vis urban areas, as a very small percentage of the rural population uses high-power appliances such as irons and refrigerators. Most people in rural areas use power for fans and lights, while some use it for charging mobile phones, and powering televisions or radios. This demand is met through different sources such as grid power, diesel generators and solar mini-grids. Many enterprises use power backup options as well to complement the frequent power outages that occur in rural areas.

Key findings

The study found that although grid power is available, its adoption is low in rural areas. However, the usage is higher among households than among micro-enterprises, as only 65 per cent of the enterprises covered in the survey have grid connections. Odisha and Rajasthan are comparatively better than Uttar Pradesh and Bihar in terms of grid power usage. Non-grid power supply systems such as solar home systems, rechargeable batteries, mini-grids and diesel generators are also used by many rural households and enterprises for meeting their power requirements.

The affordability of grid power is a key issue cited by many rural customers, especially those that are from economically weak sections. High power connection costs along with time delays and gaps in billing, which lead to inflated bills, have deterred many villagers from adopting grid electricity. Frequent and prolonged power cuts with poor quality power means that customers have to pay extra for power backup. This drives many of them towards alternative sources of energy. The concerns regarding poor power supply and billing inefficiency of discoms are leading to a moderate level of satisfaction in terms of electricity services. In contrast, customers using solar mini-grids are quite satisfied as they get reliable power supply even though it comes with a slightly higher tariff than grid power.

Discoms need to work towards improving customer satisfaction in rural areas, granting connectivity promptly, and ensuring timely billing and collection. Another important consideration is the quality and availability of power, as fewer power cuts will increase customer confidence in discoms and grid power. Apart from households, discoms should focus on encouraging more rural enterprises to adopt grid power. Enterprises may have a slightly higher power demand than households and they are high-paying customers, which means assured revenue for discoms.

Stable power supply and improved power quality will surely drive more consumers towards the adoption of grid power, which means an increase in power demand and revenue for discoms. Rural consumers can then be encouraged to adopt medium- to high-power-consuming appliances, which will further increase power demand in villages. This will also reduce the use of diesel generators in villages and curb pollution.

Outlook

Coordinated efforts by discoms, government agencies, the local administration and grassroots organisations are required to address the issue of electricity access in rural areas. Discoms need to improve power supply and availability, and instill confidence in customers regarding grid power. Discoms should shed the myth of “unwillingness to pay” by consumers in rural areas and focus on greater efficiency in metering and billing.

The local administration and grassroots agencies can take up the task of promoting different electricity access models including grid power, solar- or biofuel-based micro- and mini-grids, rechargeable batteries and solar pumps. They should discourage rural consumers from using diesel generators and instead encourage them to adopt renewable energy and energy efficiency measures. In this massive endeavour, continued policy support and effective implementation of the various schemes and incentives for distributed renewable energy sources (including distributed solar and biofuels) are necessary. Going forward, the realignment of policy priorities with proper implementation will ensure reliable, affordable and sustainable power for every household in the country.

Based on the report, “Rural Electrification in India: Customer Behaviour and Demand”, by SPI and ISEP

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