Whilst significant progress has undoubtedly been made, the metrics of the Indian government continue to focus on infrastructure connections rather than electricity use. These definitions, with low thresholds of connectivity, mean that reported progress on village electrification does not provide a reliable indication of actual electricity use and the enhancement of capabilities that it provides . Since April 2018, all 18,452 villages identified in August 2015 have been electrified, but only 8% have 100% of households connected . A distributed transformer in a village and transmission lines to individual households does not necessarily indicate the availability of reliable, affordable electricity and its use by consumers. A recent report from the Council on Clean Energy, Environment and Water (CEEW)  showed the significant improvements in energy access across five states between 2015 and 2018 but did highlight the often very real disconnect between electricity connections and energy poverty alleviation, due to implementation, quality/reliability and affordability issues.
Household electricity use may be best ascertained by direct surveys of household lighting, which are most comprehensively undertaken in the Census held every 10 years. Percentage of the population electrified can be estimated based on new households connected but must also take into account changes in demographics, such as population increases and shifts from rural to urban settings. Access-to-electricity data from the World Bank for the period 1995–2014 (Fig. 1), based on Indian government data, shows two dips in an otherwise steady rise in access. These dips occur in 2001 and 2011, India’s most recent Census years. This has led to speculation  that, for most years, there is an apparent over-estimation of the percentage of the population electrified, interrupted only by the more-reliable data garnered from Census surveys on lighting use.
The extent of actual electrification may also be constrained by definitions of a village. Some hamlets and caste settlements may be categorised via the Census as being part of a village, when in reality, they are quite physically distinct . This is manifest in a lack of agreement within the databases of Indian government departments regarding the number of villages in India, varying from 600,000 to one million . Forest reserve hamlets and un-surveyed settlements are typically not included in Census village counts, thus missing out on government electrification programs and other services entirely . For example, the principal author has visited the small tribal hamlet (pada) of Vanvasi in Maharashtra, consisting of 42 households. This forest reserve settlement was not separately recorded on the Census and was observed to have a general absence of government services, including electricity supply. This is despite the fact that electricity transmission lines pass directly overhead the hamlet’s agricultural fields—indicating some awareness of the existence of this hamlet by government service providers but no action to intervene.
Reliability and quality of electricity supply, tracked by Prayas (Energy Group)’s Electricity Supply Monitoring Initiative (ESMI) at 202 locations across rural and urban India, continue to be significant issues, with metrics in fact showing a deterioration from October 2017 to October 2018. In 2018, 56% of locations experienced outages for more than a 15-h duration during October (compared with 52% in 2017), 38% of locations experienced more than 30 interruptions (each greater than 15 min) during October (compared with 27% in 2017), and 33% of locations experienced average daily outages of more than 30 min during evening hours in October (compared with 22% in 2017) . Further, rural areas face disproportionate reliability issues due to their high transmission losses and dominance of agricultural pump sets, which incur financial losses . In October 2018, just 11% of ESMI’s rural locations received an entire 6 h of evening electricity supply, compared with 77% in mega cities and 43% in other cities .
Even if homes are connected, if the supply remains unreliable, households would still remain mired in energy poverty. Whilst India has declared a national power surplus , ‘load shedding’, where distribution companies plan supply outages to balance supply and demand , continues to occur in many parts of the country. This is fundamentally a result of mismatches in supply and demand of power across different times of the day (e.g. India’s residential demand peaks in the evening). Acknowledging the high residential load in some parts of India , electricity reliability is driven by the ability of different types of consumers (industrial, commercial, or residential) to produce adequate revenue to pay back investment. Residential consumers, for example, typically provide lower revenues, which require cross-subsidisation. Thus, load shedding may be preferentially undertaken in areas with high collection losses, where not supplying power is more economical than supplying power and not recovering costs.
Investors in generation assets must also contend with known issues within their direct customer base, the state distribution companies . Distribution companies generally exhibit poor operating and financial efficiencies, with high levels of theft from their residential customers and complex subsidisation arrangements. This notionally insecure revenue stream may restrict investment in highly capital-intensive centralised generation assets . Nevertheless, distribution and historical equity issues remain critical to energy access in India. For example, in Maharashtra, the historical focus on agricultural development has ensured an extensive grid network which was initially installed to power water pumps , ensuring a dense transmission network covering much of the state.
Poor electricity reliability has a number of cumulative implications due to negative feedback loops. For consumers, load shedding directly reduces the reliability of electricity and reduces their satisfaction and corresponding willingness to pay for electricity, driving further collection losses . In addition, high-load shedding may lead to electrified villages becoming de-electrified due to inoperative distribution infrastructure , with such villages eventually having to re-enter the DDUGJY program.
Affordability is a key parameter that heavily influences the relationship between connectivity and use for both grid and off-grid systems . Energy supplying ‘basic human needs’ can be satisfied by incumbent environmental resources, including biomass (such as wood and animal dung) for cooking; sunshine for drying; and manual labour . These resources are ‘free’ in a monetary sense, although their use has health impacts (from hazardous smoke), social impacts (especially among women and children) and significant impacts on the ecosystems from which biomass is sourced . The enabling uses of energy may become more expansive through increased energy supply levels, such as from fuel-based lighting and batteries, which may also charge mobile phones. There are potential market opportunities here for grid and off-grid energy systems as substitutions for incumbent technologies like kerosene lamps . The effects on household energy budgets are extremely important in the context of uptake and acceptance of the new technology . Whilst upfront costs may be higher, there is often a net decrease in household energy-related expenditure over the longer term [44, 45]. In Odisha, BPL grid consumers pay a fixed monthly charge of ₹80 (approximately US$1)  and their initial grid connection is free under the Saubhagya scheme . Nevertheless, in CEEW’s recent study , unelectrified households reported that perceived upfront costs are a deterrent to getting a connection, suggesting problems in the implementation of the program. Off-grid suppliers often partner with micro-finance providers  and may offer pay-as-you-go (PAYG) payment schemes , to overcome these barriers.
Thus, the mismatch between the 100% village electrification milestone and the 305 million people forming the unconnected ‘last mile’ of electricity access may be largely attributed to Census village definitions, the poor reliability of the grid and affordability barriers. Clearly, there is a need to go beyond the current government understandings of electrification and demographics and the performance indicators of village and household connectivity . The shortcomings in the quality of electricity supply, and, ultimately consumer satisfaction and associated livelihood improvements, create opportunities for alternative electricity supply systems.
Government off-grid delivery
The MNRE issued a draft National Policy on renewable energy based mini- and micro-grids in 2016 , which encouraged the development of state-level policies and regulations. This policy included a target of 10,000 off-grid projects by 2022, with a total installed capacity of 500 MW. As identified by Ma and Urpelainen , this is very small compared with India’s total installed generation capacity of over 346 GW (as at November 2018 ). Further, as one 50 kW off-grid system typically provides basic levels of lighting, mobile phone charging and television for 500 households, the National Policy’s off-grid target would provide electricity to five million households  or 24 million people (based on the average household occupancy in India ). The MNRE reported that in 2017, over 1.2 million households were using off-grid solar energy for lighting, with a similar number of households using biogas plants for cooking . The government also has various renewable energy targets for 2022, including 100 GW from solar projects (with 40 GW from decentralised rooftop solar projects), 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power .
Within the DDUGJY, of the 18,452 villages on the 2015 electrification list, 2638 villages were identified as being grid-inaccessible and have had off-grid systems provided by the Indian government, as at December 2017. Despite the push for the grid expansion in India, at a certain distance away from existing grid infrastructure, off-grid systems are inevitably cheaper [33, 53], although the viability dynamics continue to change with expansion. As grid connections are the dominant political paradigm, there is no evidence of economic optimisation of grid/off-grid composition by the government, thereby forgoing any cost savings that could be realised by off-grid installations.
Renewable energy is generally favoured for off-grid systems in remote regions, with over half of the systems in India using solar (photovoltaic) technology . Off-grid systems can range from DRE systems, such as micro-grids or mini-grids, to Solar Home Systems (SHS) for individual households. Under commitments related to the Saubhagya implementation, households in off-grid villages will generally receive SHS with battery backup, light -emitting diode (LED) lamps, a direct-current fan and power plug, along with repair and maintenance for five years . Despite the commitment to off-grid systems, the true extent of off-grid systems, installed by both the government and the private sector, is somewhat opaque. Thus, the following section discusses the roles and opportunities for the private sector along with a situational analysis of off-grid operations in Maharashtra and Odisha.
Key considerations for the private sector
Beyond government electrification delivery, private sector off-grid solutions from firms and NGOs may well provide the only response to the energy access needs of ‘Base of the Pyramid’ (BoP) consumers, particularly in ‘forgotten’ tribal communities bereft of government services. Further, there is evidence that off-grid firms may be able to identify and integrate into informal economies where formal government services are unable to be established . For example, in Vanvasi pada and other tribal hamlets in Maharashtra not recorded on the Census, solar micro-grid systems have been installed by the private sector operator Gram Oorja, in partnership with the NGO Pragati Pratishthan .
Private sector off-grid systems may also have a role to play in providing back-up ‘Remedial Secondary Infrastructure’  to unreliable grid services in currently electrified villages, although this is not without risk given the government’s commitments to reliability improvements . This market niche may be persistent, even when government services improve, due to a build-up of mistrust surrounding the unreliability of government infrastructure over time [6, 53, 58]. Further, private sector off-grid systems can become socially-embedded in communities, playing an important role in producing innovative, community-led solutions [7, 22]. The sector is often at the forefront of trialling new energy technologies with the potential to leapfrog traditional electrification paradigms .
Given the issues of connectivity and reliability, the opportunities and threats for private sector off-grid projects are presented in Table 1. Whilst off-grid systems may play an important role in the electrification of India in responding to niche opportunities, the table shows the considerable threats for the private sector. Industry body CLEAN noted ‘the private sector faces significant risks, primarily due to government’s lack of a coordinated and integrated policy approach to optimise solutions to India’s energy poverty’ (pers. comm., 24 March 2017).
Situation analysis—Maharashtra and Odisha
Analyses of operations identified in Prayas (Energy Group)’s DRE map  and data from selected off-grid operators, MEDA and OREDA, provide some insight on off-grid penetration in Maharashtra and Odisha. In Maharashtra, MEDA’s Remote Village Electrification Scheme has delivered SHS to 343 villages and 704 hamlets since 2005 (pers. comm., MEDA, 23 March 2017). Under the scheme, MEDA’s objective has been to provide systems to all unelectrified remote Census villages and hamlets, and provides the systems (and ongoing maintenance) free of charge to households. The list of villages and hamlets to be targeted by MEDA is determined by Maharashtra’s state distribution company, who certifies that such locations will not be electrified by the central grid within 5 years. MEDA prefers SHS as a cost-effective way to meet electrification targets (pers. comm., MEDA, 23 March 2017). Turning to the private sector’s implementation of off-grid systems in Maharashtra, Prayas (Energy Group)’s map does not reveal any DRE systems in the state, but five systems were identified from Gram Oorja . Three of these locations were able to be located on the Census database, with the exception being the two tribal hamlets of Darewadi and Vanvasi in Maharashtra’s tribal belt. All were locatable on Google Maps, mostly adjacent to villages or wildlife sanctuary, with the exception of Vanvasi.
In Odisha, the Remote Village Electrification Program administered by OREDA has electrified 1621 villages since 2006, mostly via SHS, with some DRE mini-grids (pers. comm., OREDA, 28 March 2017). Whilst the systems are installed at no cost to the consumer, tariffs (₹30 (US$0.43)/month) are collected from households (via a village account) that contribute to an ongoing maintenance scheme. Remote, hilly locations, often surrounded by conservation zones, constitute the typical sites where the program is implemented. Site selection is undertaken jointly by OREDA and the distribution companies. Notably, OREDA is implementing a livelihood program to complement its off-grid systems in selected villages, aiming to create support ecosystems to promote income-generating energy uses in agriculture and small businesses. Importantly, villages and hamlets where MEDA and OREDA have implemented off-grid systems are considered fully electrified by the DDUGJY and all levels of government, even though the electrification technology is generally limited to SHS and solar street lighting. Overall, OREDA has implemented more off-grid systems than MEDA, due in part to the greater electrification challenge in Odisha and also due to the large conservation and insurgent-controlled areas in the state .
Prayas (Energy Group)’s map showed 33 DRE operations in Odisha, with the majority operated by OREDA and the Odisha forestry department. The map revealed 13 of the systems were operated by local NGOs. In analysing site locations on Google Maps, Odisha’s DRE locations were either within or adjacent to forest reserves or wildlife sanctuaries. Non-Census hamlets made up only two locations in the off-grid list examined. Thus it seems that the private sector has located off-grid systems regardless of the potential for government-provided electricity (in Census villages). Interestingly, there are no sites where government and private sector off-grid systems were co-located. This is despite the fact that in interviews, MNRE, MEDA and OREDA all commented that they do not have a comprehensive understanding of the locations and types of off-grid systems provided by the private sector. This was further validated by a study that determined that the extent of the (present or planned) grid did not inhibit the market for off-grid solar technologies . The unreliability and poor quality of grid electricity may be a key factor, creating market opportunities for off-grid solutions, even when the grid is present.
The review of grid and off-grid electrification provided by the government found extensive programs to provide villages and households with electricity access. The unconnected 305 million people forming the ‘last mile’ of access can be attributed to coarse metrics on electrification and demographics, poor grid reliability and affordability issues. In this light, a market niche (although ill-defined) exists for private sector off-grid solutions in alternative electricity supply systems. The situation analysis of Maharashtra and Odisha showed that this opportunity for private sector off-grid systems was being met by limited engagement, operating on the periphery of government grid and off-grid paradigms. Private sector involvement was seen to be limited and somewhat incidental in nature, operating below the official government system and in some cases responding to localities not recorded on the Census. This is generally contrary to literature and conventional thinking which typically highlights the large potential market for off-grid power [5, 9].