Thursday, November 20, 2014

Cheap Electricity for Poor Squeezing Out Solar in India

Lights powered by a solar unit illuminate a house in a village in Karnataka, India. Prime Minister Narendra Modi wants to bring electricity to every home by 2019 by leapfrogging the nation’s ailing power-distribution infrastructure with solar-powered local networks.  (Credit: Kuni Takahashi/Bloomberg)  Click to enlarge.
Competition from state utilities, with their erratic yet unbeatably cheap subsidized power, is scuppering efforts to supply clean, modern energy in a country where more people die from inhaling soot produced by indoor fires than from smoking.

About as many people in India are without electricity as there are residents of the U.S., and the number is growing by a Mumbai every year.  Prime Minister Narendra Modi wants to bring electricity to every home by 2019 by leapfrogging the nation’s ailing power-distribution infrastructure with solar-powered local networks -- the same way mobile-phones have enabled people in poor, remote places to bypass landlines.

Political Minefield

Modi’s vision is also championed by the World Bank, General Electric Co., and BlackRock Inc.-backed SunEdison Inc., which say switching from old-style centralized networks to microgrids is a cheaper, faster solution to bringing 1.3 billion people, mostly in India and Africa, out of the dark.

India’s state utilities risk crushing that model before it gets off the ground as they continue a policy of supplying farmers and the poor with cheap power.

While the utilities incur huge losses stemming from subsidies, changing the system is a political minefield.  Bihar, for instance, has the second-largest number of people below the poverty line among India’s 29 states: almost 44 million living on 75 cents a day or less.

“The issue isn’t whether people can pay for power,” said Vivek Gupta, co-founder and director of Saran Renewable Energy Pvt., which suffered unannounced grid arrivals when building microgrids in Bihar.  “They don’t want to pay because they know the government gives it for free if the grid comes.”
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The number of Indians without access to modern energy is increasing as population growth outpaces electrification -- rising 13 million last year to 306 million, according to the International Energy Agency. That’s more than triple the next-biggest unelectrified populace:  Nigeria with 85 million.

Read More at Cheap Electricity for Poor Squeezing Out Solar in India

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