Photo: Saksham Nijhawan, EAPF

Thoughts on quality electricity access in rural Jharkhand

How does a rural Santhal tribal community perceive electricity access?

Jharkhand is one of the most diverse states in India with 32 recognized indigenous tribes accounting for more than 26% of the state’s population. The village of Kantasola is inhabited by one such tribe, the Santhals, known for their art, handicrafts, bow and arrow skills and, spot-clean villages and houses.

As a part of Energy Access Policy Fund (EAPF) managed by Forum for the Future, I was in Kantasola village to understand what energy access means to this village, if a smart decentralized solar energy system could answer rural community’s questions (a few of my own too) and if it would have any long term impact.

What does energy bring?

“It makes our work easy”
“We want to watch television during the day when we do not have work”
“My daughter can study in the evening; she helps me in household work and does not get enough time during the day”

A lively discussion with community members of this village brings up the positives of having clean energy for lighting. Currently the village receives a basic single-phase power supply enough only for a light bulb in each house and an occasional fan.

The power supply from the grid is erratic with frequent and unplanned power cuts. As pointed out by one of the heads of this village, the power is unsuitable for productive use due to low and unreliable quality and has a limited impact apart from basic (and limited) lighting. Listening to the community members (largely male, women either stayed away or were collecting water for the day), it was clear that quality energy is as important as the access to energy.

“We tried to use electric rice processor. Its motor burnt out because of bad quality power”
“I have a grocery shop in the village, I could not run a fridge because the spikes in power kept burning out the regulator coil”
“We know that we can sell processed rice and grains at a higher price in the market, but how do we run a grain processor if there is bad electricity?”

Who pays for electricity?

Most households in this village have BPL (Below Poverty Line) electricity connections which are usually unmetered and heavily cross-subsidized by the government. It is a trend that is common throughout states rapidly expanding their electricity grid to earlier un-electrified villages. BPL households in this village are charged a flat fee of Rs. 60 per month (depending on state regulations it could go up to Rs. 150 per month in other states). Even at such low subsidized rate, state utilities struggle to collect payments from rural customers. They also suffer from power theft and significant losses due to under-maintenance. Unsurprsingly, Jharkhand’s Aggregated Transmission and Commercial (AT&C) losses are to the tune of 30%.

Collecting payments from rural consumers is a challenge for the state, both in terms of logistics and consumer behavior. With positive response in payments from rural consumers, utilities can quickly and easily expand their service network which can largely overcome the challenge of logistics. It comes down to behavior change in rural consumers which poses as the biggest challenge. Multiple studies report that not only rural consumers’ buying power and preferences are changing, but quality of products or services is a major factor that rural consumers consider while making choices of what and how much to spend on. Rural aspirations are fast changing and progressing, a huge opportunity for utilities, both centralized or decentralized.

“I do not mind paying more for better quality and reliable electricity. I can process grains within my village, set-up a small unit and even charge farmers from nearby villages to use my processing machines”
“I would like to keep cold beverages and ice-creams in my shop. In this heat, children and young love to drink beverages and eat ice-cream. My sales will go up; I can even get a separate connection for my shop if there is good supply”.

It is a chicken-and-egg situation. Utilities expect better payments and behavior from rural consumers while rural consumers demand better quality of power which they can pay for.

Can quality electricity create significant impact?

The discussions above bring out an under-utilized opportunity: rural energy enterprises. Rural energy enterprises can be operated in two ways, (a) business-to-consumer (B2C) and (b) business-to-business and business-to-consumer (B2B + B2C). The former model has lower capital investment, high cost recovery and faster customer reach. On the other hand, such models have limited quality energy (usually have a single point of light and charging) and customer base. The latter model usually consists of a relatively large capacity which uses a commercial anchor point (medium sized rural enterprise or industry, telecom tower or even feed into the grid) in addition to micro and small enterprises and households. Such a model requires high capital investment but are capable of providing quality energy at relatively lower costs to households.

The decentralized renewable energy (DRE) sector in India has deployed versions of both models, although studies have reported mixed success with varying impact. But expertsevaluators and implementers have all argued that access to quality electricity for productive uses can enhance the impact created by providing energy access. Another way of ensuring significant impact and long-term sustainability is linking DRE rural enterprises to operate government and non-government initiatives such as Public Distribution Systems (which aim to provide essential food and non-food products at subsidized prices to ensure food security amongst poor), health centers, agriculture input products (seeds, fertilizers), irrigation pumps and drinking water supply.

It would be interesting to see such a model being implemented at a district level where a government regulated decentralized energy enterprises model is used to provide various services and subsidies are provided directly to the consumer (Direct Benefit Transfer).

For now, the farmers of Santhal community in Kantasola will continue to use diesel powered grain processing machines or sell unprocessed grains in the market at low prices. But there is a sliver of renewable energy powered hope in the village. A state government sponsored program has given the village a drinking water storage tank and solar powered water pumps. The women do not have to travel long distances to fetch water in summer. The Dumaria block office also plans to better utilize the solar pump system to power food processing machinery as a secondary resource when solar pump system is not in use.

I hope that not just Jharkhand but other states in India take positive and concrete steps through policy, regulations, financial benefits and institutional support to help develop an open market for decentralized renewable energy solutions that can cater to productive loads; while the state government can focus on improving and enhancing household energy access.

Energy Access Policy Fund (EAPF) is jointly set-up by UK Department for International Development (DFID) and Government of India’s Ministry of New and Renewable Energy (MNRE). It aims to promote decentralized renewable energy through policy framework with a focus on low carbon and climate resilient growth. EAPF is managed by Forum for the Future in India.

This article was written by Saksham Nijhawan, technical advisor to EAPF. It originally appeared on the Forum for the Future website.

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