Gowtham
As the global energy transition gains momentum, nations across the world are grappling
with the twin challenge of ensuring energy security while adopting clean energy solutions
that minimize environmental harm. For developing countries like India, the transition is
even more complex. Beyond decarbonization, India must also focus on creating a conducive environment for business growth and ensuring that vulnerable communities are not left behind.
The Dual Challenge: Business Enablement and Inclusive Growth
India faces two critical imperatives in its energy transition. The first is economic: to create
an ecosystem where businesses can thrive in the emerging clean energy economy. This requires well-aligned policy frameworks, robust infrastructure, market access, and institutional financial support.
The second is social: to ensure the benefits of the energy transition reach all segments of
society, especially rural and economically marginalized communities. Empowerment—not
exclusion—must define this transformation.
National Electricity Policy: A Vision for Universal Access
India’s National Electricity Policy (NEP) outlines a comprehensive strategy to address energy access, reliability, and affordability. Its key objectives include:
- Universal electricity access for all households within five years.
- Full coverage of electricity demand, with adequate spinning reserves.
- Reliable, quality power supply at reasonable rates and to specified standards.
- Increased per capita electricity availability to over 1,000 units.
- A minimum lifeline consumption of one unit per household per day.
- Financial turnaround and commercial viability of the electricity sector.
- Protection of consumer interests, especially in underserved areas.
RGGVY: A Major Step Toward Rural Electrification
Aligned with NEP directives, the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in 2005 to electrify rural India. It provided financial assistance to State Electricity Boards (SEBs) to build rural power infrastructure. While the government declared 100% village electrification as of April 30, 2018, household-level electrification lagged behind.
Persistent Challenges in India’s Electricity Sector
Despite progress, India’s electricity sector continues to struggle with systemic issues, particularly in three areas:
- Supply-Demand Mismatch – Power generation has not kept pace with rising demand, especially during peak hours.
- Unclear Energy Mix Strategy – There is a lack of strategic clarity on how to integrate renewables into the existing grid efficiently.
- Financial Stress on DISCOMs – Distribution companies (DISCOMs) face severe financial strain, resulting in poor service quality and delayed payments to the power producers.
These problems reinforce each other in a vicious cycle, weakening the energy sector’s overall resilience and compromising the goals of access and security.
Lessons from the Gokak Committee
The Gokak Committee, tasked with assessing rural electrification, identified key structural challenges:
- High Infrastructure Costs – Transmission line installation costs ranged between ₹30,000 and ₹40,000 per kilometer, depending on terrain.
- Underfunded SEBs – Many SEBs were in poor financial health and unable to meet funding requirements.
- Limited Rural Capacity – State utilities lacked the manpower to maintain rural infrastructure effectively.
In response, the Rural Village Electrification (RVE) program was introduced, focusing on decentralized solar-powered lighting. Households received 9–11W CFL lights, later upgraded to LEDs from 2010. By March 2012, the program had reached about 10,000 villages, with a 90:10 funding split between the central and state governments. A bank-financed model was also encouraged, offering a 40% capital subsidy on loans for renewable installations. However, these initiatives were framed as interim solutions, with the goal of grid connectivity.
A Strategic Shift: Decentralization and Renewable Energy
Today, the energy landscape is evolving. The traditional goal of universal grid connectivity
is no longer the sole—or most practical—objective. With advancements in decentralized energy technologies, solar and other renewables are increasingly deployed in captive power modes, enabling off-grid energy independence.
This is especially vital for remote and underserved regions, where grid extension is neither
economically viable nor logistically feasible. Mini-grids, rooftop solar systems, and standalone renewable setups are no longer just temporary fixes—they are emerging as long-term, sustainable solutions for energy access.
Conclusion
India’s energy transition is not just a technological or economic undertaking—it is fundamentally a social challenge. Success will depend on how well policies reflect ground realities, address institutional gaps, and harness evolving technologies. While programs like RGGVY laid a foundation for rural electrification, the future lies in resilient, decentralized, and inclusive energy systems that empower communities and build local capacities.
To achieve this, India must prioritize strategic innovation, financial reform, and policy coherence. The goal is clear: a clean, secure, and equitable energy future that leaves no one behind.
About the contributor: Gowtham is a climate tech enthusiast and an aspiring independent public policy researcher in the energy sector based out of Bengaluru. He is a fellow of EPAYF 2.0 – Environment Policy and Action Youth Fellowship, Cohort 2.0.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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Acknowledgement: This article was posted by Khushboo Dandona, a research intern at IMPRI.
