June 21, 2016

India: Draft of National Policy For Renewable Energy Based Micro And Mini Grids

The Ministry of New and Renewable Energy (MNRE or the Ministry) aims to attain a sustainable growth in the country by securing the energy needs through renewable energy (RE) sources such as solar, biomass, water, wind etc.

Along with the support to large scale RE, the Ministry promotes decentralized solutions based on sources such as solar, biomass, biogas, wind, small hydro etc. for meeting the lighting needs, other electricity and thermal requirements especially in rural areas through separate programmes.

Over time, based on national developmental goals, these programmes have been reformed to focus on the replacement of fossil fuels, and providing energy access to the unserved and underserved populace. Access to affordable and reliable electricity is crucial for spurring social and economic progress in rural India, and for meeting developmental aspirations.

As per the International Energy Agency, World Energy Outlook 2015 report, India has 237 million people that have no access to electricity. The Government has delivered significant progress on rural electrification in the recent past through grid extension, however a large number of households in rural areas still have no access to electricity. Decentralized RE solutions are being deployed to address the last mile access challenge in rural areas in many parts of the country.

With reducing costs and increasing efficiencies of RE technologies, RE based Micro and Mini grids solutions are being perceived as a durable solution – able to provide reliable and cost-effective energy service, cater to productive and commercial loads, accommodate future loads, and connect with grid and feed surplus power if needed.

Already, a few Energy Service Companies (ESCOs) have successfully deployed micro and mini grid projects in the country and many others are in the process of determining a viable business model. The Ministry wants ESCOs to implement RE based micro and mini grid projects, and in order to propel its deployment in the country it is empaneling interested parties as Rural Energy Service Providers (RESPs).

The RESPs will earn certain privileges for implementation under the Ministry’s programmes. Certainly, many more such supporting and practical measures will be required to encourage ESCOs and investors in to the micro and mini grid space. The Ministry is keen on working with States (and State Nodal Agencies) to build a supportive ecosystem for development – an environment able to minimize the risk associated with such investments, and mobilize capital.

As micro and mini grids are main streamed, it will enable in meeting the goals of reducing dependency on fossil fuels, providing clean power to rural households, and meeting their aspirational needs.

The Ministry of New and Renewable Energy has issued draft National Policy for Renewable Energy based Micro and Mini grids. Comments are invited by 20 June 2016.

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