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Uncertainty in Grid Expansion and Grid Supply: A Case Study in Bihar, India

Patricia Levi's picture
Massachusetts Institute of Technology
  • Member since 2018
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  • Mar 18, 2015
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By Patricia Levi and Yael Borofsky

India’s issues supplying reliable electricity to its population are well known and sometimes high profile. Just think back to the lack of adequate generation that contributed to the massive blackout in 2012. The new government under Prime Minister Narenda Modi has been promising rapid extension of the electric grid and solar power to provide electricity to every home in India. Such achievements would provide incredible benefits for states like Bihar, where only about 16% of households had electricity access in 2011, one of the lowest electrification rates in the country (Government of India 2012). Despite these promising announcements, we observed a tremendous range of opinions about the likelihood of the promised grid extension in Bihar on a recent trip to India. This diversity of opinion has significant implications for potential off-grid solutions, especially in the context of the poor performance of Bihar’s current grid.

In January, we spoke with a number of people in India across the power sector, all of whom had a different take on how likely grid extension is for Bihar. Predictions about the actual timing of grid extension to all of Bihar ranged from two years from some officials in Bihar, to ‘several generations, maybe never,’ from those in major cities outside the state. Aside from political ties to the ruling party, there are a number of possible explanations for such varying expectations about the future of the grid in Bihar. Regardless of the causes, though, such predictions have the potential to influence future plans for off-grid electrification solutions, which have been gaining momentum among NGOs and entrepreneurs throughout India and the developing world.

We went to Bihar with an interest in how off-grid solutions like micro-grids and solar home systems could prove valuable in un-electrified parts of the state. Such systems, while not typically able to support the kind of electric loads that a grid connection might, nonetheless offer some level of electricity access years before rural Indians might otherwise receive a grid connection. But the benefits of investing in such systems are highly dependent on the expected timing of grid extension; if a rural Indian village has no electricity and will not receive a grid connection in the next 5 years, it might make more sense to invest in a solar home system, for example, whereas it might not if you expect the grid to arrive in one or two years.

Past trends in electrification in Bihar and conversations with other stakeholders suggested an environment in which the uncertainty of plans for grid extension makes off-grid, often solar-based systems, seem attractive, at least in some areas. However, almost everyone we interacted with who was connected with the power industry in Bihar insisted that off-grid electrification was only useful for a few very remote areas because all other places would receive a grid connection in the next two years. Local officials in the power industry also predicted that rural inhabitants of the state would not welcome solar-based power, because they perceive it to be inferior to a grid extension. We couldn’t vet the veracity of these statements. They likely have some kernel of truth, but it is important to keep in mind that there are also many plausible motivations for these officials to insist that rapid grid extension is more likely than it actually is.

Although individuals in the Bihar power sector are bullish on the likelihood of grid expansion, the possibility of that expansion and the benefits it would create are additionally thrown into question by the poor reliability in Bihar’s current grid. We visited a substation in Bihar to obtain data about the reliability of the network. For rural electricity distribution lines, reliability was incredibly poor especially during peak hours. A sample of data we collected for one rural line from the substation revealed that electricity was only available for ~30% of the time during evening hours (6pm to 8pm), when demand is at its peak. These numbers support previous reports of spotty grid reliability in the region; Oda and Tsujita (2011) surveyed villages in Bihar that had electricity access and found that the hours of available electricity were on average only 6.3 hours in good months and 1.3 hours in bad ones.Harish et al. (2014) estimate that only 66% of peak demand is met in rural areas of Bihar.

This poor level of service to rural areas raises the question: even if the grid were to expand throughout Bihar, would it provide worthwhile benefits, in terms of high quality electricity, to the people living there? Adding a large amount of new load to the grid is virtually guaranteed to increase outages, especially at peak times, if large investments in generation as well as the distribution infrastructure of the existing grid are not made. Indeed, although lack of supply is frequently cited as the cause of outages in India, the outages we observed in rural electricity lines were not caused by lack of supply alone — the transmission line feeding the substation had dramatically fewer outages. Instead, the culprit is anemic and under-maintained infrastructure that is not sufficient to meet current load, let alone an expanded set of consumers. Such deficits do not bode well for the prospect of grid extension, and reinforce the importance of figuring out whether off-grid supply could be a more worthwhile investment in many places than grid extension, at least in the near term.

Sources

Government of India, Census of India 2011, Ministry of Home Affairs, Government of India, New Delhi. District Tables – HH-7: Households by Main Source of Lighting. (2012) <http://www.censusindia.gov.in/2011census/hlo/District_Tables/Distt_table/10/HH2507-1000CRCD.pdf>

Harish, Santosh M., Granger M. Morgan, and Eswaran Subrahmanian, “When Does Unreliable Grid Supply Become Unacceptable Policy? Costs of Power Supply and Outages in Rural India,” Energy Policy, 68 (2014), 158–69 <http://dx.doi.org/10.1016/j.enpol.2014.01.037>

Oda, Hisaya, and Yuko Tsujita, “The Determinants of Rural Electrification: The Case of Bihar, India,” Energy Policy, 39 (2011), 3086–95 <http://dx.doi.org/10.1016/j.enpol.2011.02.014>

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Steve K9's picture
Steve K9 on Mar 17, 2015

India took 2 years to start up a Russian reactor at Kudankulam that was essentially complete because of protests.  The second reactor should be connected to the grid soon.  That will add 2 GW of reliable, non-polluting power to the local grid.  Now, they are going to start breaking ground on 2 addiitonal reactors at the site … in a year!  At that rate India will stay poor forever.  

What they need to do is sign contracts with the Russians, or GE, or Westinghouse or Areva or some combination for 20 reactors (each!) over several decades.  Give the suppliers some assurance of a market, and allow cost reductions that would follow from muti-unit production, and allow suppliers to make capital investments, etc.  If they need to allow the suppliers to recoup investments from the sale of power for some period … whatever … they need cheap, non-polluting electricity … NOW.

Bob Meinetz's picture
Bob Meinetz on Mar 17, 2015

Patricia, I’ve had some experience doing business with a contractor in Mumbai when large areas of the city were blacked out during a typhoon. Personal challenges aside, it’s extremely frustrating for Indian entrepreneurs who, during critical business transactions, are unable to communicate with the outside world.

In rural areas, I’m not surprised that “electricity was only available for ~30% of the time during evening hours (6pm to 8pm), when demand is at its peak”. But as a resource which is available for 0% of the time during the same period, solar is not only a waste of money – the microgrids built to supply it are quickly converted to inefficient diesel generation, creating a dependence on fossil fuels which could last for decades.

Nathan Wilson's picture
Nathan Wilson on Mar 18, 2015

It’s popular to put the blame for lack of electricity access on ineffective utilities and weak government policy, but the root cause of the problem is poverty .. most of these people can’t afford kWatt-scale power anyway.  The Watt-scale micro-power systems that the solar companies are peddling (to power an LED light and cell-phone charger) can in many cases be deployed even more cheaply with fossil fuel and a a bit of wire than with solar+batteries on-site (this also reduces or eliminates the toxic battery waste).

What these people need most is jobs; and that means that employers need reliable electricity.  So they should first use diesel generators to electrify the business districts (obviously supplemented with solar, but only at low penetration, to reduce the need for batteries), and if the power gets cut-off at night when the factories close, then so be it.  

When the regional grid reaches the town, the formerly diesel-powered customers will gladly switch to grid power (which will be cheaper), since their equipment will already be compatible and wired-up.

I do think it’s worth-while to try to give (not sell) Watt-scale micro-power to poor communities.  Not based on solar, but on grid power, which offers a better upgrade path (and the grid can include solar as well as other sustainable energy).  Many poor neighborhoods in India are plagued by electricity theft, which compromises safety, reliability, and economic viability.  I suspect most of the theft would go away if each household got a few Watts of free electricity.  And there would be less stigma attached to micro-power if upgrading to full grid service was readily available from the same supplier for a higher cost.

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