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India provisions Rs. 5.4 billion subsidy for Decentralized Distributed Generation

Village mini-grids are important components of universal access to electricity in the country particularly for those villages where grid connectivity is either not feasible or not cost effective.

Under the RGGVY scheme launched by Government of India for attainment of Goal of providing access to electricity to all households, a provision of Rs.540 crore has been kept as  subsidy requirement  for electrification of  villages where grid connectivity is either not feasible or not cost effective for  Decentralized Distributed  Generation (DDG) during 11th Plan period. DDG may be from conventional or renewable or non-conventional sources such as biomass, bio fuel, bio gas, mini hydro, geo thermal, solar, etc. The funding is  on the  pattern of 90% subsidy from Government of India and 10% loan from REC or from own funds of the state/loan from financial institutions. The DDG projects would be owned by State Government. Implementing Agencies of the projects shall be either the State Renewable Energy Development Agencies (SREDAs)/ Departments promoting renewable energy or State Utilities or the identified CPSUs. Rural Electrification Corporation (REC) is the Nodal Agency for DDG scheme.  So far, 86 projects have been sanctioned under DDG scheme with 57 in Andhra Pradesh,19 in Chhattisgarh, 9 in West Bengal and 1 in Uttarakhand.

Most of the sanctioned DDG projects are at the stage of Bid evaluation/Award.

In a separate scheme, the Ministry of New and Renewable Energy (MNRE) provides a subsidy of 30% of project cost subject to a maximum of Rs.150/- per watt peak for installation of stand alone rural Solar Photo Voltaic (SPV) power plants with battery storage in a micro grid mode/local distribution network under the Off-grid Solar Applications Scheme of Jawaharlal Nehru National Solar Mission.  This scheme is open to all the States and Union Territories.  So far, one(1) project of 20 kWp capacity standalone SPV micro grid project has been installed in the State of Jharkhand.

 MNRE has released an amount of Rs.30 lakh during 2009-10 for a 20 kWp stand-alone SPV power project at Jhargram village in Gumla  district in Jharkhand.  Rs.50 lakh and Rs.53 lakh were released during 2010-11 and 2011-12 respectively for a stand-alone SPV power plant in Village Jari, Gumla district in Jharkhand.  During 2011-12, MNRE has sanctioned 533 kWp for SPV micro grid projects in the States of Uttar Pradesh(U.P) and West Bengal.  An amount of Rs.45 lakh has been released for projects in U.P.

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