This column first appeared in the Hindu, on October 7, 2014. Like other products of the Brookings Institution India Center, this is intended to contribute to discussion and stimulate debate on important issues. The views are those of the authors.
No one would believe that simply owning a smart phone would be enough to go online and get connected — one would still need a data connection for that to happen. Similarly, it is time that we added a similar level of service to define electrification, a focus area for the government.
A decade ago, a village was deemed electrified if it had a single light bulb connection. Subsequently, the definition was upgraded requiring at least ten per cent of homes to be electrified including all common or public areas such as schools and clinics. Based on this definition, the flagship Central government programme Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) electrified over 18,000 villages annually for several years, leaving out only some five per cent remote and distant villages which were being targeted for off-grid (decentralised) electrification.
However, the 2011 Census showed that if we considered household-level data, only 55.3 per cent of rural homes used electricity as the primary source for lighting. The figures were lower for houses with a wire as per National Sample Survey data. This presents two problems before us. First, is the household electrified? More importantly, is there power when needed? A question in the FAQs (frequently asked questions) section of the RGGVY website explains this problem better: “My village has been electrified but there is no electricity, how could RGGVY help?” The answer to this goes thus: “Ensuring supply of power is the responsibility of the concerned State power utility. RGGVY does not have any role to play in this regard. Concerned power utility may be approached for the same.”
Perils of load-shedding
Load-shedding — the bane of India’s power supply system — is far worse in rural areas than metros or large cities. There are regular reports in newspapers of 15 hours of load-shedding in some areas. Until there is power supply available in villages, a household isn’t meaningfully electrified, though it may have a line laid out.
Load-shedding is meant to handle a shortfall of electricity where supply is less than demand, inclusive of losses. An entire feeder is switched off for some time. This includes typically hundreds, if not thousands, of homes or consumers. In theory, there is meant to be a schedule for load-shedding, but many areas also face unscheduled load-shedding. Rural areas face an additional challenge in the supply schedule due to the use of irrigation pump sets, which are heavily subsidised and need three-phase power supply. To ensure households get supply during periods of need, most States only give the so-called single-phase supply during the evening (6-10 p.m.) — good for households but not for most pump sets.
Regulators aim to limit load-shedding, but targets are often violated, both by way of scheduled and unscheduled outages. Worse, we really don’t know the true picture since most States don’t report per feeder load-shedding, breaking it down to hourly or half-hourly data. Load-shedding actions are taken manually at the substation level so there is limited data. Karnataka is an exception here with a real-time monitoring system for every feeder. Analysing per minute feeder data across most of the State, we have verified the reality of very high rural load-shedding across multiple seasons. This is, effectively, a cross-subsidy from rural homes to urban homes. We believe this is not atypical, and most States are similar; some worse, some better, notably Gujarat.
While we need and might even have a wire to the home as a first step, the first threshold for electrification should be at least 50 per cent of homes in a coverage area (i.e., the majority). More importantly, we should add actual service provision, including no load-shedding, to the definition of meaningful electrification. Given our supply shortfall which will take years to resolve, we could start by demanding, say, 98 per cent supply during the peak hours of 6-10 p.m. and 6:30-8:30 a.m., allowing a small buffer for unexpected shortfall in supply. If this isn’t met, then the feeder, which covers more than a village typically isn’t meaningfully electrified.
With such a norm in place, utilities will have to do a better job of managing shortfall, including monitoring where and when load-shedding occurs. When unavoidable, utilities must stick to a transparent, equitable and well-advertised schedule for load-shedding. Unscheduled load-shedding should be penalised. Finally, for household-centric basic supply provisioning, during the evening peak, utilities may need to procure additional peak supply from generators, which will raise overall costs slightly.
Gujarat, an exception
There is a proposed scheme of feeder segregation in rural areas to separate households from pump set supply, allowing them uninterrupted supply. This was originally implemented successfully in Gujarat, and now by the national-level Pandit Deendayal Upadhyaya Feeder Segregation programme. However, there are a few reasons to be cautious of taking the practice to the national level, since other States have tried similar programmes with varying levels of success. State-to-State variations were recently documented in a major World Bank report apart from other studies. Feeder segregation will only help the evening peak to the extent of avoiding unwanted pump set loads on single-phase supply through phase converters. This is only a small fraction since most pumps are already segregated as per phase supply. Most States have a large deficit, with the exception of Gujarat. Also, the consumer profile in Gujarat is different from many other States, amenable to rural non-pump set loads. Lastly, any scheme requires political will for enforcement and consumer trust in the utilities or the government, which again varies from State to State.
Feeder segregation should be taken up in parts, applying viability analysis to choose deployments instead of blanket roll-outs. Thinking of the future, instead of just differentiation of households from pump sets — which can be done in the most part in phases — it would be better if we think of the next level of transformation and put in place smart meters to differentiate one consumer from another. With such a scheme in place, not only can we give a minimum threshold, but also a lifeline supply of electricity to all consumers, including during shortfall. We can also easily give socially important users such as schools and clinics 24*7 power supply. This is before the many other benefits of a smart grid.
The earlier view of electricity as a commodity at a fixed price is changing, as we now recognise that not all units of power are equal — the time of day, location, and even source (fuel) impact its cost, price and value. The most valuable energy for a household is the first unit of power, invariably used for lighting and charging a mobile phone. Thus, we need meaningful electricity service, not merely a wire connection to every household.
[On India's renewable energy capacity goals] [This] target implies annual growth of 25 percent — a targeted buildout rate even faster than China’s, which is widely seen as the world’s leader in deploying renewable energy.