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Saubhagya scheme may provide base for India’s energy shift

LiveMint logoLiveMint 01-10-2017 Utpal Bhaskar

New Delhi: The recently launched Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) will provide the architecture through which the government seeks to reduce import of fossil fuels, boost underutilized power plants and meet its climate change commitments.

By providing universal access to electricity under the scheme, the government plans to leverage the same to promote induction cooking, heating and charging electric vehicles, apart from the initial target of providing lighting.

This, in turn, will reduce India’s energy imports and generate fresh demand for electricity in the country.

“Lighting is to start. The consumption will certainly improve in quantity and variety also,” said Arun Kumar Verma, joint secretary in India’s power ministry.

Prime Minister Narendra Modi launched the Rs16,320-crore Saubhagya scheme last month to provide electricity connections to over 40 million families in rural and urban areas by December 2018.

“Anywhere you want to bring electricity, the first thing is to connect the house,” said Verma. “Once there is electricity in the village, many things will happen.”

According to the contours of the scheme, a service cable will be drawn from the nearest electricity pole to the household premise where an electricity meter will be installed along with the wiring for a single light point with LED bulb and a mobile charging point.

Mint reported about the scheme, which aims to universalize electricity access, on 26 July.

“As the electricity availability will increase, so will be the use and so will the per capita consumption,” Verma said.

Any substitution of fuels for cooking, transportation and heating will improve India’s per capita power consumption of around 1,200 kWh which is among the lowest in the world.

The scheme will also help India, the world’s third largest energy consumer after the US and China, to help meet its global climate change commitments.

The government has set a target of lowering import dependence in oil by 10 percentage points to 67% by 2022, when the country will celebrate 75 years of Independence.

India’s federal think tank NITI Aayog in its draft national energy policy said: “The two most significant consumer needs (after lighting), transportation and cooking, will be the first candidates for inter-play of market forces, which will be reinforced by technological advancements in areas of electric vehicles and induction cooking.”

India has drawn up an ambitious plan for a mass shift to electric vehicles by 2030 with state-owned Energy Efficiency Services Ltd (EESL) going ahead with the first stage of procuring 10,000 electric cars.

Experts say that the benefits will be manifold.

“Saubhagya will have several benefits apart from enhancing demand on the grid and viability of stressed assets. Last mile connectivity will provide options to customers to utilise electricity for cooking, mobility, heating and lighting apart from socioeconomic benefits,” said Sambitosh Mohapatra, partner, power and utilities at PwC India.

“This will result in significant reduction in fuel import bills and movement towards clean environment friendly source of power,” he added.

According to the government, the Saubhagya scheme will require an additional 28,000 megawatt (MW) of power, considering an average load of 1 kilowatt (kW) per household for eight hours in a day.

“This is a dynamic figure. With the enhancement of income and habit of using electricity, the demand of electricity is bound to vary. This figure will also vary if the assumptions are changed,” a government statement said.

This comes at a time when India is trying to tackle the issue of stressed power assets. According to the Economic Survey, non-performing assets in electricity generation accounted for around 5.9% of the total outstanding advances of Rs4.73 trillion.

“Nobody can ignore it. Spin-off has to be there,” added Verma.

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