In an attempt to provide power to remote parts of the country where it isn’t possible to have a grid, the government is providing a Rs540 crore grant for what it terms decentralized distribution generation (DDG) projects.
Power distribution in India, and in most parts of the world, is through a distribution network called a grid. Companies and utilities generating power pipe it into the grid, and those buying power pipe it off the grid. However, it might not be economically viable to expand a grid into remote and inaccessible locations.
In such cases, countries use a so-called off-grid approach to supply power. China, for instance, uses this approach in some remote areas.
The Rs540 crore grant the government plans to give for DDG projects will be managed by the ministry of new and renewable energy (MNRE).
“We are planning to support decentralized distributed power generation projects having small capacities in a big way in India, where the power will be supplied locally. This fund will be disbursed by MNRE,” a senior government official who did not wish to be identified said.
The fund will help take electricity to around 18,000 villages located in remote and inaccessible areas. The DDG projects will use available local energy sources such as bio-mass and wind. The government plans to complement these by encouraging the creation of several power plants which can together generate 5,000MW.
Distributed generation is a standard technology that is available off the shelf. The government has adopted this approach as the country’s efforts to supply electricity in remote areas using the national power grid have not been very successful.
The success of the government’s strategy to provide electricity to every household in the country could depend on efforts such as this. 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, according to data with the Union power ministry, out of 13.83 crore rural households, only 6.02 crore households (44%) have access to power.
“It is a great idea. However, going forward, there are two challenges, this amount will not be sufficient to cover a large number of villages. The government will have to come up with a comprehensive scheme for operations and maintenance as well and not only generation. 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,” said Kuljit Singh, partner at audit and consulting firm Ernst and Young.