Rural Electrification in India: Status Report & Opportunities in Mini Grid & Renewable Segment

Rural electrification is often considered to be the backbone of therural economy. Rural energy needs include energy for a) Cooking b) Basic lighting c) Irrigation d) Communication e) Water heating f) Cottage industry and so on. Development of rural electrification intoday’s context, rural electrification has five major facets:

  • Setting up of Rural Electricity Infrastructure
  • Providing connectivity to households
  • Adequate supply of desired quality of power
  • Supply of electricity at affordable rates
  • Providing clean, environmentally benign and sustainable power in efficient way

Rural Electrification (RE) has been in the focus of policy makersfor the past several decades. However this policy priority has rarely translated into effective schemes on the ground. India has always had a rural economy and since independence successive governments have tried to improve the rural infrastructure including energy infrastructure. However, a lot is yet to be achieved to give areal impetus to rural economy.

The Electricity Act 2003 (EA 2003), National Electricity Policy 2005 (Power, National electricity policy), National Tariff Policy 2006 andRural Electrification Policy 2006 are some of the major policy and regulatory initiatives supporting rural electrification programmes.

Current government has announced 24X7 Power for All by 2019. Comprehensive state-specific action plans for 24×7 power to all homes is being prepared in partnership with respective states, encompassing generation, transmission and distribution. MNRE initiated rural electrification projects using renewable such as solar PV, biomass, small hydro power since early 1980s. Evolution of renewable energy technologies and products have now opened new frontiers for renewable energy based rural electrification using solar lighting products, DC and Ac mini-grids, smart micro grids, and eventually grid interactive micro and mini-grids which cancomplement the grid extension program which will surely attract private participation and Investment in Electrification of Rural India. Recently announced enhanced targets for renewable energy programmes by MNRE (175 GW by 2022) are in phase of bringing in new investments and give impetus for rural electrification through renewable energy.

Recently announced “Saubhagya Scheme” has a planned outlay of Rs 16000 Crore as contribution required towards electricity connections for all rural and urban households currently without any access to power. Besides, it is likely to benefit for the capital goods industry, especially players in the distribution segment, Renewable Segment, Solar & Other Renewable Developers being derived from boost in energy demand, apart from improving the quality of life for rural households.

For faster, reliable and effective rural electrification a unified model for implementation is necessary. An integrated policy framework would help in this regards. Government is in the process of optimizing regulatory framework to support Mini grids with variety of sizes based on solar, wind, small hydro or biomass power. These are promising candidates for sustainable business model for rural electrification port min-grid based rural electrification which can be sustainable in long term.

This report covers various aspects to overcome this stalemate and suggest alternative approaches on rural electrification in India. Various models of rural electrification have been comprehensively presented as per the provisions of the Act and based on the prevailing conditions in a particular area. Relevant Suggestion for success of business in Rural Electrification has also been incorporated, so that the emerging solutions are of practical relevance with wide applicability.


Source :

Smart Grid Bulletin February 2019

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