100% RURAL ELECTRIFICATION? The Reality Check

By Subhajit Roy, Group Editor

Electricity is a key constituent for the economic growth of the country and is directly linked to GDP of the country. Rural electrification is required to meet surge in demand for power in India due to increase in capacity utilisation, industrialisation, urbanisation and population.

Rural electrification enhances the demand of transmission and distribution (T&D) equipment which shall help to electrical industries to utilise their production capacity.

Energising every village in the country with electricity is on the top agenda for the successive governments in India. Since 2000 around half a billion people have gained access to electricity in India, with political effort over the last five years significantly accelerating progress. However, this initiative got momentum with the present government’s thrust on providing 24×7 electricity to all households by 2019.

The International Energy Agency (IEA) recently termed India’s move to electrify every village as “one of the greatest success stories in access to energy in 2018”. Earlier, in IEA’s Energy Access Outlook 2017, India was considered as “a bright spot for energy access”.

IEA, the global energy watchdog for the developed world, said, the Deen Dayal Upadhyaya Gram Jyoti Yojana scheme is a prime example of coordinated government action. This scheme focused on strengthening distribution networks and increasing village and household connections by co-funding network upgrades and extensions. Over 99 per cent of people who have gained access in India since 2000 have done so as a result of grid extension – the focus of government measures. The government has more recently been targeting mini-grid and stand-alone solar home systems to deliver access to some of the hardest-to-reach homes.

“Electricity can increase productive hours in a household leading to positive outcomes on education and economic wellbeing. It can also spur innovation and lead to entrepreneurial micro businesses ventures, and in time lead to greater agricultural yields. Benefits also flow to the likes of schools, banking and medical services,” experts at the agency said.

Power Minister RK Singh said, “The country is on path to achieve 100 per cent household electrification by 31st March, 2019 and our next goal is 24×7 power for all households.” He informed that 2.5 crore households are electrified under Saubhagya in a record time of 17 months.

Data available on the power ministry’s Saubhagya dashboard showed that out of total 21,34,53,076 rural households, 21,34,30,385 are already electrified and 22,691 homes which constitutes to 0.01 per cent are yet to be electrified. Experts claim that the present government is doing progressive and excellent work in electrification sector. Last year, in World Bank Electricity accessibility list, India moved to 73rd positions from 99th position. India is also now the 3rd biggest power producer country in the world.

However, explaining the ground reality of ‘100 per cent household electrification’, Anil Saboo, Chairman of CII Rajasthan, said, “More than 30 million households still don’t have access to electricity. According to the government, a village will be called as electrified if 10 per cent of the total number of households in that village has access to power. So, even if in a village, 90 per cent of the population don’t have power connection, it will still be considered as electrified village.” Mr Saboo is the CMD of Jaipur-based Elektrolites (Power) Pvt Ltd. Also, he is presently the Chairman of ELECRAMA 2020.

A survey states that only 71 per cent of households in India have access to power connection. This is quite obvious that urban areas have more connections than rural areas. Only around 60 per cent of rural households have access to electricity. People wish for reliable energy which they can use when and where they need it.

According to Mr Saboo, “While it is true that we have achieved 100 per cent electric coverage in India but still around 60 per cent of rural households have access to electricity. Government claiming is simply means that basic infrastructure like transmission lines and distribution transformer has reached in all villages of India and they are now connected to power grid.”

Preparedness of Utilities and DISCOMs

India has made rapid progress in rural electrification over the past decade. To improve generation capacity or purchasing power, the state’s electricity sector must be in good shape.

However, according to Mr Saboo, power distribution companies (DISCOMs) continue to struggle with their financial turnaround plans despite implementation of the centre’s mega loan recast scheme called UDAY. “Unable to charge cost reflective tariffs, DISCOMs have been resorting to widespread load-shedding to check their operational losses,” he observed. Many state electricity DISCOMs have to sell electricity at prices well below the cost of generation, transmission and distribution. The distribution infrastructure is overburdened, as the demand has grown, causing a high level of technical losses and frequent breakdowns. The distribution network capacity in several states is inadequate to carry available electricity.

“While the performance of DISCOMs is improving, they are still not at the performance level to supply electricity 24×7. The only hope of the utilities is continued assistance from the state governments,” Mr Saboo observed.

On their own, the many of the DISCOMs right now are not ready to provide 24×7 powers. The first and foremost is their financial health. Most of them are not financially capable to do this. Also, only some of the DISCOMs have the infrastructure to supply good quality power on a sustained basis. But, in Mr Saboo’s opinion, if the respective state governments continue to give financial support and assurances to the DISCOMs, then this could definitely improve.

The state’s electricity DISCOMs’ financials must be improved for the development of country in both case growth as well as economic development.

Quality of power supply

It is very important that connected households receive adequate level of services because the size of the benefits of electrification depends on the reliability of electricity supply. Despite all the stories of progress and success on household electrification, availability of “quality power” remains the biggest concern.

The reliability of electricity is still low compared with the international standard Global Competitiveness Report ranks India 80th among 137 economies in the reliability of its electricity supply in 2018. Both policies and politics need to shift focus from universal connections to upgradation of quality of supply and services, opines Mr Saboo.

Today, DISCOMs have been resorting to load shedding while their contracted generation capacities are underutilised. Adding new load to the existing fragile distribution network will only compromise the quality and reliability of supply. It could result in continued blackouts for the rural poor during peak hours. DISCOMs should emphasis on building Smart Grids and IoT based equipment to deliver quality power, he suggests.