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Renewable energy can help bridge energy deficit in India, check govt’s subsidy burden

According to reports, switching rural India on to renewable energy sources could help the country bridge its widening energy deficit, according to the Planning Commission. The panel has suggested diversification of the rural energy basket as a measure to deal with the shortage of fuel at thermal power stations and to check the government’s rising subsidy burden.

“There is a need to change the basket of our energy sources,” a Planning Commission official said. “Meeting the needs of rural India through renewables seems like a good way to go and we will try to do that in the 12th Five-Year Plan.” In an assessment done jointly with the ministry of new and renewable energy, the commission has pointed out that the cost of setting up and maintaining biogas infrastructure for rural India would be just 9% of what the government would spend on supplying liquefied petroleum gas (LPG) to villages over the next 15 years.

According to the ministry’s estimates, setting up biogas plants would cost the government .`4,300 crore over the next 15 years as against Rs43,200 crore required to enhance production and distribution of LPG over the period.

The commission has said that the government’s plan to provide electricity to all of India’s villages under the Rajiv Gandhi Grameen Vidyutikaran Yojna by 2020 would not be feasible unless it enhances alternative sources of energy. At present, about 40% of the country’s rural households have no access to electricity.

“We have gone over the issue and it is a cause of concern,” the commission official quoted earlier said. “Going ahead, rural needs for energy will increase and we are nowhere close to provide them sustained electricity supply.” In a presentation to the commission, the ministry of new and renewable energy admitted that providing electricity to all the villages was difficult. “It is unlikely that all households will get electricity by 2020, as utilities have no incentive to provide electricity to villages because the delivered cost is higher and recovery is lower,” the ministry said.

It said an alternative was to ensure supply of lighting first and electricity later through the renewable sources. For doing so, the ministry has suggested introducing more incentive-based schemes and expanding the scope of existing schemes which provide 60% subsidy for rice huskbased power generation plants and 90% subsidy for setting up solar charging stations in villages, which are only applicable in few states as of now. “Such incentives need to be increased,” said a ministry official. “Currently, most of the work is being done by village groups themselves, but incentives should be given for the private sector to be actively involved as well.”


To ensure the need for cleaner cooking fuel for rural households, the central and state governments already have schemes to increase LPG penetration in India, which is about 25% in rural areas at present. The ministry has told the commission that it would be able to provide 7.3 million tonnes of biomass for electricity generation by 2020 at a cost of Rs1,300 crore. The project would provide alternative cooking fuel to about 20 million rural houses and employment to 2 lakh people. Most biomass plants in the country are funded and run by nongovernment organizations or village self-help groups.

“In case of community-based clean development mechanism (biomass plants), support from the government is crucial,” Sreymsa Bairiganjan, senior researcher at delhi-based Institute of Financial Management and Research said in a research paper. He said without the government support, projects do not receive trained technical personnel for maintenance, which results in the projects becoming economically unviable over a period of time. “The Planning Commission also believes that government now needs to support such endeavours as there is no other way out,” the commission official added.

Independent analysts however find the government’s projections to be ambitious. Availability of biomass, transportation issues and competition for available biomass raw material in industrially developed states like Haryana and Punjab. “There are many hurdles and most of the government’s estimation of biomass availability is very optimistic. Some of the existing initiatives have also not been very successful,” said Amit Kumar, associate director with PwC.

One comment

  1. I have also been working in this field for the last three years and found that sustained or continuous availability of biomass is doubtful. i tried to find feasibility for installation of biomass plant in western UP but could not find adequate bio mass for sustaining for long period.What we need is plant with biomass and either coal,gas or diesel. Depending upon availability a suitable plant with dual fuel cycle is needed. The plant should be small say 500kw or 1000kw.

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