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OpEd: Could the Blackout be Fuel for India’s Energy Entrepreneurs?

Aug 2nd, 2012News

Photo Courtesy of SELCO Foundation

By Jim Koch

The collapse of India’s power grid cast 670 million people into darkness—nearly one in 10 inhabitants of our planet.  It called into question the dominant logic of a fragile centralized power system with chronic outages, growth in demand that greatly outstrips new capacity, yet leaves a fourth of India’s population without basic electricity. 

Conventional “solutions” like centralized coal-fired plants and continued price subsidies for energy from polluting fossil plants and the wide use of back-up diesel generators will only exacerbate the scale of future crisis. These subsidies are, in part, motivated by the risks of political instability in the presence of the rising inflation in energy and food prices. Ironically, amongst those prone to protest are farmers forced to run diesel-powered pumps under widespread drought conditions caused by climate change. The day of reckoning for India’s badly inadequate energy infrastructure has arrived, and a plethora of social entrepreneurs is developing solutions that offer great promise.

 Social entrepreneurs in India are pioneering a decentralized energy paradigm, characterized by improving efficiencies that bring energy cost into parity with grid alternatives, and contribute to economic development and the eradication of poverty in rural areas. These new technologies provide affordable clean energy through community-scale micro-grids, solar home systems, and solar lanterns that displace the need for subsidized kerosene and provide a hundred times the lumens for a fraction of the cost. 

Bihar-based Husk Power Systems’ standalone mini-power plants convert rice husk waste into affordable off-grid energy to over 300 villages at a total capital cost of less than $1.3/watt—less than mega thermal power plants. Each plant is operated by a village entrepreneur, who manages the plant and collects payment from electricity users. SELCO India, operating out of Karnataka and Gujarat, provides customized solar home systems to meet specific customer load requirements with payment plans that dramatically reduce the total five-year cost of energy. Working with commercial banks, rural banks and credit cooperatives, it has made clean energy financially feasible and has over 135,000 solar systems installed. In Kolkata, ONergy has become a valued-added reseller of an array of solar home systems, lanterns, clean cooking stoves and energy-efficient appliances, also providing critical financing, service and support infrastructure to over 150 villages in east India through their Renewable Energy Centers.

 While the distributed solutions of these social mission enterprises seek to provide the more than 300 million Indian citizens who are off the grid with access to affordable clean energy, the problem remains that the government continues to subsidize kerosene and diesel, with market-distorting impacts.

 On the technology front, solar energy in India is benefitting from positive tailwinds, including a 75 percent reduction in the cost per watt of solar panels in the last five years alone. The policy front is less positive, however, with perverse headwinds designed to prop up a failed central power system. These need to shift to support for potential for these and other distributed clean energy solutions to serve the future of India, its people, and its environment. India could be a showcase, and grassroots social entrepreneurs are prepared to be the pathfinders. The day of reckoning has arrived.

Jim Koch is Energy Sector Director for the Center for Science, Technology, and Society at Santa Clara University and co-founder of the Global Social Benefit IncubatorTM

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