Rural Electrification

Rural Electrification
Section 4, 5 and 6
Section 14
Provided also that where a person intends to generate and
distribute electricity in a rural area to be notified by the State
Government, such person shall not require any licence for such
generation and distribution of electricity, but he shall comply
with the measures which may be specified by the Authority
under section 53:
Power : The Building Block of
Economy
 Electricity – critical Infrastructural input in the development
and prime mover of economy.
 Consumption of electricity – important Index of advancement
of the country & standard of living.
 Economic growth rate of 8-9% on a sustained basis is
necessary for us to catch up with the rest of the world.
POWER SYSTEM COMPONENTS
Generation Primary Transmission(132/220/400/765KV)

Dhuvara
n
Karamsa
d
CB
Power
220 Steel Tower
Sending
Plant end SS X’mer
(11/220kV)
CB Bus-bar Primary
Bus-bar
kV Grid
(220/66
kV) 66 kV
Commercial GCET
/ Transmissio
Industrial n
Customer
Secondary Transmission(66/132KV)
Distribution
Urban Transformer Primary
VV
Customer (11/0.415 kV) Distribution
s Nagar
Secondary
Secondary Grid
Distribution Distributio
(66/11 kV)
Underground
Cable n Pole
To Other
Residentia 66Kv
Residentia Substations
l l
Customer Customer
Ministry of Power, Government of India
Rural
Electrification
• 28th April 2018 will be remembered as a historic day in the
development journey of India. Yesterday, we fulfilled a
commitment due to which the lives of several Indians will be
transformed forever! I am delighted that every single village of
India now has access to electricity.
• — Narendra Modi (@narendramodi) April 29, 2018
• Even though it has taken seven decades after independence to
reach this milestone of ‘electricity connection for all’, it is
indeed a moment to celebrate.
• This is the outcome of the central government connection
drive that started in 2005, and continued with high political
commitment at the central and state levels.
Why Rural Electrification (‘RE’)

?
 Electrical energyconsidered superior over other energy
forms on account of its Convenience to use, Easy to control, and
Cleanliness
 Electricity : An importantinput for economic and social
development
o Energisation of pump sets - Increase in irrigated area,
Higher intensity of irrigation , Better Cropping
o Increased commercial activities – Availability of Longer time
o Productive loads of small / village industries
o Generation of employment, Elimination of
poverty, Human Development
o Improved medical facilities, communication,
education and entertainment
Rural Electrification – Challenges

 Different from National Highways?
 Rural Electrification – 4 major facets

o Setting up of rural electricity infrastructure – Providing access
to electricity
o Providing connectivity to households
o Supply of adequate power of desired quality
o Supply of power at affordable price
 While progress on creating access and providing connectivity

is encouraging, supply of adequate power at affordable price
is a major challenge
Rural Electrification – Challenges

(Contd..)
 Structural disincentive to DISCOMs to supply power to
rural areas
o High initial capital cost for extending grid because of
geographical spread
o Low load density and slower load growth leading to
unfavorable consumer mix
o Higher cost of delivery and lower tariff leading to further
financial distress to utilities\Low consumer density
o Thefts & Pilferage leading to high AT & C Losses
Definition Regarding Rural Electrification

 Villages : Revenue Villages as per census
 Habitation: Cluster of households in a village.
 Access to Electricity to households : Providing electrical infrastructure
nearby to the household so that electrical connection can be provide on demand.
 Village Electrification
o Prior to October 1997
• Village was classified as electrified if electricity is being used within
its revenue area for any purpose whatsoever.
o In 1997, the definition was modified to provide for the use of electricity to
village habitations.
• A village will be deemed to be electrified if the electricity is used in
the inhabited locality within the revenue boundary of the village,
for any purpose whatsoever.
Definition of Village Electrification

 February 2004 – Scope Enlarged
o A village would be declared electrified if:
• Basic infrastructure such as distribution transformer and
distribution lines are provided in the inhabited locality as well as
the dalit basti/ hamlet where is exists. (For electrification through
non-conventional sources a distribution transformer may not be
necessary)
• Electricity is provided to public places like schools, panchayat
offices, health centres, dispensaries, community centres etc, and
• The number of households electrified should be at least 10% of
the total number of households in the village.
 Intensive Electrification of villages : Providing access to electricity to
left out un-electrified household in an electrified village.
Stages of India’s RE Programme

 Stage I (1950 to 1965)
 Only 3061 villages were electrified till 1950
 1951-planned electrification of villages taken up with the main objective
of providing electricity as a social amenity-
(More than 45,000 villages covered.)
 Stage II (1966-1980)
 Mid Sixties- focus on the role of electricity as development input with
a primary objective of energizing pump sets-
(More than 2 lakh villages and more than one crore pump sets
energized)
 Stage III (1981 to 1990)
 Decade of Eighties- RE seen as a tool for correcting regional inequalities
(More than 2.20 lakh villages electrified, around 43 lakh pump sets
energized)
Stages of India’s RE Programme

(Contd..)
 Stage IV (1991 to 2003)
 Decade of Nineties – Deteriorating financial conditions of SEBs
broke the tempo of rural electrification.
 Emphasis on improving system efficiencies rather than
extensive coverage
 Only 44,000 villages electrified
 Stage V (2004 onwards)
 Specific program for Household electrification rather than
village electrification as the new focus of RE program
Various Schemes of Rural Electrification by

GOI
 Minimum Needs Program (Launched in Vth Plan)
 100% loans for last mile connectivity.
 Discontinued in 2004-05 because of lack of response from States.
 Kutir Jyoti Program (Launched in 1988-89)
 Single point connection to BPL Households.
 100% grant. Merged with AREP in 2002 and now with RGGVY.
 Pradhan Mantri Gramodaya Yojana (PMGY) (Launched in 2000-01)
 90% Loan, 10% grant. Discontinued in 2005 with launch of
RGGVY.
 Accelerated Rural Electrification Program (AREP) (Launched in 2002)
 Interest subsidy of 4%. Merged with AEP
 Accelerated Electrification Program AEP: (Launched in 2004)
 AEP of one lakh villages and one crore households. 40% capital subsidy
and 60% loan.
Trend in Village
Electrification Intensificatio
n of Village
Electrification of UE Village (no.
per annum) (no.annu
per
m)
41950
24106
20101 19262 2827
0
1659915511 1940
12232 1
2333 2663 3286 1892

1969- 1974- 1980- 1985- 1992- 1997- 02-05 05-07 07-12 12-14
74 80 85 90 97 02
05-07 07-12 12-14
Time Time period
period
RGGVY
Period
Focus of Govt. of India on RE

S.No. Year Focus Area
1. 1950 • Villages Electrification
2 1966 • Villages Electrification
• Pumpsets Enerigization
3 1991 • Villages Electrification
• BPL connection
4 2004 • Specific program for Villages and
habitation Electrification
• Household Electrification
5 2014 • Household electrification
• Power for All
• Sustainability of DISCOM
Various Schemes of Rural Electrification by GOI

(Contd..)
 Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY) (launched on
Mar,2005)
Electrification of all Villages and Habitations
Providing access to electricity to all
households Free electricity connection to
BPL families.
(Programme was extended for XI and XII plan and subsequently
subsumed un DDUJGY)
 Deendayal Upadhyaya Gram Jyoti Yojana (Launched in Dec,2014)

Separation of agriculture and non agriculture feeders
Strengthening of sub-transmission and distribution system including metering
at distribution transformers/feeders/consumers
Subsumed component of all previous ongoing RE schemes
Status of Village
Electrification
Prior to RGGVY (as on After RGGVY (as on Feb,
Mar,2005) 2015)
As per census 2001 As per census 2011
59373
2 59746 57901
4 6
47416
2
11957
0
1844
8
Total Villages Balance Total Electrified UE
Villages (Feb, Villages(F
Villag electrifi UE 2015) eb, 2015)
es ed as Villages
on
Mar,200
5
Status of Rural Household Electrification

Prior to RGGVY (as on Mar,2005) As After RGGVY (as on Feb, 2015)
per census 2001 As per census 2011
16.7
13.8 4
2
9.2
7.8 4
1
6.0
1 5.4
2.445
Total RHH RHH Balance

Households as on
Unelectrified
Total Households
Households
RHH electrified covered unelectrfie
Mar,2005
d RHH
Electrified
(census electrifi
2011) ed
RGGVY
Number in
Crore
DeenDayal Upadhyaya Gram Jyoti

Yojana (DDUGJY)
Broad Objectives:
1. Sustainable Distribution
systems
2. Connecting the unconnected
3. Power for All 24X7
DDUGJY - Scope of
Work
Scope of work:
1. Feeder Separation
 Helps in effective Demand Side & Peak Load Management
 Regulated supply to agricultural consumers and continuous
power supply to non-agricultural consumers in rural areas
2. Strengthening of sub-transmission and distribution system

 Creation / Augmentation of new sub-stations,
transformers, HT & LT lines
 High Voltage Distribution System (HVDS) & Aerial Bunched
Cable (ABC)
DDUGJY - Scope of Work

(Contd..)
3. Metering at all input points and all consumers for existing un-
metered connections, replacement of faulty meters & electro-
mechanical meters
4.Micro-grid and off-grid distribution network: Decentralized

Distributed Generation using renewable energy sources in off
grid and gird connected areas
5. Subsumed component of all previous ongoing RE

schemes:
New Features
 Comprehensive scheme
 Complete flexibility in upgradation of rural distribution infrastructure
 All Villages &Habitations with population below 100 also eligible.
 100% subsidy to connect all 33 & 66/11 KV sub-stations under NOFN.
 Private Discoms / Cooperative Societies also covered under the

scheme
 100% subsidy for Project Management

Agency to assist Discoms in project formulation,
bid process, monitoring implementation etc.
 Incentive – Disincentives inbuilt in the scheme.

DDUGJY - Outlay & Funding pattern

Rs. 43033 Cr including budgetary support of Rs. 33453
Cr*, with funding pattern as follows:
Quantum of support
Nature (Percentage of project cost)
Agency of Other than Special Special Category
suppo Category States States
rt
Govt. of India Grant 60% 85%

Discom Contribution Own Fund 10% 5%
Lender (FIs/ Banks) Loan 30% 10%
Additional grant from GOI on Grant 50% of total loan 50% of total loan
achievement of component component
prescribed milestones i.e. 15% i.e. 5%
Maximum Grant by GOI Grant 75% 90%
(including additional grant)
* The funding is over and above already approved outlay for erstwhile RGGVY in 12th & 13th
Plans.
DDUGJY - Milestones for Release of

TrancheGrant
Milestone Release of Grant
No.
1 i. Approval of projects by Monitoring Committee 10%
ii. Execution of Bipartite / Tripartite agreement
iii. Appointment of PMA
2 Placement of Letter of Award (LoA) by the utility 20%
3 Utilization of 90% of grant released by GOI (1st and 60%
2nd
Tranche) and 100% release of Discom contribution
4 After completion of works 10%
TOTAL 100%
Additional grant will be provided subject to achievement of the

following:
i. Timely completion of the scheme as per laid down milestones
ii. Reduction in AT&C losses as per trajectory finalized by MOP in
consultation with State Govts.
iii Upfront release of admissible revenue subsidy by State Govt. based on
. metered consumption
DDUGJY – Way
Forward
 Office Memorandum issued by Ministry of Power on 3rd Dec
14
 Detailed guidelines issued after consultation with stakeholders.
 Execution time for projects is two years from date of award
 Projects from 6 States viz., Himachal Pradesh, West Bengal,
Madhya Pradesh, Tamilnadu, Uttar Pradesh and Andhra Pradesh
have been approved in 2nd Monitoring Committee meeting held on
19.02.2015.
 Village Electrification on mission mode (in next 2- 3 years)

18448 UE Villages to be
Electrfied
(As per 2011 census)
4500 40913982
4000
3500
3000
2500 194
6 170 1529
2000 0
1143
1500 950 922
611 703 487
1000 13 3 2 4 8 5
8 1
500 3 7 6 2 2 5
0
Arunachal
Rajasthan
Tripura
Jharkhand
UP
WB
Sikkim
MP
Odisha
eghalaya
hattisgarh
J&K
Bihar
Manipur
Mizoram
Karnataka
galand
achal
ssam
Strengths and Opportunities in the


sector
Abundant coal reserves (enough to last at least 200 years).
 Vast hydroelectric potential
 Large pool of highly skilled technical personnel.
 Impressive power development in absolute terms (comparable in size
to those of Germany and UK).
 Expertise in integrated and coordinated planning (CEA).
 Emergence of strong and globally comparable central utilities
(NTPC, POWERGRID, REC, PFC).
 Enabling framework for private investors.
 Potentially, one of the largest power markets in the world.
Weakness and Threats in the

 sector
State utilities in financial mess.
 Lack of professionalism in state utilities.
 Not well laid out mechanisms for dispute
resolution.
 Political consensus on reforms still elusive.
 Widening gap of ACS and ARR.
 Role of Electricity Regulatory commissions?
 Norm of subsidy and low tariff or flat rates
 Theft in the sector & political oppurtunism
New Initiatives: Enhancing Private

Participation Urban Franchisee
 Franchisee is a route for infusing expertise of private participation.
 Franchisee have already been appointed in Bhiwandi, Nagpur,
Jalgaon, Aurangabad, Agra etc.
 Distribution franchisee can help only in reducing technical and
commercial losses but in no way it can be a substitute for tariff
rationalization.
 Forum of Regulators (FoR) has prepared a Model Document for
Appointment of Distribution Franchisee. MoP is reviewing the document
in consultation with various stakeholders. Shortly, will circulate it to the
states for implementation.
 State Government to decide on the implementation approach.
 Franchisee route can also be explored for towns where AT& C losses
are less than 15% to increase system reliability.
New Initiatives: Rating of

Utilities
The various lending institutions find difficult to extend their
financial assistance in the absence of audited annual accounts.
 Transaction period is significantly high due to absence of audited
annual accounts.
 Annual Rating of Utilities will provide some assurance to lending
institutions.
 The process will also aid in creating conducive environment by
o Removing Information Asymmetry
o Infusing competition among utilities
o Increasing transparency
o Increasing private investment in better performing utilities and
reducing burden on public funds
 Rating may also be utilized by Government of India for allocation of
Grant / Loan in next phase (post fine tuning through participative
deliberations)
New
Initiatives
 Content & Carriage choice to consumer
 Possible alternatives to incentivize DISCOMs to supply power
to rural areas
o Direct cash transfer to consumers
o Direct cash transfer to DISCOM
o Direct transfer of low cost power to DISCO
• A village would be declared as electrified if:
• 1) Basic infrastructure such as Distribution Transformer and
Distribution lines are provided in the inhabited locality as well as
the Dalit Basti/ hamlet where it exists. (For electrification through
Non Conventional Energy Sources a Distribution transformer
may not be necessary).
• 2) Electricity is provided to public places like Schools, Panchayat
Office, Health Centres, Dispensaries, Community centers etc. and
• 3) the number of households electrified should be at least 10% of
the total number of households in the village.
Selected State-wise Number of Villages Electrified in India
(2014-2015 to 2018-2019)
States 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
Arunachal Pradesh 107 174 175 854 280
Assam 190 942 1218 572 -
Bihar 341 1754 556 332 264
C hhattisgarh 67 405 294 348 31
Himachal Pradesh 6 1 27 0 -
Jammu and Kashmir 9 27 5 35 62
Jharkhand 161 750 1104 613 116
Karnataka 0 - 14 25 -
Madhya Pradesh 86 214 159 44 5
Maharashtra - - - - 80
Manipur 192 75 121 77 93
Meghalaya 43 1 681 218 151
Mizoram 47 16 24 14 -
Nagaland 10 - 76 2 -
Odisha 13 1264 1092 544 381
Rajasthan 70 163 263 1 -
Tripura 0 9 17 0 -
Uttar Pradesh 59 1305 162 9 22
Uttarakhand 4 - 18 43 30
West Bengal 0 8 9 5 -
India 1405 7108 6015 3736 1515
Sl. No Total Households
Electrified Oct,17
Balance 11th Oct,18 11th Oct 19, Balance
1 Andhra Pradesh 11436744 11281072 155672 81949 73723 0
2 Arunachal Pradesh 309024 255185 53839 0 24539 29300
3 Assam 6674071 4790245 1883826 110836 1133869 639121
4 Bihar 13973122 10714081 3259041 449016 2810025 0
5 Chhatti sgarh 5674745 4955330 719415 155490 525800 38125
6 Goa 128208 128208 0 0 0 0
7 Gujarat 11414532 11373215 41317 15748 25569 0
8 Haryana 3468065 3415291 52774 3497 49277 0
9 Himachal Pradesh1855666 1842778 12888 1943 10945 0
10 Jammu & Kashmir2440128 2072861 367267 0 367267 0
11 Jharkhand 6712648 5171500 1541148 125389 1223812 191947
12 Karnataka 10210773 9862192 348581 59709 221707 67165
13 Kerala 9813032 9813032 0 0 0 0
14 Madhya Pradesh12621007 10636743 1984264 1149748 834516 0
15 Maharashtra 24389845 23303595 1086250 182896 900852 2502
16 Manipur 453055 350925 102130 746 101384 0
17 Meghalaya 621052 435963 185089 0 51621 133468
18 Mizoram 241712 213909 27803 0 27803 0
19 Nagaland 442842 300305 142537 473 105272 36792
20 Odisha 9626175 7219339 2406836 135348 2257581 13907
21 Puducherry 95616 94704 912 0 912 0
22 Punjab 3689970 3689584 386 0 386 0
23 Rajasthan 12948577 10859210 2089367 212555 1316991 559821
24 Sikkim 98572 83868 14704 0 14704 0
25 Tamil Nadu 10285848 10283678 2170 2170 0 0
26 Telangana 6528759 6084656 444103 23803 420300 0
27 Tripura 788863 652463 136400 1882 134518 0
28 Utt ar Pradesh 28228779 21192287 7036492 1133002 5758307 145183
29 Utt arakhand 2060776 1844305 216471 4960 211511 0
30 West Bengal 15057882 14325592 732290 194153 538137 0
Total Total 212290088 187246116 25043972 4045313 19141328 1857331
Pure Political discussion
• 2016-17, 6,015 villages were electrified, five times more than
in 2013-14
• From 2014 to 2017, new rural electrification drive, 14,528
villages have been electrified
• On average, the United Progressive Alliance (UPA)
government electrified 12,030 villages per year,
• while the NDA government has electrified 4,842–less than half
the UPA’s average.
• But while we celebrate, it is also necessary to register that this
is just a good beginning and not an end of the efforts to provide
universal electricity supply.
• Efforts to provide electricity to every Indian have historically
been hampered by poorly designed and implemented schemes
that encouraged contractors to do the bare minimum to make
sure a village qualified as electrified, resulting in inconsistencies
in official data, and glaring disparities on the ground.
• A study conducted by the Council on Energy,
Environment and Water showed that over 50% of
electrified rural households in Uttar Pradesh, Bihar,
Madhya Pradesh, Jharkhand, Odisha and West Bengal
don’t even get 12 hours of supply in a day.
Case Laws for discussion
• Ella Aboobacker vs Union Territory Of Lakshadweep on 13
September, 2012
• GMR ENERGY LTD Vs. GOVT OF KARNATAKA 2010-
• HINDUSTAN ZINC LTD. ... VERSUS RAJASTHAN ELECTRICITY
REGULATORY COMMISSION

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Rural Electrification

Generation Primary Transmission(132/220/400/765KV)

Why Rural Electrification (‘RE’)

Rural Electrification – Challenges

 Rural Electrification – 4 major facets

 While progress on creating access and providing connectivity

Rural Electrification – Challenges

Definition Regarding Rural Electrification

Definition of Village Electrification

Stages of India’s RE Programme

Stages of India’s RE Programme

Various Schemes of Rural Electrification by

2333 2663 3286 1892

Focus of Govt. of India on RE

Various Schemes of Rural Electrification by GOI

 Deendayal Upadhyaya Gram Jyoti Yojana (Launched in Dec,2014)

Status of Rural Household Electrification

Total RHH RHH Balance

DeenDayal Upadhyaya Gram Jyoti

2. Strengthening of sub-transmission and distribution system

DDUGJY - Scope of Work

4.Micro-grid and off-grid distribution network: Decentralized

5. Subsumed component of all previous ongoing RE

 Complete flexibility in upgradation of rural distribution infrastructure

 All Villages &Habitations with population below 100 also eligible.

 100% subsidy to connect all 33 & 66/11 KV sub-stations under NOFN.

 Private Discoms / Cooperative Societies also covered under the

 100% subsidy for Project Management

 Incentive – Disincentives inbuilt in the scheme.

DDUGJY - Outlay & Funding pattern

Govt. of India Grant 60% 85%

DDUGJY - Milestones for Release of

Additional grant will be provided subject to achievement of the

 Detailed guidelines issued after consultation with stakeholders.

 Execution time for projects is two years from date of award

 Projects from 6 States viz., Himachal Pradesh, West Bengal,

Madhya Pradesh, Tamilnadu, Uttar Pradesh and Andhra Pradesh

have been approved in 2nd Monitoring Committee meeting held on

 Village Electrification on mission mode (in next 2- 3 years)

Strengths and Opportunities in the

Weakness and Threats in the

New Initiatives: Enhancing Private

New Initiatives: Rating of

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