Government Approves Scale Up of Access to Clean Energy Program

The Government has approved the launch of “Scale Up of Access to Clean Energy” program for the period financial year (FY) 2018-19 and FY 2019-20.

The program is one of the four components under the United Nations Development Program (UNDP) and the Global Environment Facility’s (GEF) project on Scale Up of Access to Clean Energy for Rural Productive Uses (India ACE Project), which is being implemented in the states of Assam, Madhya Pradesh and Orissa.

The funds for implementation would be met from plan allocation made every financial year. The overall cost of the program is ₹700 million (~$10.29 million). The program targets 15,000 beneficiaries in FY 2018-19 and 15,000 beneficiaries in the next financial year.

A total of 19 districts have been identified in the three target states for implementation of the scheme covering 1,500 beneficiaries. Subsequently, it would be applicable to all districts of the three target states covering an additional 28,500 beneficiaries.

The project’s focus is on access to clean energy for rural livelihoods. The project is based on the premise that a lack of access to affordable and reliable energy hinders the growth of various critical rural livelihoods activities such as poultry, dairy, horticulture, animal husbandry, fisheries and other village industries.

It is expected that decentralized renewable energy for electrical, thermal and mechanical applications will catalyze rural livelihood activities to reduce poverty, increase employment and improve the rural quality of life.

The estimated total project cost of this scheme is about $23.04 million, with ₹700 million (~$10.29 million) contributed from the government of India. ₹310 million (~$4.52 million) will be contributed from GEF and UNDP. Lastly, ₹470 million (~$6.85 million) will be mobilized through sources such as state funds and beneficiary contribution.

One of the goals of the project is reducing greenhouse gas emissions, which is to be achieved through reliable and affordable renewable energy for rural productive livelihoods in un-served and underserved areas of Assam, Madhya Pradesh and Odisha.

This is expected tp be achieved by development and deployment of key Renewable Energy Technology Packages for Rural Livelihoods (RETPRLs) applications and the integrated removal of key barriers that prevent the wider adoption of renewable energy in India.

Special focus is to be given on important rural livelihoods such as poultry, fishery, horticulture, dairy, biomass-based local businesses, cottage and other village industries. Due importance will also be given to new renewable energy applications like solar dryers, solar cold storage, and solar aerators.

The program will be implemented through state nodal agencies (SNAs) only by inviting tenders. The Ministry of New and Renewable Energy (MNRE) will provide subsidy to eligible beneficiaries at the rate of 30 percent of the benchmark cost or tender cost—whichever is lower for the renewable energy technology system.

For new, complex and non-commercialized RE technology systems, technical specifications and benchmark costs will be developed separately, while an additional financial assistance (over and above the central financial assistance of 30 percent) will be worked out as per approval from MNRE.

Projects must be complete within 12 months in general category states and within 15 months in northeastern states, failing which a penalty will be levied. However, maximum time allowed for completion of projects inclusive of penal period is 16 months in general category states and 19 months in northeastern states.

Initially, 20 renewable energy technology supply and service providers will be supported to develop a renewable energy supply chain to provide the required equipment supply. Later, 80 additional renewable energy supply and service providers will be selected (financial support will not be given but they will be assisted in developing business plans, and technical training) to set up a supply chain and provide the required equipment supply and services across different districts of the target states.

Existing renewable energy subsidy programs and other support models is to be assessed in terms of effectiveness, reach and efficiency. Alternate renewable energy subsidy and support models may be explored. Mechanisms will need to be explored for the pooling of financial resources available in the form of subsidies, soft loans and more for renewable energy technology providers and users for rural livelihood applications. Recommendations will be provided for easy access of available financial benefits for the renewable energy technology providers and users.

The implementation will come in to effect from the date of issue of administrative approval along with its operational guidelines.

In a country like India where universal electrification is still a distant dream, bringing solar power to its villages is not only desirable but necessary.

In yet another effort to expand the use of renewables in India’s hinterlands, the government recently announced that it is preparing to launch the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) program to bring solar to the agricultural sector using solar-powered water pumps and provide solar-powered electricity to rural areas.

While the Central Electricity Authority continues to forecast energy surplus in the country, there is a significant population in rural India that lack access to electricity.

Image credit: By Marcus334 [CC BY-SA 3.0], from Wikimedia Commons

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.