The government wants to turn on the lights in 1.19 lakh villages without electricity by using an experimental technology.
The move is reminiscent of China’s off-grid approach to power distribution, which lifted up its rural areas.
Only 44% of India’s villages currently get electricity.
State-owned NTPC Ltd, India’s largest power generation company, has been given the go-ahead to create wood-fuel based power plants to supply villages with their basic lighting needs. To start with, NTPC will set up 60 such units of 20 kilovolts (kV) to 100kV each, at a total investment of Rs21 crore.
If these projects are successful, the number of villages may be increased to 500 in the following year and then replicated across the country.
The government is already willing to fund around 1,000 such projects, which will take the total investment to Rs350 crore.
The scheme works like this. For extremely poor villages in remote areas, the government has decided to set up these small power units free of cost. For villages with moderate incomes, a 70% grant will be provided, while the rest will be financed by the villages themselves. For affluent villages, there will be no grant from the government.
“More than 94% of China’s households had electricity in 1994. Part of this success must be attributed to its distributed approach to power generation,” says Santosh Mehrotra, senior consultant, Planning Commission, who looks after rural development issues.
Decentralized distributed generation (DDG) means that power generated in an area is used locally, without being brought into the national grid. Till date, India’s efforts to supply electricity in remote areas using the national power grid have not been very successful.
Says Kuljit Singh, partner at accounting firm Ernst & Young, “DDG makes a lot of sense in far-flung areas as the cost of setting up a power transmission network and providing electricity becomes unviable.”
The government wants to provide power to all by 2012, but although power distribution companies have spent around Rs88,000 crore in the last decade, only 43.5% of rural households can currently get electricity.
“In 60 years of independence, we have been able to provide electricity to only about 44% of the villages. If we can make projects such as NTPC’s work, we can be ambitious enough to say that all villages will have electricity in four to five years,” said Mehrotra.
To claim electrification, the government must now not only take a part of the grid to a village, but also provide power connections to the gram panchayat, school and primary health centre as well as ensure electricity in at least 10% of the village houses.
The government plans to set up 5,000 megawatts of capacity through distributed generation during the current plan period, which runs through 2012.
NTPC already has six distributed power generation units up and running in Chhattisgarh, Rajasthan and Uttar Pradesh. The company’s plan is to set up 10 new units in the current financial year, each catering to up to 100 houses.
NTPC has been chosen as the executing agency for this project due to its pan-Indian presence. “We will prepare detailed project reports for the remaining projects in the current financial year and will be using fallen forest wood as fuel,” said a senior NTPC executive associated with the scheme, who did not wish to be identified.
Wood is a commonly available resource even in the dry parts of the country, such as Rajasthan.
But it is unclear how NTPC plans to go about finding enough wood-fuel for the proposed project, especially if it wants to avoid felling trees. “As far as pollution is concerned, wood fuel is carbon-neutral and far less damaging to the environment compared to burning fossil fuels. Deforestation won’t be a problem if eucalyptus and casurina trees are going to be razed, because they grow back within a few years,” said Varghese Paul who is with the forestry and biodiversity division of The Energy and Resources Insitute, here in the Capital.
While Paul believes the China model to be “rather successful” and welcomes the NTPC approach, he remains concerned about the impact on trees. “Using twigs fallen off trees (for the project) seems quite unlikely as very little biomass can be generated,” said Paul. “I believe a certain amount of tree-felling will occur.”
Jacob Koshy contributed to this story.