In the Union Budget 2017, the Finance minister announced that about 10 million people would be lifted from below poverty line (BPL). It is a worrisome fact that millions of citizens are still struggling for food and livelihood. However, it is heartening to see that the government has been trying to phase out poverty. In the Union Budget-2017, the Finance minister expressed the intent of the Modi Government to increase investment in the rural sector, agriculture, infrastructure, and allied sectors to boost income generation and improve livelihood. Increasing budgetary allocation to Rs 48,000 crore for Mahatma Gandhi National Rural Employment Act (MGNREGA) scheme is meant for asset creation and employment generation. Similarly, housing for all would enhance economic activity and generate employment. Government’s concerted efforts would improve living standards for millions living below the poverty line.
There are several questions relevant to poverty eradication. Some of them need serious attention: What is the linkage between economic poverty and energy poverty? Can we address economic poverty without addressing energy poverty? Unlike economic poverty, energy poverty is yet to be clearly defined. For this discussion, energy poverty is defined as lack of access to modern energy at affordable prices as and when needed by the consumer to progress well. At this juncture, it is quite difficult to draw the baseline energy need for an Indian house hold, because energy needs go beyond lighting and cooking.
At a macro level global comparison on per capita energy consumption provides a perspective on energy poverty in India. As per the World Bank energy consumption statistics, in 2013, per capita energy consumption of India stood at 606 kg of oil equivalent, 2.25 times higher than 1971. India’s per capita energy consumption is much lower than US, Canada, Germany, and China.
Among the top 15 economies based on GDP (2015), India’s per capita energy consumption was the lowest (Fig.1). One could argue that due to India’s higher population the per capita energy consumption is lower than the world average (1894kg of oil equivalent). But China’s per capita energy consumption is almost 3.7 time higher than India; the jury is out there. India’s per capita electricity consumption (765 kWh) is almost one-fourth of global average. Now our knowledgeable readers are well placed to evaluate acuteness of energy poverty in India.
Multiple factors responsible for energy poverty include: lack of affordability (linked to economic poverty), lack of access to modern energy at the point of consumption (due to non-existent/poor distribution infrastructure), and lack of political willingness to deal with energy poverty. In 2010, a report by the Word Bank suggested that energy poverty is far more acute in rural India compared to the urban India. Further, energy poverty is worse than economic poverty in rural India. Therefore, energy poverty needs serious attention at all levels.
Integrated Energy Policy (IEP) launched in 2008 aimed at ensuring availability, accessibility and affordability of energy to all residents of India. To improve accessibility of energy, previous Government launched rural electrification schemes and the current Government takes it forward. The FM announced that all villages will be electrified by 1st May 2018; an additional Rs. 4,814 crores allocated under the Deendayal Upadhyaya Gram Jyoti Yojana in 2017-18. The Government may achieve the target of electrifying remaining 5,665 villages within the stipulated time. However, it may not be sufficient enough to declare a win over energy poverty. Because, definition of rural village electrification probably has statistical significance only; as the current definition ignores quality, quantity, and continuous supply of electricity.
Affordability of energy has been a subject of debate for economists, policy makers, regulators, and political class. Often the political class wins the debate by placing “welfare state” argument ahead of all other concerns, possibly the sociologist would feel good. So, most of the unviable actions including ‘free energy’ have been justified. Anything offered free, the users are virtually at the mercy of free service providers. As a result the voter or consumers have been constantly obliging the artificial godfathers who are destroying long-term sustainability over short-term gains. So far, the fundamental concept of ‘free energy’ even couldn’t ensure reaching out to millions of people suffering from energy access.
Modern India needs a departure from the failed fundamentals and devise a market mechanism suitable for the betterment of society. It is better to have paid electricity for 24X7 than free electricity connection only - practically little or no electricity.
The Integrated Energy Policy is set to be replaced by National Energy Policy, which is expected to be far more inclusive and objective oriented. In the New Policy, the environmentalist would press for cleaner energy, economist may push for ‘no free energy’, and business houses would strive for profitability. In the context, the Government’s role is far more integrated; so the government would aspire for a balanced approach to address concerns of all the stakeholders including the political class. In the process, the final outcome should be eradication of energy poverty. The question is: how long can India wait?
To eradicate energy poverty, acknowledgement of the same is very important. Efforts are being made to improve access of energy at affordable price points. More importantly, focus has shifted to cleaner energy. Modi Government is working tirelessly to increase share of green energy in the economy. India targets 40 percent of renewable energy in the energy mix by 2030.
The Modi Government seems to have launched many programs and schemes to reduce energy poverty and boost livelihood for rural India. The Pradhan Mantri Ujjwala Yojna is one of such initiatives to increase penetration of liquefied petroleum gas (LPG) from about 58 percent in 2016-17 to 80 percent in 2018-19. About 50 million additional BPL households would have access to LPG by 2018-19 and they would be relieved from using cooking fuel like firewood, coal, and dung. In the Union Budget 2017, the Government allocated Rs. 2500 crores for LPG connections to poor households.
Simultaneously , mega scale solar plants, solar parks, onshore wind farms, and plan for exploitation of off-shore wind – are poised to address grid connected future power needs in the country. Also, other clean forms energy like small hydro is poised to address energy needs of hilly states or hydro resource rich states. Micro-grids and mini-grids are emerging as new models to address grid related challenges.
However, to deal with energy poverty, India needs go beyond grid connected power. To phase out energy poverty in a time bound manner an integrated energy solution needs to be pushed with an urgency.
In this context, off-grid or decentralized energy solutions must be given equal priority. Linkage of energy with livelihood is likely to score over free energy philosophy. There are enough evidences that availability and accessibility of energy gradually boosts affordability. Linkage of energy with livelihood augments income generation; therefore willingness to pay for timely availability of quality energy is high. In rural India, cleaner forms of energy like solar at decentralized level could be a solution. Solar roof-top could emerge as a source of income for households in the rural and urban areas. Installation of solar pumps could be a game changer for farmers. So far, 92,305 solar pumps have been installed. The Government should target to replace all fossil fuel based pumps with solar pumps. To exploit complimentary renewable resources, penetration of solar-wind hybrid systems must increase. Waste-to-energy in the urban and rural areas must be exploited to meet incremental energy needs. During 2014-15, 33 projects sanctioned for generation of energy from waste. It is important to note that bio-gas plays crucial role in reducing energy poverty and currently family bio-gas plants are serving the needs of about 4.94 million households. The Government must push for large scale commercial use of hydrogen in the transport sector. Gradual shifting of mobility sector towards hydrogen and electricity should be helpful to reduce energy poverty.
Railways initiative to solarize stations would immensely contribute to employment generation and energy security. Similarly, the road transport should develop solar based bus stations/stops to eradicate energy poverty at the public places. Indian ports should capitalize on renewable resources for meeting their energy demand.
Quite often ‘free energy’ leads to callousness on the part of consumer and conservation of energy remains a dictionary word. Consumers need to understand that one unit of energy saved is one unit of energy produced. I believe the Petroleum Conservation Research Association and Bureau of Energy efficiency are pushing the agenda vigorously. Therefore, energy saving and energy efficiency, put together could contribute significantly to eradicate energy poverty.
Government’s noble intention of lifting 10 million households out of poverty and making 50,000 gram panchayats poverty free by 2019 is commendable. My humble submission is that India should pay attention to energy poverty with utmost seriousness. All stakeholders should take responsibility and support the Government to make India ‘energy poverty’ free by 2030.
DISCLAIMER: The views expressed are solely of the author and ETEnergyworld.com does not necessarily subscribe to it. ETEnergyworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.