New Report: Progress on 24x7 Power for All

India’s government has made transparency a centerpiece of its rural electrification campaign, called Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY). A new update summarizing the status of India’s overall energy reform program (called 24x7 Power for All, or Ujwal Bharat) was recently issued, reporting that 73% of villages have been electrified under DDUGJY as of May 19, 2017.

A snapshot of rural electrification from the report is below. A full executive summary of DDUGJY as of June 2017 can be found here.

DDUGJY initially tracked village-level electrification only, but the government has now started to extend that monitoring to the household level. Government officials have said publicly that village electrification could be complete as early as the end of 2017, with total household electrification happening as early as 2019, or latest by 2022.

However, a recent draft National Energy Policy issued by Niti Aayog said India needs to “redefine the concept of ‘Electrification’, as occurs in the DDUGJY, to include stages of electrification in a village, with the village being deemed completely electrified if and only if ALL households of a village have an electricity connection, which witnesses reliable supply of electricity at least for a set number of hours.”

That would be significant change from the current definition of village electrification, which stipulates that just 10% of homes must be connected to power lines to qualify as an electrified village.

 

Uttar Pradesh: Opportunity to Scale Energy-as-a-Service Models for Rural Electrification

An electricity meter in a small Uttar Pradesh town. All new electricity connections are now metered in both urban and rural areas of the state. (Credit: Johnannes Urpelainen)

An electricity meter in a small Uttar Pradesh town. All new electricity connections are now metered in both urban and rural areas of the state. (Credit: Johnannes Urpelainen)

With a population of 200 million, Uttar Pradesh (UP) is India’s largest state. It is also the state with the largest number of unelectrified people. In the 2011 Census of India, only one in four rural households used electricity as their primary source of lighting, and the 2014–2015 ACCESS survey of energy poverty in rural India revealed that the typical grid-connected household only received nine hours of power supply on an average day.

In March 2017, Prime Minister Modi’s Bharatiya Janata Party (BJP) won a landslide in state elections, and the new state government joined Delhi’s 24x7 Power for All program (PFA) in a month’s time. The program sets ambitious targets for electrifying 10s of millions of households and legalizing illegal connections to reduce electricity theft. Meeting such targets with conventional grid extension and metered connections by 2019 — the best case scenario — would be an achievement of epic proportions.

The dilemma for UP is that electrifying rural households is both expensive and may worsen the already serious financial troubles of the state’s electricity distribution companies. Given the current electricity pricing structure, electrifying rural households is likely to produce only limited revenue. Households that are not yet electrified tend to be poor and would consume only minimal amounts of power to start. All new connections in UP are metered, so they allow the poor to minimize their power consumption.

The situation presents an opportunity for innovative approaches. Instead of selling kilowatt-hours to rural households, distribution companies could focus on energy services. They could offer different packages, such as basic lighting and mobile charging, and charge higher fees for additional services, such as fans or televisions. These models would better match the realities of power consumption in rural UP.

Service-based models would also help integrating grid extension and off-grid alternatives, such as solar home systems and micro-grids, which many private companies already use to sell energy services in exchange for a monthly fee. When energy services are provided by private companies, the state-owned electricity distribution companies do not incur losses and their debt does not grow.

Off-grid companies around the world are already deploying service-based models at scale. In India, companies like Simpa Networks installs a variety of solar home systems and then sells pre-paid “energy service days” to customers using mobile payments. In East Africa, M-KOPA and other companies offer a suite of solar products and help people finance them with mobile payments over time. Such models could also be applied to grid connections, so that people would pay a monthly fee depending on their choice of service level.

If the UP state government wants to extend electricity service for all, it needs to find a solution to the problem of finance. The current model will likely further undermine the economics of rural electricity distribution in UP, and experimenting with service-based models could lead to innovative solutions.

Johannes-Urpelainen-300px.jpg

Johannes Urpelainen is the Prince Sultan bin Abdulaziz Professor of Energy, Resources and Environment at the Johns Hopkins School of Advanced International Studies and the Founding Director of the Initiative for Sustainable Energy Policy (ISEP). Follow him @jurpelai

 

Virtually battery-free, 100% renewable, remotely-managed rural utility is coming

A Husk Power Systems biomass micro-grid. The company is now focused on solar-biomass hybrid systems. (credit: Acumen)

A Husk Power Systems biomass micro-grid. The company is now focused on solar-biomass hybrid systems. (credit: Acumen)

Husk Power Systems, an early pioneer in developing micro-grids for poor, rural communities in India and sub-Saharan Africa, plans a 7-fold increase in its power plants to 600 within 5 years, expanding into a fully-fledged rural utility that delivers reliable 24/7 grid-compatible power and better customer service than incumbent utilities.

Husk has already developed and deployed hybrid micro-grid systems that combine and synchronize biomass gasification and solar PV, which CEO Manoj Sinha says are the most affordable micro-grid systems operating in the world today.

“We realized around 2013 that customer aspirations were for more than 5 to 7 hours of nighttime power, which is what our biomass-only system offered. They wanted to be able to switch on any appliance at any time,” Sinha told Power for All. “That’s when we decided to only do 24/7 on-demand power at an affordable price point for customers”.

Husk’s hybrid system, which takes just about a week to install, has allowed the company to significantly reduce its CapEx, and made the need for batteries, which are a major system cost, minimal. And while it is focused on biomass over the coming years, Husk is open to integrating more storage with solar if the economics improve.

 

100,000 reasons not to forget the urban-rural connection in SDG7

Pollinate Energy’s 100,000th customer, Naga and his family (credit: Pollinate Energy)

Pollinate Energy’s 100,000th customer, Naga and his family (credit: Pollinate Energy)

Most international focus on electricity poverty is understandably on remote, rural communities, where 900 million people live without power. But as Pollinate Energy just proved in India, cities also face similar challenges. Pollinate, which distributes solar and other life-changing products to vulnerable urban migrants, just announced surpassing its 100,000 customer.

And the social enterprise, which was started four years ago to end the burning of toxic, dangerous and expensive kerosene by families living in tents, plans to be operating in 20 cities (it is currently in 4) by 2020, reaching 1 million customers, according to CEO Alexie Seller, who is based in Bangalore.

“We know our model works,” said Seller, adding that the enterprise, while still relying on tax deductible donations today, expects to be self-sustaining by 2020. “There is a lot of opportunity to scale. Going through metro cities has been our focus, but now we’re pushing out to tier 2 and 3 cities.” Currently, Pollinate is in Lucknow, Hyderabad, Kolkata and Kanpur.

Pollinate customers, Seller said, are “essentially still villagers” and her company is filling a gap in distribution to meet their needs. It started with solar lighting, but has evolved to include many other products that require electricity (fans, mobile chargers, blenders) as well as non-power related products such as mosquito nets and water filters.

Pollinate customers work on a cash payment plan, usually lasting 1 to 2 months.

Reinforcing the urban-rural connection when it comes to energy poverty, Pollinate is now seeing increased sales to urban migrants that are then sent back to their home villages. “They started doing it without our intervention, and we just figured out ways to leverage that,” said Seller

 

5 untapped apps of solar irrigation

The benefits of solar pumps are not restricted to irrigation, in India and globally. Besides reducing pollution and emissions by replacing diesel generators, they can deliver many other applications, which is critical in India, a country where agriculture accounts for 15% of GDP and more than 50% of the population is dependent on agriculture for their livelihoods.

Here are 5 other applications of solar pumps from Claro Energy’s Priyanka Pandey and Anirban Banerjee.

1. Clean drinking water

Half of the health hazards faced by India are due to unhygienic drinking water. Most available freshwater is underground. The various strata of soil, sand, and gravel found underground filter out most disease-causing organisms and harmful chemicals. Solar pumps can provide drinking water in places facing scarce or poor water supply, erratic power supply, and persistent drought.

2. Fogging

Credit: Claro Energy

Credit: Claro Energy

A “fogger” pressurizes the flow of water and generates droplets to maintain humidity and a lower temperature in cow sheds, especially in the hot and dry summers of Northern India. Foggers can get water supply from solar pumps at a very low maintenance cost, and avoid diesel emissions that could have a dangerous effect on livestock.

3. Pisciculture and aquaculture

In pisciculture, or fish farming, water must be supplied from a height to supply fish with enough oxygen. If this water is run off grid power, fish habitation could be harmed by a sudden power cut and result in loss of livestock due to intense heat or fluctuating temperature. Similarly, water recirculation is a critical element of aquaculture. In such cases, solar pumps can provide a stable and predictable water supply.

4. Generating electricity

Although still costly, if a compatible battery inverter can be connected to an irrigation system’s solar panels, farmers can sell surplus electricity to their neighbors or back to the grid. Solar pumps can, thus, become risk-free income generating assets for farmers. (For more detail on that, see this earlier article about an innovative project from IWMI)

5. Drip irrigation

A majority of farmers in India (whether they use grid, diesel or solar power) do not use drip irrigation, mostly due to a lack of knowledge. Drip irrigation can deliver water directly to crop roots, and supports the introduction of crops that cannot survive with erratic rainfall or grid power. Drip irrigation needs a consistent source of water supply, something that solar is able to satisfy while being cost effective.

 

Indian enterprises are banking on solar loans for sustainable energy access to tribal hamlets

Photograph of the main road in Balisara village, Kalahandi. Entire villages here still spend the nights in complete darkness. This is the photograph of a house that is celebrating a wedding. A diesel generator runs all night because the “grid” barely ever comes on. (credit: SELCO Foundation)

Photograph of the main road in Balisara village, Kalahandi. Entire villages here still spend the nights in complete darkness. This is the photograph of a house that is celebrating a wedding. A diesel generator runs all night because the “grid” barely ever comes on. (credit: SELCO Foundation)

Access to credit is an important pre-requisite for facilitating access to energy. Owing to marginal and unpredictable incomes, rural and tribal families cannot afford to pay up-front the cost of basic systems. Over the years, solar products, heavily subsidized by multiple donors, have been installed in villages without adequate servicing and maintenance. The consequences have been disastrous as many of the villages have turned into junkyards of dysfunctional systems.

Strong doorstep service along with availability of affordable finance at the local level can lead to creation of sustainable long-term delivery models for energy access. Growing number of grassroots based energy enterprises partnering with local financial institutions have installed reliable home based solar systems in remote hamlets on the hills and deep in the forests.

Why is access to credit important?

Decentralized renewable energy (DRE) products when designed as long-term durable assets, their costs are higher than similar products with shorter life times. Cheaper long-term financing makes the expensive, but more durable, products more affordable to the poor: thus helping them own long- term assets. To make financing affordable, the financial products have to be designed to match the cash flows of the various targeted segments. Unfortunately, end-user financing for renewable energy products like solar is still not very prevalent in the many parts of rural India, especially in the tribal belts as the populations are considered very risky from a banker’s perspective.

On the other hand, there are inspiring role models for other bankers to emulate. On such example is Syndicate Bank in the district of Kalanhandi in Odisha. A project conceived by SELCO Foundation along with TATA Trusts, partnered with Syndicate Bank to facilitate long-term financing of solar lighting systems in the area.

Around 20,000 families reside deep in the forests of Thuamal Rampur, in the tribal district of Kalahandi in Southern Odisha. Less than 10% of these households had access to electricity as of 2011. These districts in southern and western Odisha are made up of mostly subsistence farmers with very unreliable incomes. Thuamal Rampur has two banks, but there isn’t much interaction between these banks and the tribal communities. With little or no assets and lacking a habit of savings, local bankers consider these communities “un-bankable” and highly risky to lend to.

Bridging the gap between tribal communities and banks

Supported by SELCO’s Incubation team, Prabhat Pradhan from Koraput started Mukti Solar Energy Pvt. Ltd. in 2015. Having served over 500 remote rural customers so far, the primary barrier to grow was access to credit for their end users and the local banks were unwilling to lend small loans.

The break came in early 2016. Syndicate Bank, one of the early pioneers of solar financing in Karnataka, showed interest in replicating their efforts in tribal Odisha. Initially the branch manager was hesitant as many of the households were living at quite a distance from the bank branch. Several field visits were arranged to convince the branch manager about the need for solar loans in the region. Finally, the upper management of the Bank was convinced and decided to go ahead with a pilot of 500 solar loans in the tribal belt of Odhisa. SELCO foundation, with financial assistance from Armstrong, deposited a partial risk guarantee fund in the local bank, in case of any defaults: thus making it easier for the bank to lend.

To reduce the processing time and transaction costs, group loan applications from Joint Liability Groups (JLGs) were preferred instead of individual loans. With 5–8 families each, JLGs also create peer pressure within the group to pay their share every month, and households can share the task of going to the bank to make payments. Households are also able to deposit money in their JLG accounts during higher income seasons, leading to saving for harder times.

Impact: beyond solar lighting

In the last 6 months, Syndicate bank has sanctioned solar loans for 200 households, and 300 more would be completed in the coming two quarters. With patient hand-holding, the savings and repayments have been successful in the past quarter. For easier repayment options, a banking correspondent and weekly kiosk in Thuamal Rampur are being considered. Observing the experiment, other local banks have come forward to collaborate and replicate the efforts. Some of the other bank branches have also extended their loans from simple home lighting to income generating products like solar powered sewing machines, laptop etc.

The scaling effect of unlocking end-user financing is immense. While solar home systems help provide immediate energy access, they are in many ways an entry point to catalyze much larger development in the region. Banks have always been in a position to be at the forefront of enabling this change. In the process of obtaining a solar loan, remote tribal households are able to build credit histories. It is a matter to time that such examples can be replicated in other remote parts of India and the world: thus, enabling holistic development.

(The work of SELCO Foundation in the region of Odhisa has been supported by TATA Trust, Armstrong Foundation and GIZ India)

 

The Kenya Clean Energy Cycling Caravan

The Kenya Clean Energy Cycling Caravan

The Tour de France might still be one week away, but in Kenya young people are currently cycling across the country to connect with people who do not have access to energy. During the trip the cyclists are meeting with local communities and government officials to promote renewable energy as a clean solution to lack of energy access, ahead of the Kenyan elections that are taking place on the 8 August. This is part of the Big Shift campaign supported by the African Coalition for Sustainable Energy and Access (ACSEA), the Pan-African Climate Justice Alliance (PACJA), Kenya Youth Climate Network and Christian Aid.

So far, the caravan has visited Uasin Gishu, Kakamega, Kisumu and Mombasa counties. In Uasin Gishu, the cyclists met a man who has been using clean biogas for cooking for the last 8 years, and is now starting to use it for lighting and refrigeration, and sharing his experience with other farmers. They then hit the road again to Kakamega, passing through Kakamega forest where the cyclists saw for themselves the deforestation that is taking place due to a lack of alternative affordable energy sources, which has forced local people to chop down the precious trees for firewood. The caravan travelled on to Kisumu, where the cyclists were able to meet the county’s Chief Officer for Green Energy and Climate Change and held an energy policy dialogue with representatives from key government departments to discuss how their plans can be adapted to incorporate climate change and clean energy considerations. In Mombasa, the cyclists were able to meet residents and the Deputy Director of Energy to discuss the potential of renewables. All across the country, their message has been well received and communities and government officials have been keen to discuss renewable energy options further.

Next, the caravan will be travelling on to Makueni, Machakos and Meru, and will be ending in Nairobi on 4 July. You can follow their exciting journey by joining the Clean Energy Now Facebook event, or following the hashtags #CleanEnergyKe #BigShift. Please join in celebrating and promoting clean energy in Kenya!

Cyclists are drawing a lot of attention to their energy access caravan

Cyclists are drawing a lot of attention to their energy access caravan

Sharing knowledge about clean energy access and The Big Shift

Sharing knowledge about clean energy access and The Big Shift

In Kakamega with Deputy Regional commissioner Western Region 4

In Kakamega with Deputy Regional commissioner Western Region 4

Arriving in Makueni

Arriving in Makueni