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Introduction

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INTRODUCTION
Ministry of Non-Conventional Energy Sources (MNES) is the nodal Ministry of the Government of India for all matters relating to new and renewable energy.
VISION

To create MNES into a scientific institution characterised by pursuit of excellence in the area of new and renewable energy. Towards this end, to develop new and renewable energy technologies, processes, materials, components, sub-systems, products & services at par with international specifications, standards and performance parameters in order to make the country a net foreign exchange earner in the sector and deploy such indigenously developed and/or manufactured products and services in furtherance of the national goals of energy security and sustainable development.
MISSION

i. Energy Security: Development and deployment of alternate fuels (hydrogen, bio-fuels and synthetic) to contribute towards bridging the gap between domestic crude oil demand and supply; ii. Development and Deployment: Renewable (bio-energy, wind, hydro, solar, geothermal & tidal) energy to supplement fossil fuel based electricity generation; iii. Technology Ladder for Traditional Biomass: More efficient and cleaner conversion of biomass for meeting the energy needs of cooking, lighting and motive power in rural areas;

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iv. Availability, Accessibility, Affordability: Normative levels of energy supplies to energy deficient sections of the population; and v. Per-capita Energy Consumption: Consumption to be at par with the global average level by 2050, through a sustainable fuel- mix.
ROLE

performance parameters. For meeting specific Indian requirements, if any, additional or enhanced standards to be adopted. BIS standards to be notified accordingly; vi. Commercialisation: To facilitate commercialisation of already developed and demonstrated new and renewable energy technologies, processes, materials, products and services, through appropriate measures; vii. Making Industry Competitive: To facilitate domestic owned new and renewable energy industry to become internationally competitive and a net foreign exchange earner in the sector, through appropriate measures; viii. S&T activities: Directly linked to R&D in the area of new and renewable energy sources in terms of promoting scientific activities and services; and ix. Deployment: Facilitating deployment of indigenously developed and manufactured new and renewable energy products & services, through appropriate measures.
FUNCTIONS

Research, development, demonstration, commercialisation and deployment of new and renewable energy systems/devices for transportation, portable and stationary applications in rural, urban, industrial and commercial sectors through: i. Fundamental/basic research: Original investigation to gain new scientific knowledge in new and renewable energy technologies, processes, materials and products, not necessarily directed towards any specific immediate application; ii. Applied Research: Original investigation to gain new scientific or technical knowledge in new and renewable energy technologies, processes, materials, products and services directed towards a specific practical aim or objective; iii. Experimental Development: Use of scientific and/or technical knowledge in new and renewable energy technologies, processes, materials, products, and services directed towards producing new or substantially improved; iv. Technology Demonstration: Use of scientific and technical knowledge in new and renewable energy technologies, processes, materials, sub-systems and components directed towards the development of a prototype with the prime aim of establishing technical feasibility. Demonstration of commercial viability through a technology demonstrator may not necessarily be one of the prime aims; v. Standards, Specifications and Performance Parameters: New and Renewable energy products and services to be at par with international standards, specifications and

Development and deployment of: i. Alternate Fuels (hydrogen, bio & synthetic) to replace liquid hydrocarbons; ii. Green Initiative for Future Transport (GIFT) based on Alternate Fuels for land, air & sea applications; iii. Green Initiative for Power Generation based on Alternate Fuels for stationary & portable applications; iv. Standalone new and renewable energy products and services to provide energy needs of cooking, lighting and motive power; v. Distributed new and renewable energy systems to provide energy needs of cooking, lighting and motive power; vi. New and renewable energy products and services for urban, industrial and commercial applications; vii. Energy recovery (including cogeneration) from urban and industrial wastes and effluents; and

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viii. Grid interactive renewable electricity to supplement fossil fuel based electricity generation.
KEY PERFORMANCE INDICATORS OF THE MINISTRY

PARTNERS
i. Research and Development Institutions; ii. Indigenous developers and manufacturers (public/ domestic owned private industry) of new and renewable energy technologies, processes, materials, components, subsystems, products and services; and iii. Deployers of new and renewable energy technologies, processes materials, components, sub-systems, products and services-States/UTs government departments/ agencies, local bodies, panchayats, corporates, community based organisations, non-governmental organisations, and citizens.

RESEARCH, DEVELOPMENT, DEMONSTRATION COMMERCIALISATION (RDDC)

AND

Net foreign exchange earning in new and renewable energy sector covering technologies, processes, materials, components, sub-systems, products and services. Deployment effort to be gauged through:

MACRO INDICATORS
i. Share of alternate fuels in the liquid hydrocarbon mix; ii. Share of renewable energy in the energy mix; and iii. Share of renewable electricity in the electricity mix.

ROLE ROLE

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FUNCTIONS

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DEVELOPMENT GROUPS

OF THE

MINISTRY

MICRO INDICATORS
i. Percentage of villages, where grid connectivity is either not cost effective or feasible, termed remote villages, provided with energy services of cooking, lighting and motive power, through renewable means; ii. Percentage of electrified or to be electrified villages provided with energy services of cooking, lighting and motive power, through non-electrical renewable means (exception: SPV lanterns and only for community purposes SPV pumping systems); iii. Percentage of available potential of MSW utilised for conversion to energy; iv. Percentage of available potential of agro industrial bio waste utilised for cogeneration; v. Percentage of available potential of commercial & industrial wastes and effluents utilised for conversion to energy; and vi. Percentage of available potential of solar water heater tapped.

Development Groups are required to work in close concert with corporates (public/domestic owned private) and research institutions in order to make Indian new and renewable energy industry competitive and a net foreign exchange earner in the sector.

FUNCTIONS
i. Technology Mapping and Benchmarking; ii. Identifying Research, Development, Demonstration and Commercialisation (RDDC) needs and facilitate execution of the same; iii. Standards, specifications and performance parameters to be at par with international level or above and to facilitate industry in attaining the same; iv. Aligning costs of new and renewable products and services with international level or below and to facilitate industry in attaining the same; v. Facilitating industry to obtain appropriate international level quality assurance accreditation; vi. Facilitating industry (public/domestic owned private) to

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become internationally competitive through 2,3,4 & 5 above and related measures; vii. Laying down specifications, standards and performance parameters for new and renewable energy systems and devices to be incorporated in programmes /schemes of deployment groups; and viii. Action Plan for 2, 3, 4, 5, 6 & 7 above.

vi. To draw up suitable programmes and schemes to attain the aim of mainstreaming indigenously developed and manufactured new and renewable energy products and services; and vii. To draw up Action Plan for 1,2,3, 4, 5 and 6 above. The need to increase the use of renewable energy sources for sustainable energy development was recognised in the country in the early 70's. Since 1980s, a significant thrust has been given to the research, development and induction of renewable energy technologies in different sectors. To begin with, these endeavours were steered and overseen by the Commission for Additional Sources of Energy (CASE) in the Department of Science and Technology. In 1982, a separate Department of Non-Conventional Energy Sources was created in the Ministry of Energy and entrusted with the charge of promoting non-conventional energy sources. In 1992, DNES was upgraded and it started functioning as a separate Ministry of Non-Conventional Energy Sources (MNES).
CHARTER OF MNES

ROLE ROLE

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FUNCTIONS

OF

DEPLOYMENT GROUPS

OF THE

MINISTRY

Deployment Groups are required to work in close concert with Development Groups, Deployers, Scheduled Banks/NBFCs/ Cooperatives with the aim of mainstreaming indigenously developed and manufactured new and renewable energy products and services.

FUNCTIONS
i. Identify areas in which new and renewable energy products and services can have the maximum impact in keeping with the national goals of energy security and sustainable development; ii. Deployment strategy for various indigenously developed and manufactured new and renewable energy products and services; iii. Identifying and facilitating the development of delivery mechanisms to accelerate the process of deployment of various indigenously developed and manufactured new and renewable energy products and services; iv. Identifying and tying up with Scheduled Banks/NBFCs/ Cooperatives to facilitate the process of deployment; v. Provide sustained feed-back to Development Groups on performance parameters of new and renewable energy products and services with the aim that the same would be taken into account for continuous upgradation by Development Groups so as to attain international levels in the shortest possible time span;

Under the Allocation of Business Rules, the following specific items have been assigned to the Ministry: Research and development of biogas and programmes relating to biogas units; Commission for Additional Sources of Energy (CASE); Solar Energy including Solar Photovoltaic devices and their development, production and applications; Programme relating to improved chulhas and research and development thereof; Indian Renewable Energy Development Agency; All matters relating to small/mini/micro hydel projects of and below 25 MW capacity; Research and development of other non-conventional/ renewable sources of energy and programmes relating thereto; Tidal energy;

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Integrated Rural Energy Programme (IREP); Geothermal Energy.

The functional jurisdiction of Regional Offices is given below: ________________________________________ Sl. No. ________________________________________ ________________________________________ Location of the Regional Office ________________________________________ ________________________________________ Functional jurisdiction in States/UTs ________________________________________ 1. Chandigarh: 2. Ahmedabad: 3. Lucknow: 4. Guwahati: Jammu & Kashmir, Punjab, Haryana, Himachal Pradesh, Chandigarh, Delhi Gujarat, Rajasthan, Dadra & Nagar Haveli and Daman & Diu Uttar Pradesh and Uttaranchal Assam, Arunachal Pradesh, Manipur, Mizoram, Nagaland, Tripura, Meghalaya and Sikkim Madhya Pradesh, Maharashtra and Chhattisgarh Andhra Pradesh, Karnataka and Goa Kerala, Tamil Nadu, Andaman & Nicobar, Pondicherry and Lakshadeep Bihar and Jharkhand

STRUCTURE COMMISSION

OF THE FOR

MINISTRY
OF

ADDITIONAL SOURCES

ENERGY

The Commission for Additional Sources of Energy was established in 1981 on the lines of the Atomic Energy Commission and the Space Commission to oversee the development of new energy sources in the country. The Commission functions under the chairmanship of Secretary, MNES with the following responsibilities: Formulating policies and programmes for the development of new and renewable sources of energy. Co-ordinating and intensifying research and development activities in new and renewable sources of energy. Ensuring implementation of Government's policies in regard to all matters concerning new and renewable sources of energy. The Commission held 3 meetings during 2002-2003 to consider policy, programmes and schemes of the Ministry and to review the progress of implementation under various programmes.

5. Bhopal: 6. Hyderabad: 8. Chennai: 9. Patna :

FUNCTIONAL GROUPS
The Ministry is broadly organised into six Functional Groups dealing with `Rural Energy', `Solar Energy', `Power from Renewables', `Energy from Urban and Industrial Wastes', `New Technologies' and `Administration and Co-ordination'. In addition, the Ministry has an Integrated Finance Division. The Ministry is classified as a Scientific Ministry.

7. Bhubaneshwar: Orissa and West Bengal

OTHER ESTABLISHMENTS
The Solar Energy Centre, a division of the Ministry, is located on its own campus at Gwalpahari in Gurgaon District, Haryana. The Centre for Wind Energy Technology (C-WET) is established in Chennai, Tamil Nadu. The Sardar Swaran Singh National Institute of Renewable Energy (SSS-NIRE) is in the process of being set up near Jalandhar in Punjab.

REGIONAL OFFICES
The Ministry has 9 Regional Offices, which carry out monitoring and inspection of projects and maintain liaison with the concerned State Governments and State Nodal Agencies and other Implementing Agencies.

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WOMEN CELL
The Women's Cell of this Ministry was set up in 1997. This Cell reviews plans, schemes and progress of the Ministry with a view to ensure that all aspects of women's development are promoted and wherever feasible to introduce a component for women's development in the various schemes and programmes as per recommendations contained in the National Perspective Plan for Women.

Ministries/Departments concerned. The following major activities have been co-ordinated by the Division: The Annual Renewable Energy Conference on "Renewable Energy Strategy for 10th Plan" was organised 7-8 May, 2002 at New Delhi in which Secretaries in charge of nonconventional energy of various State Governments, Chief Executives of the State Nodal Agencies, Financial Institutions and State Electricity Boards, besides all those engaged in the implementation of various programme of this Ministry participated. The Conference was inaugurated by the Minister of State (Independent Charge) for Nonconventional Energy Sources, Shri M. Kannappan and Shri Gingee N. Ramachandran, Minister of State for Finance, who was the Chief Guest. The strategy for formulation of the 10th Five-Year Plan and the targets were finalised in the Conference. 25 awards were presented to the States and NGOs for their significant contribution in the field of various renewable energy for the year 2000-01. Higher Central Financial Assistance (up to 90%) being continued since 2001-02 for North Eastern States including Sikkim in respect of National Project on Biogas Development, National Programme of Improved chulhas (NPIC), Biomass Gasifier programme, Solar Photovoltaic Demonstration Programme and the Small Hydro Project Programme. Periodic reviews of progress of New & Renewable Sources of Energy (NRSE) programmes in the North Eastern region have been taken regularly at the Secretary level. All North Eastern States were requested to announce a Renewable Energy Policy at the earliest.

GRIEVANCE CELL
A Grievance Cell in this Ministry has been set up in 1995 with a Director of Grievances. The Cell takes appropriate steps to redress the grievances of the public, staff/officers of MNES as well as its subordinate offices.

LIAISON CELL

OF

SCHEDULED CASTE/SCHEDULED TRIBE

The Liaison Cell in Scheduled Caste/Scheduled Tribe of this Ministry was set up in 1997 to look after various matters relating to SC/ST employees of this Ministry including its various subordinate offices.
PLANNING & COORDINATION

The Planning & Co-ordination Division is responsible for the preparation of the Annual Plan and the Five Year Plans besides periodic review of their implementation, physical as well as financial, co-ordination of matters relating to Parliament, i.e., Parliament Questions, Standing Committee on Energy and work relating to VIP references, etc. Other functions of the Division include co-ordination among the various Programmes/Divisions within the Ministry as well as the other Ministries/ Departments, Planning Commission apart from autonomous organisations and the State Governments. Special reviews are undertaken for development of renewable energy sector in the North Eastern region. This Division is also responsible for preparing and sending monthly reports to the Prime Minister's Office, Cabinet Secretariat, Department of Development of North Eastern Region and reports to other

SUPPORT FOR SETTING UP & STRENGTHENING STATE NODAL AGENCIES (SNAS)


The SNA NE Scheme, which started in the year 1998-99, provides for Central Financial Assistance (CFA) for recurring and

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non-recurring (one time grant for construction of building, etc.) expenditure to the SNAs of N.E. region including Sikkim. All North Eastern States have set up independent Nodal Agencies for Renewable Energy under this Scheme. During the year 2002-03, CFA has since been released to Assam, Mizoram & Manipur towards construction of SNA buildings and recurring expenditure on salaries & contingencies. Buildings for SNAs at Mizoram and Tripura have been completed and its offices have started functioning from these buildings. The work on the construction of the buildings is under progress in Arunachal Pradesh, Sikkim, Manipur, Nagaland and Assam. During 2002-03, this scheme has been extended to provide central financial assistance to the three newly created States of Uttaranchal, Jharkhand & Chhattisgarh.

IMPLEMENTATION

OFFICIAL LANGUAGE POLICY

HUMAN RESOURCE DEVELOPMENT PROGRAMME


During 2002-03, 12 National Training Courses have been organised at the Indian Institutes of Technology, Mumbai, Delhi, Roorkee, Guwahati, NIT MACT Bhopal, CTAE Udaipur, TERI New Delhi, DAVV Indore, Winrock India & ASCI Hyderabad, in which officers of MNES and State Nodal Agencies, Public Sector Undertakings, NGOs etc. have participated. Seven officers of the Ministry have been deputed to attend an overseas training course in Renewable Energy which was organised by MNES at the Australian Co-operative Research Centre for Renewable Energy, Murdoch University, Perth, Australia during November 11-22, 2002. Under the National Renewable Energy Fellowship Scheme, which has been operative since 1999-2000, 30 M. Tech and 14 Ph.D fellowships have been approved by the National Fellowship Committee during the current year. The renewable energy fellowships are administered and implemented by this Ministry with the assistance of the Centre for Energy Studies, Indian Institute of Technology (IIT), Delhi. 24 prominent Institutions are awarding National Renewable Energy Fellowships.

During 2002-2003, a number of measures were taken for accelerating the pace of implementation of the Official Language Policy in the Ministry. Special emphasis was laid on increasing original correspondence in Hindi. As a result, the percentage of Hindi correspondence with offices/individuals in Regions `A' and `B' has increased to 84% and 57% respectively, corresponding to an overall of 65%. All specified documents were issued bilingually under Section 3(3) of the Official Language Act, 1963. Besides, Rule (5) of the Official Language Rules 1976 was fully complied with by replying to all Hindi letters in Hindi only. The scheduled training programmes in Hindi teaching/Hindi Stenography/Typing were completed during the year. The targets set for inspection regarding the use of Hindi were fully achieved. All computers in the Ministry have been equipped with bilingual facility and training imparted to operate such systems. In order to increase knowledge in Hindi, Lila Prabodh & Lila Praveen Hindi Softwares have been purchased and a demonstration thereon organised. During the year one more section (I & PA) in the Ministry was identified to work generally in Hindi. Members of Parliamentary Hindi Advisory Committee visiting an in-house exhibition on renewable energy set up in the Ministry of Non-Conventional Energy Sources. To propagate the use of Hindi and to increase the use of technical words in Hindi, an English-Hindi vocabulary has been prepared in the Ministry. A committee consisting of experts/ officers from I.I.T. Delhi, D.S.T. Delhi and A.I.C.T.E. looked into the correctness of Hindi equivalents. The Commission for Scientific and Technical Terminology is verifying the correctness of the Hindi equivalents. During 2002-03, two meetings of the Hindi Advisory Committee of the Ministry were held under the chairmanship of the Hon'ble Minister of State (Independent Charge) for Non-Conventional Energy Sources. Regular quarterly meetings of Official Language Implementation Committee were held to review the progress made in implementation of Hindi and efforts made to remove shortcomings.

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With a view to creating awareness and accelerating the use of Hindi, a `Hindi Fortnight' was observed in the Ministry and its Regional Offices from September 1-14, 2002. During this Fortnight a message was issued from the Hon'ble Minister of State (Independent Charge) for Non-Conventional Energy Sources, and a number of Hindi competitions were held. 48 officers and staff members belonging to Hindi and non-Hindi speaking categories were given prizes and certificates for excelling in their performance. In order to remove the difficulties / hesitation to work in Hindi a two-day Hindi workshop was organised. Participants were apprised of the Official Language Policy and training in Hindi Noting/Drafting was imparted. Small Hindi notings commonly used in Official work were printed on file covers for the use of all concerned. Seven officers/staff members were given awards under the Hindi Noting/Drafting incentive scheme of the Department of Official Language. To encourage writing of original books in Hindi or books translated into Hindi in the field of new and renewable sources of energy, `PRAKRTIK URJA PURASKAR YOJNA' was continued during the year.
POLICY INITIATIVES

facilities. 15 States have so far announced policies for grid connectivity of renewable energy projects. However, in order to accelerate progress and attract investments, policy support and creation of a conducive regulatory and legislative framework are critical. The Ministry had prepared a Draft Renewable Energy Policy Statement, which was considered by the Union Cabinet. The Cabinet had referred the Policy Statement for consideration by a Group of Ministers. The Group of Ministers has met once so far, and are yet to complete their deliberations. The current restructuring of the electricity sector is leading to the creation of independent regulatory commissions and the unbundling of the State Electricity Boards. The Ministry is interacting with the regulatory commissions in various States to help in bringing about a rational pricing framework that takes into account the environmental costs and other externalities of conventional energy, as well as the benefits of non-conventional energy options, with a view to providing a level playing field in the energy sector. In the new Electricity Bill which is being finalised, several enabling provisions have been proposed for incorporation in the Bill with a view to promote accelerated development of non-conventional energy based power generation.
TECHNOLOGY INFORMATION FORECASTING, ASSESSMENT & DATA BANK (TIFAD)

The Hon'ble Prime Minister had announced at the Chief Minister's Conference on power sector reforms on March 3, 2001, a goal of increasing the share of renewables to 10% of the additional planned capacity in the next 10 years that is 10,000 MW. The Central Government can mainly act as a catalyst and facilitator, with implementation being carried out by the States or by the private sector. Action is, therefore, to be taken by the States to evolve streamlined procedures for various statutory clearances, for land allotment, for providing grid connectivity, and for creating the infrastructure for power evacuation. The Ministry has been constantly interacting with the States to bring this about. The Ministry has been able to persuade the State Electricity Boards to incorporate renewable energy based electricity into their systems. They have, though somewhat erratically, provided concessional tariffs, wheeling, banking, third party sale and power evacuation

In order to bring renewable energy technologies at centrestage by providing state-of-the-art technological input through the use of technological forecasting and assessment techniques and intellectual property rights and for on-line processing/ monitoring of projects and programmes by using Information Technology tools, the Ministry has set up the 'Technology Information Forecasting, Assessment and Data Bank (TIFAD)' Division in May 1998. The Division has initiated activities for large-scale utilisation of Information Technology by providing computers and peripherals to officers up to the level of section officer, Internet and E-mail facilities to all officers, establishment of integrated Local Area Networks (LAN), establishment of a

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Renewable Energy Network (RENET), creation and updating of MNES web-site, installation of a solar powered Information Kiosk at the Ministry's headquarters, establishment of video conferencing facility, creation and updating of database in renewable energy, taking up activities for intellectual property rights, technology forecasting and technology assessment in the area of renewable energy and training of officers and staff of the Ministry in the use of computers and other allied matters.

Energy Electronic Processing System (REEPS)' for achieving the goal of e-governance over a period of time, has been developed during the year and is in testing and implementation stages.

WEBSITE, INFORMATION KIOSK AND VIDEO CONFERENCING FACILITY


MNES has prepared its website in English as well as in Hindi through in-house efforts. This website gives a comprehensive picture of the development and utilisation of renewable energy sources in the country. During the year 2002-03, `Trend Setter Achievements' and some other features have been included in the website. A 'Touch-Screen Information Kiosk' has been installed at the Facilitation Centre for providing easy access to various types of information to visitors coming to the Ministry. To demonstrate the efficacy of solar PV power packs in providing uninterrupted power supply to `Kiosks', the `Information Kiosk' of the Ministry has been powered by solar photovoltaic system.

CREATION

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UTILISATION

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IT FACILITIES

The Ministry has achieved 100% computerisation. 233 nos. of computer-based workstations have been created for providing computerisation facility at the Ministry's headquarters, its 9 regional offices and the Solar Energy Centre. All computers are equipped with Hindi software as well. At MNES's headquarters, 5 nos. of servers have been installed for the use of LAN, RENET, PAONET, Contact ORA, and OPA software in addition to installation of a CD server to cater to the needs of the Ministry. A VSAT has also been installed for providing connectivity to RENET at headquarters of the Ministry. A Local Area Network (LAN), established at the Ministry's headquarters, is being upgraded to increase its speed to gigabit range and the same is connected to the NIC headquarters through fibre optic cable. For providing connectivity and operation of LAN a VSAT and a server have also been installed at the Solar Energy Centre. Wireless LAN is under final stages of implementation at the Centre.

PATENT FACILITATION CELL


During the year activities concerning Intellectual Property Rights (IPR) included organising awareness programmes for the officers of the Ministry. Patents have been/are being filed for some of the renewable energy technologies developed under R&D projects supported by MNES by institutions/ inventors/ manufacturers. So far 10 patents have been applied/ are being applied/or obtained in the areas of solar energy, biomass gasification, biomass production and censor-less torque control device of induction generator in the wind turbine.

R ENEWABLE E NERGY N ETWORK (RENET), D ATABASE ELECTRONIC PROCESSING

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IT TRAINING

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OFFICERS & STAFF

The Ministry is in the process of establishing the Renewable Energy Network (RENET) in the country. Projects on cost sharing basis for the establishment of RENET have been sanctioned in fourteen states and union territories during the years 1998-99 to 2002-03. A project for the establishment of `Renewable Energy Network' (RENET) and the creation of Renewable Energy Database for MNES is being executed through CMC. Under the project, an intra and inter-divisional file movement software: `Renewable

Officers of the Ministry have been imparted training in the use of the computer system. Specialised training programmes for the officers of the Ministry have also been organised. During the year, officers have also been nominated for training programmes organised by NIC, free of charge at their Training Division.

IMPLEMENTATION

OF

10TH FIVE YEAR PLAN

For the utilisation of information technology and the establishment of Technology Information System in the area of

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renewable energy, TIFAD Division has successfully implemented its IT Plan at the Ministry's headquarters, its regional offices and the Solar Energy Centre. During the 10th Plan, TIFAD Division will also take up three separate schemes, namely `Information Technology Utilisation for Renewable Energy Scheme (ITRES), Renewable Energy Technology Information System (RETIS) and Renewable Energy Patent Information System (REPIS)'. During the year, these schemes were in the process of preparation for their implementation.

3rd International CHP and Decentralised Energy Symposium by Cogeneration Association of India International Conference on "Bio Fuels Driving India's Future" by CII Annual Conference of the State Nodal Agencies Vice Chancellors Meet on Renewable Energy in Tamil Nadu
INFORMATION & PUBLIC AWARENESS PROGRAMME

SEMINAR

AND

SYMPOSIA

The main objective of seminars, symposia, workshops and conferences in renewable energy is to help in creating awareness about renewable energy and provide feedback and learning points for implementing the renewable programmes more effectively. These events also provide a converging forum for scientists, technologists, policy planners, managers, economists, financial institutions, industry representatives, consultants and entrepreneurs to interact and share their views on various aspects of development of renewable energy sector. The Ministry has been providing financial and technical support to Government and Semi-Government organisations, academic and R&D institutions and NGOs for organisation of seminars, symposia, workshops, conferences, short duration awareness campaigns etc. During the year 2002-2003, the Ministry supported the following major events: International Conference on "Recent Advances in Solar Energy Conversion Systems" by Maulana Azad College of Technology. International Conference on `Bio fuels India's future' by Confederation of Indian Industries (CII). International Conference on `Power India 2002' by India Tech Foundation, Mumbai. Business Meet on Wind Energy by Agency for NonConventional Energy and Rural Technology (ANERT) Kerala

The Information & Public Awareness (I&PA) Programme aims at popularisation of New & Renewable Sources of Energy (NRSE) systems & devices for their widespread utilisation in the country, and also dissemination of information on technological developments and promotional activities taking place in the area of renewable energy. The programme is implemented using existing Government channels i.e. State Nodal Agencies, Directorate of Advertising & Visual Publicity (DAVP), Doordarshan, All India Radio (AIR), Deptt. of Posts, Song & Drama Division of Ministry of Information & Broadcasting etc. The message for adoption of NRSE systems & devices is conveyed to all sections of society using a variety of media like electronic media, print media, exhibitions and outdoor media.

ELECTRONIC MEDIA
Two video spots titled "Clean Renewable Energy" and "Solar Cooker" were produced through Doordarshan for telecast during national news mid break. A Doordarshan produced video spot titled "Clean Fuel & Manure" is under consideration for approval. A radio programme on renewable energy titled "Nai Roshni Nai Dishaein" of 15 minutes duration has been taken up for production and broadcast of 15 episodes through DAVP. One episode a week is being broadcast in Hindi and regional languages from 40 Vividh Bharati stations, six FM stations, 15 North Eastern stations and 75 local radio stations of All India Radio across the length and breadth of the country from 22.12.2002 to 30.03.2003.

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PUBLICITY

PRINT MEDIA

Thematic advertisements on various renewable energy technologies, systems and devices were issued through DAVP in English, Hindi and regional languages-newspapers. The thematic advertisements on renewable energy have also been released to several journals, magazines etc. to maximise their outreach. Printing of NRSE slogan in regional languages including Hindi & English on post cards and inland lettershas been completed. Printing of slogan with sketch diagram of NRSE systems and devices on envelopes & speed post satchels and railway reservation tickets through Department of Posts and Northern Railway is in progress. Printing a special issue of Urja Bharati on "Solar Passive Architecture" is in progress. CDs of the booklet "A Factsheet of Achievements" and the "Annual Report 2001-02" have been prepared. Updation of the book "Renewable Energy in IndiaBusiness Opportunities" is in progress for development of CDs. Two issues of "Resource", a quarterly newsletter on renewable energy for school children were released and more issues are also to be brought out.

Postal Department's mail vans has also been taken up in different States. Exhibits like photographic blow-ups and write-ups were prepared during the year. The Ministry's Photo Unit covers NRSE installations and provide photographs, transparencies and slides for the print media, exhibitions, seminars, conferences and other agencies.

LIBRARY
The Ministry has a library catering to the day-to-day reference requirements of its officers and staff. The library also has a reading room well stocked with books, literature and publications on technical, financial and administrative topics. The Ministry has taken steps to strengthen the library with technical books and journals on renewable energy. A Committee has been constituted for recommending purchase of technical books and journals including Hindi books. The library continues to provide newsclipping services.

OTHER ACTIVITIES
Publicity of renewable energy was carried out through distribution of T-shirts, printed with the slogan on renewable energy, in the 7th Health Fitness Carnival Run through the organizer of the Run. The Fourth national competition of drawing, poster, essay and working models on renewable energy for school children was organized through National Foundation of Indian Engineers (NAFEN) to celebrate the National Science Day during February 2003.
SPECIAL AREA DEMONSTRATION PROGRAMME

PUBLICITY

THROUGH

EXHIBITIONS

AND

OUTDOOR MEDIA

Twenty-two State level NRSE exhibitions were organised in important melas/festivals in different States. More such exhibitions will be organised within this financial year. The Ministry participated in the India International Trade Fair-2002 held during 14th - 27th November 2002 by setting up indoor and outdoor pavilion on renewable energy. The Ministry participated in "The India Infrastructure Show" exhibition organised by Confederation of Indian Industries (CII) at Pragati Maidan, New Delhi from 58 February 2003. Awareness campaigns were organised in different States through mobile exhibition vans (MEVs) fitted with working NRSE systems & devices. The Ministry has taken up outdoor publicity on renewable energy using kiosks, bus back panels, bus queue shelters, hoardings etc. through DAVP in different States. Publicity activity through

The Energy Park Scheme was started in 1994-95 under Special Area Demonstration Programme. Two types of Energy Park projects are promoted under the scheme. District level Energy Parks are set up at the rate of one park per district in well-known educational institutions, registered consumer forums and public places where there is large inflow of public. The State level Energy

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Park is proposed to be set up in every State in suitable public places.

OBJECTIVES
The objectives of the Energy Park Scheme are: (i) to create awareness and give publicity amongst the students/teachers and rural and urban masses about the use and benefits of the renewable energy systems and devices; (ii) to demonstrate the use of NRSE technologies; (iii) to provide opportunity to the technical institutions to carry out technical experimentation on renewable energy systems and devices by the students/teachers; and (iv) to give large scale publicity through setting up of State Level Renewable Energy Awareness/Education Parks.

maintenance of District level Energy Parks on case to case basis for a period of 4 years starting from the 2nd year to 5th year. For State level Renewable Energy Awareness/Education Parks (large sized), Central Financial Assistance (CFA) can be provided up to a maximum of Rs.1.00 crore for the energy systems/devices and exhibits. However, the State Nodal Agencies meet the total civil construction cost etc. The concerned State implementing agencies are given Rs.5,000/- per park for monitoring the progress of the implementation of District level Energy Parks. A typical district level energy park may include energy systems/devices such as, improved chulhas (fixed/portable type); solar photovoltaic street lights; domestic lights and solar lanterns; solar water heating systems, solar cookers, solar stills, biogas plant, solar PV radio, solar PV power plant, a solar PV colour TV, a solar PV pump, a solar drier, a biomass gasifier and a wind pump. However, the systems and devices are sanctioned depending upon the potential and the requirement of the institutions.

IMPLEMENTATION
The Energy Park Scheme, implemented through the State Nodal Agencies /Departments has been modified during the current Financial Year 2002-2003. The main features of modified scheme are that the district level Energy Parks are now being set up only in technical institutions and the procurement and installation cost of energy systems and devices is being shared on 50:50 basis between MNES and the institution concerned. The State nodal agencies implement the energy park projects. The number and type of renewable energy systems and devices for each energy park is decided by the Committee on Energy Parks and depends upon the requirement of the institutions and their utility.

EVALUATION

OF

ENERGY PARK SCHEME

FUNDING

OF

ENERGY PARKS

With a view to assess the performance of the Energy Park Scheme vis--vis to suggest measures for further improvements, the Ministry had sanctioned an Evaluation Study on Energy Parks in June 2001 to four independent organisations namelyAdministrative Staff College of India (ASCI), Hyderabad; Indian Institute of Mass Communication (IIMC), New Delhi; National Council of Applied Economic Research (NCAER), New Delhi and National Productivity Council (NPC), New Delhi. Forty-eight Energy Parks in twelve States were covered under the evaluation study. The main recommendations of the evaluation study are given below: All energy parks need a regular or periodic repair and maintenance. The in-charge personnel/ operational executives/operators in the institutions need to be trained on operation and maintenance of Energy Parks. State Nodal Agencies should ensure the proper running of the Energy Parks under its purview as per MNES norms.

The maximum cost of a District level Energy Park is limited to Rs.10 lakh and is shared on a 50:50 basis between the MNES and the institution concerned. Besides, the Scheme provides for Central Financial Assistance (CFA) of not more than 7% of the capital cost of the energy systems and devices for repair and

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25

There should be two levels of implementation of Energy Parks, one in public places and the other at the institutional level (apart from the Technical Institutions, it could also include Agricultural Engineering Colleges, Krishi Vigyan Kendras etc.). The size of the Energy Park may vary for these two types. On the one hand, the Energy Parks in public places generate wide scale awareness and on the other, the Energy Parks in institutions impart/provide a practical oriented training to the students. While recommending for sanction of Energy Parks to the Ministry, State Nodal Agencies should give priority to the institutions which have a minimum of 10-15 years of experience in operation and maintenance of similar projects and commitments of the institutions should also be taken into account. Local environmental conditions should also be taken into consideration, while selecting the devices for installation in the Energy Park. Literature giving details of the devices should be made available to the institutions for public distribution (visitors and students). Workshops may be organised at the State level or Regional level to ensure better understanding, learning and coordination between each other. Monitoring of these workshops by MNES will ensure that experiences are shared. A condition may be imposed on every Energy Park's institution to invite other local institutions to visit the park. At least a minimum of 10 institutions to be contacted for sending their students to visit the park. The district field/project officers are to monitor these visits.

district level and at least five State level Energy Parks has been kept for the current year 2002-03. A total of only five new district level Energy Park project proposals have been received so far which are under process for sanction. During 2001-02, 8 State level Renewable Energy Awareness/ Education Parks for setting up at Durgapur (West Bengal), Delhi, Ernakulam (Kerala), Itanagar (Arunachal Pradesh), Guwahati (Assam) Raipur (Chhattisgarh), Bhubaneswar (Orissa), and Shillong (Meghalaya) have been sanctioned. During the current Financial Year 2002-2003, 2 State level Renewable Energy Awareness/Education Park project proposals, one each from Maharashtra and Uttaranchal, have so far been considered and are being sanctioned. It is expected that a minimum of Seven State level Renewable Energy/Education Parks would be sanctioned by the end of the current year 2002-03. The Ministry has sanctioned a State level Renewable Energy Awareness/ Education Park to Delhi Tourism & Transportation Development Corporation (DTTDC), New Delhi for setting up at The Garden of Five Senses "Said-ul-Ajaib", New Delhi. The park is almost ready and is likely to be commissioned by the end of January 2003. This energy park is going to be a model park. The main attractive feature of the park is the two Solar Trolley Buses, totally run on solar photovoltaic power, have been introduced for display and use for the first time in the country. The solar buses will run on a track of about 1.2 kms. The other attractive functional models include- Energy Quiz, Electricity Generating Drum, Energy Slip, Battery operated bicycles (10 Nos.), Computer Mechano Set, Micro hydel Unit, Solar Cars (2 Nos.), Solar PV Pump, Solar Refrigerators (2 Nos.), Solar Water Heating System (1000 lpd) and Solar Colour TV etc. The friendship pavilion has also been constructed in the park based on the solar passive features. The Energy Park will be a centre of attraction particularly for the children and will give publicity about the use and benefits of renewable energy to the public. Two State level Renewable Energy Awareness/Education Parks, one each at Itanagar in Arunachal Pradesh and Durgapur

ACHIEVEMENTS
A total cumulative of 278 District level Energy Parks have been sanctioned since the inception of the scheme in 1994-95 to March 2002 in 32 States and Union Territories. A target of 60

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27

in West Bengal are also expected to be ready for the public by the end of current financial year 2002-03.
RESEARCH & DEVELOPMENT

Research & Development efforts in renewable energy are being supported since 1982. For sustained development of this sector, it is necessary that renewable energy is driven to a substantial extent by the market and the consumer. To achieve this, the ministry has given a market oriented thrust to R&D efforts and has evolved a policy of supporting Research & Development with close involvement of the industry. One focus of R&D is on cost reduction and improvement in efficiency of renewable energy devices. This includes upgradation of existing renewable energy technologies and the development, demonstration and commercialisation of new and emerging technologies. A greater level of commercialisation of renewable energy systems with a wide ranging linkage and co-operation between research and academic institutions and industry is envisaged in the R&D policy of the ministry. The ministry has also identified thrust areas for R&D efforts so as to help principal investigators to generate good quality proposals. The ministry has re-constituted the R&D Advisory Committee comprising eminent persons in the areas of research, industry, academic institutions, national laboratories, IITs, etc. to consider R&D proposals and to make recommendations. The Committee also discusses and recommends R&D strategies and priorities. During the year the Committee considered 32 R&D projects while 38 more are likely to be considered before the end of the financial year. Some of the major projects considered by the R&D Advisory Committee include development of nano and micro crystalline thin film solar cells; study on evaluation of improved chulha with reference to indoor air pollution and health aspects in field conditions in different climatic zones in North East India having diverse traditional and geographical nature; design standardisation of kitchens with respect to indoor air quality and thermal comfort; design and development of biogas powered

single pressure refrigeration for rural areas; development of high performance biogas-vegetable oil dual fuel engine; and development and testing of low cost membrane filters from biomass ash for hot gas clean up of producer gas for gasifier based power plants etc. It is proposed to take up more intensive goal oriented, industry driven R&D with large scale industrial participation in order to commercialise renewable energy technologies. R&D work would also be focused on power generation, system optimisation, efficiency improvement and feasibility of new and emerging technologies so that renewable energy sector gets greater market orientation which would result in overall economic development of this sector in the country.

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the main objective of WRED scheme is to facilitate women selfhelp groups to optimally use renewable energy systems.
NATIONAL BIOGAS MANAGEMENT PROGRAMME

2
RURAL ENERGY
Rural people depend upon biomass fuels, such as fire wood, animal waste and crop residues for meeting cooking and heating energy requirements. These fuels are burnt in an in-efficient manner in traditional chulhas, causing not only economic loss to the nation but also health problems to women. While the present level of consumption of firewood is considered unsustainable, the burning of animal waste and agricultural residues deprives our soils of much needed organic matter, adversely affecting soil health and agricultural productivity. Fortunately, technologies have been developed indigenously to produce modern biomass fuel, such as biogas from cattle dung and other organic wastes and to burn biomass in an efficient manner in improved chulhas. The Ministry of Non-Conventional Energy Sources, therefore, continues to implement a Centrally Sponsored Scheme National Biogas and Manure Management Programme (NBMMP), a modified version of the Ninth Plan Scheme on National Project on Biogas Development (NPBD), with the objectives to promote family type biogas plants and biogas power stations. These programmes depend upon developing and involving rural entrepreneurs and women self-help groups. Rural Energy Entrepreneurship and Institutional Development (REEID) and Women and Renewable Energy Development (WRED), initiated on a pilot basis in 2000-01, continued during 2002-03. While REEID scheme aims at developing and strengthening local institutions and training for promoting renewable energy entrepreneurship,

Biogas is produced using a fermentation process wherein complex organic molecules present in organic wastes are converted into methane, carbon dioxide and traces of other gases. Indigenously developed `biogas (gobar gas) plants' are simple and easy-to-operate. Biogas, which contains about 55 to 70 per cent methane, is an efficient fuel when burnt in specially designed stoves for cooking purposes and in silk mantle lamps for lighting. It can also be used in dual fuel engines for motive power and when attached with alternators for generation of electricity. The left-over digested slurry serves as an enriched manure for agriculture and pisciculture. The National Biogas Management Programme (NBMP) is a modified version of the National Project on Biogas Development (NPBD), which was implemented during 1981-82 to 2001-02. Its objectives are: (i) to provide clean and cheap source of biogas energy; (ii) to produce and use enriched organic manure; (iii) to develop management systems for production of value added products; (iv) to improve sanitation and hygiene by attaching toilets with biogas plants; (v) to mitigate drudgery of women and girl children; (vi) to generate employment in rural areas; and (vii) to set up biogas power stations in cattle-based institutions.

TECHNOLOGY
The main approved designs of biogas plants are: (i) floating gas holder type, popularly called "Indian or KVIC (Khadi and Village Industries Commission) Model", (ii) the fixed dome type, commonly known as "Deenbandhu Model" and

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(iii) bag type portable digester made of rubberised nylon fabric. Fixed dome models using different construction materials have also been approved viz. the ferro-cement Deenbandhu Model and the pre-fabricated reinforced cement concrete model.

approach". New initiatives introduced in 2002-03 for improving the quality include: (i) 100 per cent physical verification by States/ agencies before forwarding financial claims to MNES; (ii) embossing identification marks at an easily visible place on biogas plants; (iii) fixing of photographs of beneficiaries in subsidy disbursement records; (iv) sharing of lists of beneficiaries among different agencies working in a given district to avoid duplicate reporting; (v) involving Panchayats to identify beneficiaries and to display the lists of beneficiaries in Panchayat Ghars; and (vi) setting up of State and district level co-ordination committees.

ACHIEVEMENT
Against an estimated potential of setting up of 120 lakh family type biogas plants, a cumulative total of 33.70 lakh plants have been set up so far in the country, thereby covering over 28 per cent of the potential. For 2002-03, a target of setting up of 1.70 lakh family type biogas plants was planned initially with budget estimates of Rs.59.90 crore. However, a target of only 1.20 lakh plants has been allocated to States and agencies as most of the States were affected by drought. About 70,440 plants have been completed during the period April to December 2002, which is almost 117 per cent over the target of 60,000 plants planned for the corresponding period. India is in the sunny belt of the world. The country receives solar energy equivalent to more than 5,000 trillion kWh per year, which is far more than its total annual energy consumption. The daily average global radiation is around 5 kWh per sq.m per day with the sunshine hours ranging between 2300 and 3200 per year. Though the energy density is low and the availability is not continuous, it is now possible to harness this abundantly available energy very reliably for many purposes by converting it to usable heat or through direct generation of electricity. The conversion systems are modular in nature and can appropriately be used for decentralised applications.

FINANCIAL INCENTIVES
NBMP provides for Central financial assistance (CFA) for various items and activities as described below: (i) Central Subsidy: Central subsidy is given in fixed amounts varying according to categories of beneficiaries and areas. The details of Central subsidy are given in Table 3.2. (ii) Turn-Key Job Fee: The amount of turn-key job fee is Rs. 800/- per plant for North-Eastern Region States (excluding the plain areas of Assam), Sikkim, Jammu and Kashmir, Himachal Pradesh, other notified hilly areas and Andaman and Nicobar Islands. For other areas, the rate is Rs.700/- per plant. (iii) Household Toilet Linked Plants: An additional Central subsidy of Rs.500/- per plant is given for linking the cattle dung based plant with a sanitary toilet, wherever feasible. (iv) Repair Charges for Old Non-functional Plants: Financial support is given up to a maximum of 50 per cent of the rate of Central subsidy as applicable for a given category of beneficiary and area for repair of plants, which have been used for a period of at least five years and thereafter developed structural defects.

IMPLEMENTATION
The programme is implemented by State Nodal Agencies and Departments, Khadi and Village Industries Commission (KVIC) and Non-governmental Organisations. Some States like Andhra Pradesh, Karnataka, Gujarat, Maharashtra and Himachal Pradesh have linked the biogas programme with rural development schemes. The programme is implemented with a "cluster area

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33

(v) Service Charges and Staff Support: The rate of service charges is linked with a given target range allocated to States and agencies, except North Eastern Region States, Sikkim and Jammu and Kashmir, where full financial support is given for the staff sanctioned for the State headquarters and selected districts. The rates of service charges applicable for 2002-03 are as follows (i) Rs.0.50 lakh plus Rs.300 per plant in excess of 200 plants for a target range of 100-3,000; (ii) Rs.8.90 lakh plus Rs.150 per plant in excess of 3,000 plants; and (iii) Rs 14.90 lakh plus Rs.100 per plant in excess of 7,000 plants subject to a maximum of Rs.30.00 lakh. (vi) Grants to Biogas Extension Centres (BECs): A non-recurring grant of Rs.10,000/- and a recurring grant of Rs.20,000/ - per year is given to BEC for systematically organising users' courses in villages. (vii) Training Courses: Financial assistance is given for organising different kinds of training courses. A one-day Users' course for 50-60 trainees per course is given CFA of Rs.1,000. A 2-3 days Staff Course for 10-15 trainees per course is given Rs.5,000 CFA per course. A 16-day refresher/construction-cum-maintenance course for 10 trainees per course is given Rs.19,000 CFA per course and a 21-day Turnkey Workers Course for 10 trainees per course is given Rs.38,500 CFA per course. (viii) Communication and Publicity: Assistance is given for communication and publicity work linked with target ranges to state nodal departments and agencies. Rs.1.00 lakh CFA is given for target ranges up to 1,000 plants, Rs.2.50 lakh for a target range between 1,001-10,000 plants and Rs.5.00 lakh for a target more than 10,000 plants. (ix) Demonstration on the Use of Digested Slurry: Financial assistance is given at the rate of Rs.50,000/- per demonstration to State Governments, Agricultural Universities, Krishi Vigyan Kendras and Farmer's Training Centres, non-governmental organisations, etc. This item

has been approved for the first time in 2002-03 with the objective to collect scientific data on the effect of digested slurry on crop production. (x) Biogas Power Stations: Financial support is given for preparing Detailed Project Reports (DPR). The quantum is up to a maximum of Rs.1.00 lakh per project of 100-250 kW and Rs.2.00 lakh per project for capacity above 250 kW. Central subsidy at the rate of Rs.30,000/- per kW is given for setting up a power project of 100-250 kW installed capacity and Rs.75.00 lakh plus Rs.25,000 per kW for a project having installed capacity of 250-500 kW. Besides, 10 per cent of the Central financial assistance for each project is given as service charges to State nodal departments and agencies for providing technical, supervision and training support, including facilitating signing of Power Purchase Agreement with State Electricity Boards and marketing of manure.

FINANCING INSTITUTIONS
Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) continue to support the biogas programme. Detailed guidelines are available with both commercial and co-operative banks for financing family type biogas plants. NABARD is providing automatic refinancing facility to commercial banks for loan amounts disbursed for biogas plants.

TRAINING CENTRES
Biogas Development and Training Centres (BDTCs) have been established to provide technical, training and publicity support in a decentralised manner to State nodal departments and agencies for an effective and accelerated implementation of NBMP. The eight such centres functioning in major States of the country are namely University of Agricultural Sciences, Bangalore, Karnataka; Indian Institute of Technology, Kharagpur, West Bengal; Centre for Energy Studies and Research (CESR), Devi Ahilya Vishwa Vidyalaya, Indore, Madhya Pradesh; Punjab Agricultural University, Ludhiana, Punjab; Himachal Pradesh Krishi

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35

Vishvavidyalaya, Palampur, Himachal Pradesh; Maharana Pratap University of Agriculture and Technology, Udaipur; Rajasthan; Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu; and Planning Research and Action Research (PRAD), Lucknow, Uttar Pradesh. These Centres are also carrying out applied research on area-specific problems. Full financial assistance is given for sanctioned staff, contingencies and training courses. BDTCs focus on the training of masons to improve quality of construction of biogas plants with due care to ensure shape and dimensions of the approved models and use of quality construction materials. BDTCs are increasingly involved in the monitoring of quality of biogas plants and publicity for the installation and use of biogas.

(iii) development of designs and methodologies for utilisation of other biomass and agro-residues for biogas production; (iv) reducing cost of biogas plants by use of alternative building materials and construction methodology; and (v) diversified use of digested slurry for value added products. During the year 2002-03, two projects were completed and two new projects have been sanctioned. The highlights of the completed projects are given below: (i) Under the project "Microbiology of methane production from animal dung at low temperatures and improvement of digester performance", the Defence Research and Development Organisation (DRDO), Gwalior, Madhya Pradesh studied performance of two biogas digesters, made of fibre reinforced plastic (FRP) insulated with polyurethane foam and installed at National Research Centre on Yak, Dirang, Arunachal Pradesh. The digesters were inoculated with microbial consortia adapted at 10 oC and continuously operated with cattle dung and Yak waste. The digesters worked satisfactorily, although with reduced gas yields. Field trials are recommended using adapted microbial consortia for improved gas production in biogas plants installed at high altitudes. (ii) The Division of Environmental Sciences, Indian Agricultural Research Institute, New Delhi has completed a study entitled, "Green house gas emission from exposed areas of biogas plants". Quantitative measurements was carried out on emission of methane, carbon dioxide and oxides of nitrogen from exposed areas of biogas plants and manure pits located in northern plain region and hilly terrain. The study has concluded that green house effect of biogas plants is only marginal. New projects sanctioned during the year are: (i) Development of certain poultry equipment Brooder, incinerator, flame gun operated on biogas generated by poultry droppings at Poultry Experimental Station,

TRAINING
State Governments, agencies and BDTCs have planned a target of organising 3,000 users' courses and 210 construction-cummaintenance courses (CMC) during 2002-2003.

PUBLICITY

AND

AWARENESS GENERATION

Both print and electronic media are used for raising awareness in rural areas. Periodic advertisements on the benefits of biogas technology and details of the government financial assistance are released in national and regional dailies. Regional Stations of All India Radio and Doordarshan are used for broadcasting/telecasting programmes on biogas. Many State Governments and programme implementing agencies are organising farmers' training camps at the block level, distributing information leaflets during Kisan Melas and displaying publicity materials and screening documentary films in district level agricultural meets.
R&D ON BIOGAS

Thrust areas for research and development (R&D) on biogas identified are: (i) studies in the field of microbiology, biochemistry and engineering for increasing the biogas yield especially at low and high temperatures; (ii) development of cost effective designs of biogas plants;

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Livestock Research Institute, Rajendranagar, Hyderabad, Andhra Pradesh and (ii) "Value added products from biogas slurry manure produced through vermitechnology involving botanicals and microbials" at Central Institute of Medicinal and Aromatic Plants, Lucknow, Uttar Pradesh. A summary of the research work in progress under seven other R&D projects is given below: (i) The Agharkar Research Institute, Pune, Maharashtra is carrying out work under the project entitled, "Development of microbial technology to enhance biogas production from cattle dung at different temperatures". The results indicated that the increase in the biogas production was proportional to the quantity of clarified digested slurry added up to a certain level. The biogas production was increased up to 35 per cent with re-circulation of 40 per cent by volume of clarified digested slurry. (ii) Under the project "Development of two stage psychrophilic anaerobic reactor for cold climatic condition for solid waste" at Energy Research Centre, Punjab University, Chandigarh, work on single stage anaerobic digestion at psychropilic temperature has been completed. Results showed that the gas production at 7-10C ambient temperature could be sustained with inoculum acclimatized at 10C. Work is in progress to use isolated psychrophiles in the first acidogenic stage of the two-stage anaerobic digestion process. (iii) At the Indian Institute of Technology, New Delhi, preliminary studies have been carried out on the use of materials, such as, clay pipes, ferro-cement angles, asbestos sheets, nylon ropes, etc., as fixed-film matrix in laboratory scale digesters under the project entitled "Design of fixed film reactors for performance enhancement of cow dung based biogas plants". The results indicated a significant bio-film formation on clay pipes and asbestos matrix. A modified method has been standardised for determining

the Chemical Oxygen Demand (COD) in dung slurry, which contains heterogeneous substrates. (iv) Under the project entitled, "High rate biomethanation of lignocellulosic waste biomass and utilisation of the effluent for production of plant growth regulator" taken up at Regional Research Laboratory, Jorhat, Assam, a two phase digestion system has been developed for fibrous biomass, such as de-oiled citronella grass and de-oiled lemon grass, which are wastes of aromatic oil industry. A hydraulic retention time of 1.2 days has been achieved for the methanogenic reactor. Work is in progress to standardise the design for efficient gas production. (v) Under the project entitled, "Development of high efficiency biogas plant through modifications in design and feed stock amendment" at National Environmental Engineering Research Institute, Nagpur, Maharashtra, an experimental reactor with inner well and gas collection accessory has been developed to prevent short-circuiting of fresh feed stock with digested material. (vi) Project entitled, "Design and development of a high performance biogas digester for north-eastern region of India" has been initiated at IIT, Guwahati, Assam. Design and fabrication of a duplex digester is in progress along with laboratory level simulation of biogas digester and a study on thermo-physical properties of biomass feedstock. (vii) Under the project entitled "Development of improved biomethanation system: High rate anaerobic digester for wastewater containing solids" at Regional Research Laboratory (RRL), Thiruvananthapuram, Kerala, a new generation high rate system called "Buoyant Filter Bioreactor (BFBR)" has been developed and standardised for treatment of waste water from sources, such as dairy, slaughter house, food processing industries and sewage. The new design facilitates establishment of microflora capable of converting fats into biogas at a faster rate on a continuous basis.

38 BIOGAS POWER PROJECTS

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A detailed project report has been prepared for setting up a biogas power project at Sri Gopal Govardhan Goushala, Pathmeda, district Jalore, Rajasthan. It is estimated that about 100 metric tonnes of cattle dung available per day from about 16,000 cattle heads would be adequate for a 300 kW power station. The project envisages implementation in two stages, each for treatment of 50 metric tonnes of cattle dung per day at a total estimated cost of Rs.3.00 crore. This shows huge potential for setting up biogas power projects in large gaushalas and dairy farms.
ENERGY ENTREPRENEURSHIP DEVELOPMENT

teaching and management institutions. Financial support is also given to entrepreneurs for acquiring technology, getting quality certification from Bureau of Indian Standards (BIS), preparing bankable projects, etc. Provision has been made for organising market surveys, studies on financial and socio-economic analysis of renewable energy systems, preparation and distribution of good practice manuals for fostering entrepreneurship amongst rural youth.

IMPLEMENTATION
Institutions set up in different States specifically for entrepreneurship development are involved in implementing REEID Scheme. The Centre for Entrepreneurship Development Andhra Pradesh (CEDAP), Hyderabad is organising EDPs and EACs with the involvement of non-governmental organisations. The North-India Technical Consultancy Organisation Limited (NITCON), Chandigarh has organised EACs in engineering colleges and polytechnics to focus on issues relating to entrepreneurship as a career option, planning of small scale businesses and marketing of REDs. Maharashtra Industrial Technical Consultancy (MITCON), Pune, has conducted EDPs in two phases, i.e. orientation and project formulation; and project financing. Sardar Patel Renewable Energy Research Institute, Vallabh Vidyanagar, Gujarat has organised EACs with the help of local Employment Exchange and non-governmental organisations. Ramakrishna Mission Ashrama, Ranchi, Jharkhand has organised EDPs to develop entrepreneurship development abilities amongst tribal youth.

A pilot scheme initiated in 2000-01, on Rural Energy Entrepreneurship and Institutional Development (REEID), continued during 2002-03 with the objective of creating entrepreneurship in the rural energy sector by strengthening entrepreneurship development centres in different States with linkages to renewable energy industries, IREDA, SNAs and NGOs for providing entrepreneur development training, management skills, support for project formulation, maintenance services and export management, and consultancy; awareness camps; and promote rural energy micro-enterprises for manufacturing, marketing, servicing and exporting rural energy systems;

CENTRAL FINANCIAL ASSISTANCE (CFA)


The scheme provides for CFA for organisation of one-day Entrepreneurship Awareness Camps (EAC) at the rate of Rs.10,000 per camp and 4-5 week duration Entrepreneurship Development Programmes (EDP) at the rate of Rs.1.00 lakh per programme. Besides, establishment of rural energy entrepreneurs and consumers facilitation counters is supported with a grant of Rs.1.00 lakh per counter. Provision exists for capacity building by way of core organisational support up to Rs.10.00 lakh as non-recurring grant and Rs.5.00 lakh per year as recurring grant to selected R&D,

ACHIEVEMENTS

DURING

2001-02

AND

TARGETS

FOR

2002-03

During 2001-02, a total of 96 EACs and 33 EDPs were organised. A total of five Rural Energy Entrepreneurs and Consumers Facilitation Counters were established in the States of Bihar, Kerala, Maharashtra and Tamil Nadu. For 2002-03, 90 EACs, 40 EDPs and two counters have been planned with an overall objective to promote about 50 micro-enterprises. A budget of Rs.1.00 crore has been allocated.

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IN

WOMEN AND RENEWABLE ENERGY DEVELOPMENT

ACHIEVEMENTS

2001-02

AND TARGETS FOR

2002-03

The scheme on "Women and Renewable Energy Development (WRED)", initiated on a pilot basis in 2000-01, continued during 2002-03 with the objective of empowering rural women through promotion, marketing, utilisation and management of renewable energy systems and devices by establishing Renewable Energy Sales and Servicing Outlets (RESSOs) managed by women and organising Renewable Energy Women Self-Help Groups (REWSHGs) to arrange construction and maintenance of renewable energy devices, undertake energy plantation in waste lands for fuel wood production, impart training in construction, operation, repair and maintenance of renewable energy devices and systems relevant for women; recognise entrepreneurship and research capabilities among women through awards and certificate of merit; and publish training and best practice manuals, publicity and awareness materials on renewable energy systems. The scheme is implemented by State nodal departments and agencies, Khadi and Village Industries Commission (KVIC), academic institutions and non-governmental organisations (NGOs).

During 2001-02 the 140 Orientation/Training Courses were organised against a target of 200. 58 RESSOs were established against a target of 120 and 79 REWSHGs were established against a target of 122. During 2002-03 it is targeted to organise 75 Orientation/Training Courses, and establish 40 RESSOs along with 40 REWSHGs.

OTHER SCHEMES
The Planning Commission decided in June 2002 that other two Centrally Sponsored Schemes, namely, Community, Institutional and Night-soil based Biogas Plants (CBP/IBP/NBP) Programme and National Programme on Improved Chulhas (NPIC), which were being considered for transfer to the State Plan Sector, should be continued during 2002-03. Accordingly, a target of setting up of 200 community, institutional and night-soil based biogas plants with Revised Estimates of Rs.3.50 crore has been planned.

CONCURRENT MONITORING
Concurrent monitoring of the biogas and improved chulhas programmes was initiated in 2001-02. Four independent organisations have been selected on the basis of applications received through advertisement in national dailies. M/s Techno Economic Services (TES) New Delhi covers the States of J&K, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Uttaranchal and Delhi, while Agricultural Finance Corporation (AFC), Mumbai cover the States of Orissa, Bihar, Jharkhand and West Bengal apart from Rajasthan, Madhya Pradesh, Gujarat, Chattisgarh, Maharashtra and Goa. Tata Energy Research Institute (TERI), Bangalore covers the States of Andhra Pradesh, Karnataka, Kerala, Tamilnadu and Pondicherry and North-Eastern Industrial and Technical Consultancy Organisation (NEITCON) Ltd, Guwahati covers Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura. The field work for concurrent monitoring started in April 2002. A summary of number of villages covered and the devices

CENTRAL FINANCIAL ASSISTANCE (CFA)


CFA of Rs.15,000 per course is provided for organising Orientation Courses of five-day duration. Rs.20,000 per Outlet CFA is given for Renewable Energy Sales and Servicing Outlets (RESSOs) in rural areas. CFA of Rs.10,000 per Group is given for establishing Renewable energy women self-help groups for arranging purchase and maintenance servicing of renewable energy devices and systems. During 2002-03, provisions have been made for giving service charges at the rate of 10 per cent of approved CFA to State Governments and programme implementing agencies; supporting the government approved selected Women Technical Institutes to serve as technical backup unit up to a maximum of Rs.15.00 lakh as non-recurring grant and Rs.5.00 lakh as recurring grant for a period of three years, organising panchayat workshops at the rate of Rs.50,000/- per event.

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monitored during the period April to December, 2002 is given below: ________________________________________Organisation ______________________________Number of villages covered ________________________________________ Number of devices monitored during April to Dec., 2002 ________________________________________ Biogas plants TES, New Delhi AFC, Mumbai NEITCON, Guwahati TERI, Bangalore ________________________________________ ________________________________________ ________________________________________ ________________________________________ Total ________________________________________ ________________________________________ ________________________________________ ________________________________________ Reports on detailed status of devices monitored are sent on a monthly basis directly to the State nodal departments and programme implementing agencies concerned. Observations on qualitative aspects, such as, adequacy of users' training, quality of construction materials used, maintenance servicing provided by turn-key workers/self-employed workers/ non-governmental organisations and awareness about the use of digested slurry are included in the reports. State governments and 1454 7869 8476 120 476 983 853 331 150 Improved chulhas 3996 936 2722 5833 675 724

programme implementing agencies are taking follow up action on these reports with a view to improve quality of the programme. Besides 100 per cent physical verification of biogas plants prescribed for the State Governments and agencies to be carried out at the block level and sample re-verification to be done by the district and State level functionaries, field inspections are carried out on a random basis by the Ministry's Regional Offices. During the period April to December, 2002, the Ahmedabad, Bhopal, Chennai, Hyderabad, Lucknow and Patna Offices inspected a total of 5006 plants in the States of Andhra Pradesh, Bihar, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Tamilnadu, Uttar Pradesh and Uttaranchal, and reported an overall average functionality of 86 per cent.

EVALUATION STUDY
At the instance of the Ministry, the Programme Evaluation Organisation (PEO), Planning Commission conducted a diagnostic survey study on National Project on Biogas Development in 200102. The study covered a sample of 615 plants set up during the years 1995-96 to 1999-2000 in 19 States, namely, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Orissa, Punjab, Rajasthan, Sikkim, Tamilnadu, Uttar Pradesh and West Bengal. The report received in May, 2002, indicated that about 81 per cent plants were commissioned, 6 per cent plants were lying un-commissioned, 4 per cent plants were incomplete and 9 per cent plants were dismantled. Out of the commissioned plants, only 66 per cent plants were found in use. The study's major recommendations included: (i) earmarking areas for implementation to specific agencies to avoid unhealthy competition; (ii) improving reporting system for accuracy and consistency; (iii) following mandatory physical verification before release of Central subsidy; (iv) involving Panchayat level officers in physical verification of biogas plants;

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(v) added emphasis on repair of non-functional plants; (vi) emphasis on training to users on preventive maintenance; and (vii) to set up large size community biogas plants. Guidelines have been modified in the light of these recommendations and issued to all States and agencies for compliance. IIT, Delhi was assigned a study entitled "Determining the extent of installation and impact assessment study of MNES supported programmes relating to improved chulhas, family type biogas plants and community, institutional and night soil based biogas plants in four selected States, namely, Andhra Pradesh, Karnataka, Madhya Pradesh and Uttar Pradesh" in January 2002. The fieldwork was done in March to June 2002. The primary survey was based on structured questionnaire for two respondent categories i.e. State nodal department/nodal agencies and beneficiaries. It covered a sample of 3755 biogas plants and 14,310 improved chulhas set up during 1996-97 to 2000-01 in 367 villages selected from 28 districts of the four States. The interim report on the extent of installation received in August 2002 indicated that on an average 77 per cent of the plants were functional, 19 per cent plants were non-functional, 4 per cent were not installed and dismantled. State-wise status of biogas plants found in the study is given in Table 3.6. In regard to improved chulhas, the study pointed out that only 33 per cent chulhas were in use, 7 per cent were non-functional, 43 per cent were dismantled and 17 per cent were not installed. IIT, Delhi is preparing report on the second part of the study relating to "impact assessment".

Details of the awards for 2000-01 given at the Annual Renewable Energy Conference held in Vigyan Bhawan, New Delhi in May 2002, are mentioned below:

BENEFITS
Achieving 1.5 lakh family type biogas plants and 200 institutional biogas plants would result in the estimated saving of about two lakh tones of fuel wood equivalent and production of about 20 lakh tonnes of enriched manure per year during the life span of about 15-20 years of the plants. The social benefits accrued are reducing drudgery of women involved in collecting fuel materials from long distances, minimizing health hazards due to smoky kitchens, saving in cooking time, etc. Besides, 4.5 million person days employment for both skilled and unskilled workers will be generated and 100 sales and servicing outlets are functioning and about 120 women self-help groups are involved in promoting and maintaining renewable energy devices.
INTEGRATED RURAL ENERGY PROGRAMME (IREP)

AWARD SCHEME
National Project on Biogas Development (NPBD) and National Programme on Improved Chulhas (NPIC) envisaged annual awards to encourage a healthy competition for quantitative and qualitative achievements. An award scheme for women scientists, entrepreneurs and self-help groups and NGOs was instituted under the Women and Renewable Energy Development Scheme.

Rural areas account for the vast majority of the country's population and as such the country's efforts in the direction of sustainable energy security cannot be expected to succeed unless the problems encountered in meeting the energy needs of the rural population are addressed in a planned and systematic manner. This calls for an integrated rural energy planning and implementation framework. It was in this context that the Integrated Rural Energy Programme (IREP) was launched during the Seventh Plan with the aim of developing the planning and institutional capabilities at the State, District and Block levels to formulate and implement area-based micro-level plans to tap in an integrated manner all types of energy sources. Under this programme, people's participation in the planning and implementation of Block-level energy plans and projects is being achieved through the involvement of people's participation, government and non-government agencies and the panchayats, wherever feasible. It also envisages the setting up and the strengthening of mechanisms for effectively linking micro-level

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planning for rural energy with national and the state-level planning for rural energy and economic development. The IREP has two components- Central and State. Under the Central Sector component, the Centrally Sponsored Scheme of IREP provides for developing capabilities in the States and the Union Territories for preparing and implementing integrated rural energy plans and projects. Central financial assistance is provided for the support staff in the IREP project cells at the State and Block levels and for training and extension. The State-sector outlay is utilised for the implementation of IREP plans and projects, including funding of demonstration activities, provision of financial incentives for various energy devices, funding of extension activities and other related activities. The funds and resources from other ongoing energy-related programmes are also utilised in IREP Blocks to the extent possible.

TECHNICAL

AND

TRAINING SUPPORT

Regional Training and R&D institutions have been functioning, one each at Village Bakoli (Delhi), Chinhat (Lucknow), Jakkur (Bangalore) and village Amrol, Distt. Anand in Gujarat. The objectives of these institutions are to: (i) impart training to planning, implementation and administrative manpower at the village, block, district, state and national levels for the IREP; (ii) develop course material for various training programmes for different levels on IREP; (iii) establish data base on rural energy demand and supply for different micro regions of the states and sub-regions, (iv) monitor the various rural energy and development projects and develop suitable computer simulation model; (v) establish facilities for documentation, information dissemination and mass communication in the area of rural energy, appropriate technology and efficient uses of water; (vi) establish a demonstration center for appropriate rural technologies; (vii) undertake research and development on rural energy systems and appropriate technology, including drought animal power resources, manual labour, energy efficient practices utilising conventional and non-conventional energy in agriculture, forestry, rural industries works, etc.; (viii) undertake research and development on programme implementation and management methodologies, including the use of various organisational and institutional alternatives including voluntary agencies/and NGOs; and (ix) carry out economic, social and environmental impact and other related issues. The training programmes organised by the IREP Training Centres during the current year (till 15th January, 2003) are as follows: The IREP Training Centre at Lucknow has organised 17 training programmes on various aspects of IREP and non-

OBJECTIVES
The objectives of IREP are: To provide for minimum domestic energy needs for cooking, heating and lighting purposes to rural people in IREP Blocks; To provide the most cost effective mix of various energy sources and options for meeting the requirements of sustainable agriculture and rural development with due environmental considerations; To ensure people's participation in the planning and implementation of IREP plans and projects through the involvement of panchayats, voluntary organisations and other institutions at the micro level; and To develop and strengthen mechanisms and co-ordination arrangements for linking micro-level planning for rural energy with National and State level planning and programmes for energy and economic development so as to ensure regular and planned flow of energy inputs for meeting the requirements of various end users in IREP Blocks.

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conventional energy programmes for a variety of target groups such as project officers and officers of the other departments involved in the implementation of IREP in the State, SEW's on the repair and maintenance of energy systems and devices, school students for giving an exposure to the non-conventional energy systems, Bankers on their role in the implementation of nonconventional energy programmes and village Panchayat Heads and Municipal Corporations. The IREP Training Centre at Amrol has organised a training programme for technicians on repair of Solar Cookers. The IREP Training Centre at Jakkur (Bangalore) named as Mahatma Gandhi Institute of Integrated Rural Energy & Development (MGIIRED) has organised 40 training programmes on various aspects of IREP to the Project Officers and Junior Engineers involved in the implementation of the IREP in the State of Karnataka and for Village Panchayats, NGOs and Self-help Women Groups.

with the States and Union Territories in a meeting held in October, 2002. The States were requested that while implementing IREP projects, they should consider the total energy for each IREP Block through the most cost-effective mix of different technological options/convergence of different programmes at grass-root level. The States were also requested to provide a minimum of Rs.5.00 lakh per IREP Block for implementation of block level IREP projects apart from mobilising financial resources from other State departments implementing energy related projects/ programmes. The Planning Commission while deciding to continue IREP during the 10th Five Year Plan suggested that IREP may be streamlined to make it more effective and meaningful. The Ministry has, therefore, decided to modify the IREP for implementation from the financial year 2003-2004. Meetings with the Planning Commission and selected States have been held to discuss the modified IREP. Further, it is proposed to discuss the modified IREP in a National Workshop, which may be organised by the end of current financial year 2002-2003.
SOLAR THERMAL ENERGY PROGRAMME

STRENGTHENING

OF THE

PROGRAMME

With a view to demonstrating the formulation of a realistic energy project and its implementation with an assured provisions for maintenance and repair, the Ministry has approved in December, 2000 the provision of financial support to State Governments for implementing IREP in a cluster of villages in selected existing 100 IREP blocks. For this purpose, the Central financial assistance is being given @ Rs.1.00 lakh per cluster of villages for each selected IREP block for preparing detailed energy projects and Rs.50,000 for meeting the cost on maintenance and repair of energy systems and devices. A total of 61 cluster of villages have been sanctioned for 13 States.

Solar thermal technologies utilise the heat energy from the sun for various purposes. Depending on the technology, the temperature of the output thermal energy can vary from as low as ambient temperature to as high as 3000 oC. This opens up a vast area of applications including power generation and refrigeration. As a result of sustained research and development, some technologies have already been developed and are in the stage of large-scale exploitation; a few technologies are still required to be fine tuned after testing them in a variety of field conditions. R&D is also being pursued to develop newer technologies and processes. The solar thermal energy programme of the Ministry has been designed to promote utilisation of available technologies optimally and develop newer applications. The status and the promotional efforts related to the relevant technologies are reported below.

ACHIEVEMENTS
A total of 860 blocks have been sanctioned for implementation of IREP from the inception of the Programme till 1997-98. The Programme has been consolidated in the sanctioned 860 blocks during 2002-2003. With this, about 16% of the total number of the blocks in the country have been covered under IREP. The implementation of the programme was reviewed in the Ministry

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SOLAR WATER HEATING


Solar water heating systems (SWHS) have been commercialised in many countries of the world including India. Their technical feasibility and economic viability has been established. It is now recognised as a reliable product that saves substantial amounts of electricity or other conventional fuels, leads to peak load reduction and prevents emission of carbon dioxide, a major green house gas. The initial scepticism about the utility, effectiveness and maintenance has given way to widespread product acceptance. Depending on the site, type of utilisation and the structure of electricity tariff or fuel prices, the pay back period of the technology may vary from 2 to 6 years. To promote widespread utilisation of the technology, the Ministry has been operating an interest subsidy scheme being implemented through Indian Renewable Energy Development Agency (IREDA) and a few designated banks. This helps offset the high initial cost of the systems, provides an acceptable pay back period to various end users, stimulates the market and results in establishing a strong manufacturing base & after-sales service network. On the basis of the experience gained in operating the Solar Thermal Energy Programme during the Ninth Five Year Plan period, a comprehensive scheme for the Tenth Five Year Plan has been formulated and notified. The interest subsidy scheme has been extended for the entire Tenth Five Year Plan. Under the new scheme, the banks have been authorised to finance solar water heaters up to a capacity of 5000 litres instead of 2000 litres. The subsidised rate of interest is 5% to the end users. Considering the prevailing interest rates in the market and structure of income tax, the rate of interest for loans to end users in the commercial category through IREDA has been reduced to 7% from 8.3%. Housing co-operative societies and developers of real estates have also been made eligible for soft loans for installing solar water heaters in bulk at an interest rate of 5%. However, all borrowers taking loans at 5% interest rate (except individuals) are required to give an undertaking that no accelerated depreciation allowance would be availed.

It has also been decided to include solar water heaters based on evacuated tubular collectors (ETCs) under the soft loan scheme. Currently ETCs are not being manufactured in the country. However, the introduction of ETCs for solar water heating is expected to broaden the application area and promote the solar water heating technology further. On the basis of the test reports issued by MNES test centres, three companies have presently been recognised for supply of ETC based solar water heaters under the soft loan scheme. During the year the soft loan scheme has been expanded through more branches of the implementing banks. Currently Bank of Maharashtra, Andhra Bank, Punjab National Bank, Syndicate Bank and Punjab & Sind Bank operate the scheme through all their branches in the country. Canara Bank and Union Bank of India operate the scheme through their designated branches. The banks provide 85% of the cost of the project as soft loans repayable in 5 years. The banks are finding increasingly greater response from the customers for soft loans. The award for the best performance for the year 2000-01 was given to Bank of Maharashtra. IREDA has also changed its financing norms for solar thermal systems. The repayment period for loans has now been made 6 years including a moratorium period. The minimum promoter's contribution for such loans is 20%. The Ministry has been pursuing with state governments the proposal for making solar assisted water heating mandatory in certain categories of buildings through amendments in the building bye-laws. To encourage local governments to notify the mandatory provision for solar water heating systems, a provision for central financial assistance to municipalities and municipal corporations has been made in the new scheme. The quantum of assistance is Rs.5 lakh for municipalities and Rs.10 lakh for municipal corporations and is meant for training, study tours, awareness creation, demonstration, preparation of brochures/manuals, creating the infrastructure for implementing the mandatory provision. A large number of solar water heaters comprising collector area of about 30,000 sq. m have been financed till December 2002.

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A total collector area of 680,000 sq. m. has been installed in the country so far. The heat from the sun can also be used for cooking. Solar cooking has the potential of saving significant amounts of conventional fuel. On clear sunny days, it is possible to cook both noon and evening meals in a solar cooker. Solar cooking, however, does not fully replace conventional fuels, but helps in partly substituting such fuels. Different types of solar cookers have been developed in the country. These include box cooker, dish cooker, cardboard cooker, community cooker for indoor cooking and solar steam cooking system. A box solar cooker is a slow cooking device useful for small families. It can cook 4 dishes at a time and can save 3-4 LPG cylinders in a year if used regularly. It is an ideal device for domestic cooking during most of the year except the monsoon season and cloudy days. Cookers with electrical back up are also available for use during non-sunshine hours. The dish solar cooker is a fast cooking device useful for homes & small establishments. It can cook almost all types of food for about 10-15 people. The cooker can save around 5 to 10 LPG cylinders depending upon its use in homes or small establishments. The cardboard solar cooker is a low cost foldable device and can be used for preparing one or two single dishes at a time in areas having good sunshine and low wind velocities. The cooker is light in weight and can be easily carried in a bag. The community solar cooker for indoor cooking has a large automatically tracked parabolic reflector standing outside the kitchen; it reflects the sun rays into the kitchen through an opening in its North wall. A secondary reflector further concentrates the rays on to the bottom of the cooking pot painted black. It can cook all types of food for about 40-50 people and can save up to 30 LPG cylinders in a year with optimum use. The solar steam cooking system comprises automatically tracked parabolic reflectors coupled in a series and parallel combination that generates steam for use in community kitchens for cooking purposes. It can cook food for thousands of people in a very short time depending upon its capacity. It is normally installed in conjunction with a boiler that can use conventional fuel if necessary.

The scheme of the Ministry to promote solar cookers was revised during the year. Under the revised scheme, instead of providing a lump sum grant for promotional activities to state nodal agencies, the support has been linked to the actual sale of box solar cookers in the form of some incentive/ service charges. Higher incentive has been provided for sale of ISI marked solar cookers. The cookers could be sold through state agencies as well as their associated promoters like Aditya Solar Shops/ private establishments/ NGOs/ Cooker Manufacturers/ Women Welfare Organisations/ Self Help Groups/ Institutions/ Petrol Pumps / LPG agencies etc. 50% of the incentive goes to associated promoters if the cookers are sold by them. Support is also extended to reputed NGOs/ universities /institutions /Regional Test Centres etc for organizing promotional activities on solar cookers. Manufacturers are supported for taking BIS approval on their product. It will help in improving the quality of the product being sold in the market and increase manufacturers' interest in the programme. However, there are no subsidies on box solar cooker and cardboard solar cooker. The concentrating type solar cookers are being promoted under a demonstration scheme wherein support up to 50% is being provided to the users. During the year 2002-03, over 5000 box solar cookers were sold till 31.12.2002 making a total of 5,30,000 cookers sold in the country till date. Cooking demonstrations, competitions, publicity and awareness promotion activities are being carried out in several states. Such activities have been reported in U.P., M.P. and Pondicherry. On community solar cooking, the World's largest solar steam cooking system for cooking food for around 15000 people per day was installed at the temple town of Tirumala by the Tirumala Tirupathi Devasathan, Andhra Pradesh. (For details see Box Item) Another system for 2000 people was erected at Brahmakumari's Ashram, Gurgaon in Haryana and is functioning since July 2002. This system has been designed, to generate around 900 kg of steam per day and has been installed by the team of Brahmakumari's workers only. In addition a system for 500 people was installed in September 2002 at Rishi Valley School, Chittoor

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District, Andhra Pradesh. In all, 6 such systems have been installed in the country under the MNES demonstration scheme. Three community cookers for indoor cooking were also installed at a training hostel and an NGO's establishment in Leh and are functioning satisfactorily. A total of around 500 dish solar cookers and 60 community solar cookers for indoor cooking have been installed so far in the country. The world's largest solar steam cooking system has been installed by the Tirumala Tirupathi Devasthanam (TTD) at Tirumala in Andhra Pradesh. The system has been installed by M/S Gadhia Solar Energy Systems, Valsad under a demonstration scheme of the Ministry with almost 50% financial support. Balance of the cost has been borne by the TTD trust. The system has a capacity to prepare food for 15000 people/day and employs automatic tracking solar dish concentrators, which convert water into high pressure steam. The steam thus generated is being used for cooking purposes in the kitchen of TTD. It has been hooked up with the existing boiler working on diesel so as to make the system reliable under all climatic conditions. The system has been designed to generate over 4000 kgs of steam/day at 180 C and 10 kg/cm2 which is sufficient to cook two meals for around 15,000 persons. It is modular in nature and consists of 106 automatic tracked parabolic concentrators arranged in series and parallel combination, each of 9.2 sq. meter reflector area. Each unit of concentrators is connected to a central steam pipeline going to the kitchen. The system is made of indigenous components and the reflectors are of acrylic mirrors having reflectivity over 75%. Its installation was completed during September 2002 and was inaugurated by the Chief Minister of Andhra Pradesh on 11th October 2002. The system is expected to save around 1,18,000 litres of diesel per year, valued at Rs.23 lakh. The total cost of the system is about Rs.110 lakh, which includes back up boiler, utensils and annual maintenance contract for 5 years. A total of 6 such systems have been installed in the country. This technology could be very useful at places where cooking is done on a very large scale such as ashrams, temples, gurudwaras, and army canteens.

To encourage the state nodal agencies to take up large-scale promotion of solar cookers in their respective states and to recognise their efforts made in this direction, the Ministry has been giving annual awards to them. The award for the best performance for the year 2000-01 was given to the State of Gujarat at a function held at Vigyan Bhavan, New Delhi in the beginning of the year.

SOLAR AIR HEATING


Solar air heating technology can effectively be used for drying or curing of agricultural products, space heating for comfort, regeneration of dehumidifying agents, seasoning of timber, curing of industrial products, tanning of leather and many more industrial and agro-processing activities. It can act as a partial energy delivery (PED) or a full energy delivery (FED) unit. The PED units require a back up energy system. Depending on the drying process, required temperature, microclimate and site conditions, the technology has the potential of saving considerable conventional energy in a variety of industrial establishments. Various kinds of solar dryers have so far been developed and used in different field conditions in the country. These include cabinet dryer, roof integrated solar air heating system, tunnel dryer, dryer based on solar wall metal cladding technique, solar powered solar air dryer and dryer based on solar hot water system coupled with liquid-air heat exchanger. Whereas around 5000 sq. m. collector area for solar air heating has so far been installed with financial support of the Ministry, a good initiative has been taken by a number of manufacturers, NGOs, and other organisations for developing and popularising solar drying technology. MNES is supporting a special demonstration programme to evaluate the field performance of various new technologies and innovative designs and for establishing the techno-economic viability for specific applications. A solar system for drying medicinal plants has been proposed under the programme and several other demonstration projects on solar air-drying are under consideration. A national level workshop on solar drying is being planned to discuss in detail the issues concerning solar drying. The Ministry is also developing a project for the dissemination of solar drying

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technologies in the country. Soft loan facility for already proven designs is available from IREDA. Under a sponsored project being implemented by SPRERI, Vallabh Vidyanagar on "Market development for solar dryers in industrial and agricultural sectors of Gujarat", two business meets have been organised at Vallabh Vidyanagar and Valsad. One indirect type forced circulation solar dryer having collection area of 12 sq. m. has been installed at Rural Engineering School, Rojmal in Bhavanagar District of Gujarat. The dryer has been designed by SPRERI and is being used to dry about 400 kg. of wooden planks at a time which are being used for manufacturing box solar cookers.

recently been recognised as approved test centres under the revised laboratory recognition procedure of BIS. Apart from regular testing of solar collectors and cookers for BIS and manufacturers, the RTCs conducted training programmes for capacity building in this area and also a few workshops and seminars to promote solar energy utilisation.

SOLAR BUILDINGS
The Ministry has been implementing a comprehensive Solar Buildings Programme since 1995 to promote energy efficiency in the building sector through solar building design principles, and use of renewable and other energy efficient technologies. During the financial year it continued to sponsor programmes for capacity building and awareness creation, and also to provide partial financial support for design and construction of demonstration solar buildings. During the year, financial sanction has been issued for construction of the office building of Science City at Chennai. Work on buildings sanctioned earlier is on progress. A number of training programmes and workshops have been planned. In Himachal Pradesh, the state government has taken keen interest to promote solar passive buildings in the state. 20 major solar buildings have already been constructed in seven complexes. Three more buildings are under construction. Most of these buildings have been designed and constructed under the MNES programme. A large number of primary schools and teachers' hostels in high altitude cold desert areas of the state are also being constructed by the state government. The project management cell at Himachal Pradesh State Council for Science, Technology and Environment (HPSCSTE), which has acquired considerable experience in executing various MNES projects, has provided the designs for these buildings. A few new provisions have now been incorporated in the programme to be implemented during the tenth five-year plan period. These include: (a) central financial assistance for formulating guidelines for energy efficient buildings by housing development organisations/ corporations / institutions etc.

TESTING & STANDARDISATION


The Ministry continued to work with the Bureau of Indian Standards (BIS) for standardisation of solar thermal products. The Indian National Standards on solar flat plate collectors were brought out by BIS in 1990 (revised in 1992) as IS 12933 (parts 15). These (parts 1-3 &5) have further been revised by the Solar Thermal Sub-Committee of BIS. The revision has been approved by the Sectional Committee of the BIS on Non-Conventional Energy Sources in its meeting held on 3rd July 2002. The revised standards are likely to be available to public shortly. The standards for solar cookers (IS: 13429 parts 1-3) have already been revised in 2000. The Sectional committee in its meeting in July 2002 approved a few amendments to these standards. The Committee also decided to revise the 'Solar energy-Thermal applications-Vocabulary' (IS 12934: 1990) based on the revised international standards ISO 9488:1999. Six Regional Test Centres (RTCs) for solar thermal energy funded by the Ministry are in operation in Pune, Calcutta, Vallabh Vidyanagar, Indore, Madurai and Chandigarh. In view of large concentration of manufacturers of solar flat plate collectors in Karnataka, it has been proposed to set up a new RTC in the region. An expert has been deputed to examine the feasibility and prepare a detailed report for the same. In addition to the RTCs at Vallabh Vidyanagar and Calcutta, the RTCs in Pune and Indore have

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(b) provision for incorporating photovoltaic elements in building design, also known as building integrated photovoltaics (BIPV). Under a project entitled "Development of guide to sustainable building design" sponsored to TERI, New Delhi, a comprehensive database and a user-friendly interface is currently being compiled. The School of Planning and Architecture (SPA), New Delhi, through a MNES funded project has developed a software for a computer aided climate responsive integrated approach to architectural design. The software is proposed to be refined further in consultation with the practitioners in the field.

A project on `Solar air heating using matrix absorber' implemented by Planter's Energy Network (PEN), Madurai has been completed during the year. Development of a low cost galvanized iron (GI) matrix collector with efficiency of 65% has been reported. A 10 kW solar dish Stirling system for generation of power from solar energy has been commissioned at Vellore Institute of Technology. Initial trial runs are being conducted to optimise the system performance. In a project sponsored to Sardar Patel Renewable Research Institute at Vallabh Vidyanagar, experiments are being conducted to determine the heat transfer potential of the earth with different moisture conditions. This work is expected to provide further insights for designing earth heat exchangers for providing comfort conditions in buildings.

RESEARCH & DEVELOPMENT


R&D activities are undertaken through universities, national laboratories, and research institutions. Industry sponsored research projects are encouraged. During the year one new research project has so far been sanctioned. Seven research proposals have further been processed for consideration of the R&D Advisory Committee of the Ministry. A meeting to review some on going projects on solar thermal materials by an expert team was held in October 2002. Under the project `Development and evaluation of spectrally selective coatings for solar energy utilisation' in operation in Indian Institute of Technology (IIT) Delhi, the design and fabrication of an instrument based on vacuum calorimetric technique to measure solar absorptance and thermal emissivity of solar selective coatings has been completed. An optical technique to measure the total emissivity of various materials has also been developed. The objective of the project on `Smart Electrochromic Windows for Energy Conservation' being implemented by National Physical Laboratory (NPL), New Delhi is to develop a cost-effective smart window of size 30cm. x 30cm. After analysing the progress made it was suggested that a reliable cost-effective window may be developed within the project duration through the Solgel technique. As recommended by the expert team, a oneday workshop on the Solgel technique has been planned by NPL in February 2003 for deliberations on effective utilisation of the technology.

ADITYA SOLAR SHOPS


To make renewable energy products easily available to people and provide them after sale repair services, the Ministry has been promoting the establishment of Aditya solar shops (showroomcum-sales and service centres) in major cities of the country by providing some financial assistance to State nodal agencies. This assistance is also extended to manufacturer's associations / reputed NGOs on case to case basis. Finding the concept of solar shops very useful for the public, it has now been decided to establish these shops in smaller cities/ towns also so as to make the renewable energy facilities available to rural and semi-urban areas also. During the tenth plan, a provision has been made to provide financial assistance not only for the establishment of solar shops by government agencies but also by private entrepreneurs and NGOs who are able to provide an establishment having a minimum area of 200 sq. ft. Support will also be provided for establishment of `Solar counters' having a minimum area of 50 sq. ft. in existing shops/ showrooms dealing with consumer durables. The shops/counters to be established by private entrepreneurs and NGOs will be identified by State nodal agencies as per the guidelines of MNES. During the year, 5 Aditya Solar Shops started functioning at Bangalore, Berhampur (Orissa),

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AND

Thalassary (Kerala), Gangtok and Itanagar bringing the total number of Aditya Solar Shops operating in the country to 35. Ten more shops are in the process of establishment. With the participation of private entrepreneurs and local NGOs in the programme from current year, it is expected that the Ministry will be able to establish at least one shop in each district of the country. To encourage these shops to perform well and make a good turn over from sale and repair of renewable energy devices, the Ministry has been giving an award to the best shop on annual basis. The award for the best performance for the year 2000-01 was given to the shop at Alipore, Kolkata. The shop is being run by West Bengal Renewable Energy Development Agency through an NGO named FOSET. The total turnover made by the shop for renewable energy products during the year was around Rs.144 lakh.
SOLAR PHOTOVOLTAIC PROGRAMME

DEMONSTRATION

UTILISATION PROGRAMME

The Ministry is implementing a country-wide programme for the demonstration and utilisation of solar photovoltaic systems for various applications. The most common systems being deployed under this programme till 2001-02 were portable solar lanterns, fixed - type solar home systems, street lighting systems and stand - alone, small capacity, village level power plants. These systems have been found to be very useful in rural and remote locations having no access to reliable grid electricity and unelectrified villages and hamlets. The Ministry reviewed the programme based on the experience of the Ninth Plan and introduced certain changes in the programme for the Tenth Plan. The changes introduced during 2002-03 are: (i) capital subsidy on solar lanterns was removed (ii) a new single-light point solar home system was introduced (iii) subsidy on the solar home systems was revised (iv) new programme components on solar generators and building integrated photovoltaics (BIPV) systems were introduced, and (v) a new interest subsidy scheme for users of SPV systems, including solar lanterns, was introduced through IREDA and banks. There are two levels of subsidy for installation of SPV systems and power plants under the programme. One level i.e. 50 % of the ex-works costs subject to certain upper limits is for installations in the general areas of the country. The other level i.e. 90 % of the ex-works costs subject to certain upper limits is for installations in the North-Eastern region, including Sikkim. The 2002-03 programme was implemented in the tendering and / or market mode, through the State renewable energy development agencies and selected NGOs. Installation of solar home systems, street lighting systems and stand-alone SPV power plants was supported under this programme. Sale of SPV systems through the recognised solar shops i.e. 'Aditya' showrooms, was also covered under the programme.

Solar Photovoltaic (SPV) technology enables direct conversion of sunlight into electricity through semiconductor devices called solar cells. Solar cells are interconnected and hermetically sealed to constitute a photovoltaic module. The photovoltaic modules are integrated with other components such as storage batteries, electronics, etc. to constitute solar photovoltaic (SPV) systems and power plants. Photovoltaic systems and power plants are highly reliable, modular in nature, cause no pollution and have long life. Such systems and power plants have emerged as viable power sources for applications such as lighting, water pumping and telecommunications and are being increasingly used for meeting the electrical energy needs in remote villages, hamlets, hospitals and households in the hilly areas, forest regions, deserts and islands in the country. The Ministry of Non-Conventional Energy Sources has been implementing a country wide Solar Photovoltaic (SPV) Programme over the last two decades. The country has developed a strong research base with indigenous production capabilities in the entire area starting from silicon material to solar cells, photovoltaic modules, complete systems and power plants.

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Supply and installation of solar photovoltaic systems under the programme mandatorily needed test certificates from the Solar Energy Centre / Other Authorised Test Centres (OATCs). The test centres authorised for testing SPV systems are the MNES Solar Energy Centre (SEC), Gwalpahari, Gurgaon, Harayana, the Electronics Regional Test Laboratory (ERTL) East, Kolkata and the Central Power Research Institute (CPRI), Trivandarum. In addition, the Electronics Testing & Development Centre, Bangalore is also authorised to test and certify the PV modules. For supply of systems under the 2002-03 SPV programme, the test reports of the samples issued during 2001-02 or 2002-03 were considered valid. Many new manufacturers / suppliers of the SPV systems tested their samples at these centres for testing and certification and were qualified. SPV systems supplied under the programme mandatorily carry a warranty for two years for full systems and ten years for the PV modules. Implementing agencies are advised to provide for Annual Maintenance Contracts (AMCs) from manufacturers for a period of three years after the two years mandatory warranty period, so as to ensure satisfactory operation of the systems on a sustainable basis. NGOs like the All India Women's Conference (AIWC), New Delhi, the Ladakh Ecological Development Group (LEDeG), Leh, the Rajagiri College of Social Sciences (RCSS), Kochi, the Ramakrishna Mission (RKM) Ashrama, Narendrapur, West Bengal, the Social Work and Research Centre (SWRC), Tilonia, Rajasthan and the World Renewal Spiritual Trust (Brahmakumaris), Mount Abu, Rajasthan continued to be involved in implementation of the SPV Programme. Some other NGOs are also likely to be associated with this programme. Under the 2002-03 Programme, separate targets were fixed for installation of SPV systems in the general areas of the country and in the north-eastern region, including Sikkim. The targets for the general areas were 45,000 solar home systems, 1,000 solar generators, 450 kWp aggregate capacity of SPV power plants, street lighting systems, building integrated photovoltaic (BIPV) and other systems.

In addition, there is a target of 40,000 solar lanterns to be achieved in the whole country through the recently introduced interest subsidy scheme. As per reports received till 31st December 2002, 20,207 solar home systems, 1,250 street lighting systems and 39 kWp of SPV power plants had been installed in the general areas in the country. In addition, 5,538 solar lanterns were distributed during this period in these areas. The targets for the north-eastern region were 5,000 solar home systems and 50 kWp aggregate capacity of SPV power plants, street lights and other systems. The achievements reported under the programme in the north- eastern region including Sikkim as per reports received till 31st December 2002 are 480 solar home systems and 3,125 solar lanterns. The Kentenich Vidya Niketan, Bangalore installed power plants of 9 kWp aggregate SPV capacity in their premises with support from the Ministry. A project sanctioned during 2000-01 for enhancement of the capacity of the SPV power plants installed at the Bitra Island by 25 kWp and at Bangaram Island by 40 kWp in the Lakshadweep Islands continued to be under implementation. Similarly the project sanctioned during 2001-02 for installation of a 10 kWp SPV power plant at the Centre for Science and Environment in New Delhi is under implementation. As per the directions of the Hon'ble Supreme Court, the Archeological Survey of India installed a 30 kWp SPV power plant for its air pollution monitoring laboratory at Taj Mahal, Agra with partial financial support from MNES. The power plant was installed and commissioned by the public sector Central Electronics Limited, Sahibabad, UP. Four SPV power plants of 25 kWp capacity each in Mizoram and three SPV power plants of aggregate 9.2 kWp capacity in Arunachal Pradesh (all sanctioned during 2000-01) and two SPV Power plants of aggregate 14.7 kWp capacity in Sikkim (sanctioned during 2001-02) are also under implementation. A pilot project sanctioned during 2001- 02 for installation of 170 solar street lighting systems of special design at Moreh town on the Indo-Myanmar border in Manipur with some support from

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MPLAD funds was completed during the year. The Social Work and Research Centre (SWRC), Tilonia, District Ajmer, Rajasthan has been sanctioned a project for installation of 10 Nos. of SPV power plants, each of 2.5 kWp SPV capacity, in its field units / laboratories in seven states. The installation of such power plants would facilitate field-testing, repair and maintenance of SPV systems installed by SWRC in these states. The programme implementing organisations are responsible for submission of monthly progress reports during the implementation phase and periodic reports on the performance of the systems. The field installations are inspected by MNES officials from the Regional Offices. The field inspection reports received from regional offices of the Ministry indicated a very high level of functionality of the systems and user satisfaction. A performance evaluation study undertaken by the Anna University, Chennai for the Ministry for the project implemented during last year for electrification of 129 remote scheduled caste and scheduled tribe colonies in Kerala showed a very high level of performance of the power plants and solar home systems installed under the project. The study covered 1536 solar home systems out of a total of 5100 systems and all the 11 village level SPV power plants installed under the project. The beneficiaries were using 98.7 % of the systems surveyed. The study recommended the extension of the programme to other unelectrified remote villages. Independent physical inspections by School of Energy Studies, Jadavpur University, Kolkata, Eastern Regional Chapter of the Solar Energy Society of India, Kolkata, and the Forum of Scientists, Engineers and Technologists, (FOSET), Kolkata of all the solar home lighting systems installed in West Bengal by WBREDA under the 2000-01 programme and some of the systems installed under the 2001-02 programme have shown more than 98 % functionality of the systems. The Ministry continued to encourage implementing organisations to avail of the soft loan scheme from IREDA for installation of SPV systems and power plants.

In addition, a soft loan at 7.5 % interest rate is provided by IREDA for manufacture of silicon material and solar cells. Schemes for solar generators and building integrated photovoltaics (BIPV) and interest subsidy scheme for users of SPV systems were introduced during the current year. SPV systems are being used to provide power for rural telephones, battery charging, power plants, water supply, road and railway signalling, low power transmitters, cathodic protection, etc. A sizeable portion of the deployment is for non-subsidised applications. So far a total of 61 MWp aggregate capacity SPV systems (about 10.3 lakh systems)p and power plants have been deployed for different applications in the country and about 46 MWp capacity SPV products have been exported.

VILLAGE ELECTRIFICATION
There are about 80,000 unelectrified villages in the country. Out of these about 18,000 villages cannot be electrified through extension of the conventional grid. Most of these villages are located in remote, forest, hilly, desert, islands and tribal regions in the country. The Ministry, therefore, initiated a new programme for village electrification in the year 2001-02. The objective of the programme is to electrify all these villages through renewable energy sources by the year 2012. A target for electrifying 5,000 such villages has been fixed for the Tenth Plan period. Renewable energy systems like solar photovoltaic systems and power plants, small hydro units and biomass gasifiers, which use locally available renewable energy sources are the most suitable options for electrification of such remote villages. During the last one year, MNES held consultations with state renewable energy development agencies, manufacturers, NGOs and the corporate sector and prepared an action plan for the electrification of remote villages. Two important requirements for implementing such a plan were the identification of remote villages and putting in place appropriate financial arrangements. The Ministry is implementing the programme based on the lists of un-electrified remote villages furnished to it by the state

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agencies and confirmation that the villages are not likely to be electrified by conventional means. The Ministry also decided to implement the programme based on the norms of the existing schemes relating to biomass, solar energy and small hydro power, till higher central financial support for the programme is approved by the Government. Implementing agencies monitor the implementation of the projects and provide progress reports and other feedback to the Ministry. The Ministry may also carry out monitoring and evaluation studies through its offices and through independent agencies. The implementation of the projects sanctioned under village electrification programme during 2001-02 continued during the year 2002-03. Further proposals for electrification of about 1,000 remote villages through SPV systems and power plants have been received for sanctioning under the 2002-03 programme. These projects are likely to be sanctioned during the current year. Some of the SPV village electrification projects sanctioned during previous years were completed during 2002-03. These projects include SPV electrification of 200 villages in West Bengal, 57 villages and 27 hamlets in Ladakh in Jammu & Kashmir, 80 villages and 14 hamlets in Uttaranchal (all sanctioned during 2001-02) and the project for SPV electrification of 36 villages in Cachar District in Assam (sanctioned during 2000-01). The project sanctioned by the Ministry during 2000-01 for SPV electrification of 90 tribal villages in the Bhopalpatnam and Usoor Blocks of the Bhopalpatnam Tehsil in Dantewade district of the Bastar tribal region in Chattisgarh State has also been competed. This Ministry and the Ministry of Tribal Affairs funded the project jointly. Under the project 2,921 solar lanterns, 2,921 two light points solar home systems, 589 four light points solar home systems, 183 solar community TV systems and 1,171 solar street lighting systems were installed in these villages. Further, 6 villages in Arunachal Pradesh have been electrified through SHP during the year. The entire Ladakh Region, covering both Leh and Kargil districts, is considered as 100% electrified region. 10,000 solar

home lighting systems and 6,000 solar lanterns have been installed under the Village Electrification programme, which was financed to the extent of 90% by the Central Government. The programme was implemented through the Ladakh Autonomous Hill Development Council (LAHDC), Leh for Leh District and the District Development Commissioner (DDC), Kargil for the Kargil district, with active involvement of local NGOs i. e. Social Work & Research Centre (SWRC) and Ladakh Ecological Development Group (LEDeG). Training courses for local technicians have been conducted under the project and arrangements made for servicing of the systems for a period of five years. The projects sanctioned during 2001-02 for SPV electrification of 14 villages in Uttar Pradesh, 30 villages in Chattisgarh, 16 villages in Tripura, 13 villages in West Bengal and 173 remote scheduled caste and scheduled tribe colonies in Kerala continued to be implemented during the year. These projects are likely to be completed within 2002-03.

RESEARCH & DEVELOPMENT


The Research and Development activities in the solar photovoltaic technology are aimed at achieving improved performance of PV modules and systems. The Ministry is supporting research on all aspects of the PV technology through higher efficiencies and improvements in the production yields, design and reliability of PV systems and reduction of costs in the production of solar photovoltaic cells, modules and systems. During 2002-03 the Ministry continued to support R&D on new materials for fabrication of solar cells, thin film solar cells, development of electronics to be used in a PV system etc. A major project on development of large area multi-junction amorphous silicon solar modules at the Indian Association for Cultivation of Science (IACS), Kolkata concluded during 2002-03. The project was funded jointly with DST. Under this project, the IACS team designed a Plasma Enhanced Chemical Vapour Deposition (PECVD) system for deposition of amorphous silicon films and a magnetron sputtering system. Both these equipment are required to fabricate large area (30 cm x 30 cm substrate size)

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double junction amorphous silicon solar cell modules. Double junction amorphous silicon solar cell modules of 6 7% efficiency have been developed at IACS. The IACS team has also developed laboratory scale process to produce 10% efficiency solar cells. New material for encapsulation of amorphous silicon modules has also been developed. In view of the potential of the polycrystalline thin film solar cell module technologies to bring down the cost of photovoltaic modules in future, the Ministry has been supporting R&D on various aspects of thin film solar cells. During the year, a project on Nano Composite Copper Oxide based Thin Film Solar Cells progressed at the IIT, Delhi. Another R & D project on development of silicon thin films is also under implementation at the Jadavpur University. Development of PV systems, various system components and their performance testing continued during the year. Under a project on design and development of SPV systems as replacement to diesel generators used in urban areas, a 1.5 kW capacity system was installed at HUDCO centre at Gwalpahari, District Gurgaon. The performance of the satisfactorily working system is being monitored by IIT, Delhi. The design and development of stand alone inverter for use in PV systems in under progress at IITBombay. A project on measurement of AC parameters of solar cells is progressing at the IISc., Bangalore. The Ministry continued to work with the Bureau of Indian Standards and other international organisations for evolving standards for solar photovoltaic systems. The test facilities created at the Solar Energy Centre of the Ministry and other authorized test centres were utilized effectively for testing and standardization of photovoltaic modules, components and complete PV systems.

to reduce the cost of PV modules in the country and help in strengthening the production base in the country. During the year the programme was implemented through the Indian Renewable Energy Development Agency (IREDA) and the state nodal agencies. The implementation of the programme was reviewed thoroughly in the context of the Tenth Five-Year Plan. The programme is implemented on a subsidy and soft loan arrangement. The Ministry continued to provide subsidy of Rs.110 per peak watt of the photovoltaic array used with the pumping system. The maximum amount of subsidy was Rs.2,50,000 per system. However, during 2002-03, a new provision for providing additional financial assistance of Rs.25 per Watt of PV array to the state agencies that do not avail of any soft loan from IREDA, has been introduced. This subsidy is available only if solar pumps are directly procured by the agency and the states also provide some financial support from their side as well. The other provisions of the scheme as applicable in 2001-02 were continued in 200203 also. Provision of soft loan at the rate of 5% per annum for the users and 2.5% for the financial intermediaries was retained mainly for states that do not avail of the additional subsidy. To provide soft loans at the specified rates, the Ministry provided interest subsidy to IREDA. The maximum amount of the soft loan was limited to 90% of the remaining price of the system after subsidy. The soft loan was to be repaid in a maximum of 10 years with one-year moratorium. A total of 5113 SPV water pumping systems have been installed so far, of which 613 SPV water pumping systems have been installed by December 31, 2002 during the year. Most of the pumping systems installed during the year are of 1800 Watt PV array capacity to operate a 2 hp DC motor pump set and are owned by individual farmers.

SPV WATER PUMPING PROGRAMME


The main objective of the SPV water-pumping programme is to promote large-scale use of photovoltaic pumping systems in the country. This in turn is expected to reduce consumption of fossil fuels. Large-scale use of pumping systems is also expected

AWARENESS & TRAINING


A publicity and awareness campaign through electronic, print media and exhibitions is a regular feature of the programme.

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Through radio programmes in Hindi and other regional languages, awareness was created about the SPV water pumping systems. To encourage publicity by the manufacturers, a scheme for reimbursement of 50% of the cost of publicity on specific items, subject to a limit of Rs.1,00,000/- per supplier was continued. IREDA published brochures in Hindi, English and several regional languages. Training programmes on the operation & maintenance and water management aspects of PV water pumping systems were also continuing for actual users, local technicians and mechanics. State Nodal agencies have also started conducting training and awareness programme for existing / prospective users of pumping systems.

pumping windmills, small aerogenerator and hybrid systems and (b) to field test, demonstrate, strengthen the manufacturing base of water pumping windmills, small aerogenerator and hybrid systems. During the year the Ministry reviewed the programme in the context of the Tenth Five Year Plan and decided to continue support for research and development, field trials for new systems and deployment of water pumping windmills, small aerogenerators and wind-solar PV hybrid systems. The programme is implemented through the state nodal agencies. Manufacturers are also eligible to market these systems directly to users; however, the subsidy is released through the state agencies. The state nodal agencies / manufacturers are required to identify the sites for installation of windmills as per the guidelines issued by the Ministry. During 2002-03, the Ministry continued to support shallow well and deep well type windmills. The Ministry provided a subsidy up to Rs.20,000/- for a direct drive windmill, Rs.30,000/ - for a geared type windmill and Rs.45,000/- for an AV 55 type direct drive windmill. A total of 854 windmills were installed till 31st December 2002, of which 61 installations were reported during the year. Installation of small aerogenerators and wind-solar hybrid systems is a major component of the programme. Small aerogenerators / wind machines of a capacity up to 10 kW are eligible for subsidy under the programme. The state agencies were encouraged to use aerogenerators as wind- PV hybrid system where ever found feasible. Community applications of aerogenerators and hybrid systems were also supported. The subsidy on installation of aerogenerators/hybrid systems for community use was reduced from 80% of the ex-works cost to 75% of the ex-works cost. The maximum amount of subsidy remained as Rs.2 lakh per kW of installed capacity of the system. For other users like the R&D organisations, academic institutions, individuals and industrial users the grant support was maintained as 50% of the ex-works cost subject to a maximum of Rs.1.25 lakh

PERFORMANCE EVALUATION
During 2002-03 an independent study on field performance evaluation of pumps installed in Punjab was completed through the Administrative Staff College of India (ASCI), Hyderabad. The ASCI team evaluated 300 pumps from a total of 500 pumps installed during 2000-01. As per report about 91% pumps were found to be fully in use for agricultural activities. About 93% of the users have been using their pumps for 610 hours a day. 91% users were satisfied with the performance of the pumping systems. In most of the cases the users were able to earn or save between Rs.5,000 and Rs.40,000 per year.

SMALL WIND ENERGY

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HYBRID SYSTEMS

Small wind energy systems such as water pumping windmills, small aerogenerators and hybrid systems are capable of harnessing vast wind energy potential in the country for meeting mechanical and electrical energy requirement in decentralised mode especially in rural and remote areas. The Ministry is implementing a programme on deployment of small wind energy systems such as water pumping windmills, small aerogenerators and windsolar photovoltaic hybrid systems. The main objectives of the programme are (a) to carry out research & development to improve the designs and efficiency and to create test facilities for water

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per kW. Small aerogenerator systems with an aggregate capacity of 183 kW have been installed under the programme of which 58 kW capacity has been installed during the year so far. In addition demonstration projects on small aerogenerators and wind-solar PV hybrid system of aggregate capacity of about 45 kW are under different stages of implementation.

3
POWER FROM RENEWABLES
The strong economic growth expected in the near future calls for substantial addition to India's energy generating capacity. Fossil fuels and hydro-electricity will continue to play a dominant role in the energy sector of the country in the next few decades. Being limited and non-renewable, fossil fuel resources therefore need to be used prudently. Use of fossil fuels also leads to environmental problems such as global warming and climate change. At the same time the existing technologies of production, transmission and distribution of electricity as well as end-use have inherent inefficiencies. It is, therefore, imperative to diversify the country's energy supply. India's energy scenario calls for the effective management of all available resources in order to attain national objectives. A well-balanced fuel mix, in which all energy resources are appropriately utilized, is essential for sustainable development. Renewable energy resources, which the country has in abundance, such as solar, wind, biomass, small hydro, etc. are non-depletable, and can effectively meet energy demand and are environmentally benign. They can create a significant impact in the generation of grid electricity, as progress in wind power, small hydro, biomass power and bagasse cogeneration has demonstrated in the last few years. About 3700 MW of power generating capacity based on renewable energy sources has been installed in the country so far. This constitutes about 3.5% of the total installed capacity. Resource assessments and technology development are being intensified, and new application areas are being identified. A fairly broad-

RESEARCH & DEVELOPMENT


The R&D activities during the year covered the development, field testing and performance evaluation of new designs and improvements in the existing designs both shallow-well and deepwell windmills. A project on development of 250 watt small wind battery charger is progressing at the Osmania University, Hyderabad. A study was sponsored through Engineers India Ltd. to assess if any reduction in the cost of water pumping windmills and small aerogenerator systems is possible, without sacrificing the technical performance of the systems. The final report of the study is expected during the year.

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based local manufacturing base has been set up and commercial development is being promoted. The power generation capacity established so far has largely come about through private investments. Considerable progress has been made in the area of wind power generation. India has the fifth largest wind power installed capacity in the world, which has now reached 1702 MW. Most of this capacity, or 1639 MW, has come about through commercial projects from private investment. Supporting this effort is the world's largest wind resource assessment programme. Over eleven billion units of electricity have been fed to various State grids from these projects. New initiatives have been taken in re-assessment and expansion of the wind resource data base; establishment of a Centre for Wind Energy Technology; and, motivating large private sector corporations, public sector units and power utilities to set up wind power projects. Local manufacturing capacity has been established and wind turbines and wind turbine components are being exported to USA, Europe and several developing countries. Optimum bagasse cogeneration in the sugar mills and biomass power generation from surplus agricultural residues, are being actively promoted. A capacity of 468 MW has so far been commissioned and 530 MW is under installation. Notable initiatives include a biomass resource assessment programme to bring out a Biomass Resource Atlas for India; facilitating fast track projects; new modes of implementation of projects in co-operative / public sector sugar mills; and, technology development and demonstration of producer gas engines and advanced biomass gasification. Biomass gasifiers capable of producing power from a few KW up to 500 KW have been developed indigenously. They have successfully undergone stringent testing abroad, and are being exported to countries in Asia, Latin America, Europe and USA. A large number of installations for providing power to small scale industries and for electrification of a village or group of villages have been undertaken. A total capacity of 53 MW has so far been installed, mainly for stand-alone applications.

Small hydro power generation of station capacity up to 25 MW, which is particularly suitable for remote, hilly regions, and in Ladakh and North-Eastern States, is being expanded. A capacity of 1463 MW has so far been installed and an additional 538 MW is under installation. The programme is reaching a stage of near commercialisation with over 2300 MW of capacity being offered / allotted by different States to the private sector. Grid quality power generation programmes based on solar thermal and solar photovoltaic technologies are also being supported. A 140 MW Integrated Solar Combined Cycle (ISCC) Power Project is planned to be set up at Mathania near Jodhpur in Rajasthan by Rajasthan Renewable Energy Corporation Ltd. as a centrally assisted project. The project will comprise a 35 MW solar thermal power plant and 105 MW combined cycle power plant. This will be the first of its kind, and the largest such project in the world. The Ministry is also providing support to grid interactive solar photovoltaic projects for voltage support at the tailends of rural grids and for peak shaving / demand side management in urban centres. Projects on diesel grids in islands and other remote areas, and for captive power generation, are also being promoted. Grid interactive solar photovoltaic power projects aggregating to 2.5 MW have so far been installed and another 550 KW capacity is under installation. Attractive financial and fiscal incentives are being provided under the National Programme on Energy Recovery from Urban, Municipal and Industrial Wastes for promotion and development of projects based on appropriate conversion technologies such as biomethanation, gasification, pelletisation, etc. While projects with an aggregate capacity of about 25 MW have been completed, projects with a capacity of about 16 MW are under execution.
WIND POWER PROGRAMME

India is now recognised as a leading country in the world for the development and utilisation of renewable energy, particularly in wind power development. In fact, power generation from wind has emerged as one of the most successful programmes in the renewable energy sector, and has started making meaningful

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contribution to the overall power requirement in some of the States. With an installed capacity of over 1700 MW, India is the 5th largest wind-power producing nation in the world. The comprehensive wind power programme that was launched in India in the mid 80's with the active involvement of utilities and industry has led to the creation of an industrial base and infrastructure which has contributed to the large scale commercial development in this sector. Based on the experience gained so far, it is planned to add another 1500 MW of wind power capacity during the 10th Five Year Plan.

UTs, annual mean wind power density greater than 200 W/m2 (at 50 m height) has been recorded. Six Handbooks on `Wind Energy Resource Survey in India' have so far been published covering 208 stations in 15 States and two Union Territories. It is also proposed to prepare a Wind Atlas for India, which will give the overall potential in various States, as well as identify high wind areas and specific sites for setting up wind power projects.

RESEARCH & DEVELOPMENT


The Centre for Wind Energy Technology (C-WET) acts as the technical focal point for wind power development in the country. C-WET co-ordinates all activities relating to R&D and wind resource assessment. The generic areas identified for R&D in this sector are: research and advanced technology development; technology support to wind power industry; improvement in the performance of existing wind turbine installations; manpower training and HRD; and research support to wind resource assessment. Two R&D projects proposed to be taken up during the current year relate to parameterization of flow distortion around wind turbine nacelles and scanning of wind profiles in Palghat Gap in Tamil Nadu. The Centre has evolved a Type Approval Provisional Scheme 2000 (TAPS-2000) for India in line with International certification schemes for wind turbines. The formulation of Indian standards on safety of wind turbines in line with International standards and suitable for Indian site conditions is under preparation in collaboration with BIS.

WIND RESOURCE ASSESSMENT


According to initial estimates, India's wind power potential was assessed at around 20,000 MW. It has been re-assessed at 45,000 MW, assuming 1% of land availability for wind power generation in potential areas. However, the present exploitable technical potential is limited to 13,000 MW, on account of the limitation of grid capacity in the State Grids. Grid penetration of more than 20% could result in grid instability. The technical potential will go up with the augmentation of grid capacity in the potential States. 25 States and Union Territories have been covered under the Wind Resource Assessment Programme. Around 1000 wind monitoring/mapping stations were set-up in various parts of the country, out of which 64 monitoring stations are in operation. Master Plans have been prepared for 87 potential sites taking into account the zone of influence around each mast. 12 Master Plans were completed during the current year. These Master Plans provide information on availability of wind, land, grid availability and accessibility to the site. The Master Plans have been provided to State Nodal Agencies and have been offered for sale to project promoters, developers and consultants at a nominal cost. The criteria for identification of a potential site for wind power projects has been modified, with sites having wind power density greater than 200 W/m2 at 50 m height to be considered as potential sites. At 201 wind monitoring stations, covering sites in 13 States/

DEMONSTRATION PROJECTS
An aggregate demonstration capacity of 63 MW has been established at 31 locations in nine States. The demonstration projects are considered for new potential areas or locations, where projects have so far not been undertaken, with a view to open up these areas for commercial projects, or where new types or designs of WEGs are to be demonstrated. A 2 MW Demonstration project has been taken up at Motha in Maharashtra in the current year. The second phase of the demonstration project of 1 MW capacity is

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being implemented at Frazerganj in West Bengal. Two demonstration projects of 2 MW each for Karnataka and one demonstration project of 2 MW capacity for Kerala is proposed to commence during 2003. As per the approved funding pattern for demonstration projects, 60% of the full cost of WEG, including spares and erection/commissioning is met by MNES, while the State Agency meets the balance costs and other local civil/electrical costs. The benchmark cost of wind turbine equipment for financial support from MNES has been revised to Rs.3.5 crore/MW during the current financial year. Wind-Diesel Hybrid projects are also being taken up in areas dependent on costly diesel generation. Full cost of wind turbine and control equipment is provided by the Ministry, with benchmark cost of Rs.70 lakh per 100 KW. In addition, up to 90% of the cost of laying new, or upgrading existing lines, for decentralised electrification in remote and inaccessible areas, such as islands, remote and difficult areas, is provided. The first phase of a Wind-Diesel Hybrid project of 100 KW capacity was completed during the year at Sagar Islands in West Bengal. The second phase of 400 KW capacity is being taken up during the current year. Proposals for such projects are being developed for Lakshadweep and Andaman & Nicobar Islands.

includes tax concessions such as 80% accelerated depreciation, tax holiday for power generation projects, soft loans, custom and excise duty relief, liberalised foreign investment procedures, etc. Nine States have announced policies for wheeling, banking, buyback of power generated from wind, based on our guidelines. There have been some problems regarding policy issues with the reorganisation of the State Electricity Boards. Efforts are being made to persuade the State Governments /State Electrification Regulatory Commissions to announce conducive policies/tariff for non-conventional energy projects. After consistent efforts by MNES, Gujarat declared a Policy after a gap of four years. Karnataka has agreed to follow MNES Guidelines up to March 2005 for the projects already sanctioned by them. Kerala Government has also come up with a Policy for private sector projects. The Regulatory Commissions in Tamil Nadu and Maharashtra are also deliberating on tariff for wind power projects in those States.

MONITORING

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EVALUATION

COMMERCIAL PROJECTS
A wind power capacity of 74 MW has been added during 2002-03 (up to 31.12. 2002), taking the cumulative capacity to1702 MW. The unit size of the turbines installed in the country has reached 1250 KW. Five turbines of 1250 KW capacity have so far been cosmmissioned during the current year. The highest capacity utilisation of 42% has been achieved in a commercial project at Muppandal in Tamil Nadu while at Jogimatti in Karnataka, it is about 38%.

A wind farm project with exclusively MW class machines has been developed at Kavdya Donger at Supa, off the PuneAhmednagar highway, about 100 KM from Pune. This wind farm has 57 machines of 1 MW capacity each. Annual capacity utilisation of up to 27% has been reported, despite the moderate wind potential of the site. The farm is connected via V-sat to the offices of the project developers as well as promoters, for on-line performance monitoring. Wind power development at this site has changed the socio-economic conditions of the local population with creation of considerable employment opportunities. Guidelines are reviewed and modified periodically on the basis of feedback received on the programme. A High-Level Consultative Group was constituted by the Ministry to suggest measures for accelerating the development of the wind power sector in the country. The Terms of Reference include aspects relating to policy, fiscal and financial incentives; financing; technology development; development of local manufacturing base; and, other related matters. One meeting of the Consultative

PROMOTIONAL POLICIES
Wind power development in the country has been spurred by a mix of fiscal incentives and promotional measures. The Government has introduced a package of incentives, which

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Group was held during the year. The performance of all wind power projects is monitored on a regular basis. Monthly reports of all demonstration as well as private sector projects are prepared and their performance evaluated. Ministry officials regularly visit various projects for on-the-spot-assessments and advice and Wind Farm Co-ordination meetings are regularly organised by the Ministry to monitor the progress of various projects. Regional Offices of the Ministry also provide feedback on the programme.

SOLAR POWER PROGRAMME


Solar Power Programme of the Ministry comprises Solar Photovoltaic Power Programme and Solar Thermal Power Programme. It aims at producing grid quality power using solar photovoltaic and solar thermal technologies. Solar photovoltaic modules produce DC power, which is converted into grid quality AC power using an inverter and other electronics. Solar thermal concentrating systems increase the temperature of a working fluid above 300 oC, which runs a conventional turbine. The turbine operates a generator and electricity is thus produced. 31 grid-interactive Solar Photovoltaic (SPV) projects of aggregate capacity 2.5 MW have so far been installed in 10 States and three Union Territories for voltage support in the remote sections of weak grids; on public buildings in urban centres for peak load shaving; and, as diesel savers on islands. Seven projects of 550 kW capacity are under different stages of installation, in two States and three Union Territories. Approval has been accorded for the Centrally-assisted 140 MW Integrated Solar Combined Cycle (ISCC) power project at Mathania, Jodhpur, in Rajasthan, to be implemented by Rajasthan Renewable Energy Corporation Ltd. (RRECL).

is given in Table-5.6. A 100 kWp project at Kavaratti island and another 150 kWp project at Kadamath island in Lakshadweep were commissioned during April 2002. A 50 kWp project was commissioned at Neil island in Union Territory of Andaman & Nicobar in August 2002. In December 2002, another project of 200 kWp has been commissioned at village Khatkar Kalan, district Navan Shahar in Punjab, the native village of Shaheed Bhagat Singh. The State-wise list of projects aggregating to 550 kWp, which are under implementation in three States and two Union Territories, is given in Table-5.7. A new scheme of grid interactive SPV power projects for captive use by industry up to a maximum unit capacity of 200 kWp was introduced during the year. A diesel-grid interactive solar photovoltaic (SPV) power project can help in saving diesel in an island/ remote location by providing electricity during a sunny day. A grid-interactive SPV power project can boost voltage of a rural weak grid and can meet partial electrical demand in a village. A typical grid interactive system comprises SPV modules, which supply electrical power to the load through a high quality inverter. This inverter converts direct current generated by SPV to grid quality alternating current. When the SPV system produces more power than is needed in the load area, the excess power can be sold to the utility. Two important projects were commissioned during the year, one at Neil Island in Andaman & Nicobar, which is a 50 KW project, and another at village Khatkar Kalan in district Nawanshahar, Punjab, with a capacity of 200 KW. The 50 kWp grid interactive SPV power project at Neil Island in the Andaman & Nicobar Islands pertains to diesel saving application. The project was installed on 7th April 2002 and had generated over 17,043 units of electricity up to 31st October 2002. The project is reported to have saved about 7,000 litres of diesel during this period. A 200 kWp grid-interactive SPV power project at village Khatkar Kalan, district Nawanshahar, Punjab, the native village of Shaheed Bhagat Singh has been installed for voltage support and meeting local lighting loads. The project will provide power

SOLAR PHOTOVOLTAIC POWER PROGRAMME


The demonstration scheme for grid interactive SPV power projects up to 100 kWp capacity in modules of 25 kWp, for the three `niche' applications was continued during the year. State Electricity Boards, State Nodal Agencies and utilities are implementing the projects. The State-wise list of completed projects

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to 100 streetlights in the village and on the road leading to the museum in the village. The plant has generated over 9400 units of electricity till 15.1.2003.

SOLAR THERMAL POWER PROGRAMME


The Ministry proposes to set up a 140 MW Integrated Solar Combined Cycle (ISCC) Power Plant with a solar thermal component of 35 MW and a Combined Cycle component of 105 MW capacities at village Mathania in Jodhpur district of Rajasthan. The solar thermal component will be based on parabolic trough collectors. The Combined Cycle Power Plant will be run on Regasified-Liquified Natural Gas (R-LNG). The project will be implemented by Rajasthan Renewable Energy Corporation Ltd. (RRECL), a State Government Undertaking. Government of India will provide a grant of Rs.50 crore for the project. World Bank/ Global Environment Facility (GEF) will provide a grant of US $49 million, including Technical Assistance of US $4 million, while the Government of Germany, through KfW, will provide a composite loan of DM 250 million. The Government of Rajasthan will provide equity of Rs.50 crore, and a loan of Rs.200 crore, if required. In October 2001, an Agreement was signed between Government of Germany and Government of India for the composite loan amount. RRECL issued Request for Qualification (RfQ) during 200102. Three consortia including BHEL - Solel, Larsen & Toubro Solel and DSD - Inabensa were short-listed. Request for Proposal (RfP) has been issued to these three consortia.Heads of Agreement (HoA) was signed between RRECL and Gas Authority of India Ltd. for the supply of 0.46-0.5 MMSCM per day of R-LNG for the project. Principles of Power Purchase Agreement have been finalized and terms and conditions have been agreed to between Rajasthan Vidyut Prasaran Nigam (RVPN) and RRECL. All the statutory clearances for the project have been obtained by RRECL. Supplementary Project Report with R-LNG as the fuel for the combined cycle component of the project has been submitted to Central Electricity Authority for review of Techno-Economic Clearance of the project. Two pre-bid conferences were held with the selected consortia. The RfP documents are required to be

submitted by May 2003. The third meeting of the Steering Committee of the 140 MW ISCC power project was held in September 2002. The meeting reviewed the status of various ongoing activities and preparations for implementation of the project.

BIOMASS POWER PROGRAMME


Biomass power for generation of distributed grid quality power, both from captive and field based bio-mass resources, has been receiving attention the world over, particularly in the last decade. The social, economic and environmental benefits of biomass power are accepted for long term sustainability. The technologies are progressively getting upgraded, attaining maturity, and reaching commercialisation. The Biomass Power Programme of the Ministry has reached the take off stage, after dedicated and sustained efforts over the last decade. The total potential is about 19,500 MW, including 3,500 MW of exportable surplus power from bagasse-based cogeneration in sugar mills, and 16,000 MW of grid quality power from other biomass resources. The total installed capacity in the country, as of December 31, 2002, is 468 MW, and projects of capacity 530 MW are in various stages of implementation. Yearwise installation of biomass power/co-generation capacity is given in Figure 5.2. A target of 700 MW has been proposed for the 10th Five Year Plan (2002-07), including 450 MW from bagasse/biomass co-generation and 250 MW from biomass power.

BIOMASS POWER/CO-GENERATION PROGRAMME OBJECTIVES


The Biomass Power/Co-generation Programme is being implemented during the 10th Plan, which commenced during 2002-03, with the following objectives: (i) To promote technologies of co-generation, biomass combustion, megawatt scale gasification, and industrial co-generation for generation of power. (ii) To develop Biomass Resource Atlas based on biomass resource assessment studies in different regions of the country.

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(iii) To support District-wise Resource Assessment Studies in potential States. (iv) To support R&D for development of technologies including Advanced Biomass Gasification and 100% producer gas engines, as well as applications research for enhancement of potential in identified areas of thrust. (v) To support and thus enlarge activities through awareness creation, publicity measures, seminars/workshops/ business meets etc. The Programme includes the following Components: Interest Subsidy for Bagasse/Biomass Co-generation projects, including IPP mode projects; Interest Subsidy for Biomass Power Projects, including captive power projects; Grants to MW-scale projects with 100% producer gas engines, and Advanced Biomass Gasification projects; Promotion of Industrial Co-generation projects in core industry sector for surplus power generation; Promotional Incentives for awareness creation, training and preparation of Detailed Project Reports; and Grants for Biomass Resource Assessment Studies.

Service Centre (RRSSC), Bangalore to integrate the data obtained from field-level studies on biomass assessment and inputs from (a) agricultural output from reliable sources like the Ministry of Agriculture, Government of India, (b) agro-industrial residues from state data sources, (c) plantation residues from local data sources, and coupled with the utilisation of the bio-residues for (i) fodder, (ii) domestic cooking, roofing (for thatched roofs), etc and (iii) other semi-industrial uses. The actual location of the bioresidue or at least biomass production area is sought to be made available on a map to help in planning and development of biomass power projects in various States. RRSSC provides GIS based maps for the identification of cropped areas across the country. Additional work related to crop identification is being done using the data on NDVI (Normalised Difference Vegetation Index). Some of these are at the level of new knowledge and hence what is guaranteed from the maps would be the cropped area with a probability index attached to the specific crop identified.

RESEARCH & DEVELOPMENT


The R&D component of the Programme aims at the development of biomass conversion technologies, technology application packages; strategic developmental demonstration pilot projects; improvement in efficiency; reduction in cost; and, eventual commercialisation and development of biomass power/ cogeneration on an industrial scale. An R&D project on "Strategic Development of Bio-energy" (SDB) is being implemented, which entails development of technology packages for a variety of biomass materials for power generation, as well as industrial applications. The important development relates to producer gas based reciprocating engines. Experimental work on an industrial natural gas engine of 360 kWe produced 195 kWe with a gas calorific value of 4.5 MJ/kg. The specific fuel consumption of the engine was 1.1kg/kWh. Peak output of 214 kWe, with a gas calorific value of 5 MJ/kg, is likely to be achieved in the field systems with an enhanced design of the reactor, slightly different from the one used in the laboratory. The modelling of the reciprocating engine for predicting the pressure-crank angle diagram using fluid

BIOMASS RESOURCE ASSESSMENT


The Ministry had undertaken taluka level biomass resource assessment studies during the 9th Plan, with a view to assess surplus biomass availability for power generation in 500 talukas in the country. The Programme was implemented through a National Focal Point, Five Apex Institutions, and a number of consultants to carry out field level surveys. 495 studies were taken up in 23 States; 299 studies have been completed, and the remaining studies are likely to be completed during 2003. District-level biomass resource assessment studies in six potential States will be initiated during the year. A project on "Biomass Resource Atlas for India" is being jointly undertaken by IISc, Bangalore, and Regional Remote Sensing

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dynamic inputs from three dimensional flow computational tools has been taken to a logical conclusion in predicting the performance of the engine with varying compression ratio or ignition timing. A multi-institutional co-ordinated project on "Advanced Biomass Gasification" (ABG) is being implemented, which aims at the development of a high pressure gasifier coupled with gas turbine engines for generation of power. The progress during the year relate to the procurement of a micro-turbine derived from an Auxiliary Propulsion Unit (APU) of an aircraft with aviation kerosene as the fuel, and the establishment of all the elements of the high pressure gasifier. They have been individually run and they are to be coupled. The full automation system is being put together to enable the operation of the gasifier and the power generation system run by the gas turbine.

programmes on biomass/bagasse cogeneration, and industrial co-generation projects were organised during the year. Interaction meetings were held with State Governments, financial institutions, State Nodal Agencies, State Electricity Boards, manufacturers, developers, investors and consultants to stimulate their interest and generate support for the biomass power generation programmes. Promotion of industrial co-generation in core industry sectors such as textiles, paper, food processing, petro-chemicals etc. was initiated during the year. Industrial co-generation has a potential of about 10,000 MW surplus power generation in the industry. These projects could effectively meet the industry's requirements of power and steam, and surplus could be sold to SEBs. Advanced Biomass Gasification (ABG) has been identified as a thrust area for the 10th Plan. Development and application of advanced technologies such as, Biomass Integrated Gasificationcum-Gas Turbine Combined Cycle (IGCC); Integrated Pyrolisis Combined Cycle (IPCC); and MW scale reciprocating engines with very high diesel replacement (exceeding 90%), are proposed to be supported. These technologies offer a number of advantages, which include higher efficiency of conversion, and ease of operation, enable cleaner combustion, and are environment friendly. Limited numbers of demonstration projects are proposed to be supported during the Plan period. It is also proposed to support captive biomass power projects through combustion and gasification routes.

PROGRESS

AND

NEW INITIATIVES

43 bagasse based co-generation projects with aggregate capacity of 304 MW capacity have so far been commissioned; 31 projects with aggregate capacity of 312 MW are under implementation; 34 commercial grid connected biomass based power projects with aggregate capacity of 164 MW capacity have so far been commissioned, and 36 projects of 218 MW capacity are under implementation. Capacity addition of 86 MW in three States has been achieved, up to December 2002, against the annual target of 100 MW. Another 25 MW of capacity addition is expected to be achieved during the year. High pressure & temperature configurations of 67 kg/cm2 and 495C have been demonstrated in several bagasse cogeneration and biomass power projects in the country. Extra high pressure configuration at 87 kg/cm2 and temperature of 515C was established during the year in bagasse co-generation projects in Andhra Pradesh and Tamil Nadu; a number of projects are being planned with similar pressure and temperature configurations. The Ministry has taken a number of steps to create widespread awareness and promote the acceptance of biomass power/ cogeneration. A number of workshops, business meets and training

EXTERNAL ASSISTANCE
The Project Brief on UNDP / GEF / MNES Project on "Removal of Barriers to Bio-mass Power Generation in India" was approved during the year. The objective of this two part project is to remove barriers to the increased use of bio-mass energy sources for generating electricity for own consumption and / or export to the grid, and accelerate adoption of environmentally sustainable biomass power and cogeneration technologies in India. It will promote combustion, gasification and cogeneration technologies for electricity generation using different types of captive and

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distributed bio-mass resources. The project will focus on bio-mass power projects to be undertaken in three specific scenarios, viz. co-operative sugar mills, agro-processors / bio-mass producers and distributed bio-mass. Apart from the Technical Assistance component for removing the remaining technical, regulatory and institutional barriers, the project will provide investment support to model investment projects in the focused sectors in candidate States for risk mitigation. The project is expected to become operational in April / May 2003.

MNES. An important milestone reached during the year was the commissioning of the 17 MW co-generation power project set up by M/s Kakatiya Cement Sugar & Industries Ltd., at Peruvancha village, Kallur Mandal, Khammam District, Andhra Pradesh. The project is the first of its kind for a sugar mill. A high pressure boiler of 87 ata./515 deg C has been installed, which ensures high energy efficiency & better utilisation of bagasse resulting in more steam and hence more electricity. The project envisages generation of power to meet captive sugar plant requirements, cement plant requirements and export of about 10.85 MW of surplus power during season and 14.70 MW during off-season, to the State grid. The project uses bagasse generated from the crushing operations of the sugar mill during season, and stored bagasse, cane trash & coal during off-season. The project was completed in a record period of 18 months and has already supplied about 84.90 million units to the State grid. It has achieved a PLF of around 90% in the very first year. The cost of the co-generation project was Rs.50.17 crore. IREDA has extended a term loan of Rs.36.60 Crore under ADB line of credit and MNES provided an interest subsidy of Rs.4.09 Crore. The technology used was indigenous, except for the turbogenerator, which was imported. The project has generated direct employment opportunities to about 100 persons and has also contributed to economic development of the area. The 8 MW Biomass based Power Project with export of 7.20 MW of surplus power after meeting 0.80 MW for in-house auxiliary consumption has been set up at Patancheru in Medak District of Andhra Pradesh. The project utilises a variety of agricultural wastes and industrial wastes for generation of power, such as sugar cane trash, coffee shells, toor dal stalks, corn cobs, ground nut shells, poultry manure, jowar husk, waste crops, juliflora, eucalyptus, cotton stalks, saw dust, wood husk, rice husk and bagasse. The project was commissioned in February 2002 and in a record period of 11 months and has already supplied 38.43 million units to the State grid. A PLF of 90% has been achieved in the first

POLICIES, FISCAL INCENTIVES

AND

INSTITUTIONAL ARRANGEMENTS

The promotion of biomass-based power generation in the country is being encouraged through policies introduced at the Central and State levels. A package of fiscal incentives such as concessional custom duties; exemptions from excise duty and sales tax; tax holiday and accelerated depreciation; and, soft loans are available for commercial projects. The Ministry continued its efforts during the year to persuade the State Governments/State Electricity Boards/State Electricity Regulatory Commissions to announce remunerative polices for purchase/wheeling/banking or power generated from biomass power/co-generation projects. Kerala, Gujarat, and Chattisgarh States have announced policies for purchase/wheeling/banking of power from biomass power projects during the year. A Tariff Order for bagasse based cogeneration projects was announced by Maharashtra Energy Regulatory Commission. The Ministry continued its endeavour to bring about a sustainable policy framework through appropriate provisions in the Electricity Bill 2001, and continuous facilitation and awareness campaigns within all major stakeholders. The programmes are being implemented with the active involvement of the State Nodal Agencies, State Governments, State Electricity Boards, Industry Associations and Federations, NGOs, financial institutions, manufacturers, developers, entrepreneurs, R&D Institutions, consultants and experts. The State agencies are responsible for development of proposals from their respective States; monitoring of the progress of implementation; and, for providing post-installation feedback to

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full year of commercial operation. The technology used is totally indigenous with the Boiler supplied by M/s Walchandnagar Industries Limited. The company has tied up with M/s AP Forest Development Corporation Limited for developing fast growing clonal euclayptus plantations in about 500 acres of barren land for fuel supply to the plant. The Plant has generated direct employment to over 110 persons, and has also contributed to the economic development of the region.

To demonstrate an integral approach of biomass production, gasification and utilisation. To promote R&D on biomass production, briquetting, gasification and producer gas engines. To develop and promote commercialisation of technologies for various end-uses in rural and urban sectors. To intensify electrification of remote villages. To take up demonstration projects for 100% indigenous producer gas engines coupled with gasifiers for power generation. To expand manufacturing capacity, decentralised service facilities and introduce testing and certification. To support and thus enlarge activities through awareness creation, publicity measures, seminars/ workshops / business meets/training programmes etc.

BIOMASS GASIFIER PROGRAMME


Biomass gasifiers convert solid biomass (woody and nonwoody) materials such as wood, agricultural residues and agroindustrial wastes etc. into producer gas through thermo-chemical gasification process. The producer gas could be either burnt directly for thermal applications, or used for replacing diesel oil in dualfuel engines for mechanical and electrical applications. Biomass gasifier systems from 3 kW up to 500 kW unit capacity which use wood, non-woody and powdery biomass, have been developed indigenously. Conversion of dual-fuel engines to 100% producer gas engines has also been achieved under R&D Projects. A total of 1806 biomass gasifier systems aggregating to 53.16 MW have been commissioned in 22 States and UTs of the country. The programme has been restructured and modified to promote and encourage development of viable application packages; deployment of gasifier systems for different end-use applications and higher capacity utilisation; and to bring about greater market orientation and commercialisation. Additional features that have been included in the programme include demonstration of indigenous 100% producer gas engines coupled with gasifiers for power generation, and retrofitting of existing diesel based power plants in the North Eastern Region with biomass gasifiers for power generation.

R&D

ON

BIOMASS PRODUCTION

Five R&D projects on biomass production were taken up. Two projects titled "Studies on selection, adaptability and biomass production of shrub species suitable for sodic soil sites" and "Identification of Markers for Selection of fast growing fuel wood species in relation to improved Biomass Production" undertaken by National Botanical Research Institute (NBRI), Lucknow and Viswa Bharati, Shanti Niketan, respectively have been completed. Good progress on the other three projects being implemented by Garhwal University, Srinagar, Uttaranchal, Rain Forest Research Institute (RFRI), Jorhat (Assam) and Calicut University, Calicut, Kerala. was made during the year.

R&D

ON

BIOMASS GASIFIERS

OBJECTIVES
The objectives of the Programme in the 10th Plan, which commenced in 2002-03, are given below:

The Gasifier Action Research Projects (GARPs), supported at Indian Institute of Technology (IIT), Delhi; IIT, Mumbai; Indian Institute of Science (IISc), Bangalore; Madurai Kamaraj University (MKU), Madurai; and, at Sardar Patel Renewable Energy Research Institute (SPRERI), Vallabh Vidyanagar, were completed during the year.

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R&D activities at IIT, Delhi focused on thermo-chemical characterisation of about 450 samples of different biomass from different areas in terms of moisture content, fixed carbon, volatile matter, ash content, ash fusion temperature, calorific values and devolatisation characteristics and density, etc. These have been documented in the form of a book, which was published during the year. The model village electrification project based on 100 kW biomass gasifier system using local biomass being implemented by IIT, Delhi and an NGO at village Fatehpur Taga in Faridabad District of Haryana, is likely to be commissioned during the year. This would provide electricity connections to about 140 households and would be managed for day-to-day operation, maintenance and revenue management by the local Village Energy Society. GARP, IIT, Mumbai, laid emphasis on formulation and updating of the Test Procedures, Standards and Methodology Protocols for biomass gasifiers up to 500 kW unit size. Application specific two-stage and single-stage premixed producer gas burners developed awaits commercialisation. A non-throat type downdraft rice husk gasification unit with rotating grate type and an up-draft biomass flexible throat-less designs have already been commercialised. 100% Spark Ignition Producer Gas Engine has been developed. A State-of-art Report on Biomass Gasification (SAROBG) with updated information on the technology and Indian achievements was prepared. At MKU, Madurai, efforts were concentrated on developing and testing a 120 kW thermal gasifier for use in high temperature applications particularly ceramic industries, with novel features of tapered hopper and air nozzles that promotes efficient firing. A gasifier based continuous zigzag Ceramic Kiln (CZZ) has been designed, and is being tested for commercial use. Fast-firing kilns have been developed, along with rubber combustion gasification of old used tyres. Development of cardamom drier to dry 50 kg. per run was developed, designed, fabricated and tested as per the field conditions, with encouraging results. Development and fabrication of 100 kW (equivalent) thermal gasifier using long sticks, avoiding cutting expenses and fuel loss while cutting, has also been undertaken.

SPRERI, Vallabh Vidyanagar designed and tested a 125,000 kcal/hr thermal open core gasifier using groundnut shells and their briquettes. Powdered groundnut shells were successfully briquetted in a modified punch and die unit. Gasification efficiency levels of 60-70% were achieved. A one million kcal/hr thermal gasifier using groundnut shells was installed in a ceramic industry in Morbi to test and demonstrate the feasibility of replacement of LDO/kerosene oil with producer gas for firing the kilns with encouraging results. SPRERI's gasifier-based community cookstove was demonstrated to 16 owners of roadside food stalls and representatives of seven NGOs engaged in relief and rehabilitation work in earthquake-affected Bhuj District of Gujarat. Nominees of the seven NGOs were trained in the operation and maintenance of the cookstoves. Ten such community cookstoves were supplied to the NGOs for cooking food in different relief camps. IISc, Bangalore concentrated on developing a new gas cleaning system using cloth filter at the end of the cleaning train & ash extraction and various control systems for safe operation of biomass gasifiers. A 500 kWe biomass gasifier system was developed and commissioned at M/s. Senapati Whitely, Ramanagaram. Modifications of natural gas based engines to 100% producer gas engines in unit sizes up to 250 kWe was achieved. These engines will now be taken up for demonstration and field trials.

APPLIED R&D PROJECTS


Innovative R&D projects covering applied, associated and other strategic industry-wise sectoral studies on scientific, technical, engineering, management, financing and evaluation aspects, were supported at various research institutions and universities. Progress made in these projects is given below: At Anna University, Chennai, a Biomass Gasifier based direct fired vapour absorption cold storage system for rural areas has been designed; and 60-75% diesel replacement has been achieved. " Energy Systems Department at IIT, Mumbai has developed a cashew shell gasifier integrated to cashew processing unit with simultaneous extraction of cashew shell liquid

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using the heat available from the engine exhaust. Oil obtained is of commercial quality with high pH value and low moisture content reducing an additional step of further distillation carried out conventionally. IIT, Mumbai has also conducted experimental investigations to compare various practised methods for standardisation of tar and particulate measurement from a gasifier system. Modified sampling unit and revised procedure for making such measurements has now been suggested. In another project at IIT, Mumbai, detailed characterisation of particulate matter in biomass based producer gas from different types of gasifiers, is being experimented for formulation of guidelines and recommendations for design of particulate control devices for gas borne particulates. In the project on Development of Technology for the Production of Gypsum Plaster utilising eco-friendly 100 kg/hr biomass gasifier, CBRI Roorkee has re-designed systems for providing adequate agitation in the charge and power operated screw feeder for continuous feeding of gypsum powder in the shell. Integrated experimentation of the system is planned during this year. In another project entitled "Development of Environmentfriendly alternate fuel based system for lime burning utilising biomass gasifiers" CBRI, Roorkee has designed a pilot plant of 90 kg/hr. capacity for continuous production of quick lime of consistent quality with biomass gasifier based firing system. Design specifications and drawings of steel shell lime shaft kiln of 2 T per day capacity have been finalised. The temperature required for calcination of limestone are of the order of 1000 oC. The kiln is under fabrication and will be connected with biomass gasifier already installed in the premises of the Institute. M/s. Ankur Scientific Energy Technologies Pvt. Ltd., Vadodara are conducting initial trials for converting a slow-speed, reconditioned marine genset to 100% producer gas operation.

Tata Energy Research Institute (TERI), New Delhi has designed, fabricated and commissioned a biomass gasifierbased crematorium at Ambarnath Municipal Crematorium, in Thane district of Maharashtra, being run by an NGO. It was observed that a gasifier based system takes 60-80 minutes, and consumes 100-150 kg wood, as against 400600 kg in traditional way, and about 250-300 kg in improved open fire systems using metal grate. The fuel cost saved per cremation is Rs.350 and the system will pay back its cost in 430 cremations.

PROGRESS

AND

NEW INITIATIVES

1.870 MW capacity was commissioned under ten projects in the States of Chhattisgarh, Kerala, Tamil Nadu, Uttar Pradesh and West Bengal during 2002-03. Other promotional features include support for preparation of DPRs, awareness creation, applied R&D, service centres, and other professional /technical services. Gasifier use for industrial heating, mechanical and captive electrical applications is fast picking up. During the year, special emphasis was given for electrification of remote un-electrified villages. Another special feature of the Programme during the current year is retrofitting of biomass gasifier systems to existing diesel power stations in the North-Eastern States. In order to encourage the use of indigenous 100% producer gas technology in the country, demonstration of 100% producer gas engines has been taken up. IIT Mumbai designed and developed an industrial package for a Steel Re-rolling Mill in Raipur, Chhattisgarh State, producing 50 T/day of re-rolled steel. The mill was consuming 2800 litres of furnace oil on an average shift of 10 hrs per day. The target was to replace 50% of furnace oil by producer gas. An updraft gasifier of 12,50,000 kcal/hr. capacity was designed using 500 kg per hr of wood or 700 Kg of rice husk as the input biomass and along with specially designed and developed producer gas burners of fully premixed type.

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The requirements of steel re-rolling include a temperature of above 1200C and a long stretch of flame geometry. The gasifierretrofitted mill works on dual-fuel mode with 50% of the thermal energy supplied by producer gas. The retrofitted re-rolling furnace has successfully logged over 1000 hours of proving trials. 50% furnace oil substitution by producer gas implies annual conservation of 400 tonnes of furnace oil, saving 25% in the energy cost of steel re-rolling. At present costs, the payback period for the package works out to less than one year. It is important to underline the environmental benefits of replication of this package. It would yield an annual reduction of 1000 Tonnes of CO2 and 30 Tonnes of SO2 per steel mill. This project can be replicated in an estimated 150 units in the Chhatisgarh steel belt alone.

to 25 MW. The focus is also on implementation of projects, which have been offered by State Governments to the private sector. Concurrently, efforts are being made to identify potential sites, conduct detailed surveys and prepare DPRs to generate a shelf of SHP project options. While capital subsidy is being given to the state sector projects, especially those in North Eastern States, which are entitled to 90 percent subsidy, interest subsidy is being offered to commercial SHP projects.

POTENTIAL
The country has an estimated SHP potential of about 15,000 MW. 453 SHP projects with an aggregate installed capacity of 1463 MW have been installed. Besides, 199 SHP projects with an installed capacity of 538 MW are under erection. A database has been created for potential sites suitable for SHP projects. As part of the UNDP-GEF Hilly Hydro Project, a detailed exercise was undertaken to prepare zonal plans for 13 participating states in the Himalayan and sub-Himalayan region. Models have been developed that take into account the available geomorphological and hydrological data and use Geographic Information Systems (GIS) for identification of potential sites. A software package has been developed for Himachal Pradesh, which incorporates regional hydrological models for rapid estimation of the hydro power potential and other salient features of potential sites. A similar exercise is proposed to be carried out for other potential states as well. The database for SHP projects created by MNES now includes 4215 potential sites with an aggregate capacity of 10,279 MW. It is proposed to launch a study during the 10th Five Year Plan to identify potential sites for small hydro projects up to 25 MW. In order to encourage State Governments and private developers to undertake surveys & investigation and preparation of Detailed Project Reports for identified SHP sites, a composite scheme is being implemented to support this activity. Financial support is being provided up to Rs.3 lakh for survey and investigation work and up to Rs.2 lakh for DPR preparation. The State Governments have been advised to undertake these items of work in order to prepare a shelf of SHP project options for

SMALL HYDRO POWER PROGRAMME


The small hydro power (SHP), i.e., up to 25 MW capacity is set to attain commercial status in the country. SHP projects are becoming economically viable with appropriate systems for evacuation/ utilisation of power from the project being increasingly put in place. Promotion of SHP continues to be a thrust area for generating grid quality power from renewable energy sources. It has been recognised that SHP can play a critical role in improving the energy position in some parts of the country and in particular in remote and inaccessible areas. SHP is increasingly becoming an acceptable alternative. Further, technological developments in control systems have made it economically viable for automated operations of even small-sized SHP projects in grid connected and decentralised modes. The gestation period and capital investment are also getting reduced in SHP projects. Since 1989, MNES is responsible for promoting the development of SHP in a planned manner in the country. By giving various physical and financial incentives, investments have been attracted in commercial SHP projects. In addition State Governments are being subsidised to provide power from SHP projects to remote and isolated areas. Fresh incentive schemes have been announced for faster development of SHP projects up

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offering them as commercial projects to the private sector. MNES has so far supported the survey & investigation and preparation of DPRs of 362 potential sites under this scheme.

DEVELOPMENT

OF

COMMERCIAL PROJECTS

PROGRESS
During the 9th Plan period, a capacity addition of 269 MW from SHP projects was achieved against a target of 130 MW. During April-December, 2002, SHP projects with a total capacity of 25.5 MW were commissioned. Under the scheme of capital subsidy, 119 Demonstration SHP Projects with an aggregate capacity of 200.85 MW spread over 20 States and UTs are being supported. Of these, 50 projects with an aggregate capacity of 56.15 MW have been commissioned so far. During the year, Sewa Stage III (9MW) in Jammu & Kashmir, Sonepryag (500 KW) in Uttranchal, Lingti (400 KW) & Sural (100 KW) in Himachal Pradesh, Potteru Stage I & II (3 MW each) in Orissa, Chini Ahfra (250 KW) & Tah Ahfra (50 KW) in Arunachal Pradesh, Korba Stage I (800 KW) in Chhattisgarh and Telangsao (800 KW) in Nagaland were commissioned. The other projects in Arunachal Pradesh, Mizoram, Manipur, Uttaranchal, Himachal Pradesh and Maharashtra are likely to be completed shortly. The capital subsidy scheme was revised to include SHP projects up to 15 MW in order to support state sector projects in hilly regions of the country. Stand-alone hydro power has been identified as one of the sources for electrification of remote villages where such projects are viable. It is proposed to involve local bodies, NGOs etc. from the beginning to set up such SHP projects. The experience of the UNDP-GEF Hilly Hydro Project would be utilised in involvement of local bodies and NGOs in operating, maintaining and revenue collection of SHP projects. 7 decentralised SHP projects in Uttaranchal and 4 projects in Arunachal Pradesh to electrify around 80 remote and isolated villages have already been supported. Further 8 decentralised SHP projects in Uttaranchal and 16 projects in Arunachal Pradesh are under consideration under the village electrification programme.

A high priority has been accorded for the commercialisation of the SHP sector through private sector participation. In order to accelerate the setting up of commercial SHP projects, an interest subsidy scheme has been introduced through financial institutions. Under this scheme, interest subsidy up to 7.5% in the hilly regions and up to 5% in the plain regions is being provided. 32 projects with a total capacity of 54.90 MW under this scheme have been supported. So far 24 projects aggregating 41.85 MW in Andhra Pradesh, Karnataka and Himachal Pradesh have been commissioned by the private sector. As a result of the policy initiatives taken for adopting a uniform policy on NRSE fourteen states having a large potential for SHP projects have announced policies on wheeling, banking and buy-back of energy generated to attract private sector investment. Uttaranchal has announced its policy during the current year. Sites with a total potential of over 2200 MW have been offered so far by these states for the setting up of commercial projects. Uttaranchal, Orissa, Punjab, M.P. and Maharashtra have offered SHP sites to the private sector and consequently PPAs/ MOUs were signed.

RENOVATION, MODERNISATION

AND

CAPACITY UP-RATING

Solang (1 MW) Small Hydro Power project in Solang valley in Himachal Pradesh. The first private sector 33 KVA grid connected project in Himachal Pradesh MNES has a scheme for providing financial assistance for renovation and modernisation (R&M) and capacity up rating of SHP stations. Under this Scheme, financial assistance is provided up to 75% of the R&M cost or Rs.2 crore per MW, whichever is less to the utilities in the Government or public sectors. The R&M scheme has been extended to cover SHP projects up to 15 MW with a maximum support of Rs.10 crore per project. The aim of this scheme is to extend the life of stations with improved performance and reliability. A grant has been approved for the renovation of Jali (6 x 350 KW) and Rongnichu II (5 x 500 KW)

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SHP projects in Sikkim, Rinchington (2 x 1000 KW), Little Ranjit (2 x 1000 KW) and Sidrapong (3 x 200 KW) in West Bengal and Nogli (3 x 250 + 4 x 500 KW), Chaba (3 x 250 + 2 x 500 KW), Chakki (1 x 100 + 1 x 200 KW), Rongtong (4 x 500 KW) in Himachal Pradesh, Dzuza (2 x 500 KW) in Nagaland, Bortikharu (4 x 500 KW) in Assam and Ganderbal (3 x 5 MW) in Jammu & Kashmir. The renovation work in these projects has started and is likely to be completed by 2003-04.

SCHEME

FOR

DEVELOPMENT/UPGRADATION

OF

WATER MILLS

Jharkhand, Himachal Pradesh, Jammu & Kashmir, Manipur, Mizoram, Nagaland, Sikkim, Meghalaya, Tripura, Uttaranchal/ U.P. and West Bengal. The project envisages the preparation of Zonal Plans and a Master Plan for these regions, besides setting up 20 demonstration projects based on different commercially viable and environmentally sound technologies. The project also envisages development of new and efficient designs of water mills and study of the demonstration projects from the environment point of view. The project is now in its final stage. Most activities envisaged in the project have been completed. The zonal plans for all the 13 states have been prepared and as a result 2162 potential sites aggregating 3827 MW have been identified. These sites have been categorised into different ranges of capacity and head. 12 demonstration projects have been completed and others are in advanced stages of execution. Solang (1 MW), Lingti (400 KW) and Sural (100 KW) in Himachal Pradesh; Soneprayag (500 KW) in Uttaranchal and Daragaon (20 KW) in West Bengal have been made operational this year. Solang is the first private sector project connected to 33 KVA grid in Himachal Pradesh. Environment Improvement Plan and Environment Impact Assessment have been made for all the demonstration projects. New designs of mechanical water mills and of Multi Purpose Power Unit (MPPU) for water mills have been developed and 143 water mills based on modified designs have been installed in Uttaranchal, Himachal Pradesh, Jammu & Kashmir and Arunachal Pradesh.

More than 1.5 lakh water mills have been used traditionally in the Himalayan region of the country for mechanical applications such as rice hulling and milling of grain etc. However, their use is continuously on the decline. Efficiencies of these water mills can be improved and can also be used for electricity generation. Keeping this in view, new designs of water mills for mechanical use as well as electricity generation were developed by the Alternate Hydro Energy Centre, IIT, (AHEC), Roorkee under the UNDP-GEF Hilly Hydro project. The Ministry has also announced a Promotional Incentive Scheme for the development/ up gradation of water mills. Under this scheme, financial assistance is provided to the tune of Rs.30,000 or 75% of the actual cost in mechanical mode and Rs.60,000 or 75% of the actual cost in electrical / electrical & mechanical mode. The scheme is being operated through local organisations such as the Water Mill Associations, co-operative societies, registered NGOs, local bodies, and State Nodal Agencies. So far, five training programmes have been organised for training local bodies, NGOs and individual water mill owners. A target of installing 200 improved water mills during 2002-03 were given to Uttaranchal (150 nos.), J&K (35 nos.) and Himachal Pradesh (15 nos.).

RESEARCH & DEVELOPMENT


While there exists a manufacturing base for small hydro sector in the country research and product development are required to improve efficiencies and reduce the equipment costs. The main objective of this effort is: simplification and optimisation of the system design and engineering practices; reduction in the cost of all elements of SHP projects; improvement in equipment reliability and development of techniques for speedy construction so as to reduce the gestation period. New concepts are being tried out in

UNDP/GEF TECHNICAL ASSISTANCE PROJECT


MNES has been implementing the UNDP/GEF technical assistance project on 'Optimising Development of Small Hydro Resources in the Himalayan and Sub-Himalayan Regions'. The project is being implemented in Arunachal Pradesh, Assam, Bihar/

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the demonstration projects undertaken as part of UNDP-GEF Hilly Hydro project. These efforts include use of COANDA system, SCADA system for computerised project monitoring, electronic load diverters etc. The industry is being encouraged to take up product development in collaboration with research & academic institutions.

TRAINING/ MANPOWER DEVELOPMENT


Training and Human Resource Development is an important component of the SHP programme which ensures availability of trained man power for operating and maintaining SHP stations. Training courses, workshops and business meets are regular features of the programme. Training to local bodies and NGOs has been a thrust area. The AHEC had organised a training programme for technical officers from State Governments and the private sector to focus on design aspects of SHP projects. An International training programme had been organised in February 2003. AHEC is also offering a Post Graduate course on Small Hydro. MNES has sanctioned 10 fellowships in each academic course to attract students to the Small Hydro area.

40 million tonnes of solid waste and about 5000 million cubic metres of liquid waste is generated every year in the urban areas of the country. In addition to this, a large quantity of solid and liquid waste is also generated in the industrial sector. Most of the waste generated in the country finds its way into rivers, ponds, low lying land, etc., without any treatment, resulting in odour, pollution of water and air as well as emission of Green House Gases like methane, carbon dioxide, etc. This problem can be mitigated through adoption of environment friendly technologies for treatment and processing of waste before it is disposed of. These technologies not only lead to generation of a substantial quantity of decentralised energy but also reduce the quantity of waste besides improving the quality of waste to meet the pollution control standards. It is estimated that there is a potential of generating about 1500 MW of power from urban and municipal wastes and about 1000 MW from industrial wastes in the country, which is likely to increase further with economic development. Ministry of Non-Conventional Energy Sources is promoting setting up of Waste-to-Energy projects through National Programme on Energy Recovery from Urban and Industrial Wastes and a UNDP/ GEF assisted project on Development of High Rate Bio-methanation Processes as a means of Reducing Green House Gases Emission.

PUBLICITY

AND

AWARENESS CREATION

Business meets are organised in different parts of the country so as to create awareness about policies and programmes and to bring about greater interaction among prospective developers, State Agencies, consultants etc. IREDA also organises regular business meets in various regions of the country. Publicity is also being provided through advertisements in national dailies as well as in regional newspapers apart from business magazines. A publicity campaign was launched for creating awareness on power generation from SHP projects and water mills through radio programmes in Hindi and other regional languages.
ENERGY FROM WASTE

ENERGY RECOVERY PROGRAMME


The National Programme on Energy Recovery from Urban and Industrial Wastes was launched during the year 1995-96 with the following objectives: (i) creation of conducive conditions with financial and fiscal regime to promote, develop and demonstrate the utilisation of wastes for recovery of energy; (ii) improvement in the waste management practices through adoption of renewable energy technologies for processing and treatment of wastes prior to disposal; and (iii) promotion of projects for recovery of energy from wastes from Urban and Industrial sectors.

Wastes generated from Urban and Industrial sector increase continuously with rising population, rapid urbanisation and industrialisation. Some recent estimates have indicated that about

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FINANCIAL INCENTIVES
Financial Incentives being provided for eligible waste-toenergy projects under National Programme on Energy Recovery from Urban and Industrial Wastes are given below:

PREPARATION

OF

DETAILED PROJECT REPORT

50% of the cost of preparation of DPR or Techno-economic Feasibility Reports, subject to a maximum of Rs. 2.00 lakh per report to Urban Local Bodies only.

COMMERCIAL PROJECTS
Interest subsidy is provided for reducing the rate of interest to 7.5% (4% in case of Municipal Solid Waste (MSW) based projects taken up by the Municipal Corporations / Urban Local Bodies).

IMPLEMENTATION ARRANGEMENTS
The National Programme for Energy Recovery from Urban and Industrial Wastes is implemented through the State Nodal Agencies, Govt. Departments, and Urban Local Bodies who have to forward the project proposals to MNES in accordance with a prescribed procedure for applying for Central Financial Assistance. This scheme is applicable to both, private as well as public sector entrepreneurs and investors having technical and managerial capabilities for implementing such projects on the basis of Build Own Operate & Transfer (BOOT), Build Operate & Transfer (BOT), Build Own & Operate (BOO), Build Operate Lease & Transfer (BOLT).

DEMONSTRATION PROJECTS
Assistance of up to 50% of capital cost of the project limited to Rs. 3.00 crore per MW for demonstration projects to generate power from Municipal Solid Wastes and a few selected Industrial Wastes.

POWER

GENERATION AT

SEWAGE TREATMENT PLANTS (STPS)

Financial assistance of up to 50% of the incremental capital cost for generation of power from biogas.

UNDP/ GEF ASSISTED PROJECT


The project on "Development of High Rate Bio-methanation Processes" is being implemented since 1994. The project envisages setting up of demonstration sub-projects for wastes from seven sectors namely, Sewage, Slaughterhouse, Leather & Tannery, Pulp & Paper, Vegetable market yards, Fruit & Food Processing and Animal manure besides Utilisation of biogas for power generation. The overall developmental objectives of the project are as follows: o Institution and capacity building; o Promotion of bio-methanation technology through setting up of demonstration sub-projects and organisation of seminars and workshops, training, etc.; o Development of a National Master Plan; and o Publication of a quarterly newsletter 'Bio-Energy News'.

URBAN LOCAL BODIES


Financial Incentive @ Rs. 15.00 lakh per MWe is payable to Municipal Corporations/Urban Local Bodies, for providing garbage free of cost at the project site and land on long term (30 years +) basis on nominal lease rent. However this incentive will be reduced to 50% in case of projects for generation of power from fuel or fuel from waste.

STATE NODAL AGENCIES


Financial incentives @ Rs. 5.00 lakh per MWe is payable to State Nodal Agencies for promotion, co-ordination and monitoring of projects. However, this incentive will be reduced to 50% in case of projects for generation of power from fuel or fuel from waste.

FINANCIAL INSTITUTIONS
A service charge of 2% of the actual subsidy channelised through the FI to the promoter or other FIs, subject to a maximum of Rs. 2.00 lakh per project.

ACHIEVEMENTS
The main achievements under the National Programme for Energy Recovery from Urban and Industrial Wastes and the

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UNDP/ GEF assisted Project on Development of High Rate Biomethanation Processes as means of Reducing Green House Gases Emission, for the year 2002-03 are as follows:

(viii) Project for generation of 150 kW power from vegetable market waste by Municipal Corporation, Vijayawada, A.P. (ix) Project for generation of 0.5 MW power from biogas generated at Sewage Treatment Plant by Surat Municipal Corporation

IMPLEMENTATION

OF

WASTE-TO-ENERGY PROJECTS

WASTE-TO-ENERGY PROJECTS INSTALLED / COMMISSIONED


(i) Project for generation of 2 MW power from biogas by M/ s Saraya Distillary, Gorakhpur, U.P. (ii) 25 KWe Bio-methanation project based on leather solid waste (chrome shavings) at M/s. Tata International Ltd., Dewas, M.P. (iii) Project for generation of 0.5 MW power from Tapioca Processing Industry at M/s Varalakshmi Starch Industry Ltd., Salem, Tamilnadu

WASTE

TO

ENERGY PROJECTS

UNDER

DEVELOPMENT

(i) Project for generation of 6.6 MW power from Municipal Solid Waste in Hyderabad city by M/s SELCO International Ltd., Hyderabad (ii) Project for generation of 5.7 MW power from Municipal Solid Waste in Vijayawada city by M/s Shriram Energy Systems Pvt. Ltd., Hyderabad (iii) Project for generation of 11 MW power from Municipal Solid Waste in Hyderabad city by M/s RDF Power Projects Ltd., Hyderabad (iv) Project for generation of 2 MW power from Sugar Cane press mud by M/s St John Sangam Trust, Perambalur, Tamil Nadu (v) Project for generation of 6 MW power from poultry waste by M/s Kakatiya Alloys Pvt. Ltd., Rangareddy Distt., A.P. (vi) Project for generation of 2 MW power from Furfural Industry waste by M/s. Delta Agro Chemicals Ltd., Krishna Distt., A.P. (vii) Project for generation of 3 MW power from Poultry Waste by M/s Ramaprasad Pvt. Ltd., Tanaku, A.P. (viii) Project for generation of 7.5 MW power from poultry waste by M/s Rajabhaskar Power Pvt Ltd., Mundargi Vill., Billary Dist. Karnataka. (ix) Project for generation of 3.6 MW power from Poultry waste by M/s Raus Power Pvt. Ltd., Anaparthy Vill., East Godavari Dist. A.P.

WASTE-TO-ENERGY PROJECTS

UNDER

INSTALLATION

(i) 5 MW power and 75 tonnes per day biofertiliser from Municipal Solid Waste of Lucknow city, on BOO Basis by M/s Asia Bioenergy India Ltd., Chennai (ii) Project for generation of 1.3 MW power from Poultry droppings by M/s. G.K. Bio-Energy Pvt. Ltd., Namakkal, Tamil Nadu (iii) Project for generation of 4 MW power from Starch Industry Solid Waste by M/s Vensa Biotek, Samalkot, A.P. (iv) Project for generation of 3 MW power from Palm Oil Industry Waste by M/s MPR Power Projects Pvt. Ltd., Hyderabad (v) Project for generation of 1 MW power from animal manure at Ludhiana by Punjab Energy Development Agency, Chandigarh. (vi) Project for generation of 1.25 MWeq biogas from Bagasse wash effluent at M/s. Tamil Nadu Newsprint and Papers Ltd., Karur, T.N. (vii) Project for generation of 0.5 MW power from abattoir wastes by M/s. Hind Agro, Aligarh, U.P.

PREPARATION

OF

NATIONAL MASTER PLAN

Drafts of most of the reports leading to the preparation of National Master Plan for the development of waste-to-energy

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sector in the country have been prepared. The National Master Plan is likely to be finalised by June 2003.

PUBLICATION

OF

BIO-ENERGY NEWS

Three issues of quarterly newsletter `Bio-Energy News' have been published by December 2002 and one more would be published by March 2003.

TRAINING PROGRAMMES/ CONFERENCES


(i) One training programme on Clean Development Mechanism was organised for senior officials in the USA and The Netherlands during May-June 2002. (ii) Financial support has been provided for the organisation of seminars/ workshops on `waste-to-energy' by NGOs, Govt. Departments and consultancy organisations for creating awareness in different parts of the country.

environmentally benign and reliable for power production. The use of fuel cells has been demonstrated for stationary/ portable power generation and other applications. MNES has taken up projects on different types of fuel cells through various organisations. These projects have led to the development of prototypes of fuel cells, materials/catalysts and components for fuel cell systems. Phosphoric Acid Fuel Cell (PAFC) stacks have been developed and demonstrated for decentralised power production. Under a project funded by MNES, a 50 kW (2x25 kW) PAFC power plant has been developed and tested by BHEL, Hyderabad for distributed power generation. As part of an R&D project funded by this Ministry, the SPIC Science Foundation, Chennai, had developed an improved version of 5 kW Proton Exchange Membrane (PERM) fuel cell module and successfully demonstrated its use for on-site power generation and vehicular propulsion. Efforts were on to develop durable ionexchange membranes and establish performance and reliability of systems. The Central Electrochemical Research Institute (CECRI), Karaikudi has developed a small Molten Carbonate Fuel Cell (MCFC) stack. The Central Glass and Ceramic Research Institute (CGCRI), Kolkata is developing a 1 kW Solid Oxide Fuel Cell (SOFC) power pack. Under an R&D project funded by MNES, the Indian Institute of Science (IISc), Bangalore, will construct a 100watt liquid-feed solid polymer electrolyte direct methanol fuel cell (DMFC). The Indian Institute of Technology (IIT), Madras, Chennai in collaboration with SPIC Science Foundation is also working on a project to develop a 250-watt DMFC stack. The Indian Institute of Chemical Technology (IICT) and BHEL, Hyderabad have developed catalysts and reformers for reformation of methanol into hydrogen for fuel cells. A PEMFC-based uninterrupted power supply (UPS) system to deliver single-phase AC power at 220 volts, 50 Hertz has been developed and demonstrated by SPIC Science Foundation, Chennai. This system has been sent to Indian Institute of Technology, Madras, Chennai for testing/demonstration.

POLICY GUIDELINES

FOR

WASTE-TO-ENERGY PROGRAMME

Various State Governments were requested to issue policy guidelines for encouraging the setting up of waste-to-energy projects in their respective States. State Governments of Kerala and Gujarat issued the policy guidelines during the year 2002-03. Thus the total number of States, which have announced policy measures for waste-to-energy programme, has risen to ten.
NEW TECHNOLOGIES

The Ministry of Non-Conventional Energy Sources (MNES) is implementing programmes on Chemical Sources of Energy, Hydrogen Energy, Alternative/Biofuels for Surface Transportation (Battery Operated Vehicles), Geothermal Energy and Ocean Energy. As part of these programmes, a number of research, development and demonstration projects have been taken up through various research and educational institutions, universities, national laboratories and the industry.

CHEMICAL SOURCES

OF

ENERGY (FUEL CELLS)

Fuel cells produce electricity from an electrochemical reaction between hydrogen and oxygen. Fuel cells are efficient,

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SPIC Science Foundation has identified a number of polymers under an R&D project and studied their suitability as electrolytes for fuel cells. Modified Nafion membranes have been developed for high temperature applications. By incorporating a suitable reinforcing agent, the mechanical strength of films of block polymers of polystyrene has been improved. Membranes of up to 100 sq. cm area have been made. As part of another project, the National Chemical Laboratory (NCL), Pune, has carried out literature survey on various types of polymeric membranes for PEMFC and procured important patents and reprints of relevant work. They have selected suitable monomers and synthetic strategies on the basis of anticipated transport behaviour of protons. NCL has also synthesised different proton conducting polymers such as polyimides, polybenzimidazoles and surface functionalised polymers using surface functionalisation. Membrane electrode assemblies (MEAs) for fuel cell stack have been prepared. The fabrication of a prototype using MEAs is in progress. The Indian Institute of Technology, Madras, Chennai and SPIC Science Foundation, Chennai are jointly implementing a project for optimisation of Proton Exchange Membrane Fuel Cell Stack design using advanced computational techniques. Preliminary modeling work has commenced. The application of fuel cells has already been demonstrated for small-scale power generation and for operating an electric vehicle. It is proposed to take up projects and activities related to demonstration and testing of fuel cell systems in field conditions. Information/data/experience generated on the performance of fuel cells in field conditions will help in improving the performance of components and systems for greater reliability. MNES proposes to initiate Technology Mission on Fuel Cells during the Tenth Plan.
HYDROGEN ENERGY

renewable energy sources and from other fuels. Hydrogen could be used for a broad range of applications to supplement or substitute the consumption of hydrocarbon fuels and fossil fuels in an environmentally friendly manner. The large-scale introduction of hydrogen as a fuel would reduce the consumption of fossil fuels and keep the air clean and free from pollution. This Ministry is supporting research, development and demonstration projects on various aspects of hydrogen energy including production, storage and utilization of hydrogen as fuel at various research, scientific and educational institutions, laboratories, universities, and industries. Hydrogen can be produced from renewable energy sources by various methods. Electrolytic, photolytic/photo biological, photo-electrolysis and thermo-chemical hydrogen production technologies are currently under development and use. The selection of production processes/technologies will depend on the availability of resource, expertise, infrastructure and economical aspects. The research group at Banaras Hindu University (BHU), Varanasi, carried out studies on semiconductor-septum solar cells for pilot scale production of hydrogen by photo catalytic decomposition of water. This Ministry has sanctioned a project to Shri AMM Murugappa Chettiar Research Centre (MCRC), Chennai, for the production of hydrogen from organic effluents at a pre-commercial level and optimise various parameters for optimal hydrogen production. Photo bioreactors of 0.125 m3 and 1.25 m3 have been fabricated at Nellikuppam. One more reactor of 12.5 m3 capacity is being fabricated by MCRC. For hydrogen production, 12 heterotropic bacteria and two phototropic bacteria were isolated from different sources. The project seeks to demonstrate sustained biological hydrogen production at a pre-commercial level, study and optimize various parameters and prepare documentation for commercial exploitation of the technology for treatment of industrial biological effluents. The research group at BHU, Varanasi, is also developing a laboratory scale bio-hydrogen production plant for producing hydrogen from bagasse.

Hydrogen is a clean fuel and efficient energy medium for fuel cells and other devices. Hydrogen can be produced from water,

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The Indian Institute of Technology (IIT), Madras, Chennai is engaged in developing a hydrogen storage device based on indigenous Mischmetalbased alloys. A hydrogen storage device using special SS tubes, filter and 100 g of AB2 alloy has been designed and developed and its working performance has been studied. Design aspects of a larger hydrogen storage device using special SS tubes, heat exchanger and flow meter with alloys have been studied. Four Mischmetalbased AB2 and AB5 alloys, which have reasonable plateau pressure at room temperature, have been used in the hydrogen storage device. Another research group at IIT, Madras, Chennai has studied the design aspects of the novel metal hydride reactors for environment-friendly energy conversion devices. A concept has been devised for preliminary screening and selection of metal hydrides for specific energy conversion devices. Various energy conversion systems with suitable metal hydrides such as Zr-based hydrides and carbon nanotubes are being analyzed. Transient heat and mass transfer analyses are being done. Design aspects of the reactor bed are also being studied. It is proposed to demonstrate and field test 5 hydrogen fueled two-wheelers at BHU, Varanasi, under the MNES-funded project. Each vehicle will require about 20-25 kg of hydrogen storage material to cover a distance of up to 100 km. BHU has synthesised new composite materials for storing hydrogen under this project. Procurement orders have already been placed for the purchase of material and equipment including 5 motorcycles. IIT, Kharagpur, is to design and develop a compressor driven metal hydride system for cooling and heating applications. The design optimisation of a working prototype of 1 kW space cooling system based on compressor driven metal hydride systems, using hydrogen as the working fluid has been completed. Different components including compressors have also been selected. With MNES support for the development of low-polluting hydrogen-diesel dual-fuel engine, IIT, Delhi has successfully operated an engine (125 KVA) in the hydrogen diesel dual fuel mode. Different parameters have been studied including the engine performance and exhaust emission characteristics of this system.

MNES propose to initiate Technology Mission on Hydrogen Energy during the Tenth Plan.

BATTERY OPERATED VEHICLES


The Ministry of Non-Conventional Energy is implementing a programme on Alternative Transportation, which focuses on development of battery operated vehicles (BOVs). BOVs are benign, noise-free and consume no oil. Sources (MNES) Fuel for Surface and deployment environmentally

The Central Electrochemical Research Institute (CECRI), Karaikudi is developing high-energy lithium polymer batteries of 1 Ah capacity with a cycle life of 350 for vehicular traction. CECRI has already synthesised and characterised LiCoO2 cathode active material and completed the optimisation of polymer electrolyte films and basic cell studies. The charge-discharge studies indicated cell efficiencies of more than 60%. The project sanctioned at the Centre for Materials for Electronics Technology (C-MET), Pune, envisages the development of novel route synthesis, characterisation and electrochemical studies on high quality cathode materials for rechargeable lithium batteries for electric vehicle use. Lithium manganese oxide is one of the cathode materials for lithium batteries. C-MET has developed cathode materials and characterised by using different characterisation techniques. Work is in progress for the development of prototype lithium cells and for optimisation of various parameters for the cathode materials developed so far under this project. IISc, Bangalore, has assembled and characterised laboratory scale lithium ion secondary cells in non-aqueous electrolyte with aluminium as a negative electrode and lithium manganese oxide as the positive electrode. Several carbon samples are used for separation of negative electrodes and electrochemical characterisation. Commercial lithium cobalt oxide is used for preparation of positive electrodes and electrochemical characterisation. Discharge capacity of 60-80 mAh/g has been achieved during a long cycle life.

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NCL, Pune has synthesised carbonaceous materials based on coconut shell carbon for super capacitor electrode using various activation methods. The Laboratory has prepared activated carbons using different processing procedures with KOH, ZnCl2, LiOH, and CsOH etc. The BET surface area after gas phase activation is in the range of 800-1000 m2/g. The research group has also prepared carbon composite electrodes using Ru and Ir metal oxides. IISc, Bangalore, is implementing a project entitled `Development of solid electrolyte materials for electrochemical double layer super capacitors'. The Institute has developed solid polymer electrolytes of silicate-salt composites based on sol-gel process for ultra capacitor applications. Capacitance of 300-400 Farad per gram of the material developed has been achieved. Polyacrilonitrile-based solid electrolytes have been developed and capacitances of the order of a few hundreds of Farads achieved. A number of solid electrolyte systems would be investigated for super capacitor applications. The CECRI at Karaikudi is implementing a project to develop conducting polymer based super capacitors. The Institute has fabricated and characterised ntype and p-type conducting polymer composite electrodes for super capacitor use. It is in the process of assembling and analyzing a model super capacitor to achieve higher performance. The Nimbkar Agricultural Research Institute (NARI) at Phaltan, under another project, developed and demonstrated the operation of 20 battery-assisted cycle rickshaws in Maharashtra. Encouraged with the performance, NARI plans to develop and deploy more such passenger rickshaws. The Ministry sanctioned a pilot project to M/s. Scooters India Limited (SIL), Lucknow and M/s Mahindra Eco Mobiles Limited, Mumbai, for demonstration of 300 numbers of battery operated three wheelers (BOTWs) in Agra and other cities. 250 BOTWs are already operating in Agra, Allahabad, Ahmedabad, Delhi, Kolkata, Lucknow and Pune for demonstration, awareness promotion and generating performance data of the vehicles in field conditions. The Ministry broadened the scope of the demonstration programme on BOVs in the year 2002-2003 to cover battery operated passenger three wheelers and battery operated passenger

cars, besides the battery operated buses/mini-buses. This programme provided subsidy for the purchase of these types of indigenously manufactured vehicles through the Nodal Agencies and Departments in the States and Union Territories. MNES propose to initiate Technology Mission on Battery Operated Electric Vehicles during the Tenth Plan.

GEOTHERMAL ENERGY
Encouraged by the findings of nearly 340 hot springs in the country, a systematic collaborative, research, development and demonstration programme was undertaken with different organizations viz. IIT, Delhi, National Aeronautic Limited, Bangalore, Geological Survey of India, National Geophysical Research Institute (NGRI), Hyderabad, Oil & Natural Gas Corporation etc. and the use of geothermal energy was demonstrated in the country for small scale power generation and thermal applications. After ascertaining the existence of potential reservoirs in Tattapani and Puga geothermal fields in Chhattisgarh and Jammu & Kashmir respectively through magneto-telluric investigations by NGRI, Hyderabad, the Ministry is planning to develop these fields for power generation. Sutluj-Spiti, Beas and Parbati valley in Himachal Pradesh, Badrinath-Tapovan in Uttaranchal and Surajkund in Jharkhand also have some potential sites for power generation. A programme for ascertaining the existence and potential of the reservoir at these sites is being planned by the Ministry through NGRI, Hyderabad and NHPC. As most of the geothermal sites in the country are in low and moderate temperature range, some demonstration projects with direct heat utilization are being planned to be taken up at different places in the country.

OCEAN ENERGY
The Ocean Energy contained by the oceans in the form of temperature gradients, waves, tides and ocean currents, can be used to generate electricity in an environment-friendly manner. With the present technology, only tides can be harnessed on

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commercial basis. Gulf of Kutchh and Gulf of Cambay in Gujarat and delta of Ganga in Sunderbans area in West Bengal have so far been known as the potential sites in the country for generating tidal power. A systematic study to assess the tidal power potential in the country is being planned to be carried out. A Detailed Project Report (DPR) for setting up of a tidal power plant of 3 MW capacity at Durgaduani Creek in Sunderbans area of West Bengal has been prepared through West Bengal Renewable Energy Development Agency (WBREDA), Kolkata. The DPR has been reviewed by a Committee of Experts constituted by the Ministry under the chairmanship of Member (Hydro), Central Electricity Authority. The case is being processed for further activities to install the country's first tidal power plant. A research & development programme for the development of other forms of ocean energy is being planned to be undertaken in the country.

in automobiles. Recently a policy analytical study has been carried out by the Ministry for drafting a long-term policy on biofuels. A soft loan scheme based on interest subsidy has been introduced during the current financial year for the producers of ethanol and other biofuels and the manufacturers of modified engines and kits enable to use biofuels. A research and development project has been sanctioned to Andhra University to develop aqua-petrohol and develop the specifications of the engines enable to use the fuel thus developed. The efforts are being made to take up a demonstration project on the trial runs of diesel vehicles with biodiesel in collaboration with some oil company and manufacturers of diesel vehicles followed by launching a Technology Mission on biofuels.

SPECIALISED TECHNICAL INSTITUTIONS


Continuous research and development effort is a prerequisite for the promotion of any new technology. This is particularly true for renewable energy devices where the acceptance of the technology depends on cost, efficiency of operation and product life, among other factors. The Ministry of Non-conventional Energy Sources (MNES) has set up three specialised technical institutions to constantly work on upgrading technology, ensuring reliability of systems through testing, standardisation and certification and developing design to suit specific needs of different sectors and target groups.

BIOFUELS
Conservation of imported petroleum products and environmental pollution are the two important issues of concern today in the country. Thus, there is a need to search for alternate fuels to petrol and diesel for use in automobiles and diesel engines. Ethanol, currently used mainly as a raw material for chemical industries, in medicines and for potable purposes, is being increasingly looked upon as a potential fuel for powering automobiles. When used in blends with gasoline, Ethanol enhances the combustion of gasoline due to oxygen molecules resulting in a more efficient burn and reduced emissions. Other potential bio fuels are edible and non-edible oils such as Jatropha curcas, Karanje, honge, etc. Recent developments taken place world over have made the use of ethanol petrol blend and biodiesel interesting new alternatives for conventional, unmodified diesel vehicles. Development of technology for the production of ethanol from different routes, converting different non-edible oils to biodiesel, developing kits/modified engines capable of using biofuels with 10% and more blends are some of the attempts being made by the Ministry to reduce the use of imported petroleum products

CENTRE

FOR

WIND ENERGY TECHNOLOGY

During the financial year 2002-03, the Centre for Wind Energy Technology (C-WET) was recognised as a Scientific and Industrial Research Organisation by the Department of Scientific and Industrial Research (DSIR). Apex and departmental quality manuals including procedures, work instructions, formats to implement ISO 9001- 2000 have been prepared and are in use for various activities. Preparation of matching National Standards for Wind Turbines is underway. An office-cum-workshop building for Wind Turbine Test Station (WTTS) has been constructed; the campus for the Centre

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is under construction near Chennai. The construction work began in October 2002, and is likely to be completed by June 2003. The Centre will become functional from the new campus in July 2003. The Building Construction Management has been entrusted to CPWD.

WIND RESOURCE ASSESSMENT


Wind Resource Assessment programme is being implemented in co-ordination with the State Nodal Agencies. 59 wind monitoring stations are operational in 11 States. Seven new stations in the States of Rajasthan, Haryana and Maharashtra were commissioned. DPRs have been prepared for establishment of Wind Turbines at Car Nicobar, Madhya Pradesh and Uttaranchal. Wind monitoring stations in Marathwada and Konkan are also being established. A wind monitoring programme at five sites in Andaman & Nicobar Islands is planned. Micro-survey/Micro-siting studies were carried out in the States of Kerala and Maharashtra. Micro-survey reports including master plans for 81 stations have been prepared for 10 States. During the current year six more reports have been prepared and it is proposed to take up 10 more stations for micro survey studies and preparation of Master Plans. Wind monitoring at 21 identified sites in North-eastern States is also being taken up.

Review of the manufacturer's documentation is carried out for Certification. Safety and Structural integrity of the Wind Turbines is verified through independent evaluation. During the current year, one Category I Certification and renewal of one Category II Certification, have been completed. Preparation of Type Approval Scheme (TAS), a full-fledged system for Certification of Wind Turbines has been initiated. Preparation of National Standards for wind turbine evaluation has been taken up. An Expert Group has been set up to draft the Indian Standards for Wind Turbines. A meeting of scientists from C-WET and RISO was held with the manufacturers to discuss the documentation requirements for certification.

WIND TURBINE TESTING


During the year, the infrastructure facilities were upgraded from 1.40 MW to 1.65 MW. Preliminary tests were initiated on two wind turbines of capacity 1.25 MW and 250 KW, installed and commissioned during the windy season of 2002. The tests will be continued during the windy season of 2003. One in-situ power curve measurement was carried out on a 750 kW wind turbine at Karunkulam in Tamil Nadu. Two more in-situ power curve measurements are planned at Jaisalmer, Rajasthan and Edaiyarpalayam, Tamil Nadu. Preliminary work is on hand to obtain accreditation from National Accreditation Board for Testing and Calibration Laboratories (NABL), Ministry of Science and Technology.

RESEARCH & DEVELOPMENT


Two approved proposals, the first to carry out wind tunnel based studies for establishment of flow past wind turbine nacelles, and the other to revisit Palghat Gap with advanced measurement systems are under implementation. The Centre, in association with NRSA, is studying the applicability of GIS to identify and quantify the wind power potential in a given area. To analyse the problems faced in operation and maintenance of gearboxes of Wind Turbines, the Centre is conducting a study with Centre for Energy Studies, Osmania University. The project is expected to lead to improved operation and maintenance of gearboxes.

INFORMATION

AND

TRAINING

STANDARDS & CERTIFICATION


The Centre is implementing Type Approval Provisional Scheme-2000 (TAPS-2000), for Certification of Wind Turbines.

C-WET has now established a web page with the help of National Informatics Centre. A library has been established with focus on renewable energy in general, and wind energy, in particular. An International Training Program on Wind Energy Technologies, in association with ECN, Netherlands, is being planned for September 2003 under an MOU signed between ECN and MNES. The Ministry of Non-conventional Energy Sources is establishing an autonomous institution - Sardar Swaran Singh

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National Institute of Renewable Energy (SSS-NIRE), on the Jalandhar - Kapurthala road in Punjab, to serve as the Apex Institution for research & development in different areas of nonconventional energy. The Institute will especially focus on new areas which are not being taken-up by the existing centres supported by the Ministry. The work will, therefore, be focused in the areas of Biomass Energy, Energy Recovery from Wastes, New Technologies, energy needs in rural areas, as well as Hybrid and Integrated Energy Systems. The Institute will also focus on commercialisation of renewable energy technologies, human resources development, training and international co-operation, besides supplementing the activities of the existing centres, and providing co-ordination as an apex institution in the area of renewable energy. The progress made towards the setting up of the Institute during the current year, is given below: 1. The contract for the construction work was awarded to Uttar Pradesh Rajkiya Nirman Nigam Ltd (UPRNN), Lucknow in August 2001 by CPWD. 85% construction work of the Technical Services Block was completed; balance work is in progress. The Technical Services Block is expected to be completed by April 2003. The first phase of construction of the Campus is likely to be completed by mid-2004. 2. Three meetings of Building and Infrastructure Development Committee (BIDC) were held during the year to discuss various issues related with Power Management Plan for the Institute, progress of the construction work etc. The campus requirement of Power will partially be met from renewable energy systems. Building Integrated Solar Photovoltaic (BIPV) systems, Root Zone Sewage Treatment Plant (RZSTP) system, Heating, Ventilation and Air-conditioning system (HVAC) based on PDIEC concept, along with geothermal heat exchanger, are being envisaged for the Institute building. 3. The Chairman, Governing Council, SSS-NIRE/Secretary, MNES visited the SSS-NIRE project site to review the progress of the construction work of the Institute Building,

and thereafter held a meeting with State/District officials at Jalandhar in July, 2002 to discuss various pending matters such as mutation of land, change in land use pattern, water supply for water body, demarcation of common land of the three Institutions, power connections for SSSNIRE campus, etc. 4. The Ninth meeting of the Governing Council of the Institute was held in September 2002 in Chandigarh under the Chairmanship of Secretary, MNES. The Annual Report and Audited Account for the year 2001-02 was approved by the Council. Fourth Annual General Meeting of the Governing Body was held in December, 2002 in the Ministry, to receive, consider and adopt the Annual Report, audited balance sheet as at 31.03.2002, income & expenditure accounts for the year 2001-02 and Report of the Auditors thereon. Third meeting of the Scientific and Technical Advisory Committee (STAC) was held in October 2002 to discuss the scientific and technical work to be taken up initially by the Institute. 16 posts have been created for SSS-NIRE during the year, including the post of Director. 5. A meeting of State-level Co-ordination Committee was held in October 2002 in Chandigarh to discuss the common issues related to three institutes like demarcation of land, mutation of land, construction of road between PTU and SSS-NIRE, telephone connections, etc. The main objectives of the Solar Energy Centre, set up for the promotion of solar energy use in the country, include i) to act as a national test and standardisation Centre; ii) to undertake interactive research and development projects; iii) to assess solar radiation resources in the country; iv) to provide advisory and consultancy services; and v) to disseminate information. The Centre also participates in bilateral and multilateral projects. During the year, Parliament's Public Accounts Committee headed by Honourable Sardar Buta Singh made a local study visit to the Centre. The Committee appraised Solar Energy Programme

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of the Ministry and saw the activities of SEC followed by discussions.

SOLAR THERMAL ENERGY TESTING


AND

assessment studies on Shimla buildings has been completed. The draft course material for inclusion in the curricula of B.Arch in the country is close to completion. A two-day national workshop on solar passive architecture for hilly regions was organised at Dehradun, jointly with Housing and Urban Development Corporation (HUDCO) and Uttaranchal Renewable Energy Development Agency. A committee has been consequently constituted by the State government to examine the possibilities of integrating solar concepts into the design of new and existing government buildings.

STANDARDISATION

The accreditation of the Solar Thermal Test Facility from National Accreditation Board for Laboratories is in progress. Certification testing of solar flat plate collectors, and box type solar cookers for Bureau of Indian Standards (BIS) are carried out at the facility. Dish type solar cookers, domestic solar hot water systems based on plastic collectors and evacuated tube collectors were the new products tested in addition to a comparative testing of prototype design of improved box type solar cooker, developed at the Centre. Under round robin testing of solar collectors and solar cookers, the test data obtained at Regional Test Centres of MNES are being analysed. The development of standardised test procedure for domestic thermo-siphon solar hot water systems is in advanced stage. The work related to development of test procedures for other solar thermal devices viz. unglazed and evacuated solar collectors, dish type solar cookers, basin type solar still and solar dryers has been initiated. As a part of ongoing interactive R&D effort, a pilot distillation plant of 100 litres/day capacity based on multistage concept has been installed at the Centre for monitoring and performance evaluation.

SOLAR THERMAL POWER GENERATION


The 50 kW solar thermal power plant continued to be operated for demonstration and educational purpose. A large number of tubes were repaired to keep the plant operational. A biomass gasifier has been installed and test charged to conduct interactive R&D tests in collaboration with TERI, New Delhi related to hybridisation of the solar thermal power plant. About 10 acres land is being developed by planting fast growing trees for use in hybridised solar thermal power plant.

TESTING

AND

STANDARDISATION

SOLAR PASSIVE ARCHITECTURE


Promotion of solar passive architecture in the country was pursued through research & development, training, organizing national workshops, and undertaking technical consultancy. As a part of R&D efforts, the buildings constructed based on solar passive concepts in different climatic zones (Indore and Shimla), are being monitored for quantitative assessment of their performance. Monitoring of the guesthouse building of SEC has been completed. The software TADSIM developed by the Centre has been sent to experts for use and feedback. A report on energy

The PV test facility continued its operations for testing of SPV components, batteries and systems. The systems included solar lanterns, home lighting systems, street lighting systems, PV water pumps, and PV vaccine refrigerators. The qualification testing of 148 sample mono-crystalline and amorphous PV modules were carried out. In addition, over 300 samples were also tested for inhouse projects. The facility is in the process of being upgraded. Documentation for obtaining accreditation of PV test facility as per International Electro-technical Quality System's Standard 17025 have been completed. Application is being filed for accreditation with BIS.

PV TEST BED FACILITY


The 25 kWp mono-crystalline silicon PV module test bed facility is being monitored to evaluate the performance of modules

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from 11 Indian manufacturers used in the plant. The facility is also being monitored to evaluate the performance of hybrid inverters of 10 KVA (single phase) and 15 KVA (three phase) in solarmains-diesel (SMD) mode to provide power for in-house use. A test bed facility of 21 kWp capacity is being set up to evaluate the performance of thin film PV modules under Indian conditions. PV thin film modules, received from USA have been installed while installation of balance of systems is in progress. The facility is planned for commissioning by March 2003.

for identifying areas of mutual co-operation. A copy of bimonthly publication of SEC "Solar Energy Information Service" is being regularly sent to member countries of G-15 project on solar energy applications.

INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY


Established in 1987 as a Public Sector Enterprise, under the administrative control of Ministry of Non-Conventional Energy Sources (MNES), Indian Renewable Energy Development Agency Limited (IREDA), has been spearheading the mission to ensure "Energy for All". In the past fifteen years IREDA has evolved into a unique developmental financial institution in the renewable energy sector, reaching out to the individual user and providing micro-credit through financial intermediaries.

SOLAR RADIATION RESOURCE ASSESSMENT


Radiation models for estimating diffuse solar irradiance were studied with reference to measured data. In order to expand network of weather stations for monitoring of solar irradiance and other associated weather parameters, an active interaction is made with India Meteorological Department.

LENDING OPERATIONS
During the current year up to 31st December 2002 the IREDA has sanctioned loans to the tune of Rs 337.11crore and disbursed Rs 227.84 crore against the annual targets of Rs 825 crore and Rs 500 crore respectively. The loans were sanctioned for the establishment of about 108.5 MW of installed capacity of power generation and 55978 metric tonnes coal replacement projects from renewable sources. The cumulative sanctions and disbursements as on 31st December 2002 were of the order of Rs 5625.01 crore and Rs 2964.74 crore respectively.

INFORMATION SERVICES
The bimonthly publication entitled "Solar Energy Information Service" is being brought out regularly. Two new technical publications on Solar Water Heating Systems have been brought out. These publications have also been put on the web-site of the Ministry for easy availability to the interested persons. The Centre has come out with a draft simplified procedure protocol for availing of carbon emission reduction benefits by solar thermal manufacturers and users. A workshop on this subject was organised at Pune, with an aim to elicit the opinion of the industry on the draft procedures.

MOU

WITH

MNES

INTERNATIONAL COOPERATION
The technology validation project taken up under SEC-NREL MoU has progresses well. Final commissioning of the 21 kWp thin film test bed is in progress. As a part of Indo-French agreement, a delegation from SEC visited GENEC, France and identified two areas of co-operation, which are "Storage Batteries for PV Applications" and "PV Hybrid Systems". A delegation from Inter Solar Moscow visited the Centre under Indo-Russian agreement

Based on the audited figures, the performance of IREDA in achieving the targets set for the year 2001-02 in its Memorandum of Understanding (MoU) with the Ministry has been ranked as "Good". IREDA has signed an MoU with the Ministry for the year 2002-03, besides submitting the draft MoU for the year 2003-04.

RESOURCE MOBILISATION
The Government of India has contributed Rs 17.50 crore representing 50% of the allocation of Rs 35 crore for the current year, towards equity. With this the paidup capital has risen to

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Rs 267.85 crore as on 31st December 2002. The authorised share capital of IREDA stood at Rs 400 crore as on 31st December 2002. IREDA had been permitted to raise funds to the tune of Rs 50 crore through Tax Free Bonds and action is being taken to raise the same. The World Bank released Rs 30 crore under its second line of credit against the counterpart provision of Rs 95 crore and Rs 3.60 crore under IBRD. The Asian Development Bank and the KfW of Germany have released Rs 208.62 crore and Rs 28.99 crore respectively. Assistance from the Japanese Bank for International Cooperation, Japan to the tune of US $ 145 million is under consideration.

giving special concessions in its lending terms and conditions to women, the IREDA has been organising various promotional programmes exclusively for women. During the period AprilDecember 2002 IREDA organised three promotional programmes exclusively for women.

DEVELOPMENT

OF

NER & NEWLY CREATED STATES

NEW INITIATIVES
IREDA has introduced a new scheme for financing of development of demonstration of offshore wind farms.

IREDA has prepared feasibility report on financing of Renewable Energy Projects in the Northeastern region and Sikkim. In the current year's Financing Policy, IREDA provides concessions in financing norms/ various charges to encourage the entrepreneurs for setting up projects in the newly created States viz. Uttaranchal, Jharkhand and Chhattisgarh. Strategy and Action plans for exploitation of renewable energy potential and financing of NRSE projects in these states have been drawn up by the IREDA officers posted at Camp offices.

DISSEMINATION

OF

INFORMATION

PLANNING, MONITORING & EVALUATION


IREDA has formulated its proposals for the Annual Plan 2003-04 envisaging ambitious targets. The Planning Commission has held discussions on the proposals of MNES /IREDA to give final shape to the Annual Plan 2003-04. A study on socio-economic and environmental impact of bagasse based cogeneration and biomass power projects in Andhra Pradesh was awarded to the Consultant. IREDA has hired services of M/s Confederation of Indian Industry for concurrent and postcommissioning monitoring of energy efficiency/ conservation projects of M/s Orissa Sponge Iron Ltd and M/s Arunachalam Sugar Mills Ltd.

IREDA has launched publicity campaigns through the print and the electronic media, brochures, website, video films and newsletters to disseminate information about RETs. "IREDA News" is published quarterly to highlight current developments in the renewable energy sector. A bimonthly Bulletin on Energy Efficiency is being published for creating awareness about energy efficiency and conservation in the country. A Touch-Screen Information Kiosk has been installed for providing easy access to information relating to financing policy of IREDA to the visitors/clients coming to IREDA.

PROMOTIONAL EFFORTS
IREDA continued to sponsor/co-sponsor various types of programmes to promote Renewable Energy Technologies.

INSTITUTIONAL DEVELOPMENT
The package on industry information services of M/s Centre for Monitoring of Indian Economy (CMIE) has been installed in the server which is available through LAN for use of IREDA officials for appraising and monitoring of the projects. IREDA has prepared supplementary English-Hindi glossary on words relating to NRSE for use of its officials.

WOMEN DEVELOPMENT
Dedicated to the cause of women's empowerment, IREDA has taken a number of initiatives for empowering women development through renewable energy programmes. Besides

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HUMAN RESOURCE DEVELOPMENT


In-house programmes on various topics were organised for the benefit of the employees. Officials at various levels were nominated to attend the professional training courses and Seminars, Workshops and Symposia on specialised topics both in India and abroad so as to keep them abreast with latest developments in their respective fields. All efforts to ensure employee satisfaction were made through various measures like job rotation, welfare measures and introduction of new schemes, etc. to keep the morale of the employees high and achieve the goals of the Company.

4
INTERNATIONAL COOEPRATION
International co-operation activities in non-conventional energy are primarily focused on sharing experiences and expertise with other countries, promoting co-operation in scientific research in technologies of interest, mobilising financial resources for programmes and promoting human resource development in the field of non-conventional energy. During 2002-2003, the Ministry took initiatives for accelerating international co-operation activities in the field of renewable energy. These initiatives were taken in close co-operation with the State Renewable Energy Development Agencies, Research & Development institutions, Industrial institutions, Indian Renewable Energy Development Agency and other Central Ministries. Major International co-operation initiatives taken during 20022003 are as follows:

NETWORKING
IREDA has been networking with various technical and professional organisations through a scheme of Business Development Associates (BDA) for generating more business. The total number of BDAs rose to 51 as on December 31, 2002. These BDAs comprise 16 technical consultancy organisations, 12 State Nodal Agencies, 2 local productivity councils, 16 private sector enterprises and 5 NGOs and Technical Institutions.

MULTILATERAL COOPERATION
(i) UNDP/GEF (a) Under UNDP/GEF project on selected options for stabilising greenhouse gas emissions for sustainable development, four project briefs for possible GEF assistance in the areas of solar thermal technologies, rural electrification, biomass gasification for thermal application and energy recovery from solid waste have been prepared. Total estimated GEF component of these projects is about US $ 26 million.

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(b) The project brief "Removal of Barriers in Biomass Power Generation in India" with GEF component of US$ 10million was approved by the GEF council. The project document is expected to be finalized by March 2003. (c) UNDP/GEF assisted projects on "Development of High Rate Biomethanation Processes as a Means of Reducing Green House Gases Emission'' and "Optimising Development of Small Hydel Resources in the Hilly Regions of India" continued to be under implementation. (ii) World Bank /GEF (a) The 3rd World Bank Energy Environment mission visited India from 6-17th May 2002 and held discussions on Climate Change Partnership (CCP). The thrust areas of CCP are renewable energy and energy efficiency. CCP aims at market expansion besides renewable energy applications for rural electrification and introduction of high efficiency agricultural water pump sets. Discussions are in progress with the World Bank for crystallising these proposals. (b) In the Second Line of Credit, the World Bank has extended loan assistance to the "Second Renewable Energy Project" for US$ 135 million, which is being implemented by IREDA. (iii) Asian Development Bank Line of Credit to IREDA The Asian Development Bank Portfolio of US$ 100 million for the "India Renewable Energy Development Project" has been completed on the 31st July 2002. (iv) PREGA project Asian Development Bank (ADB) has extended technical assistance for the project "Promotion of Renewable Energy, Energy Efficiency and Green House Gas Abatement (PREGA)" to stimulate investments in renewable energy and energy efficiency technologies

and to generate a pipeline of such investment projects for financing from Global Environment Facility (GEF) and Clean Development Mechanism (CDM). In this connection, the Ministry has been designated as the National Counterpart Agency (NCA). MNES has forwarded proposals for finalisation of National Technical Experts (NTE) to ADB. (v) United Nations Framework Convention on Climate Change. (UNFCCC) (a) MNES was represented in the Indian delegation for the Eighth Meeting of the Conference of Parties (COP8) to the UNFCCC held at New Delhi during 23rd October to 1st November 2002. The major side events on `Indian Renewable Energy Programme A Developing Country perspective', 'Wind Power in India Approaches and Prospects' and 'MNES-UNEP Roundtable on Renewable Energy' were held parallel to COP-8 from 25th to 30th October 2002. (b) TERI, Development Alternatives and Winrock International India have been assigned studies on some aspects of CDM in renewable energy relating to baseline determination, sustainable development indicators, reduction in transaction cost and retrofitting of ongoing programmes in CDM framework. The Netherlands launched the Certified Emission Reduction Unit Programme Tender (CERUPT) for acquisition of Certified Emission Reductions (CERs). Through CERUPT 2001, the Netherlands will purchase approximately 3 million CERs. The six projects short-listed from India are in the areas of wind energy and biomass power. (vi) BIMST-EC meeting on renewable energy MNES sponsored a training programme on renewable energy technology for participants from BIMST-EC countries at TERI, New Delhi from 9-15th May, 2002. Nine participants from Sri Lanka, Myanmar and Thailand participated in the said programme.

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BILATERAL CO-OPERATION
(i) Indian Assistance for Village Electrification in Myanmar Within the ambit of India - Myanmar S&T co-operation, MNES has provided financial assistance and hardware for the electrification of Yanmyoaung village in Myanmar through solar photovoltaics. Central Electronics Limited has executed the project and it has been commissioned in February 2003. (ii) Indo-Finland Joint Working Group on Energy and Environment In the India-Finland Joint Working Group on Environment (JWG) meeting held on the 18th October 2002, both sides evinced interest in furthering cooperation, particularly in areas of advanced biomass gasification, waste to energy and CDM. (iii) Indo-German Renewable Energy Co-operation In the Indo-German Bilateral Consultations during 45 December 2002, discussions were held for the second KfW line of credit to IREDA and assistance for the Integrated Solar Combined Cycle Power Project at Mathania, Jodhpur, Rajasthan. The DM 120 million KfW Germany line of credit to IREDA for providing loans to commercial projects in wind energy, baggase based co-generation and solar photovoltaic areas is under implementation. (iv) Indo-French Co-operation in Renewable Energy (a) An Indian delegation led by Shri M. Kannappan, Minister of State (Independent Charge) for Nonconventional Energy Sources, visited Paris, France to participate in the 2002 Global Wind Power Conference during 2-5 April 2002. Shri M. Kannappan delivered the opening address in the conference and held discussions with Mr. Andre Antolini, President, French Renewable Energy Federation, Mr Christian Pierret, French Minister for Industry and Energy and Mr. Pierre

Radanne, President French Agency for Environment and Energy Management (ADEME) on issues of bilateral cooperation in renewable energy areas. (b) A SEC delegation was deputed to France for discussion and follow up on the work plan for SECGENEC cooperation in solar energy during 29th July to 2nd August 2002. (c) MNES participated in the 3rd meeting of Indo-French Working Group on Energy (JWG) held at New Delhi during 14-15th November, 2002. Both sides agreed to further co-operation between SEC in India & GENEC in France in the field of battery testing & hybrid models, SPV-biomass hybrid project in Sunderbans and winddiesel project in Lakshadweep. Besides, tidal energy and geothermal energy were identified for cooperation. (v) Visit of Indian Renewable Energy Mission to Europe MNES in collaboration with Confederation of Indian Industry (CII) fielded a Renewable Energy mission to The Netherlands, United Kingdom and Switzerland during 19-28th June, 2002 to further the business opportunities in renewables between India and EU countries. Shri M. Kannappan, Minister of State (Independent Charge) for Non-conventional Energy Sources led the mission. The specific outcomes of the visit were a) Signing of Statement of Intent between IREDA and Basel Agency for Sustainable Energy (BASE), Switzerland and implementing a programme of IndoSwiss partnership for electrification of remote villages in India, and b) Signing of Agreed Minutes between C-WET, India and ECN, Netherlands for undertaking joint projects in wind energy development in India. Besides, the mission held discussions with counterpart ministries/ departments and industry representatives for enhancing technical and business co-operation in the area of renewable energy.

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CO-OPERATION

DEVELOPING COUNTRIES

HUMAN RESOURCE DEVELOPMENT


During 2002-03, MNES officials, including the Secretary, Joint Secretary, Heads of Divisions, senior technical staff and other officials participated in eleven international events, in India and abroad, for updating their knowledge and skills and exchanging information with regard to international developments in the field of renewable energy.

During 2002-2003, five training programmes in the areas of solar energy, small hydro, biomass gasification and renewable energy management have been organised at premier institutions for the participants from other developing countries.

PROJECT FORMULATION

FOR

INTERNATIONAL FUNDING

A scheme of Project Preparatory Assistance has been launched, which provides for organizing training and preparation of information package on international funding. Training courses on project preparation, analysis of Green House Gases (GHG) emission reduction costs, and financial assistance for formulating project proposals are some of the areas in which assistance has been provided under the scheme. A manual on international financing mechanisms is under preparation, which will serve the purpose of a handbook and a ready reckoner on international funding mechanisms and will contain indicative formats of project proposals.

INDUSTRIAL INFRASTRUCTURE
One of the main reasons for the significant growth in the share of renewable energy sector in the total installed power generation capacity has been the growing share of indigenous manufacture of the systems for a variety of applications. A number of entrepreneurs have set up their units independently or as joint ventures with foreign collaboration. The reason is simplerenewable energy system applications are a viable option and the market is growing. The manufacturing base is not limited to the leading public sector enterprises. Leading private industrial houses and multinationals share the market place to supply renewable energy systems, components and spares. The vibrant industrial base has come about because of the consistent catalytic role of the Ministry of Non-conventional Energy Sources (MNES) in initiating and implementing an attractive policy regime to promote investment in the sector. Financial institutions have shared their responsibility by providing the required funds for projects in this sector. A number of small-scale and medium sector units are also engaged in the manufacture of parts, components and systems for the sector. They fulfill the requirements of the rural energy devices like biogas plants, fuelwood based biomass gasifier systems, biomass briquettes, gasifier systems, portable metallic chulhas, solar cookers, etc. The manufacture of solar cells, PV modules, wind turbines etc is largely limited to the large sector.

GOI/UNDP RURAL ENERGY PROGRAMME SUPPORT


Three sub-programmes for pilot testing different approaches for renewable energy dissemination are under implementation. The 6th and 7th meetings of the Standing Committee for implementation of GOI/UNDP Rural Energy Programme Support, held on 18th June 2002 and 16th December 2002, reviewed the progress made under the sub-programmes and new proposals were discussed and approved. A proposal for undertaking energy activities under UN Country Co-operation Framework-II is under preparation.

FOREIGN DELEGATIONS
During 2002-03, delegations from the USA, Japan, Mongolia, Mauritius, Denmark, Austria, United Kingdom, Bulgaria, Norway, France and Finland visited MNES and discussed possibilities for expanding co-operation activities in renewable energy.

BIOMASS INDUSTRY
The Biomass Power Programme has picked in the country, comprising combustion based power projects as well as bagasse

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based co-generation projects in sugar mills. The technology and facilities for design, manufacture, supply, construction, operation and maintenance of such power plants is indigenously available in India. Certain critical components like travel grates for boilers, governing systems for turbine generators, critical valves and control systems, etc. are being procured from abroad for these projects. There are about half a dozen leading manufacturers and suppliers of boilers, turbines, electrical systems and other related equipment for such projects, including the public sector enterprise, Bharat Heavy Electricals Limited. The industry has supplied high pressure boilers of 87 bar as well as advanced turbines for a few bagasse co-generation projects in Andhra Pradesh, Tamil Nadu and Uttar Pradesh. Developments are in progress to supply equipment of even higher boiler pressure viz., 105 bar for maximizing the generation of surplus power to the grid.

and three are also involved in fabrication and installation of solar steam cooking systems. One company in Delhi is also making the low cost cardboard type solar cooker which works efficiently in areas having bright sun and low winds. From this financial year, a scheme to provide loans to the manufacturers at reduced interest rate (7.5%) has been introduced through IREDA. The loans will be provided only for projects involving advanced and new technologies, which can lead to lower costs of production, improved performance and reliability of the products.

WIND POWER INDUSTRY


State-of-the-art wind turbines are being manufactured in the country. The unit size of machines has gone up from 55-100 KW in the 80s, to 1250 KW in recent projects. A number of companies have tied up with foreign wind turbine companies for joint ventures/licensed production of Wind Electric Generators in India. A few companies produce locally without any foreign tie-up. The present annual production capacity of the domestic wind turbine industry is about 500 MW. The local industry not only meets the demands of the domestic market but also caters to the emerging export market. Depending upon market needs, this capacity can be expanded to 750 MW. Wind turbines aggregating to 74 MW have been supplied by the local industry for the domestic market, and another 125 MW capacity is expected to be supplied by the end of the current year. Wind turbines and wind turbine components aggregating to Rs. 50 crore have been exported during the current year to USA and Europe. This includes six complete wind turbines of 1.25 MW capacity each exported to USA. The export of wind turbines and their components is expected to touch Rs. 125 crore during the current year. The progress of phased indigenisation by the leading manufactures of wind electric generators up to 500 KW has been good, and on average, up to 80% indigenisation has been achieved. Import content is high in higher capacity machines, since vendor development of higher capacity machines will take some time. The industry has taken up indigenised production of blades and

SOLAR THERMAL
Only BIS approved collectors are required to be used for government projects and systems installed under the soft loan scheme. There are 62 BIS approved manufacturers for solar flat plate collectors for water heating. The current annual production of collectors by these manufacturers is estimated to be around 80000 sqm. There are a large number of business associates/ dealers of these manufacturers in various places who can supply and install solar water heaters. An aftersale service network has now been established as a result of insistence on annual maintenance contract for the systems under the soft loan scheme. Selectively coated absorbers for solar collectors are also being manufactured in the country by a few manufacturers. There are about 30 units in small-scale sector for box cookers. Some of these units also make cookers with electrical back up. After making the BIS approval mandatory for manufacturers of box solar cookers, 13 of these units have applied to BIS for approval out of which samples of 8 collected by the BIS team have been sent for testing. There are also about 15 suppliers/NGOs engaged in production and supply of concentrating type dish solar cookers. Eight of them are making the indoor type community solar cookers

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other critical components. Efforts are also being made to indigenise gearbox and controller. Centre for Wind Energy Technology (C-WET) is providing facilities for testing and certification of wind turbines, and assisting Indian industry in technology development for wind turbines suitable for Indian climatic and grid conditions. Indian Standards are being formulated for wind turbines in association with Bureau of Indian Standards (BIS).

SOLAR PHOTOVOLTAIC INDUSTRY


The Ministry functions as the administrative Ministry for all matters relating to industrial licenses, foreign investments, imports and exports in the area of solar photovoltaics. During the year 8 companies were engaged in regular manufacture of solar cells and 20 companies were involved in the manufacture of PV modules. In addition, about 45 companies were actively engaged in the manufacture of variety of PV systems. The overall production in the country during 2001-02 was 20 MW of solar cells and 20 MW of PV modules. The production during 2002-03 (till December 2002) is estimated to be over 12 MW of solar cells and 14 MW of PV modules.

BIOMASS GASIFIER INDUSTRY


The increase in the diesel prices has made the generation of energy as well as power more attractive through gasifier systems. As a result, a wide spectrum of industries such as rice mills, cold storages, textile mills, tube and tyre manufacturing companies, plywood industries, carbon dioxide manufacturing units, steel rerolling mills, tea/coffee drying units, brick kiln industry, ceramic industries, etc. have now accepted gasifier systems as a means of reducing energy cost with an attractive pay back period. The gasifier industry has gone through a process of continuous improvement and ensuring better performance with higher reliability in field installation of gasifier systems. The six existing biomass gasifier manufacturers have continued their efforts to further improve the performance of their products in terms of diesel replacement for mechanical, electrical and thermal applications in commercial mode; three more gasifier manufacturers have also initiated supply of gasifier equipment; the gasifier industry is, therefore, growing. The R&D Institutions and indigenous gasifier industries have also taken up development and demonstration of 100% producer gas engine technology. Producer gas engines upto 250 kW have been designed, developed, and are being tested using a variety of biomass materials at different locations in the country. The research and development efforts in collaboration with current manufacturing infrastructure, have put the country in the forefront on the global market. Gasifiers manufactured by Indian industries are being exported to countries in Africa and Europe, besides Bangladesh, Indonesia, Guatemala, Myanmar and USA.

E XPORT P ROMOTION A ND B USINESS D EVELOPMENT CONVENTIONAL ENERGY

IN

N ON -

To promote the development of the renewable energy market in India and abroad, Business Meets were organised by the Confederation of Indian Industry (CII) to promote exchange of views in areas of mutual concern such as market demand, export development, technological development, government assistance, etc. Two Handbooks under preparation by the Ministry titled 'Handbook for Exporters' and `Compendium on Indian Renewable Energy Industry', are expected to provide information on facilities available, guidelines to be followed and procedures involved in the export of renewable energy products. These documents will provide valuable support to both the Government and the private sector, especially in the field of market and export development of NRSE products.

NON-CONVENTIONAL ENERGY TECHNOLOGY COMMERCIALISATION FUND (NETCOF)


Because of the perceived risks involved, several technologies have not been able to attract adequate industrial investment. The Non-Conventional Energy Technology Commercialisation Fund (NETCOF), created by the Ministry during 2000-2001, will primarily support commercialization of indigenous or imported technologies

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through equity, loan, etc. or a suitable mix of these. This support will be linked to financing through financial institutions (FIs), including IREDA. The Fund was set up with an initial corpus of Rs.2.00 crore and an amount of Rs.3.00 crore has been earmarked during 2002-03. It is expected that returns on investment and interest would be adequate to ensure that the Fund grows and becomes self-sustaining in the long-term. The Project Review and Monitoring Committee (PRMC) under the Chairmanship of the Secretary, MNES will monitor projects sanctioned under this Scheme. Proposals under this scheme are evaluated and approved for funding by the NETCOF Committee which is headed by Secretary, MNES and comprises technical and financial experts.

47.04 lakh households in the region have no electricity. A massive village electrification programme is being undertaken for tapping available natural resources for providing electricity in remote and far-flung areas. MNES provides CFA up to 90% for undertaking the village electrification programme through non-conventional energy sources.

SETTING UP OF STATE NODAL AGENCIES IN NE STATES INCLUDING SIKKIM


A scheme for setting up /strengthening of State Nodal Agencies (SNAs) in North-Eastern States is operational since October 1998 to create dedicated agencies to strengthen the planning, co-ordination, implementation and monitoring of renewable energy programmes in the North-East. A one-time grant of Rs.50 lakh for the construction of an office building, Rs.7 lakh for equipment and Rs.14.20 lakh to meet recurring expenditure is provided every year for each state. At present, all North-Eastern States have SNAs in position.

NORTH EASTERN REGION


The North-East region with its sparse population and thickly forested hilly terrain and a large number of small rivers has traditionally been viewed as a major potential area for renewable sources of energy. The demand for energy is highly decentralised and is mostly in the household sector as the level of industrial activity is relatively low. Cooking, heating, lighting and electricity are the main requirements for energy in the North-East.

HIGHER

SUBSIDY IN

NE STATES

POTENTIAL

AND

ACHIEVEMENTS

Although the North -East offers a large potential in renewables, the region is still largely unexplored. Some estimates of the potential for small hydro, biogas and improved chulhas only have been made.

The costs of some NRSE devices/systems are higher in the North-Eastern states due to difficult terrain and logistic problems. To offset higher costs, the financial assistance in respect of biogas, improved chulhas, solar photovoltaics, village electrification programmes, biomass gasifier and small hydro power programmes has been increased to 90% in all the North-Eastern states. Special review of renewable energy programme Special review of renewable energy programmes in the North-Eastern region is undertaken at the level of the Minister. Special package formulated by IREDA for the North-East Indian Renewable Energy Development Agency (IREDA), in the new financing policy for the year 2002-03, offered entrepreneurs various concessions and incentives for setting up NRSE projects in the North-Eastern region and Sikkim. These include an interest rate rebate of 1% p.a., exemption from payment of registration fee, inspection charges, legal charges (other than those incurred on

FINANCIAL ALLOCATIONS

AND

EXPENDITURE

As per the Prime Minister's initiatives, 10 per cent of budgetary support is earmarked for development of the North -East including Sikkim, since 1997-98. During the 9th Plan, a total allocation of Rs.90.38 crore was made for the North -Eastern region against which an expenditure of Rs.128.39 crore was incurred. Major initiatives taken by MNES in the North-East region for promotion of renewables: 3943 of the over 7,500 unelectrified villages are remote and non-feasible for grid power and 81.54% of the

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recovery), expenditure incurred on nominee director(s), front-end fee, concession of 5% p.a. in promoter's contribution and cost of DPR preparation (up to 50% of the total cost subject to a maximum of Rs.3.00 lakh) for grid-connected projects. In addition to the above, a rebate of 2% p.a. in interest rate is provided for non-gridconnected projects.

BIOMASS GASIFIER PROGRAMME


In view of surplus biomass availability in the form of crop residues, agro-industrial wastes and forest residues in the NorthEastern states and Sikkim, biomass gasification route offers a viable option for decentralised energy supply to these remote and difficult locations. During the 9th Plan, several projects were initiated on biomass gasification based village electrification. Projects of a total capacity of 3.3 MW have so far been sanctioned for the NE states and Sikkim for electrification of 62 villages. A 4x250 kW biomass gasifier based plant was commissioned during the year in village Kshetricherra, block Chawmanu of Tripura State (see Box). Among the new initiatives taken during 2002-03 are the conversion of existing diesel power plants to biomass gasifier based stations and demonstration of indigenous 100% producer gas engines coupled with biomass gasifiers for power generation. A 4x250 kW biomass gasifier based power plant was commissioned in June, 2002 at Village Kshetricherra, Block Chawmanu, Distt. Dhalai, Tripura for meeting peak time demand and improving tail-end grid electricity quality. Chawmanu is a remote and backward block in Dhalai District with a population of about 35,000. The civil works of the power plant was carried out by the State Rural Development Department and the electrical works by the State Power Department, while supply of woody biomass was entrusted to the State Forest Department. The cost of power generation at present is about Rs.2.50 per Kwh. The plant is run and managed by Chawmanu Rural Energy Cooperative Limited, set up with the active participation of prospective consumers of the locality with the Block Development Officer as Chairman and Managing Director of the Society. A number of local youth trained by the equipment supplier are now operating the plant under the overall guidance of TREDA,

ALLOCATION

OF

FUNDS

DURING

2002-03

12.5 During 2002-03, MNES stepped up support for decentralised power generation, stand alone lighting systems and cooking energy needs and has earmarked Rs.46 crore mainly for biogas, small hydro power, village electrification, solar photovoltaics and for setting up State Nodal Agencies.

MAJOR PROGRAMMES

IN THE

NORTH-EAST

DURING

2002-03

WIND POWER PROGRAMME


On account of peculiar topographic conditions of the NorthEastern states including Sikkim, a special project was taken up by the Centre for Wind Energy Technology (C-WET) for identification of probable windy sites. Consultants visited these states and studied the existing wind data, folklore information and topography of the area. They also carried out short-term wind data measurements with 10m masts at candidate sites. The project has been completed and 27 sites have been identified for detailed wind monitoring with 25 m masts in seven states including Sikkim. A project for detailed wind resource assessment at 21 of these locations is being initiated. Based on this assessment wind power projects could be planned for the North-Eastern states.

BIOMASS RESOURCE ASSESSMENT STUDIES


The Ministry has allotted 45 Biomass Resource Assessment Studies to North-Eastern states including Sikkim. So far, 24 studies have been completed in three states and 21 studies in five States are under progress and are likely to be completed by March 2003. The studies completed so far have indicated that the available surplus biomass could support biomass gasification projects of capacities ranging from 200 KW to 1MW in potential sites.

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the State Nodal Agency of Tripura. While, the system is currently operated for about 6-8 hours (peak load hours) daily through appropriate changeover, the operating hours can be substantially increased, if needed. This project has shown that gasification can be a viable alternative for meeting power needs in the remote regions of the North-Eastern region.

the 2002-03 SPV Programme, the targets for the North-eastern region including Sikkim were 5,000 solar home lighting systems and 50 kWp aggregate capacity of SPV power plants, street lighting systems and other systems. The achievements reported under the programme in the Northeastern region including Sikkim as per the reports received till December 31, 2002 are 480 solar home systems and 3,125 solar lanterns. A project sanctioned during 2001-02 for installation of 170 special solar street lighting systems in Moreh town on the IndoMyanmar border in Manipur with some support from MPLAD funds was completed during the year. Four SPV power plants of 25 kWp capacity each in Mizoram and 3 SPV power plants of aggregate 9.2 kWp capacity in Arunachal Pradesh (all sanctioned during 2000-01) and 14.7 kWp SPV capacity in Sikkim (sanctioned during 2001-02 are presently under implementation). Renewable energy systems like solar photovoltaic systems and power plants, small hydro units and biomass gasifiers, which use the locally available renewable energy sources, are the most suitable options for electrification of such remote villages in the NE region. A project for SPV electrification of 36 villages in Cachar district in Assam sanctioned during 2000-01 was completed during 200203. Further, 6 villages in Arunachal Pradesh have been electrified through SHP during the year. The project sanctioned during 200102 for SPV electrification of 16 villages in Tripura is under implementation and likely to be completed within 2002-03. Proposals from the state agencies and some NGOs for SPV electrification of remote villages in Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, and Tripura have been received and some of these may be sanctioned during the current year.

SHP PROGRAMME
A special incentive package has been developed for the promotion of SHP programme in the North-Eastern states and Sikkim. A capital grant of up to Rs. 7.5 crore per MW is available for SHP projects in the region. The capital support covers 90% of the cost for projects up to 1 MW, 75% of the cost for projects in the range of 1-5 MW and equipment cost plus 25% of civil cost for projects above 5 MW and up to 15 MW. The maximum support per project is limited to Rs.22.5 crore. So far 45 projects have been supported with an aggregate capacity of 98.48 MW. Support has been provided for conducting feasibility studies for 82 sites in the region. Special efforts are being made to electrify remote and isolated areas through stand alone SHP projects. MNES supported 4 SHP projects in Arunachal Pradesh to electrify 25 remote and isolated villages. Chini Ahfra (250 KW) SHP project at Amuli in Dibang Valley District of Arunachal Pradesh was commissioned during the year, electrifying 5 remote villages.

SOLAR PHOTOVOLTAIC PROGRAMME


The Ministry has laid special emphasis for implementation of the SPV programme and promoting portable solar lanterns, fixed - type solar home systems, street lighting systems and standalone, small capacity, village level power plants in the northeastern region including Sikkim. The Ministry provides higher level of central financial assistance for implementation of the projects in the region. Under

BIOGAS PROGRAMME
During the period April-December, 2002 a total of 1,000 plants have been set up.

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WOMEN

RENEWABLE ENERGY DEVELOPMENT (WRED)

Twenty-two Orientation Training Courses (OTC) and five Renewable Energy Women Self Help Groups (REWSHG) besides three renewable energy sales and service outlets (RESSO), which are managed by women have been organised in the region.

Vigilance Officer for this Ministry from December 16, 2002. There were three complaints in the matter of irregularities in the functioning of IREDA, a PSU under the administrative control of this Ministry and one against some official in the Ministry. Inquiries into complaints are in progress. In addition, complaints of a general nature were examined from time to time. The vigilance awareness week was observed to sensitise the concerned officials on various aspects of corruption in the Ministry, the Solar Energy Centre, the Regional Offices and IREDA. As a part of vigilance awareness, a pledge was administered to the officials of the Ministry on October 31, 2002. An Officer of the Central Vigilance Commission delivered a lecture on preventive vigilance and a film on evils of corruption was also shown. Apart from these, banners proclaiming the observance of vigilance week were place at prominent places. The CVO took various steps in implementing the instructions issued from time to time by CVC. Utmost importance/urgency was attached to the advice of UPSC, CVC, CBI etc. The advice of these authorities was also taken, wherever necessary. The vigilance work of IREDA was periodically reviewed.

INFORMATION & PUBLIC AWARENESS PROGRAMME


Radio programme "Nai Roshni Nai Dishaein", taken up through DAVP has been scheduled for broadcast from 15 NorthEast region stations of All India Radio from 22.12.2002 to 30.3.2003. A number of thematic advertisements have been released in newspapers through DAVP in Hindi, English and regional languages of the North-Eastern region. Five State level exhibitions on renewable energy have been financially supported through State Nodal Agencies. A number of public awareness campaigns have been organised through Mobile Exhibition Vans already procured with the financial support of this Ministry. Outdoor publicity has been taken up in the region through DAVP.

R&D ACTIVITIES
An R&D Project on the conversion of Mesnaferrea linnaeus seed oil to biodiesel is being carried out at the Department of Energy, Tezpur University, Assam since September 2000, with MNES support. The project aims to characterise the Mesnaferrea linnaeus seed oil for its various properties and then to convert the oil into methyl and ethyl esters to be used as an alternative to diesel. The project has so far developed a lab-scale production technique for conversion of this oil to bio-diesel and testing the bio-diesel so produced.

BIO ENERGY
Bio-energy includes all plant and animal derived material essentially all energy originally captured by photosynthesis, is bio-energy. As a domestic, renewable energy source, bio-energy offers an alternative to other non biomass energy sources and provides national energy security, economic growth, and environmental benefits. It is derived from numerous sources, including the by-products from the timber industry, agricultural crops, raw material from the forest, major parts of household waste and wood. Bio-energy does not add carbon dioxide to the atmosphere as it absorbs the same amount of carbon in growing as it releases when consumed as a fuel. In India so far we achieved only 62 MW.

VIGILANCE ACTIVITIES
During 2002-03, Shri A.K. Mangotra, Joint Secretary, functioned as Chief Vigilance Officer for the Ministry till September 2002. Shri Sunil Khatri, Joint Secretary has been functioning as the Chief

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As per the guidelines of MNES, the types of bio-energy resources that are allowed to be used in Biomass power projects are as follows. Forestry based and Agro based industrial residues Animal residue Forestry residues Agro residues In the present age of 'semi-inorganic culture', many initiatives are now taken to find alternatives to overcome the problem caused by the usage of inorganic fertilizer. The focus now is on the 'organic movement' and use of biomass in different forms like organic mulching, vermin-compost etc. A study was conducted by IIT, Kharagpur on Biogas Manure (BgM) and the reveals that the fermentation of cattle dung reduces the C/N ration by removing some of the carbon, which has the advantage of increasing the fertilizing effect. Another favorable effect is that nitrogen and other plant nutrients become mineralized and hence more readily available to plants. More over, well digested slurry is practically odorless, easier to spread and does not attract weeds and insects flies. Fossil fuels up to 25% will be allowed as support fuel to achieve extended operating days in a year. It is estimated that there is a potential of 448 MW in the state of Andhra Pradesh of biomass resources. Based on these studies, NEDCAP has accorded sanction for 59 biomass power projects with an aggregate capacity of 360.75 MW by inviting proposals from private entrepreneurs duly issuing notification in the leading newspapers during the year 1998 and 1999. In addition to these projects, 48 MW projects based on energy plantation were sanctioned on experimental basis to 8 developers. NEDCAP provides its services in the following areas in Bioenergy: Assessment of availability of biomass within 50 km radius of project location.

Assessment of quality of biomass material on its availability in different sectors. Preparation of Detailed Project Report. Assistance for administrative clearances. Assistance in obtaining statutory clearances for the project. Technical guidance in selection of equipment and suppliers. Assistance for arranging finances. Supervision during erection of equipment and commissioning. Guidance on power evacuation of the project. Trial run of the project. Operation and Maintenance

WASTE

TO

ENERGY

Waste to Energy (WTE) is a range of processes usually associated with municipal waste (but also used for industrial waste) where the waste is burned, gasified or digested at a high temperature. Heat energy is recovered from these processes (usually in the form of heat) and is reclaimed to produce steam and/or generate electricity. According to a recent estimate, about 42 MT (million tones) of solid waste (1.15 lakh tones per day) and 6000 million cubic metres of liquid waste are generated every year by our urban population. This translates into a potential for generation of over 1700 MW of power from urban wastes in the country and this garbage generated in different municipalities can be effectively utilized for generation of power which not only solves the problem of disposal of garbage but also improves the health conditions. The composition of urban wastes is rapidly changing with increasing use of packaging material, which involves paper as well as plastic bags. While Municipal Solid Waste (MSW) is the major urban waste, some other wastes such as cattle dung,

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vegetable market wastes, and slaughter house wastes are also found separately in urban areas. MSW in India typically comprises of organic and inorganic waste, including, recyclables in the following proportion. Organic matter (Biodegradable and non-biodegradable) 30%-55% Inert matter Recyclable matter 40%-55% 5% -15%

Improved Chulhas programme Solar Energy programmes like Solar Cookers (Box type, SK 14 cooker, Solar steam cooking) Solar thermal systems (Solar Hot Water systems - both domestic & industrial), Solar desalination, solar driers, solar timber kilns etc. Solar photovoltaic systems like domestic lighting, street lighting etc.

The biological method involves bio-methanation of the biodegradable fraction of waste for producing methane-rich biogas, which can be used as fuel for generating electricity. A potential of 40 MW is identified in the state for generation of power through Municipal Solid wastes in 6 municipalities. NEDCAP provides its services in the following area s in Bioenergy: Assessment of availability of biomass within 50 km radius of project location. Assessment of quality of biomass material on its availability in different sectors. Preparation of Detailed Project Report. Assistance for administrative clearances. Assistance in obtaining statutory clearances for the project. Technical guidance in selection of equipment and suppliers. Assistance for arranging finances. Supervision during erection of equipment and commissioning. Guidance on power evacuation of the project. Trail run of the project. Operation and Maintenance

IMPLEMENTATION OF NBMMP PROGRAMME IN THE STATE OF ANDHRA PRADESH


This programme is being implemented since the year 198283 under 20 Point Programme with the financial assistance from Ministry of Non-Conventional Energy Sources (MNES), Government of India. NEDCAP being Nodal Agency is implementing this programme by extending technical guidance, subsidy and after sales service to the beneficiaries. The main objective of this programme is to reduce dependence on fossil fuels like kerosene and conservation of firewood. The rural women are getting several benefits with the family size biogas plants programme. As many as 2.93 lakh nos. of biogas plants were installed upto 2004-05. For the year 2005-06, a target of 2500 family size biogas plants was allotted by MNES, Government of India.

IMPROVED CHULHAS PROGRAMME


The population covered under this programme is from the suburban and rural areas who utilize the fire wood for their cooking needs and those who do not have enough cattle to avail biogas programme. Improved Chulha helps in protecting rural women folk from health hazards and provides pollution-free environment. So far 28 lakhs nos of improved chulhas have been installed in the State.

RURAL ENERGY PROGRAMMES


National Biogas Manure Management Programme (NBMMP)

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OBJECTIVES
To eliminate smoke from the kitchen and improve health of women and children To upgrade environment and check deforestation To generate employment

test projects will be implemented initially in un-electrified remote villages. The project shall be implemented through DRDA, Forest Departments and NGOs.

TIDAL ENERGY
Tidal electricity generation involves the construction of a barrage across an estuary to block the incoming and outgoing tide. The head of water is then used to drive turbines to generate electricity from the elevated water in the basin as in hydroelectric dams. Barrages can be designed to generate electricity on the ebb side or flood side or both. Tidal range may vary over a wide range (4.5-12.4 m) from site to site. A tidal range of atleast 7m is required for economical operation and fore sufficient head of water for the turbines.

BENEFITS
Respiratory and eye diseases are caused due to continuous exposure to smoke in the kitchen. The improved cook stove carries away the smoke from the kitchen making the environment in the kitchen clean. An improved wood burining cook stove is three times more efficient than a traditional wood burning stove. The thermal efficiency of traditional cook stove is 9% and that of an improved cook stove is 26%. Create employment for Rural Women and self employed workers. A self employed worker will be earning Rs.20/- per chulha installed. Work also is generated for potters in making cowls and indirect employment for making AC pipe in cement industry.

OCEAN ENERGY
Oceans cover more than 70% of earth's surface, making them the world's largest solar collectors. Ocean energy draws on the energy of ocean waves, tides, or on the thermal energy (heat) stored in the ocean. The sun warms the surface water a lot more than the deep ocean water, and this temperature difference stores thermal energy.

VILLAGE ENERGY SECURITY PROGRAMME


MNES has launched a new programme Village Energy Security Programme to provide energy security to the villages. The objective of the programme is to provide energy for cooking, lighting, water pumping for drinking and irrigation in rural areas using renewable energy sources with special emphasizes on Biomass utilization using gasification technology. 90% of the cost of the project as grant is being sanctioned by MNES. The balance 10% is to be born by the State Government / District Administration. The villages which will not be electrified through conventional means by 2012 are only to be considered under this scheme. Few

GEOTHERMAL ENERGY
Geothermal energy is energy coming out of the molten interior of the earth towards the surface. The average rate at which this heat emerges is about 0.05 W/ m2, while the radial temperature gradient which causes this heat flow is about 0.03C per metre. Thus, on an average, the temperature of the earth increases by 30C per kilometer as one moves inwards. Because of nonhomogeneities in the earth's crust, there are numerous local hot spots just below the surface where the temperature is in fact much higher than the average value expected. Ground water comes into contact with the hot rocks in some of these locations and as

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a result, either dry steam or wet steam and water are formed. A well drilled to these locations causes the dry or wet steam to emerge at the surface where it s energy can be utilized either for generating electricity or for space heating. The first commercial geothermal power station was erected in Larde-rello in Italy in 1904. The capacity of the plant was increased in stages and was 406 MW in 1975. Other locations where relatively large plants are operating are in The Geysers, California, U.S.A. (600 MW) and in Wairakei, New Zealand (190 MW). The total installed capacity in the world in 1975 was about 1500 MW. This estimate indicates that about 62500 MW could be generated for a period of 50 years. The geothermal is the heat stored locally at depths of 1 or 2 km in the earth's mantle in hot dry rocks with which water has not come into contact. Utilisation of these sources required development of techniques for artificial fracture of the rocks, the injection of water into the fractures and subsequent recovery of the steam for driving turbines. In India, geothermal resources in the form of steam and hot water are known to exist along the West Coast, in Ladakh, and in parts of Himachal Pradesh. However, no firm estimates of their potential are available.

5
RURAL ENERGY SCENARIO IN INDIA
Seventy per cent of the population in India, over 650 million, still lives in the rural areas, and meeting their energy requirements in a sustainable manner continues to be a major challenge for the country. Traditional biomass resources still meet an overwhelming proportion of the rural energy demand. One of the main reasons of this continued dependence on biomass is the failure of the commercial fuels such as kerosene and LPG to penetrate the rural areas on account of high costs and low accessibility. On the other hand, inefficient use of biomass in traditional devices has serious environmental effects both at the local and global levels. In the rural economy, domestic household sector is the most prominent energy consumer, followed by the agricultural sector. It accounts for nearly 75% of the energy use in the rural areas. In the domestic household sector cooking is the largest end-use accounting for almost 90% of the total domestic energy use. Biomass fuels - fuelwood, crop residues and animal dung provide 85-90% of the domestic energy and 75% of all rural energy. The present level of consumption of fuelwood is around 200 million tonnes per annum (mt/annum). On the supply side, it is estimated that the annual sustainable yield of fuel wood is only about 86 mt/annum. Thus there is a wide gap between the demand and the sustainable supply, and this gap is widely believed to be met from illicit and unsustainable exploitation of forests and other resources.

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Animal waste in the form of dung cakes is an important fuel in the regions which are agriculturally prosperous but where the fuelwood supply is poor. The total current consumption of dung as fuel is about 100 mt/annum. However, most of the dung produced is used as manure in the fields, and diversion of its use for fuel has a large opportunity cost. Crop residue is the least preferred of the biomass fuels because, being in the loose form, the rate of combustion is high and difficult to control. As a consequence, it is also an inefficient fuel. However, this acts as a back up fuel whenever there are scarcities of fuelwood, and is gaining prominence, as fuelwood availability is becoming difficult. It is estimated that about 100 mt of non-fodder crop residue is produced and consumed as fuel in different parts of the country. Kerosene and electricity are the two most important fuels used for lighting in the domestic sector. In 1996/97, the total consumption of kerosene in the country was 9.6 million tonnes, a large proportion was utilised for lighting in rural areas. Nearly 40% of the total kerosene was imported, for which country paid out precious foreign exchange. Almost 87% of the total 5,80,000 villages have been electrified, but in 1996 only 37% of the rural households were having electricity connections, which indicates that still the majority of households in rural areas solely depend on kerosene for lighting. While the burning of biomass fuels such as fuelwood and crop waste leads to high levels of indoor air pollution that especially affect women and children gravely, kerosene use for lighting is characterised by low conversion and luminous efficiency of lighting devices. Thus, thoughtful interventions in the rural energy sector could bring about a host of social and economic benefits, namely, healthier lives, less strain during cooking, usage of lesser quantities of fuelwood leading to reduced time/resources spent procuring it, more time for economic activity due to lighting and easy availability of ground water.

TERI'S APPROACH METHODOLOGY

DECENTRALISED ENERGY PLANNING

It was realised that rural energy consumption pattern depends on geographical, cultural, social and economic factors. Given the geographical and ecological diversity in the country, the consumption pattern for energy and the fuel-mix vary considerably across different agro-climatic zones. While a significant proportion of energy may be utilised for heating water in cold climate areas, families in warm and dry climate areas may end up using a large part of the energy consumed for extraction of water. It was strongly felt that energy interventions needed to be integrated with other development activities. According to a survey conducted by TERI, roads, drinking water and employment topped the wish list of rural communities. Thus while wanting electricity, a villager thinks of the usage of electricity primarily for easy extraction of ground water and for lighting that brings about the possibility of working longer hours, that is after sunset. Thus, the interventions were planned to meet the wish list as far as possible. The main objective of this project, sponsored by the Indian Oil Corporation Ltd and the Gas Authority of India Ltd was to devise and implement pilot-scale projects aimed at conserving firewood and kerosene in selected villages in three districts, representing different agro-climatic and socio-economic conditions. The 18-month project began in May 1995 and clearly demonstrated three key ingredient of success in promoting renewable energy technologies in villages and checking environment degradation: 1. Financial support from outside, i.e. the government or the corporate sector 2. Informed technical and planning inputs 3. Active involvement of panchayats and grassroots NGOs in implementation and management The project was implemented in more than 35 villages in three districts:

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Lo c a l in s titu tio n s in v o lv e d in th e management Ma h ila m a n da l & pa n ch a ya t s Loca l NGOsDE E P & Developm en t P r om ot er

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SOLAN METHODOLOGY
The first step in the project was to conduct village-level surveys to find out how much energy is consumed, how it is consumed (patterns of consumption) and how much of it is available locally. Based on the results of the survey and development priorities of the local population, one focus area was picked for each district: water-heating and cooking in Solan; lighting in Jaisalmer; and cooking in Sultanpur. Energy plans were prepared for each project area, based mainly on renewable energy technologies (e.g. biogas and solar photovoltaic lighting) and energy efficient devices (e.g. improved kerosene lamps and lanterns developed by the Indian Oil Corporation, and improved chulhas). Local capacity for repair and maintenance. One of the important aims of the project was to ensure that the initiative is maintained and that the devices are used for a long time. To achieve this objective, not only were planning and implementation decentralized, back-up service for repair and maintenance was created and provided. By training local technicians or signing annual maintenance contracts with the manufacturers, a back-up service was set up to ensure that the devices remain in good working order. Adapting the technology to local requirements. Special attention was paid to modify the technology where necessary, e.g. development of improved chulha in Solan (energy savings of 40%) and improvement in solar lanterns design at Jaisalmer. This was made possible due to continued monitoring of the installed devices.

S o la n 5 villa ges in Sola n dist r ict of H im a ch a l P r a desh Agr oclim a t ic zon e: West er n H im a la ya n S u lta n p u r 3 villa ges in Su lt a n pu r dist r ict of Uttar P r a desh Agr oclim a t ic zon e: U pper Ga n get ic

Wa t er h ea t in g and cookin g

Com m u n it y sola r wa t er h ea t er s (750 lpd ca pa cit y): 3 Im pr oved ch u lh as: 116 Sola r cooker s wit h elect r ic ba ck-u p: 51

Cookin g and ligh t in g

Bioga s pla n t s (2 m 3 ): 24 Im pr ove ch u lh as: 250 N u tan d eep im pr oved ker osen e la n t er n s: 500 Sola r la n t er n s: 65

Villa ge pa n ch a ya t Loca l t ech n icia n s

J a is a lm e r 4 villa ges of J a isa lm er dist r ict of Ra ja st h a n Agr oclim a t ic zon e: West er n dr y Ligh t in g Sola r la n t er s: 275 Villa ge pa n ch a ya t Loca l t ech n icia n s

BENEFITS
Overall, the project has benefited more than 1000 rural families in 12 villages, raising their standard of living by providing them with efficient and user-friendly cooking and lighting devices. The project has also promoted renewable and environment-friendly technologies in remote villages. In addition, the project is expected to lead to annual savings of 11000 litres of kerosene and nearly 650 tonnes of biomass

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(equivalent to about 600 full-grown trees). In monetary terms, the total savings are of the order of Rs. 7 lakh per year (taking firewood price to be Re. 1/kg and kerosene as Rs. 3.50/litre). Estimated annual energy savings
An n u a l E n er gy sa vin g in cookin g & wa t er h ea t in g S o la n Im pr oved ch u lh a Sola r cooker Com m u n it y sola r wa t er h ea t er S u lta n p u r Im pr oved ch u lh a Bioga s To ta l E n er gy sa vin g in ligh t in g S u lta n p u r Im pr oved ker osen e la n t ern Sola r la n t er n J a is a lm e r Sola r la n t er n To ta l 357688 kg of fir ewood 33997 kg of fir ewood 71535 kg of fir ewood

Women spend upto four hours of their productive time of a day in fetching fuelwood and cooking. Children too are involved in collection of fuel wood. Access to energy is an important prerequisite for a nation's development. Energy occupies the centre stage in almost all our daily activities - cooking, access to clean water, agriculture, education, transportation, employment generation and environmental sustainability. About 80% of the rural energy used is derived from biomass. This puts heavy pressure on the already declining vegetation in villages. Use of inefficient chulhas often increases the drudgery of women and children who are involved in collection of fuel wood. Moreover, the smoke generated during indoor cooking from these chulhas affect the respiratory health of women and children to a great extent. Increased energy conservation, improved energy efficiency and enhanced energy production from renewable sources can definitely lead India in general and rural areas in particular to become self sustainable communities. The rural energy portal attempts to give information on the above aspects with inspiring stories that would motivate you to use them and derive the associated benefits.

109799 kg of fir ewood 68133 kg of fir ewood 641152 k g o f fire w o o d

3000 lit r es 1560 lit r es 6600 lit r e 11160 litre

RURAL ENERGY

A MUST FOR

LIVELIHOOD IMPROVEMENT

In India, where 70% of people live in rural areas, rural energy is all the more vital if our country is to keep its pace of development. 21% of our villages and about 50% of rural households are as yet not electrified. There is also wide disparity in the per capita energy consumption between rural and urban areas. For eg, 75% of rural households depend on firewood for cooking, 10% on dung-cake and about 5% on LPG as against 22% of urban households depend on firewood for cooking, another 22% on kerosene and about 44% on LPG. Similarly for home lighting, while 50% of rural households depend on kerosene and another 48% on electricity, 89% of urban households depend on electricity and another 10% on kerosene.

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6
FINANCING RURAL ENERGY SERVICES
INTRODUCTION

rural energy services delivery such as the mobilization of private sector or local communities should be explored and enabling environment created. Experiences elsewhere have shown that creating a transparent legal and regulatory environment with level paying field can be an effective way to mobilize private resources and capital for rural energy service delivery. In order to develop private markets for rural energy services delivery, developing country governments need to seriously focus on leveraging their resources with multilateral and bilateral sources of funds. To achieve this, it is essential to put in place comprehensive rural energy and electrification policies, enact appropriate legal and regulatory framework, and establish a dedicated institution to manage and finance RE activities in order to promote efficient private sector-led rural electrification service markets through the design of efficient subsidy programs. In Nepal, where more than 85% of the population leaves in rural areas and the access to electricity to the rural population being as low as 5%, the foregoing observations are equally applicable. Increasing the current low level of rural electricity access is an immense challenge to His Majestys Government of Nepal (HMGN). Various past national plans have set targets to provide electricity to the rural population. However the achievements have been less than satisfactory. A number of factors contributed to this situationdifficult terrain, insufficient financing, lack of generation capacity and so on, and above all lack of comprehensive policy for rural electrification. These and other issues are further discussed in the sections to follow. In Nepal rural electrification to date is the domain of the government, mostly financed through regular budgetary appropriations, and/or through loans and grants from bilateral and multilateral donors/financers. Lately, with the level of external support decreasing, the government is looking for other alternative options to finance rural electrification programs. In this backdrop, HMGN has come up with a policy to involve the local communities and/or private sector as a potent vehicle for expanding RE activities. Recently, Nepal Electricity Authority (NEA), a public

The economic and social development of rural areas with poverty alleviation as a cornerstone is increasingly becoming a priority for many developing countries. Rural development history, process, and experiences have helped bring about a broad consensus among national and international stakeholders on the necessity of developing rural areas as an integral part of the overall national development process. Since the early 1990s, developing countries and the donor community began translating this consensus into joint policies and programs that focused on integrated rural development. These joint policies have included the provision of rural energy services as a critical element for poverty alleviation. The pivotal role of energy in sustainable rural development is now widely acknowledged and thus is no longer an issue to be debated. However, Identifying and implementing country specific approach and mechanism in financing sustainable rural energy services is an issue, needing policy and institutional related discussions among stakeholders. Developing country governments often do not have enough resources to finance their rural energy service needs. At the same time, it is unlikely that grant and/or confessional support from multilateral and bilateral donors in electrification efforts will last forever; such supports are in fact showing a decreasing trend, of late. Alternative ways of financing

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electric utility, has brought forth Community Electricity Distribution Bye Laws to facilitate the community participation in rural electrification. Under this new arrangement, the financing is still an issue, although the Government has announced in the current years budget to provide 80% subsidy to support electric cooperatives. In addition, the Hydropower Development Policy 3058 (2001) has proposed to establish a REF to accelerate RE on community-managed basis. The purpose of this paper is to present a view on major design elements in establishing rural electrification funds as a vehicle for financing rural energy services, primarily rural electricity services. The paper focuses initially on policy issues concerning the establishment of dedicated REFs, followed by discussions on key elements for designing appropriate institutional setup for REF operations, role of donors and private sector in REFs capitalization, as well as subsidies and other related issues and options. The paper then proceeds further with the case of Nepal, which is planning on the implementation of a large program for rural electrification through private sector and/ or community-led initiatives.
ESTABLISHING RURAL ELECTRIFICATION FUNDS POLICY ISSUES

(i) Establishment of legal and regulatory framework for rural energy provision and service delivery (including rural electrification), so as to create an enabling environment for the creation of an efficient rural energy market, (ii) Institutional arrangements for RE policy implementation, including the establishment of a dedicated REF to facilitate fund raising and disbursement, and program implementation supported by internationally accepted rules, standards, and procedures that ensure accountability, transparency and efficiency of the RE process, (iii) Identification of the role of various stakeholders, primarily, that of the government, private sector including technology providers, rural consumers and their associations, as well as donors as to promote viable rural energy markets, and (iv) Subsidy design and delivery policy answers to questions as to who, what for, why, how much, and for how long will subsidy will be received, while ensuring equal opportunity to environmentally friendly technologies and their providers to compete in an open and fair market environment. Geographic location of the project area may also dictate subsidy policy. The discussions above point to a need to establish a pivotal institution for RE financing a dedicated fund to promote successful rural electrification program. Such a fund is essential because: (i) RE stakeholders having a vested interest in REFs (both in its capitalization and utilization) they may constitute a major source of finance for RE programs, and (ii) REFs can be an appropriate institution for directing government and donor funds in an efficient manner. An important policy message that comes out of the above discussions is that the establishment of REFs is a good option for the large RE program implementation. Such funds should be based on a comprehensive and widely accepted and agreed upon RE policy. Furthermore, the policy should be formulated in consultation with the major RE stakeholders so that they can play

Electricity is a critical input to almost all social and income generation activities. This is true for urban as well as rural areas. In the case of rural area development efforts where poverty alleviation through sustained economic growth is a major challenge, provision of electricity and other energy services becomes a top political, economic, and social priority. As rural electrification is a long-term undertaking that requires commitment of significant financial resources over a sustained period of time, it is important to have a comprehensive RE policy in place before embarking on a large RE program implementation. Ideally, such RE policy should become an integral part of the overall national energy sector policy and provide for stakeholder-wide (donor community included) agreed guidance and approaches in four major areas:

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a meaningful role in the design and implementation of REF. Additionally, successful REFs should be independent, free of direct political influence, and be able to operate along commercial lines.
INSTITUTIONAL ARRANGEMENTS FOR REF MANAGEMENT AND OPERATION

This does not, however, prevent the government from exercising its legitimate role of policy making, strategy development and supervision through adequate participation in the Board. * Rules and procedures for the management and administration of the REFs should be based on accepted international best practices. To achieve this, the government may seek inputs from, donors and consumer groups, and other private sector financial instructions in the country. Such an approach would help promote practical and rational procedures for the design and implementation of a sustainable REF. Other key considerations that should guide the establishment and operation of such funds are: * Funds should be free of political interference and should be used only for the specific purpose for which they are established. This can be achieved by ensuring transparency and accountability in the operation under the policy guidance of the Board composed of public and private representatives. * Governments should capitalize the fund adequately. Sources of funds may include, among others: (i) privatization proceeds from the sale of shares of national power utilities, (ii) government bonds and budgets, (iii) multi- and bilateral donor financing, (iv) commercial and private sector financing (v) a part of the revenue proceeds to the government from power sector licensing and operation (vi) special tax funds, and so on. * It is generally advisable to keep the operational management of the fund outside of public administration. This is also necessary to ensure that commercial practices are instituted in REF operations.

There is no single best model for establishing and managing a rural electrification fund. However, in countries with successful RE experience, the entity responsible for implementing the fund has a high degree of operating autonomy and accountability. REFs are generally funded out of tax payers money, and are leveraged with funds from other sources. The following are important issues that need to be take in to consideration in designing an REF management policies and operation practices: * REFs need to be adequately regulated in order to provide the necessary legal basis for independence and accountability according to the legal and regulatory environment of each country. * Government ministries in charge of energy matters and, to some extent the existing Regulatory Authorities, should assume a role and take greater responsibility in terms of RE policy implementation, REF Boards members appointment, and REF management supervision. * The REF Management Board should be well represented to include representatives from all major RE stakeholders, namely government, local consumer associations, civil society, private sector, regulator, local financial institutions, and possibly major donor representatives. * The Board of any REF should exercise supervisory authorities and policy decision functions, and leave the day-to-day management in the hands of the REF Director/ Manager. * In order to ensure transparency, equality, and accountability, as well as to be able to attract donors support, REFs should be managed and operated along commercial lines with full transparency and accountability.

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It is understandable that the way a REF is designed, established and managed may ultimately determine its success or failure. A poorly designed REF may result in low or no capitalization by donors and private sector, with little impact on the level of rural electrification.
ROLE OF THE GOVERNMENT, DONORS AND THE PRIVATE SECTOR IN REFS CAPITALIZATION

Ownership structure is extensively intertwined with the design of the financing structure and the management of the RE Fund, and should be continually adapted to ever evolving situation throughout the life of the fund. Community participation in REFs is desirable as it provides an opportunity to include the ultimate end users in the process. All too often the structure of government funds does not involve community representatives thus lacking credibility in the eyes of the rural communities. Also, they are unable to meet the community needs as lack of participation by the community limits the fund managers ability to assess the community needs. The essence of participation of various stakeholders in the RE financing process is to enlist their support in establishing a REF. Wider stakeholder participation may support in leveraging the REF should they feel that their specific interests could be met in the process. More explicitly: * Donors are most likely to leverage the REF when they see that it is well designed, managed, and operated and are, to a large measure, in compliance with their policy objectives, guidelines, rules and procedures, and such rules and procedures are transparent. To enlist the support of the donors it is advisable to involve potential donors from the early stages of REF design and implementation. * Private sector players are likely to participate in the REF when they see that: (i) they can have a voice in the REFs decision-making and management process, (ii) the REF is run along commercial lines and far from direct political interference, (iii) a reasonable potential for profit exist, and (iv) sustainable rural energy markets are likely to emerge and that the government policy supports such markets. * Local rural communities are likely to increase their participation in the RE activity and may eventually be

Most RE programs are associated with REFs in one form or another. They are effective instruments in implementing RE programs. As discussed earlier, in developing countries governments alone cannot provide for RE. So resources from other sources also need to be mobilized. The ownership structure of an REF needs to be carefully designed in order to maximize the utility of the fund. While complete government ownership of such funds may provide access to a variety of sources of soft finance, in practice most official sources of funds prefer not to see full government ownership of the REF. Participation of private parties in the REFs ownership enhances its credibility. Joint financing by public and private sector entities represent an emerging trend because of better sharing of risks, and better flexibility in mobilizing soft debts and equity financing. In identifying the sources of finance, it is essential to focus on the following: * Maintaining a flexible REF ownership structure to integrate the interest of all major stakeholders in the REF. * Ensuring support of multilateral agencies, and regional and local development banks to the REF. * Enlisting the support of bilateral donors for technical assistance to maximize fund capitalization from the equipment suppliers in that country. * Contacting with equipment suppliers for their ability to provide soft trade or export financing. * Assessing the availability of other specialized energy funds and explore the potential for capitalizing on these funds.

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willing to participate with larger degree of cost-sharing when they are assured of reasonable voice in the REF administration. This entails wider consultation during REF establishment phase with rural communities for their possible participation in the management of REF. Such an arrangement is likely to result in larger number of rural households electrified in most cost effective manner.
GRANTING SUBSIDIES ISSUES

Key factors that should be explicitly addressed concerning subsidy while designing REFs include the following: * Competition in Use of Funds: Subsidies may be competitively given to the private entrepreneurs or community groups who offer to electrify an area with the minimum amount of subsidy. Competition for subsidies can help minimize RE program costs and promote better customer satisfaction. * Targeted subsidies: Where resources are limited, selective targeting of subsidies is always preferable. By and large, the people who can not afford to have electricity connections are the poor and indigenous communities. The subsidy based on the average cost of connections while administratively expeditious, will provide subsidy across the board for all connections. Targeting subsidies to specific groups or geographic locations, on the other hand, may complicate administration and planning. Initially, the Government may try to target subsidies by specifying a list of target communities and the expected number of connections in each community to be electrified under a particular RE project. Linking payment of the subsidy to certain performance criteria would afford objective verification of achievement or lack of it. At the same time it would also greatly increase the complexity and burden of monitoring. * Incentives to the Private Sector: Incentives available to the private energy providers should be clearly articulated and well publicized. In addition, penalties for failing to complete the program should be included in all contracts awarded under the fund. For example, larger and more attractive subsidies may be provided to those providers who agree to connect more distant communities and those from the poorer sections of the rural population. * Recovery of Cost of Service: While the regulator should ensure adequate level of competition for financing through the REF, it should at the same time ensure that the service

There are many examples of successful programs of rural electrification fund around the world. All of them share one thing in common some form of subsidy. Regardless of the characteristics of an REF and the type and nature of subsidy, the success of any fund depends on how it is administered. One important element for successful administration of an REF is the establishment of objective criteria and process to identify and select projects for possible financing. Such an approach will not only ensure transparency in the selection process but ultimately help ensure an effective project implementation. Subsidies for a RE project can be grouped into the following (i) support by providing technical assistance and capacity building to communities, NGOs, and local private energy service providers, and (ii) support to finance the high upfront initial investment needs to build the electricity system and to connect customers. Subsidies to meet operating costs and/or in the form of electricity price being below the true cost are generally undesirable as they tend to compromise the long-term financial sustainability of the operation. Further, such a situation while promoting higher consumption thus harming the environment, may also distort the energy markets resulting in under investment in the energy sector, eventually contributing to the deterioration of the quality and the reliability of supply. Ultimately, this can undermine the overall economic health of a country.

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providers are able to recover the costs and some reasonable amount of profit/surplus. In summary, the most desirable situation is when subsides are: (i) for financing capital investment, (i) targeted to those most in need, (iii) transparent, (iv) granted through competition among energy service providers, and (v) measurable in terms performance targets.
HMGNS PLANS AND PROGRAMS FOR RURAL ELECTRIFICATION

This idea is incorporated into the Tenth Plan (2003-2008), which makes rural electrification one of HMGNs highest development priorities. The Tenth Plan specifically calls for creation of a central entity with the mandate of developing rural electricity supply. Since electricity services in urban areas are relatively adequate, but lacking in rural areas, during the Tenth Plan emphasis will be given to rural electrification. Ninety-five percent of the sectors budget for distribution is to be used for rural electrification. During the period of the Tenth Plan, from 2003-2008, more than 17,000 kilometers of transmission and distribution lines are to be added. These will bring the national grid to an additional 1,050 Village Development Committees, encompassing some 705,600 people. Implementing such general plans, however, has proven difficult in the past. It is widely perceived that a clear and consistent strategy for developing rural energy is lacking. While there are obvious complementarities between rural energy development and the development of agriculture and forestry sectors, and each of these sectors relates to national programs for poverty alleviation as well as for decentralization and village development services, there has been little coordination of effort across sectors. Rural electrification and alternative energy development projects have been administered by numerous government and donor-funded programs. There is no one organization that oversees and coordinates efforts to develop the sector. The NEA currently has a mandate for developing rural electric supply via extension of the national grid. But off-grid microhydro and solar photovoltaic projects are channeled through the Alternative Energy Promotion Center (AEPC), which was established in 1996 under the Ministry of Science and Technology. Various donor-funded programs are implemented either through these channels or independently by the donor organizations themselves.

Rural electrification has figured prominently in Nepals national development planning since the mid-1970s. In the Fifth and Sixth National Development Plans (1975-1980 and 1980-1985), rural electrification was recognized as a tool to contribute to the development of rural industry and agriculture. The Seventh Plan (1985-1990) dealt more extensively with rural electrification, and set goals for both small hydro and grid extension to develop and expand agriculture development and cottage and small scale industries. Under the Eighth Plan (1992-1997) rural electrification was to be carried out through the extension of the national grid as far as practical. The Ninth Plan (1997-2002) also emphasized the need to continue rural electrification as a driving wheel of rural development. Significantly, the Ninth Plan focused on poverty as its number one priority. The Tenth Plan (2003-2008) is even more firmly focused on reducing poverty and improving the rural economy. Its target is to reduce poverty to 30 percent of the population. The target set for access to electricity is also 30 percent. In 2001, a new Hydropower Policy had also highlighted rural electrification, specifically calling for the creation of a central rural electrification fund to support development of rural electric supply.

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CHALLENGES TO RURAL ELECTRIFICATION IN NEPAL

The need to extend the benefits of electric power beyond the 5 percent of rural Nepalese who resently have access to it is clear enough. But there are also obvious challenges to providing electric power nationwide in Nepal. Of the total land areas more than a third consists of steep foothills, and another third is rugged mountain terrain. These hills and mountains, together with monsoon rains give Nepal some of the greatest hydroelectric potential in the world. But the slopes also isolate communities and make any kind of transportation especially roads and railways difficult and expensive. Rural electrification in Nepal, just as elsewhere in the world, has expanded outward from the centers of demand and supply. This has worked well enough for the Kathmandu Valley and much of the lowland Terai. But for most of the country the mountainous terrain and remoteness of prime sites for largescale hydroelectric power generation are formidable physical constraints to developing an integrated grid system. The socio-economic barriers are also formidable. Terrain, distance, and isolation make the costs of normal grid connection prohibitively expensive. Where line extensions are installed in rural areas, they are characterized by poor reliability and low per customer utilization. Demand per household is likely to be very modest a few light bulbs and perhaps a television or other appliance. At the same time, NEA is expected to perform as a private utility, leading eventually to full privatization. For NEA and for most private power companies, efforts to electrify remote rural areas are costly distractions from their efforts at efficiency and profitability.
TIME TO ESTABLISH A COMPREHENSIVE REF IN NEPAL

of partnership with the local people in promoting rural energy delivery. It is expected that this initiative will promote access to affordable electricity to the rural consumers. Given the energy resource endowment profile of Nepal, renewable energy resources (primarily hydro and solar) seems the most feasible solution to meet energy needs in remote rural areas in Nepal. The type of terrain and accessibility determine the settlement density and hence the demand for energy services. Thus, given Nepals difficult terrain with varied settlement densityhighest in the Southern plain decreasing as we go norththere is no single technology that would suit all the rural settings and applications, and hence the demand characteristics. In the plains and the mid-hills where the population settlement is relatively high and opportunity for economic activity is good and the national grids are in place, grid-based electrification is most suited. In the hilly areas where the settlement is not dense, mini-grid may be the most suited option. Similarly, in the high mountains were the settlement is sparse, off-grid technology such as microhydro and PV solar are most appropriate options. Accordingly, the degree of subsidy may also varyhighest in the high mountains, with little or none in the plains so will the type of rural electrification delivery institutions. While electric utility, private electric service company or community groups may be best suited for RE in areas where electric grids exist, in mid-hills mini-grids may be operated by a Community or private providers. Similarly, in the high mountains the institutional option may be community or individual households depending upon microhydro or PV option. Accordingly, the level of subsidy to be provided to those areas will also vary. A number of Government documents have noted the need the need to establish rural electrification fund in Nepal. Notable of which is the Hydropower Development Policy 2058. Further

The major challenge facing Nepal in promoting rural access to energy service is to overcome the above barriers. To this end the government through policy initiatives has advanced the concept

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Community Electric Distribution Bye Law 2060 also mentions about crating Community Rural Electrification Fund to cater to the expansion of the distribution system within a Distribution Institution. The Bye Laws allows for any community groups or private companies to apply for setting up distribution institution to provide electricity service. One element which is conspicuous by its absence is the criteria against which the schemes with be judged as being viable to qualify for subsidy. One effective way may be to base the project approval process on economic criteria, or award the fund on competitive basis to those providers who offer to electrify a certain area with least amount of subsidy. Further in the current fiscal year, the Government has announced that it will provide a subsidy up to 80% for community groups to construct RE systems. In the absence of an objective framework to base the screening of distribution institutions proposals for financial support, the ward process my become adhoc with potential for being ineffective. Currently, NEA is undergoing through a phase of reform to commercialize its operations. Consequently, it may not be possible for NEA to continue in future with rural electrification without being in a position to recover the full cost. Under these circumstances, the formation of a separate Rural Electrification Authority (REA) to implement RE and especially an independent National Rural Electrification Fund (NREF) to provide funding support covering grid as well as offgrid RE options has emerged as necessity. The proposed institutions such as REA and NREF together will be responsible for rural electrification planning, financing and providing technical support to all RE stakeholders, community groups or private service providers. The task of managing rural electrification process can be entrusted to these institutions and their branches at the district and municipal levels, with the bulk power supply coming from

the NEA or IPPs. However, with 95% of the rural population yet to be electrified this task cannot be accomplished without the government, donor, and the private sector support. There are various institutional models for providing sustainable rural energy services to rural areas. The recently implemented NEA Community Electricity Distribution Bye Laws 2060 in principle allows for the implementation of this generic model. In summary, we conclude that it is time for the HMGN to consider the establishing a national REF in Nepal along the line of the best practices discussed in the previous sections of this paper, in order to accelerate the rural electrification plans as envisaged in the various national plan documents.
CONCLUSIONS AND RECOMMENDATIONS

RE is a long-term process requiring not only a strong political commitment, but also very large amounts of funding, which governments alone are unlikely to be able to mobilize from their own resources. Based on the conclusions drawn at the end of each section of this paper, we would like to conclude as follows: 1. Based on our analysis and experiences from other parts of the world a dedicated REF should be an essential element to accelerate RE efforts. 2. In order to ensure success and sustainability in financing of RE activities by REFs they should be established as independent entities under government supervision, managed and operated along commercial lines. Also, to ensure leveraging of the fund by donors and private sector, full accountability in the operation and transparency in rules and regulations is essential. Consumers Service Provider 3. The role of various stakeholders in the RE financing is of critical importance. Stakeholder groups such as donors, private sector, and consumer associations can potentially leverage government financed REFs only when they see that their specific interests can be met by these REFs.

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Involving all these stakeholder groups from the early stage of REFs design is the best way to ensure their commitment and participation in the REFs. 4. It is clear that some form of subsidy will be required in any RE program. The issue is what type of subsidy and how to deliver it. REFs should design an appropriate mechanism for delivering subsidies without distorting the rural energy service delivery market. Furthermore, a transparent and socially equitable subsidy policy and program are a precondition to ensuring sustainability, effectiveness, and efficiency. Such a subsidy policy and program should ensure that subsidies are delivered (i) to meet part of initial capital investment, (ii) to those most in need, in a most transparent manner through competition among energy service providers, and against measurable performance targets. 5. Nepal is getting ready to embark in a wide-scale RE program. In the medium term, HMGN needs to consider establishment of a REA and probably of a dedicated REF for rural electrification for cover both the grid- based as well a the off-grid options. HMGN should consider involving the donor community, private sector, and consumer associations in designing and establishing these institutions.

7
GRAMEEN SHAKTI - A MODEL FOR AN INTEGRATED APPROACH TO RURAL ENERGY SERVICE
INTRODUCTION

In Bangladesh, per capita annual fuel consumption is only 16.67 liter of oil equivalent, which is one of the lowest in the world. Since 85% of the population lives in the villages and in order to meet this increasing demand for development of agriculture and industry, it is necessary to utilize all the available alternative resources. Grameen Shakti (GS), one of the family members of Grameen companies, was established in 1996 as a renewable energy company with the aim to serve the difficult-toaccess rural areas with Solar, Wind and Bio-gas based electricity. The grid power was not available to these areas. GS has by now made significant progress in this field and has promoted 21,100 Solar Home System with 1.1 MWp capacities and has distributed to the household of different areas of Bangladesh through it's 92 unit offices till February 2004. Board of directors of GS and its top management has lot of experience in micro-credit financing and most of them are founder member of Grameen Bank. Therefore, their experience in micro-credit has contributed in proper designing of the program. In addition, vast network of Grameen Bank is supporting GS to expand it's program very quickly. GB borrower can avail the loan from GB for the down payment of the system (SHS) and this is an additional

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opportunity for the poor to afford the solar home system. Another Grameen Bank project called Polli Phone (Village pay phone), which has a great potential in income generation activity by the poor women. At present many areas covered by Grameen Phone signal does not have access to grid power and Grameen Shakti's SHS is working as an alternative source of power for charging the mobile phone. Approximately 50,000 Polli Phone is operated by Grameen Bank women borrower. The Polli phone is playing a major role in village economics. GS goal has always been to provide customers with the best and most complete solutions for their particular business and personal needs. GS is continuing to grow and evolve with the mission to serve the rural population.

Information and communication technology including (i) IT education, and (ii) Village Internet GS provides complete and end-to-end services to the rural population. Grameen Shakti is conducting research to utilize wind energy in the coastal areas of Bangladesh. It has installed 4 hybrid power stations (combination of wind turbine and diesel generator) in four cyclone shelters of Grameen Bank. Power generated from the wind turbines is connected to four cyclone shelters. Three of which are Grameen Bank and one exclusively used as cyclone shelter. Appliances used with these systems include light, fan, television, and water pump. phase of the program will allow Grameen Shakti to gather financial and technological information for possible future expansion in the other places
SUCCESS STORIES AND LESSON LEARNED

GRAMEEN SHAKTI (GS) SERVICES


Energy is the most important input for industrial development. The use of fossil fuel such as oil and gas for energy needs has an associated cost due to the environmental pollution and human health hazards. If the pollution and health hazard costs are taken into account in the energy pricing, then the cost of fossil fuels would be much higher than the cost of nonconventional sources of energy such as PV, and wind. GS designs and delivers the technology solutions that drive the business value, creates social value and improve the quality of life of the people. GS is one of the few companies in Bangladesh to successfully marry the technologies of renewable energy, computing and communication. GS delivers the following services and products: Renewable energy including (i) solar home system (SHS), (ii) bio gas, and (iii) wind turbine Resource development including (i) adaptive research for renewable energy, (ii) training for the internal human resource, and (iii) training program for user and local community to develop the awareness and technology dissemination

As mentioned earlier, the GS has installed 21,100 Solar Home Systems till February 2004 with an installation capacity of 1.1 MWp. Its Current promotional rate is over 850 SHS per month which will be 1000 within couple of months. For this purpose, Shakti has already opened 92 unit offices and has planned to open 20 more branches in rural Bangladesh. This network allows GS to quickly disseminate and commercialize any improvement in the technology. Since the systems are expensive for the rural people, GS has introduced a soft financing scheme for the customer. GS has linked this technology to the income generating activities as well. Grameen Shakti encourages customers to apply PV systems for productive use. Some examples of application of PV system for income generation include: (i) charging village pay phone, (ii) lighting rice/saw mill, (iii) lighting tailoring shop/grocery shop, (iv) poultry farm, (v) lighting restaurants, (vi) bazaar,

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(vii) micro-utility (selling power to neighboring shop), and (viii) radio/TV repairing shop.

IMPACT

OF

PV

ON

SOCIETY ESPECIALLY

ON

WOMEN

it to GS account. After a certain period the operator becomes the owner of the system. GS has installed 10 numbers of SHSs under this model. Issues behind the success Grameen Shakti realizes that the following facts and issues are the keys to its success: Appropriate designing of the program Commitment and dedication for the program Motivational program for awareness creation Community involvement and social acceptance Understanding of market demand Innovative financing model Realistic targets Constant monitoring and evaluation Award for outstanding performances Quality product Reliable backup service Minimum overhead cost

Children's education and other activities of houses have improved due to better quality of light. Consumers reported increase in income by extended working hours after dusk. Besides, PV system has opened up new opportunities for employment and income generation activities. Living standard of our customers is also improving. In addition, women are enjoying the hazardless and hassle free lighting system in their daily life. Moreover, they are getting opportunities to earn extra money by utilizing their time after dusk by sewing or poultry farming. It also has been observed that the solar home systems are increasingly used in the mosque, pagoda, Church, the health clinic, and other places of community activities. The social awareness among the users has increased as now they have access to educational and entertainment programs of TVs and radios.

POWER MICRO-UTILITY

TO

REACH

THE

POORER

GS APPROACH

TO

MARKET DEVELOPMENT
(i) sola r h om e syst em (SH S), (ii) bio ga s, a n d (iii) win d t u r bin e (i) a da pt ive r esea r ch for r en ewa ble en er gy, (ii) t r a in in g for t h e in t er n a l h u m a n r esou r ce, a n d (iii) t r a in in g pr ogr a m for u ser a n d loca l com m u n it y t o develop t h e a wa r en ess a n d t ech n ology dissem in a t ion (i) IT edu ca t ion , a n d (ii) Villa ge In t er n et

There are some very poor consumers who can not afford a complete solar home system. In order to help such consumers, the GS has introduced two different types of micro-utility systems which are as follows: Model 1: In this model, one entrepreneur installs a solar home system at his/her premises and shares the load with some of his neighbors within the technical limit of the SHS. Owner of the system pays monthly installment to GS and he/she collects load charge (daily or weekly) from the users according to the load capacity they use. Generally, more than 50% of installment comes from this power selling mechanism. More than 100 of such systems are working in rural market place. Model 2: In this model, GS installs the SHS in a market place and appoints one potential entrepreneur to look after the system and this entrepreneur becomes the operator of the system and his/her prime duty is to collect the bill from all users including his/her own (generally the operator pay 50% less) and deposits

R e n e w a ble e n e rg y in c lu d in g

R e s o u rc e d e v e lo p m e n t in c lu d in g

In fo rm a tio n a n d c o m m u n ic a tio n te c h n o lo g y in c lu d in g

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In this section, the approaches and methods adopted by the GS to promote the renewable energy service will be addressed, following the GS PV program present coverage. The GS to promote the renewable energy service and expand the market for PV and other RETs has adopted the following approaches and methods:

and the rest can work as free-lancers as GS certified technicians. Even GS engages them on daily basis whenever required.

PROMOTION

OF

RETS

Demonstration: The public gathering places like market, exhibition, school, collage campus are used for demonstration to convey the massage among the masses. Seminar: Seminars and workshop are organized to address the policy makers. Poster, Billboard, leaflet, banner, brochure and video show: Poster, leaflet and brochures on the products and services are distributed among the people. Billboard and video shows increase the awareness of the rural masses. Publicity in mass media: Grameen Shakti has invited the press people and explained its products and services to them which was published in the public interest in local and national news papers. Solar Scholarship: Grameen Shakti has introduced Solar Scholarship for its client's children. It reflects our social commitment and at the same time, it works as a promotional activity for our solar program. Grameen Shakti believes that, with out the adaptation of the technology at the local level and creation of the awareness among the society, there can not be a sustainable development. So parallel programs were carried out to develop the technology through adaptive research and motivational work including distribution of poster, leaflet, banner, brochure and training program were performed to create the awareness among the rural masses on the benefits of the product. This approach ensures the participation of the local community. Thus such programs coupled with innovative soft financing scheme, have accelerated penetration of the SHSs. Grameen Shakti has already achieved an International recognition in the form of "Energy Globe Award 2002" for it's outstanding performance in increasing the rural energy access. In addition, GS has achieved another international award "European Solar Prize 2003" in 2003 from EUROSOLAR in Berlin and "Best Theme Award" from USAID.

MARKET DEVELOPMENT
Competitive price with quality product: GS always tried to keep the product within the limit of affordable price for its clients. This has been possible due to the locally developed accessories of SHS of standard quality. It is because of adaptive research, which is funded by SIDA. GS is producing charge controller, ballast for fluorescent lamp, DC-DC converter, mobile charger etc. As such, the sales volume is increasing so negotiation power for reducing the price of imported solar module is also increasing. All these factors have positive impact in reducing the prices of SHS. After sales service: Generally, clients get free support for three years from the date of installation. GS engineer visits at least once in a month during collection of monthly installment and the engineer checks the system and makes entry in the logbook of the SHS. In case of any problem, he takes the necessary corrective action on the spot. Post warranty service: GS has introduced post warranty service for its valuable clients. This post warranty service charge is very low and which is about US$ 5 per annum. It ensures that the user gets prompt response for any kind of technical assistance and service from GS engineer or technician. Major replacement cost is borne by the user at a reasonable price. Capacity building to consumers, technicians and entrepreneurs: GS arranges training programs for the technicians and the consumers to disseminate the technology and build capacity of local entrepreneurs. GS has introduced two different types of training programs; one aiming at the users of the PV system and other for the development of the local technicians or entrepreneurs. GS absorbs few of them for its technical support

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FINANCING MODELS

GRAMEEN SHAKTI

Operating cost = Taka 22,000 (US$ 373) Running capital = Taka 280,000 (US$ 4,746) Break even period = 8 months Breakeven feature = At least 9 numbers of SHS is to be setup Breakeven calculation: For a 50 W system, which is worth Taka 21,500, if customer pays 12% service charge for it, then the total service charge collected would be Taka 3,443. Considering that 9 of such system are sold by a unit office then the total service charge generated from this unit office will be Taka 30,897. Operating cost of that unit office is Taka 22,000 so the rest of the amount may be considered as management cost. At present, this unit office is promoting 40 SHS per month.

We perceive that the success behind GS promotional work is its innovative financing scheme, which is based on the socioeconomic aspect of Bangladesh and blending with community involvement at grass root level. World Bank appreciated this model and now following this model World Bank is financing in this sector through Infrastructure Development Company Ltd. (IDCOL). The GS financing instruments are as follows: Mode 1: Customer has to pay 15% of the total price as down payment during installation and remaining 85% of the cost is to be paid by monthly installment within 36 months including 12% service charge. Mode 2: Customer has to pay 25% of the total price as down payment and remaining 75% of the cost is to be paid by monthly installment within 24 months with 8% service charge. Mode 3: Customer has to pay 15% of the total price as down payment during installation, and remaining 85% of the cost including 10% service charge is to be paid by 36 post dated cheques. Mode 4: Customer is given a 4% discount for cash purchase. Managing Director of Grameen Shakti Mr. Dipal C. Barua is receiving "European Solar Prize 2003" from Dr. Hermann Scheer MP and President of EUROSOLAR, in Berlin on December 2003

OTHER PROGRAMS

AND

FUTURE PLANS

CASE STUDY

OF A

UNIT OFFICE

GS has installed country's first solar powered computer education center at Kutubdia, an island on the Bay of Bengal and seven other places in the remote areas of Bangladesh including one at Maheskhali another offshore island of Bay of Bengal. GS is the pioneer in bringing the concept of Village Internet for rural areas of Bangladesh. GS has installed its first Village Internet setup at Cox's Bazar and extended its program in to an island Maheskhali through radio link connectivity. Through this program, at least ten villages have facilities of Internet Services. At present 245 dial-up connections, including 6 broadband have been established. Three Village Internet centers (Cyber Center) are being operated through this infrastructure. GS intends to develop the infrastructure for ICT which in turn would develop the human resource and create lot of jobs in rural areas. Future plans. GS has planned to install 100,000 SHS by 2008; its current progress indicates that this can be achieved. It is also trying to explore other renewable resources like wind, hydro and bio-mass. To develop the infrastructure of ICT, GS has taken some initiatives to expand its existing coverage area for Village Internet. It has a plan to cover 100 villages within the shortest possible period.

Sandwip is an offshore island of Bangladesh and the island is not covered by conventional electricity. GS primary investigation assessed that there is a good potential SHSs in this island. Before establishing a new unit office, GS had carried out a survey and the report indicated that SHSs can penetrate the island. Then GS established a unit office at Sandwip on January 2001. The following represent some basic data: Capital investment to = Taka 40,000 (US$ 678) setup the new Office (US$ 1 = Tk 59)

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Success behind the GS model is its integrated approach of addressing socio-economic problem related to energy crises in rural areas. GS has identified the barriers to social acceptance of renewable energy technologies and has taken the necessary steps to overcome the barriers. Grameen Shakti's integrated approach always focuses on women welfare, income generation, child education, capacity building of local entrepreneurs and after sales service. Its innovative financial schemes have helped the rural people to procure the RETs systems for their livelihood activities. Standalone and owner ship model of SHSs have created more awareness for proper care and use of the systems. Moreover, user-training program is an added advantage for ensuring the proper maintenance of the system. To reach the poor, GS has taken the micro-utility concept, which has extended the program through out the community. GS always encourages the users to use the systems for productive activities so that RETs can be a source of income generation activities. It has been observed that the SHSs have helped in extended working hours and increased income for the consumers. Thus, the innovative integration of financial support with social awareness has lead to the success of Grameen Shakti.
MINI HYDRO APPLICATIONS FOR SERVING ELECTRICITY IN RURAL NEPAL - INNOVATIONS

areas. High cost of the distribution network to cater to dispersed and small loads was economically unviable. This challenge will be discussed further in the next chapter. In the late 1980s, BPC built the 5.1 MW Andhi Khola Hydropower Project in Syangja District. As a part of this project, BPC also undertook to develop appropriate technologies as well as suitable methods and tariffs for rural electrification in the districts close to the power plant. This initiated the development and uses of various innovations in rural electrification that is the subject of this paper. The ultimate aim was to "establish a replicable model for equitable and sustainable rural electrification". The first phase of the rural electrification activities in the Andhi Khola Hydel and Rural Electrification Project (AHREP) was funded through grant assistance from the Norwegian Government. Based on the success during this phase, BPC received a grant from the United States Agency for International Development (USAID) in 1995 for rural electrification expansion in the area. In addition BPC has invested its own resources. Each year, BPC allocates a percentage of its operational surplus for rural electrification.

Source BPC USAID Grant NORAD Grant TOTAL

Amount NRs 137,814,000 34,722,00 31,583,000 204,119,000 US$* 2,297,000 579,000 526,0000 3,402,000

P erce ntage 68% 17% 15% 100%

Butwal Power Company Limited (BPC) was established in 1966 as a private utility to supply electricity to a newly industrializing town in Western Nepal. At present, the Company owns and operates two hydropower plants with a total capacity of 17 MW and supplies electricity to about 21,000 predominantly rural consumers in Western Nepal. It supplies the excess energy to the national utility, Nepal Electricity Authority (NEA). Since its establishment, BPC's mission has been to generate and distribute electricity in the most effective and efficient manner. BPC quickly realized that distributing electricity in the rural hills of Nepal was very different from supplying electricity to urban

A breakdown of the total investment made by BPC in rural electrification during the last 10 years is as follows.

CHALLENGES

OF

RURAL ELECTRIFICATION

IN

NEPAL

Electricity is widely considered as an important ingredient for socio-economic development. In the rural hilly areas of Nepal, fuel wood is the major source of energy. These areas have

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experienced widespread deforestation, which has led to environmental problems of soil erosion and drying up of water springs. The inhabitants have very little disposable income. Furthermore, the terrain is rugged and houses are widely dispersed. Bringing electricity to these villages poses Herculean challenges in terms of effort and financial resources. Furthermore, just bringing electricity poles and lines to a village does not automatically result in the economic revolution that a lot of us imagine it would. Putting electricity within the economic reach of the population and promoting productive end-uses of electricity is as challenging. BPC's innovations in rural electrification aim to address some of these issues.

USE

OF

DEMAND BASED TARIFF

INNOVATIONS

IN

RURAL ELECTRIFICATION

In rural areas in Nepal, the electricity consumption is very low. Therefore, using an energy based tariff structure does not yield high revenue. On the other hand, the operational costs associated with meters, meter reading, account keeping and collecting are high, and may at times be higher than the revenue generated. A tariff structure based on subscribed demand (power) does away with meter reading and the associated complicated tasks of account keeping. Furthermore, in rural areas, strictly limiting demand is essential for reducing the cost of distribution lines. Furthermore, if the distribution is from a run-of-river plant without an access to the grid (as in micro-hydro applications), power is more valuable than energy.

A number of technological and managerial innovations were tried out at AHREP. In this paper, four of the major innovations will be highlighted. The two major technological innovations were the intermediate 1 kV distribution voltage and demand based tariffs. The two major managerial innovations were the Electricity Users' Organization and Motivators.

MANAGERIAL INNOVATIONS
Electricity Users' Organizations (UOs). As mentioned above, building rural electrification networks is expensive. Operating these networks is also very labor intensive. Carrying out simple routine maintenance and collecting dues, which are simple matters in urban and roadside settlements, present difficulties for remote and dispersed locations. Technicians have to travel for hours to carry out a simple task that can be completed in minutes. Collecting dues from farmers who are often away from home in their fields during the day may take many days' work for an outsider. The UOs, established by BPC, mobilize local resources for construction of lines in the form of labor and local materials. During maintenance, these UOs carry out simple maintenance of the system and collect dues and deposit them in the company offices. For their contribution to the operation of the network, 10% of the fees collected are refunded to the UO. The UO uses this fund to pay a serviceman to carry out the tasks. In addition to reducing the cost of constructing and operating the network, the UOs help channelize the social capital in the villages and instill a sense of ownership the distribution system among the consumers. Motivators. Motivators are local youths who have been trained to familiarize rural consumers with various aspects of electrification such as safety, end use promotion, tariff etc. In many villages,

TECHNOLOGICAL INNOVATIONS - DISTRIBUTION VOLTAGE

OF

1 KV

In urban areas, electricity is distributed at either 400 V or 11 kV. Beyond about a kilometer range, 400 V lines have excessive voltage drop. 11 kV lines present practical problems to supply the low but highly dispersed loads in the rugged hilly rural terrain. Keeping this in mind, a 1 kV system was used where many line accessories for 400 V lines were used. This extended the service distance from about 1 km to about 5 km. Furthermore, a 1 kV system discouraged theft of electricity because tapping these lines did not give consumers a usable voltage. However, one of the most significant advantages of the 1 kV system was that 1/0.23 kV, 1 kVA and 2 kVA transformers were relatively inexpensive and light enough to be carried by porters into even remote service areas. In comparison, even the smallest 11 kV transformers are quite heavy and small sized transformers in this voltage are comparatively expensive.

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there are people who have never experienced electric lighting before, let alone other uses of electricity. Concepts and devices we take for granted are novelties for many in rural areas. Therefore, consumers have to be educated about productive uses of electricity, the relevant tariff rates, safety, connection procedures etc. Local youths, preferably local married couple, are hired so that the locals feel free to talk to someone from their neighborhood, and share their own ideas, feelings and frustrations, rather than listening passively to some outside expert. Various methods like drama, presentations, house visits, demonstrations are used as motivation tools.

Transformer Specification 1/0.23 kV, 2 kVA 1/0.4 kV, 5 kVA 1/0.4 kV, 10 kVA 1/0.4 kV, 25 kVA

Number 167 38 76 43

The cutout consumers subscribe for demands from 25 watts to 400 watts. The breakdown of the cutout consumers is as follows. Watts 25 50 100 250 400 800 TOTAL Number of Consumers 125 1,454 6,605 6,057 1,053 18 15,319

BPC'S RURAL ELECTRIFICATION EFFORTS


At present BPC has 20,766 consumers. The breakdown of the consumers is as follows. Concumer Category Metered Cutout (Demand based) Industrial TOTAL Number of Consumers 5,227 15,319 220 20,766

The total number of consumers served by 1 kV system is 12,668. There is a total of about 277 km of 1 kV lines. Distribution transformers of 100, 200 or 250 kVA step down the voltage from 33 kV to 1 kV. 1 kV lines are then taken to load centers, which may be anything from a small sized bazaar to a cluster of a few houses. Then single-phase transformers of 1 or 2 kVA, or three phase transformers of 5, 10 or 25 kVA further step down the voltage to 230 V. The details of the transformers are given below. Transformer Specification 33/1 kV, 100 kVA 33/1 kV, 200 kVA 33/1 kV, 250 kVA 1/0.23 kV, 1 kVA Number 8 3 2 148

A total of 11,881 consumers are served through 55 UOs in the BPC distribution system. The average size of a UO is 216 households (consumers). However sizes range from 36 to 380 consumers. There are typically 3 to 6 UOs supplied from a distribution transformer.

EXPERIENCES

WITH THE

INNOVATIONS
OF

DISTRIBUTION VOLTAGE

1 KV

The 1 kV lines usually consist of ACSR conductors strung on tubular steel or wooden poles using porcelain shackle insulators used in 400 V lines. However, self-supporting insulated aluminum cables have also been used. These lines emanate at the 33/1 kV distribution transformer and end in the 1/0.23 kV transformers at load centers. The transformers were previously protected on the 1 kV side using 400 V MCCBs, which are tested for up to 1 kV voltage. However, they were prone to frequent insulation failure both between phases and to earth.

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Nowadays, either HRC or kit-kat fuses are used. A bigger distance is maintained between phases, and fuses are installed on a fiberglass plate to strengthen the insulation to earth. As discussed above, one of the advantages of the 1 kV system over the 11 kV system is that the 1 kV transformers can be built to small sizes. BPC uses 1, 2, 5, 10 and 25 kVA transformers depending on accessibility and load size. These transformers are lightweight and thus easy to transport. For a number of years, these transformers were dry-type. However, during the monsoon, they frequently failed because of moisture and lightning strikes. Based on this experience, most of these transformers have now been immersed in oil by fitting an outer tank. This has strengthened the insulation of the transformer, resulting in a drastic reduction in failure. In many areas, there has been pressure to extend the 1 kV lines beyond 5 km resulting in excessive voltage drops. Furthermore, because of a massive road building drive by local governments and communities in the past few years, previously inaccessible areas have become accessible. Consequently, BPC is planning to convert some of the 1 kV lines into 11 kV lines. However, this is not a failure of the 1 kV system but rather a change in the socio-geographical conditions in the distribution area, brought about by increase in population density and accessibility. The 1 kV voltage system is still relevant where the consumers are located in small groups and are widely dispersed. It may specially be applicable in remote areas served my micro hydro power plants where 400 V lines result in excessive voltage drop.

plant is supplied to NEA. Even then, the power or demand based tariff is relevant in the rural distribution areas. Because of the reduction in costs associated with metering, it has been possible to provide electricity to the lowest income group consumers at very affordable rates. Over 50% of the cutout consumers subscribe for less than 100 W. These are households that use from one to four 25 W bulbs in their houses. Thus, the demand-based tariff has been very successful in making electricity available to the consumers in the lowest income group. The major technical challenge has been to find a reliable current controlling device for very low current levels. Presently, positive thermal coefficient devices (PTCs) are used for 25 and 50 W consumers, and German-made MCCBs for the other categories.

ELECTRICITY USERS' ORGANIZATION


The three main advantages that BPC saw in forming Users' Organizations were: Reduction in cost of the distribution system construction, Reduction in BPC's burden in administering the distribution system, and Assistance in building social capital in the community. BPC saw the UO as an informal community organization that assists BPC in reducing the cost of rural electrification. For the remote areas, BPC stipulated that it would deal only with Uos and not individual onsumers. Communities interested in being supplied with electricity would have to organize themselves into a UO. These UOs were entrusted with the following tasks: Gathering and submitting applications to BPC, Organizing local labor and local materials contributions, Collecting fees from consumers and depositing it with BPC, Assuming responsibility for simple maintenance of the system within the UO area, and Serving as a communication link between the community and BPC.

DEMAND BASED TARIFF


When the tariff structure was introduced in the early 1990s, it was assumed that the power from the 5.1 MW Andhi Khola plant would be quickly used up for rural electrification. At the time, there did not exist a power purchase agreement (PPA) with NEA. Consequently, it was assumed that power rather than energy would be the major constraint. However, a PPA has since been signed with NEA, according to which all excess energy from the

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Typically, BPC receives an application for electrifying a village or a group of villages. BPC then conducts a study of the area with respect to system design and cost of the system. The findings of the study and BPC's condition for electrification are presented to the community leaders. If the community is still interested, they are asked to organize themselves into a UO and select members for the UO Executive Committee. During construction, frequent meetings are held between BPC and the UO, while BPC supplies technical manpower and non-local materials. The UO has to supply all unskilled labor and locally available materials such as wooden poles, sand, pebbles and stones etc. In the meantime, one or two members of the UO are trained to serve as servicemen during the operation phase. The training is mostly on-the-job. The serviceman will later be responsible for collection of dues and simple maintenance and repairs within the UO area. BPC also provides the UO with a small starting capital for buying tools etc. The ownership of the system is always with BPC. It has been BPC's experience that there are always more areas wanting electricity than available funds would allow. Thus, BPC views community contributions as a way to reduce construction costs so that more areas could be electrified with the available budget. In addition, community contributions also allow more remote communities to enable BPC to electrify their houses at the BPC's cost-per-consumer limit of NRs. 10 to 12 thousand (US$ 130 to 160). For the work that the UO does for BPC during operation, BPC refunds 10% of all fees and dues collected by the UO. This is primarily used to pay the salary to the serviceman. BPC has had about a decade of experience in implementing the innovations described above. Though a rigorous financial analysis about the savings achieved thus far has not been carried out as of yet, there is a consensus among BPC's technical staff that the results have been promising. The 1 kV distribution system serves 61% of the consumers through 215 km of lines and about 1.9 MVA of transformer capacity. This system seems suitable to distribute electricity up to about 5 km line distance in remote hilly areas, areas typically served by

micro hydropower. The ease of transportation of lightweight transformers is seen as one of its main advantages. The consumers subscribing to a pure demand based tariff constitutes 74% of the consumers. This type of tariff has specially benefited consumers with very low income. BPC is still experimenting with different type of current cutout devices. The success of this tariff rests on a reliable cutout device. The advantage associated with reduction in metering costs is clearly evident. About 57% of the consumers are served by UOs. The Uos in BPC's distribution area has sown the seed for community owned distribution systems, a concept that is being aggressively promoted by Nepal national utility, NEA.

LOOKING AHEAD
BPC intends to continue its study of these and other innovations in rural electrification. BPC's vision is to aggressively expand its distribution area in the next few years. Rural electrification will continue to be a major BPC activity during this expansion. With further refinement, BPC hopes to prove that sustainability and equity can be achieved in rural electrification. Many of these innovations are relevant for distribution of power by mini and micro hydro plants in remote hilly areas as well as grid-connected community owned systems. BPC aims to disseminate these innovations to the concerned stakeholders, such that benefits of the innovations can be experienced in a much larger scale.

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8
INNOVATIVE APPROACHES FOR FINANCING RURAL ENERGY SERVICES
INTRODUCTION

of rural energy service delivery by encouraging the governments to be "brokers" and "leveragers". While the answer to the first challenge is to find the way and consensus for making energy prominent in countries' Poverty Reduction Strategies; the answer to the second challenge is the focus of this paper. The objective of this paper is to bring to discussion our experience and opinions on a few alternative arrangements that have recently shown results in facilitating the environment for mobilizing private sector and consumer finance participation in the process of RESs delivery, while governments and donors are reassessing their roles toward becoming enablers and facilitators by leveraging RESs financing. This paper will illustrate the importance of rural energy for rural sustainable development, stressing the importance of dedicated policies and institutions for rural energy and rural electrification (RE), describing the traditional approach, and presenting innovative approaches to RE and RESs financing. Furthermore, it will logically tackle issues and present views on potential institutional arrangements, the "to be changed" role of subsidies, new role of various stakeholders, and a proposed integrated institutional approach for financing largescale rural electrification projects and programs. It will then be followed by examples, lessons learned, and the way forward to close the paper.
POLICIES AND INSTITUTIONS FOR SUSTAINABLE RURAL ENERGY SERVICES

What does poverty alleviation mean? This is a crucial question for all. In our view, it means the provision of resources for facilitating reasonable leaving conditions to those categorized as poor. Among many other linkages that are essential to poverty alleviation, energy is a crucial element. However, energy alone cannot bring about poverty alleviation and sustainable development. While substantial efforts have been made worldwide to increase energy access for the poor, approximately two billion people worldwide still remain without access to affordable and reliable modern energy services. This has remained about the same in absolute numbers for the past 20-30 years. Most of these people live in rural areas which make the provision of energy services more challenging due to the nature and characteristics of rural energy needs and loads. To substantially reduce the above number of un-served people with energy in the future, two key challenging issues must be addressed (i) how to find the best way for ranking rural energy access much higher in the list of priorities of most governments, and (ii) what the best policy and framework arrangements would be to substantially enhance the environment for increased financing

Without modern energy services the existence of basic community services and infrastructures is questionable. Modern lighting and telecommunications, reliable health care, water supply and irrigation, and local manufacturing would all be curtailed. Investment and income generation activities would never increase at the expected levels and the poverty would never be eradicated.

ENERGY ALONE CANNOT BRING ABOUT RURAL DEVELOPMENT


Energy enhances the opportunities for learning, education, and access to information. It enables the use of tools and machinery needed to increase production. And, it facilitates the flow of essential services by removing the hardship of manual labor

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(especially freeing many hours every day to women and children), thus improving the quality of life in rural areas. Energy alone is not enough. It is a tool in poverty alleviation, but by itself it cannot cause poverty alleviation. Without being coupled with other parallel infrastructures, energy supply becomes a luxury that poor people cannot afford. While we all accept that energy is a prerequisite to rural development, we recognize the need to utilize it in income generation activities first. Economic and socially sustainable rural development must be supported by sustainable energy services. The following are the elements of sustainable energy: (i) everyone is entitled to some minimal modern energy access, (ii) economic pricing should underlie the long-term use of energy, (iii) energy production or use should be sustained by the ecosystem.

Several governments in Africa and Asia are considering the need for establishing dedicated commercially-run institutions for planning and managing the rural electrification process. Various examples from Latin American countries and few from Asia have proven that these types of RE institutions are required in order for developing country governments to embark and implement large scale RE programs and leverage substantial amounts of money by donors, private sector, and rural consumers themselves. Exhibit I represents the proposed organizational structure for a rural electrification authority (REA), developed based on lessons learned and best practices worldwide.
FROM TRADITIONAL TOWARDS NEW APPROACHES TO SUSTAINABLE RURAL ENERGY FINANCING

POLICIES

TO

INCREASING ACCESS

TO

RURAL ENERGY SERVICES

To expand access to energy services for people living in rural or remote areas, policies, institutions, and programs need to be developed and implemented. Some of the high priority actions include the following: Establishment of public institutions at the national and local levels - including regulations, taxation, incentive systems, legal frameworks and institutional mandates dedicated to addressing and financing rural electrification and expanding rural energy services Energy services must be affordable and accessible to support rural development by increasing employment and income generation Expansion of electricity generation through centralized and decentralized systems using conventional or renewable energy based on the resources available locally Implementation of an integrated approach to the provision of rural services and "bundle" it with other rural infrastructure services - water, health, education, and etc.

Although there is no generally accepted and practical definition for sustainable rural development, there is a clear framework for assessing sustainability of finance. The framework encompasses income statements and balance sheets which show whether an energy service entity is likely to meet its operating costs and finance its investments within a financial structure which does not jeopardize its creditworthiness. These are then translated into various measures such as rate of return, debt-equity ratio, selffinancing ratio, etc., which can be monitored to ensure the entity's financial health. The bottom line of all these measures is that in the long-term, rural consumer prices should be sufficient to cover all of the capital and operating costs. The rest of the paper provides 'food for thought' to all of those who in some fashion are dealing with sustainable rural energy financing issues.

THE TRADITIONAL APPROACH

TO

RE FINANCING

Many real-life examples have proven that the above theory on the sustainable finance works out well for energy service delivery in urban areas in many countries. The problem arises in the case of rural areas where the poor (for many known reasons) simply cannot afford paying for energy at the same prices (and in many cases higher) as those in urban areas. In responding to this issue and trying to solve the above stated problem,

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governments and donors, during the past 30-40 years, have largely agreed and arranged for the financing of RES in the way shown in Exhibit II. This exhibit provides a general picture of the traditional approach used by governments and donors to finance RES and rural electrification (RE) projects and programs in the developing world. At first glance, we see that dedicated institutions for RES and RE financing that involve the private sector, consumers, and civil society - who in recent years have become major players in the RE process - are missing. This RE financing process as proven to be unsustainable in many cases. In the final analysis, this traditional approach has the following major implications: * Donors and technology program financing have affected the rural energy market and discouraged other players * Governments have been paying large amounts of untargeted subsidies, which in many cases have compromised the sustainability * Governments have been heavily involved in project and program implementation with no or little commercial participation * Markets and market-driven approaches have been widely neglected - predominantly a top-down approach has been implemented, and * Economic feasibility has not been the focus. In recent years, governments and donors have realized that the above approach cannot be sustained. They still face many challenges in the developing world, while the financial resources available cannot increase, as desired, and there are signs that they may even decrease. This new reality needs to be addressed with innovative visions and approaches. In the following section, we will focus on innovative approaches for financing RE and RES on a macro level. This is because all micro-financing financing institutions, mechanisms, and interventions (that in recent years have been emerging successfully in the micro level) need to be part of an integrated

policy and institutional arrangement that will provide for efficiency and effectiveness. This will result in the sustainability of RE process toward the final goal of establishing sustainable rural energy markets.

TOWARDS NEW APPROACHES MARKETS

TO

RURAL ENERGY FINANCING

AND

Presently, we face the reality where power utilities (traditionally assigned by governments with a central role in delivering relatively massive rural energy and electrification programs - as shown in Exhibit II) in Southeast Asia are committed to undergo deep reform and restructuring. Most of them now operate under some form of government ownership, implementing week financial regimes. Their financial viability is the major reason behind their reform and commercialization. The goal of commercialization is moving towards financial sustainability by increasing power tariffs to levels that pay for covering operating and capital costs. Some of the countries in the region have a long way to go in that respect. Under these circumstances of reform and commercialization, it is unlikely that national utilities would be willing to continue being involved in rural energy delivery or the electrification process. For this reason, politicians, governments, donors, private sector (technology producers and financiers), civil society institutions, and rural consumer themselves need to collaborate and identify innovative ways and means to finance massive energy service and electrification primarily in rural areas. In recent years, we see that various forms of private participation in rural energy services delivery are flourishing in the developing world, (and some of them in the Southeast Asia region as well). These forms of private participation include: (i) commercial finance - banks, (ii) commercial finance - rural saving & loans (S&L) cooperatives, (iii) rural energy investment funds, (iv) rural cooperative finance,

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(v) rural energy service company (RESCO), (vi) "sweat equity" participation,and (vii) suppliers credits. In the sections above we tried to make the case on the needfor private and consumer participation in RE and the RES delivery and financing. And, governments and donors need to revise the traditional roles they have played in the RE process. While recognizing that a fully developed rural energy market is the goal and most desired option of offering RE and RES (which will take many years), we believe that transitory institutions and mechanisms need to be designed and implemented in the interim. In an attempt to keep the paper concise, we have developed Exhibit III, where roles, relationships, authorities, and responsibilities are assigned in the process of RE/RES financing, and implementation. It has to be noted that a national rural electrification fund (NREF), run along commercial lines, is a crucial element of the whole scheme in Exhibit III, because it provides an attractive opportunity for leveraging government funding with private sector financing. Chile launched a new RE program in the mid 1990s. A Special Fund for rural electrification was established in 1994. The RE program was designed to be compatible with the government's overall reform program for the electricity sector. The program was designed to reach 75% of the rural population by 2000. It was estimated that the central government would need to provide US $150 million in subsidies to allow for the electrification of about 110,000 dwellings. Subsidies were allocated competitively as onetime direct subsidy to provide distribution companies to cover capital costs of grid extension. The operating costs were to be covered by tariffs set by the regulatory authority. Competition, private investment, and decentralized decision making have been the drivers of this program. The use of a subsidy has made rural electrification an attractive business opportunity. Government share of investment in the program declined from 70% in 1992 to 61% in 1999. The program increased the coverage of electricity in rural areas from 53% in 1992 to 75% by 2000.

PUBLIC PRIVATE PARTNERSHIPS - WHY?


A Public Private Partnership (PPP) - a partnership between the public and private sector for the purpose of delivering rural energy services - represents a process of recognition that both the public sector and the private sector have certain advantages relative to the other in the provision of rural energy services in the most economically efficient manner by allowing each partner/sector to do what it does best. Private sector innovation and technological, financial, and management expertise can be gained only through using a PPP approach to programs such as rural energy delivery, which traditionallyhas been within the sphere of local authorities. While public actors (domestic) are needed to create the appropriate environment for action through policies and incentives, energy service delivery to the smaller, poorer rural consumer needs a host of private actors for: (i) innovation and efficient delivery (e.g. private companies, entrepreneurs), (ii) local institutional support (e.g. NGOs), (iii) flexible financing (e.g. private credit institutions, international financial institutions), and (iv) consolidation of lessons learned (e.g. NGOs, bilateral & multilateral organizations, research institutions) among others. Bilateral & multilateral organizations are crucial partners at the early stages, especially for mobilizing soft term finance, building human capacity through technology transfer and knowledge exchange, and supporting interventions at the rural level. Exhibit IV summarizes the role of each partner in the PPP. Opportunities for establishing new and sustained market oriented partnerships between the public and private sector for financing RES do exist. Civil society can also play catalyzing role in this process, both at the project and the program level. As shown in Exhibit IV, the identified types of civil society institutions should contribute to both sides of any successful public private partnership - cooperatives and trade unions need to buy in and

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be partners in the private sector family, while universities and local governments can play an important role as partners of the public sector. The Global Village Energy Partnership (GVEP) represents the very last worldwide - partnership of partnerships program agreement for collaboration between multilateral institutions, bilateral donors, non-governmental organizations and developing countries public institutions. The GVEP supports policy dialogue, capacity building, and financing mechanisms to expand access to energy services in rural areas, especially through support for the provision of electricity and cleaner fuels. We have begun work on this Presidential Initiative in Brazil, Mexico, Sri Lanka, and Zambia.

* Energy service should be offered and provided first to income generation activities. It would be best to integrate it with other programs supporting rural agriculture and other production activities * The poor need, and can afford paying for predictable energy service, which will let them adjust the consumption pattern, both in terms of quantity and timing, when the energy service is available * Energy tariffs should be such that the poor can pay. Furthermore, the payment for energy should be scheduled flexibly allowing for matching them with their cash receipt cycles * Decentralization, empowerment, and rural consumer ownership will support efforts for expanding this type of market by mobilizing local and rural financial resources. Although all the above elements are critical and need special attention, there exists another element without which rural energy markets cannot emerge. This is the issue of "subsidy", a word that the world has been struggling with for quite some time.

RURAL ENERGY MARKET REALITIES


Two billion un-served customers represent a huge energy market worldwide.. The problem is that this market has the following disadvantageous characteristics: (i) it is dispersed, (ii) it is disadvantageously located - imposing difficulties to deal in it, and (iii) it has limited demand and income resources to make the market attractive. Because of these disadvantages, the private sector has been reluctant to enter this market. Another reality is that many 'best case' programs and projects in rural energy services - worldwide, including the South Asia Region - have shown that people are willing to pay for energy. The poor spend up to 1/3 of their disposable cash income on poor quality lighting mostly. In many cases they have surprisingly proved their ability to pay for energy services and contribute their time and local resources when they are empowered to be part of the process. As in all types of markets, 'what the rural energy market wants' is a critical element of its design. The characteristics of this market should drive its design process. Taking a bottomup approach in the designing process will increase the potential for building a sustainable rural energy market for. Some of the critical design elements of this market are:

CENTRAL ROLE

OF

SUBSIDIES

There is a wide consensus on the belief that subsidies are essential to expand rural energy services and rural electrification. The problem is to avoid life-time and untargeted subsidies by designing, developing, and implementing types of subsidy programs that do not compromise the long-term sustainability of RES and RE programs, which they are dedicated to. The use of "Smart" subsidies seems to be the solution to this problem. Some important elements for designing such subsidy programs are the following: * Design targeted subsidies to create intended markets, while achieving social goals and not distorting rural energy markets by providing for a more level paying field among all market actors * Encourage least-cost options by (i) introducing competition for subsidies, and (ii) providing for the implementation of

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'lighter' and unconventional RE system design and construction * Provide best - most efficient, effective, and transparent system for subsidy delivery * Build prior consensus and awareness - between politicians, consumers, and other stakeholders - on objectives, targets, and duration of subsidy programs In summary, a good subsidy program should have clear target market, and support only upfront one-time capital costs (e.g. cost of connection). This type of subsidy, when designed and allocated appropriately, will, at least initially, bring the energy rates and prices to levels affordable by the rural poor. Several positive examples of "Smart" subsidy schemes, such as subsidies for capital investment and performance-based subsidy schemes and programs, do exist in Southeast Asia Region. More are emerging and/or are under consideration by governments and international donor community. We have encountered them in various forms and models in Sri Lanka, India, Nepal, and Bangladesh. These schemes need to be enhanced and enlarged in order to support the achievement of each country's goals in rural energy and rural electrification. Bangladesh is using cooperatives for rural electrification, based on the principles of the U.S. model. It pplies performance-based schemes for delivering subsidies. The cooperatives have to meet 21 specified targets. Payout of subsidies to the cooperatives depends on their achieving the annually negotiated targets, such as reducing system losses, increasing sales, meeting customer connection targets, improving collection rates, and repaying loans. Targets are also the basis for annual bonuses to cooperative management and staff. The cooperatives' performance has been mixed. While some have been able to achieve most of the targets, others are suffering financial losses.
LESSONS LEARNED AND WAY FORWARD

* It is clear that governments and donors alone cannot raise enough funds to meet the challenges on RES and RE. Furthermore, power sectors are undergoing reform and restructuring towards commercialization and open markets; and, under these circumstances, the traditional approaches - engaging national power utilities in massive subsidized rural electrification processes - cannot be sustained in the future. Therefore, other players and stakeholders have to come on board with substantial financing for RE programs. These stakeholders include, at first, the private sector and rural consumers themselves. * The power sector restructuring and reform events and the challenging goals on rural energy and electrification set by the governments in Southeast Asia pose major implications requiring change in the philosophy, perception, conception, design, development, implementation, management and operation, and ownership of the whole RE process. New approaches should be implemented in addressing institutional and financing issues for RES and RE. The implementation of bottom up approaches and the inclusion of all stakeholders in the process of RE and RES financing and management is crucial to sustainability and poverty alleviation. RES institutions and funds at the national levels have proven to be effective instruments in delivering well coordinated and large scale electrification and energy service programs. * Various forms of partnerships for RE development and financing should be explored. All of them have to assign a specific role for civil society institutions. Partnerships roles and relations, as well as financing approaches to the RE and RES should be developed in an open and fair market environment for rural energy services. These markets should be designed based on their specific characteristics without being distorted by subsidies. Smart subsidy programs need to be designed appropriately in order to avoid negatively impacting rural energy markets.

There are many lessons learned in the area of sustainable RES and RE financing. What we believe is important to be noted are summarized as the following:

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Way forward - There are numerous areas that will have to be focused and improved upon, for the future, which include: (i) broadening the range of energy delivery mechanisms and bring new players in the scene, (ii) ensuring that rural energy markets be open to competition and let the private sector and consumers to be the major players in it, (iii) ensuring that all grant, concession, and other subsidized interventions do not distort the emerging markets and maximize the benefits of all types of subsidization, (iv) enhancing coordination among all RE stakeholders, including donors and direct their interventions towards market oriented forms of RES delivery, and (v) having governments play the leading role on facilitating the establishment of the right environment for RES and RE development.

loss" basis). The individual members of the cooperative are the owners of the system and have input on how the PBS is managed through the election of the PBS Board of Directors. The service territories include all the rural areas, including some district headquarters and municipal areas. The Program is now in its 5th and final phase of the original Master Plan that was developed in the late 1970's. Total investments in excess of $1 billion have been made thus far with support being provided from 16 donor countries/agencies, as well as the Bangladesh Government. The Program is currently adding around 1,000 new connections and 25 miles of distribution lines every day. The following statistics indicate the current status of the RE Program as of February 2001. * No. of PBSs Organized 67 * No. of Villages Electrified 32,368 * kms of Energized Lines 126,000 * No. of 33/11 KV Substations 230 * No. of Metered Connections 3,245,000 * Average System Loss16.29% * Bill Collection 95.56% * Average Accounts Receivable2.69 mos. * IPP Generation - Small Power 33 MW * Solar Home Installations (62 KW) 800 * Total REB/PBSs Staff 8,000 Approx.

BEST PRACTICES

FOR

RURAL ELECTRICITY ACCESS

Over the past few years, there has been a growing awareness and an unprecedented global consensus that poverty poses the greatest threat to humanity, and to peace and stability. The 1995 World Summit offered a resounding expression of this with the identification of poverty eradication as a political, economic, social and moral imperative for Social Development. However, in spite of increased awareness and array of poverty alleviation initiatives, it is a sad realization that there is very little to show in terms of real impact on the plight of the poor, which is the epicenter of intervention. Although some of these initiatives managed to stimulate partial growth in some sectors of the economy, the unanticipated dysfunctional impacts were so marked and the overall poverty situation has continued to deteriorate. Rural Electrification Board (REB), a semi-autonomous government agency, was established in 1977 and is responsible for the distribution of electricity to the rural areas through the rural electric societies (electric distribution cooperatives called Palli Bidyut Samities - PBSs that function on a "no-profit and no-

KEYS FACTORS

FOR THE

PROGRAM'S SUCCESS

The Bangladesh RE Program has accomplished a significant amount in terms of its development since 1978. However, despite the progress that has been made, it is clearly recognized that with only about 20% of the people having access to electricity, there is much still to be done. The following are the summary of some of the keys that continue to contribute to the Program's success. * Engineering and construction standards are used for the development of the system.

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* There are approved specifications for equipment and materials used in the Program. * A "system" has been established for developing and monitoring the PBSs, which provide for necessary "checks and balances" to ensure proper performance. * The Cooperative model has promoted local involvement of the rural people who are the beneficiaries of the Program. This is done through member ownership in the PBS and participation in the election of the PBS Board of Directors. * The decisions taken at REB and the PBSs are in accordance with approved Policies and Procedures that have been established for all activities (i.e., engineering, accounting, PBS management, etc.) within the Program. * The system is built on a priority basis and the lines that do not fulfill the revenue requirements are not included for construction. * The PBSs are responsible for the day-to-day operations, but REB monitors their activities (i.e., management, system operations, commercial practices, etc.) to ensure that accepted levels of performance are maintained. * In order to prevent unnecessary staffing at the PBSs and additional operational costs, there are established rates of growth that must be met by a PBS before any additional staff can be added to assist with a particular function. * "System loss" is one of the primary indicators of the PBS performance. A careful watch is kept on system loss and is maintained at reasonable levels. * The consistency of attaining 95% collection rates. * Since the Program's inception, there has always been a very strong emphasis on the training of all personnel involved with the Program. The REB Training Directorate continues to offer programs to all levels of personnel. * The RE Program has had the good fortune to be nonpolitical in nature. The effort to electrify the rural areas has been supported by all parties. Provisions within the PBS Bye-

Laws keep the local political parties from becoming overly involved. To date the Bangladesh RE Program has achieved a significant amount, but still much needs to be done.

GRAMEEN SHAKTI (GS), BANGLADESH


Grameen Shakti, a renewable energy company affiliated to Grameen Bank, was established in 1996. It is a not-for-profit company limited by guarantee and registered with the NGO Affairs Bureau

OBJECTIVES
* To popularize and deliver renewable energy to the rural households. * To market solar, biogas and wind energy on commercial basis, focusing on rural areas, particularly the clientele of Grameen Bank. * To provide services that alleviate poverty and protect environment through applied research and development of renewable energy based technologies. * To undertake a project to progressively manufacture and market efficient and affordable household based photovoltaic systems. * To implement projects to generate electricity from wind in the coastal belts and offshore islands; operate mini and micro hydro-plants in the hilly areas. * To develop and implement special credit, savings and investment programs for generation, storage, and utilization of renewable energy for benefit of the rural people * To test the new and appropriate technologies to provide more cost effective energy services at affordable price to the non-electrified areas * To provide capital, technology and management services to energy enterprises, including individuals, communities, businesses, non-government organizations (NGOs), private

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voluntary organizations (PVOs) which promote, produce and finance enterprises based on renewable energy sources

Option IV * 4 % discount on cash purchase

PROGRAMS
* Solar Program: marketing solar home systems through a network of branch offices with a soft loan program * Wind Program: distributing electricity through microenterprises in cyclone shelters in coastal areas of Bangladesh * Bio-gas Program: promoting bio digester to produce cooking fuel and fertilizer * Bio-mass Gasification Program: producing electricity from bio-mass and marketing the power in rural market * Training Program: creating employment for rural people and a base of necessary skills * Research and Development Program: exploring appropriate technologies, marketing and financing mechanisms, local manufacture of components * RICT Program: Introducing Rural Information & Communication Technology * Solar Powered Computer Education Program: providing computer education at remote places

NETWORKING

AND

AFTER SALES SERVICE

43 branch units, located in difficult-to-access areas, consisting of one engineer and one technician based at each of the branch units that not only markets the program but also provides full onsite service and maintenance of all systems. The units take care of the following activities: 1. Engineers visit the customers each month to collect the installments. During the visit he checks the systems and takes corrective measures if necessary. 2. Each system has a "Maintenance Card" to record problems and actions taken. Technicians regularly attend the maintenance call. 3. Customers are given orientation training on minor maintenance issues. 4. Engineers and technicians train the local technicians who are expected to gradually take over the maintenance of PV systems

STATUS

OF

SOLAR PROGRAM

SOLAR PROGRAM FINANCING POLICY


Option I * 25 % down payment * 75 % in 24 installments. It has 8 % service charge Option II * 15 % down payment * 85 % in 36 installments. It has 12 % service charge Option III * 15 % down payment * 85 % in 36 post dated cheques. It has 10 % service charge

* Grameen Shakti (GS) has marketed and installed 5206 Solar PV systems by July, 2001 with a total capacity of 259.4 kWp. On an average 50 Wp per system. * Typically a solar PV system of 34 kWp costs Taka 17000 ($309). * GS is installing on an average 300 solar systems per month. * GS has trained 300 local technicians (young men and women) on installation, operation, and maintenance of PV systems. These trained technicians are expected to take over after sales service. * GS has trained 2100 customers on minor maintenance of their systems. Gradually all customers will be brought under training program.

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STATUS

WIND PROGRAM

GS has installed 6 wind turbines in coastal areas. Four of them are hybrid systems with diesel backup. One system is of 10 kW and the rest 1.5 kW. The power is being supplied to cyclone shelters of Grameen Bank and some customers.

to be established by that time, it, in consonance with the objectives set out in its charter and policy directives of the Government, took the responsibility of funding and promoting these pilot societies. Inclusive of these five pilot societies, REC has so far sanctioned 41 RE Cooperatives in the country spread over 12 States. As on date 33 are in operation as 8 societies (3 in Rajasthan and one each in the States of Bihar, Gujarat, Jammu & Kashmir, Uttar Pradesh and Orissa) have since been taken over by the respective State Electricity Boards (SEBs). 33 RE Cooperatives Societies presently in operation are located in the States of Madhya Pradesh (17), Andhra Pradesh (9), Tamil Nadu (3), Maharashtra (1), Karnataka (1) and West Bengal (2).

SOLAR POWERED COMPUTER EDUCATION PROGRAM


GS has started four computer education centers. Each center is equipped with 1.125 or 1.5 kWp solar systems consisting of 15 or 20 panels of 75 Wp each. The average cost of total system including battery, charge controller and inverter is around Taka 7.5 Lac ($ 13600).

FUTURE PLAN
* GS has planned to install 10841 solar home systems within next 5 years * 18 small battery-charging stations, powered by solar PV, will be installed within next 2 years * 16 computer-training centers, powered by solar PV, will be installed within next 2 years * 20 multi service centers, powered by solar PV, will be installed within next 2 years
RURAL ELECTRIC COOPERATIVES IN INDIA

OBJECTIVES

OF

RURAL ELECTRIC COOPERATIVES

The broad objectives of the rural electric cooperatives are to:1. Extend the electrical network in their areas quickly and economically; 2. Provide proper service to the consumers taking into account local conditions; 3. Support the wider program of development of the area for increasing agricultural production and stimulating the growth of rural industries, and 4. To ensure local participation in the management of rural distribution of electricity.

In India, steps for formation of Rural Electric Cooperatives for distribution of Power in rural areas, for the first time, were taken only in the later half of the Sixties when the Government of India sponsored an investigation by an expert team from the National Rural Electric Cooperatives Association (NRECA), USA for identifying a few areas with adequate potential for establishment of Rural Electric Cooperatives. As a result, 5 areas were identified, one each in the States of Andhra Pradesh (Sircilla), Gujarat (Kodinar), Karnataka (Hukeri), Maharashtra (Rahuri & Shrirampur) and Uttar Pradesh (Lucknow) and five pilot rural electric cooperatives were established during 1969. Since, by coincidence, Rural Electrification Corporation (REC) had also come

LOAN SANCTION / DISBURSEMENT


Up to 31.3.2000 REC has sanctioned a total financial assistance of Rs.125.91 crore as project loan to Cooperatives and Rs. 15.88 crore as loan to State Govts. (SDR Loan) for participation in the share capital of respective Cooperatives. Against the amount sanctioned as above, Rs.118.82 crore and Rs.15.23 crore respectively have been disbursed up to March 2000.

EXISTING EXPERIENCE
Only two of the rural electric cooperatives, viz., "The Cooperative Electric Supply Society Ltd., Sircilla (Andhra Pradesh)

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and Singur Haripal Rural Electric Co-operative Society Ltd. (West Bengal) are well run and have positive margins; revenues exceed expenses including debt servicing. Both are registered under Cooperative Societies Acts of their respective States. Sircilla also holds an electricity supply license from Andhra Pradesh Electricity Regulatory Commission (APREC). However, other rural electric cooperatives are working under severe financial, institutional and organizational constraints and appear to be struggling for survival. Reasons for this state of affairs vary from society to society. It is observed that these arise primarily out of certain internal and environmental drawbacks that these societies are presently saddled with. These can be broadly classified as: * Lack of freedom to fix tariff on commercial basis for different types of consumers in their area of operation. * Unfavorable load mix that is often forced on these societies on account of SEBs proximity and influence with the State Governments. * The societies being creatures of the Cooperative Societies Act, their management is highly susceptible to fluctuations in fortunes of political parties operating in the area affecting thereby objectivity and professionalism in their own decision-making. * Regulatory powers given to Govts. under the Act for checking irresponsibility and delinquency in functioning of these bodies are at times misused on account of State Govts. own political priorities and compulsions. * Subjective and politically colored functioning of their managements permeates downwards resulting in inefficiency and corruption creeping in at the operational levels As a result what one often sees is narrow political compulsions giving rise to subjectivity and irresponsibility within these organizations, very often matched only by similar subjectivity and irresponsibility by authorities overseeing and regulating functioning of these bodies.

SOLAR HOME SYSTEMS PROGRAM UNDER ENERGY SERVICES DELIVERY (ESD) PROJECT, SRI LANKA
The Energy Services Delivery (ESD) Project, launched in March, 1977, has three components, viz., i) Credit Program, ii) Pilot wind farm, and iii) Capacity building to support the Ceylon Electricity Board's Pre-Electrification Unit and its Demand Side Management Unit Credit Program. ESD project is funded by IDA credit of US $ 24.2 million and GEF grant US $ 5.9 million amounting to a total of US $ 30.1 million. The Administrative Unit is set up with DFCC Bank and funds are disbursed by following 'Participating Credit Institutions' (PCIs) DFCC Bank National Development Bank Hatton National Bank Sampath Bank Commercial Bank Sarvodaya Economic Enterprises Development Services (SEEDS)

SHSS -

FEATURES

i . Typically 30 Wp, 45 Wp, 50 Wp ii. 30th June 2000 - 968 SHS cumulative iii. 30th June 2001 - 4,236 SHS cumulative iv. To date around 6,400 cumulative with an additional 1000 being processed by authorities v. Pipeline for December 2002 - Additional 10,000 SHSs vi. GEF Grant - Co-financing of average $ 100 per SHS vii. Financing is mainly through SEEDS on commercial rates. viii. 97% recovery rate. Four dealers in the industry who provide sales and maintenance services are given below: Shell Renewables Lanka Ltd. Selco Solar Power Lanka Ltd.

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Access Int. (Pvt.) Ltd. Alpha Thermal Systems Ltd. Beneficiaries Viewpoints: "Night Shift is Easier with Lights.." Mr. S.P. Wimalasena (Bakery Owner - Indigolla Polpithigama, Kurunegala District) Supplier: Alpha Thermal Six bulbs, TV (B/W), radio Financed by: Micro finance institution (MFI) credit scheme Cost: Rs 36000 Down payment: Rs. 9000 Monthly installment: Rs. 545 for six years "We are delighted" Mrs. A.M. Muthumenika (Widow Polpithigama, Kurunegala District) Supplier: Alpha Thermal Six bulbs, TV (B/W), radio Financed by: Micro finance institution (MFI) credit scheme Cost: Rs 46000 Down payment: Rs. 8300 Monthly installment: Rs. 775 for five years "I was elated" Mr. D.L.I. Liyange (Businessman -Dambaara, Madahapola, Kurunegala District) Supplier: Shell Renewables Four bulbs, TV (B/W), radio Financed by: Micro finance institution (MFI) credit scheme Cost: Rs 36000 He took one more SHS for his shop. Now he opens his shop from 7.30 a.m. to 10.30 p.m. Earlier he used to close his shop by 6.30 p.m. -Dekanduwala

RURAL ENERGY DEVELOPMENT PROGRAM (REDP) IN NEPAL

Established with the joint initiative of His Majesty's Government of Nepal (HMG/N) and the United Nations Development Program (UNDP) in 1996 REDP is based on a holistic energy sector development policy and encompasses: * Energy development * Social capital building * Environment management * Income generation Major Institutions 1. At the central level * Rural Energy Development Board (REDB) * Management Committee (MC) These two have created a consistent mechanism for coordinating activities of REDP and government line agencies 2. Networking * Micro Hydro Promoters' Group (MHPG) * Rural Energy Consultative Forum (RECF) These two address the problem of repetition and duplication of works prevalent in the energy sector. 3. At the district level * District Energy Network (DENET) A forum of DDC Chairpersons of REDP districts for exchanging ideas and experiences among the districts as well as with other districts interested in rural energy development * District Development Committee: Rural Energy Development Program (DDC:REDP) Act as the authoritative district office on energy * District Rural Energy Management Committee (DREMC) Discuss and seek approval if needed for the regular activities of DDC: REDPs. The committee comprises of the DDC Chairman,

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the Local Development Officer (LDO) and the District Energy Advisor (DEA) * District Energy Committee (DEC) The DEC is represented by all energy related institutions working in the district. It serves as the planning committee for preparing the district energy plans and programs. Another important task of DEC is to coordinate all energy related activities to ensure optimal utilization of available resources and avoid duplication in the district * Support Organizations (SOs) Developed as local institutions specialized in the implementation of community mobilization in the communities. Each and every SO personnel is trained on different aspects of the REDP community mobilization package 4. At the Grassroots Level * Community Organizations (COs) A platform to launch, collectively, the development activities that directly concern the rural community The following 15 Program Districts (out of 75) have come under REDP by 2000: Kavre, Tanahun, Dadeldhura, Baglung, Achham Parvat, Myagdi, Baitadi, Dolakha, Sindhupalchowk, Tehrathum, Okhaldhunga, Dailekh, Bajura and Pyuthan

* Plantation : 370816 nos. * Male Savings : 952775 Rs. * Female Savings : 948817 Rs. * Male Investment : 2769697 Rs. * Female Investment : 804667 Rs

IMPACT

OF

RURAL ENERGY DEVELOPMENT PROGRAM

IN

NEPAL

REDP has emerged as one of the outstanding programs in the rural energy sector. The program has demonstrated that rural energy is appropriate developmental input for the enhancement of the rural economy of Nepal. Impacts of REDP on economic, social and environmental sectors of the communities are vividly noticeable at local level in the areas of enhancement of livelihood and preservation of natural resources. REDP program has received the following international recognition: * REDP has been recognized as "Best Practice" both nationally and internationally in 2000. * REDP was featured as " Projects around the World" at Expo 2000, in Hanover, Germany. Over 1000 projects around the world had participated in the competition * REDP received the second prize under the Public Investment category of the Energy Globe Award 2000 at Linz, Austria. The Energy Globe Award is presented for sustainable energy programs throughout the world. More than 900 projects and initiatives from 72 countries had participated for this prestigious award. * REDP is registered as one of the "best practice" programs by Sub Regional Resource Facility (SURF) of the UNDP based at Islamabad, Pakistan.

A TYPICAL PROGRAM DISTRICT


Baglung village under Baglung Program District * Micro Hydro : 4 nos. * Power Output : 83 kW * Beneficiary Households : 911 nos. * Solar : 100 nos. * Bio gas : 105 nos. * ICS (Improved cook stove) : 872 nos. * Male COs (community organizations) : 167 nos. * Female COs : 178 nos.

CONSUMER PARTICIPATION AND SOCIAL ACCEPTANCE ELECTRIFICATION STRATEGIES

OF

RURAL

An evaluation found that the rural development efforts have failed to deliver on their promises. In fact more than half of rural development projects are outright failures. What has gone wrong?

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In practice, conventional projects usually target medium to largescale "progressive" producers, supporting them with technology, credit and extension advice in the hope that improvements will gradually extend to more "backward" strata of rural society. In many cases, however, the channeling of development assistance to the better-off has led to concentration of land and capital, marginalization of small farmers and alarming growth in the number of landless laborers. The basic fault in the conventional approach is that the rural poor are rarely consulted in development planning and usually have no active role in development activities. This is because the vast majority of the poor have no organizational structure to represent their interests. Isolated, undereducated and often dependent on rural elites, they lack the means to win greater access to resources and markets, and to prevent the imposition of unworkable programs or technologies. The lesson is clear: unless the rural poor are given the means to participate fully in development, they will continue to be excluded from its benefits. This realization is provoking new interest in an alternative rural development strategy, that of people's participation through organizations controlled and financed by the poor. People's participation in rural development was formulated in the mid-1970s, amid growing awareness that development efforts were having little impact on poverty. At the World Conference on Agrarian Reform and Rural Development (WCARRD), held in Rome in 1979, the international community identified the reason for this failure - the lack of active participation of the poor in programs designed, supposedly, to assist them. WCARRD declared that participation by rural people in the institutions that govern their lives is a basic human right. If rural development was to realize its potential, the Conference said, disadvantaged rural people had to be organized and actively involved in designing policies and programs and in controlling social and economic institutions. WCARRD saw a close link between participation and voluntary, autonomous and democratic organizations representing the poor. It called on development

agencies to work in close cooperation with organizations of intended beneficiaries, and proposed that assistance be channeled through small farmer and peasant groups. In addition, the rural programs including rural electrification have been and still are focused to cater to the basic needs of the rural population. Such efforts have never been sustainable and in fact most of the times the impacts of the programs have vanished for want of a mechanism for its sustainability. This is because the planners never believed that rural consumer could in any way contribute to the success of rural programs. The rural consumers are always considered ill-equipped. However, of late, there has been an effort to decentralize the process of rural energy access and integrate it with other rural development programs for poverty alleviation. In other words, the efforts have now focused to provide for "basic needs plus" to rural population. The "basic needs plus" approach has been based on the interaction with local consumers and local NGOs. The planners realized that the sustainability could be achieved only when the rural consumers can at least meet the cost of operation, maintenance and replacement of equipment. This is possible only when the rural programs aim at poverty alleviation. The rural population must find ways and means for gainful employment. The local resources and skills must be utilized for income generation. This can be achieved successfully by involving local communities in planning and implementing the rural programs. The examples from many countries world over clearly shows that rural electrification programs can benefit greatly from the involvement of local communities - or suffer because of its absence. These examples show that the rural energy programs have always been successful where the rural population was also involved in income generation activities. The increased income helped the rural consumers in being able to afford the cost of energy service.
IMPORTANCE OF COST RECOVERY

Cost recovery is probably the single most important factor determining the long-term effectiveness of rural electrification programs albeit any other rural service such as water. When cost

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recovery is pursued, most of the other program elements fall easily into place. All the successful programs place a strong emphasis on covering their costs, though there is a wide variation in how it can be approached. In contrast, energy supply organizations depending on operational subsidies are critically vulnerable to any downturn in their availability. When the subsidy is reduced, as inevitably happens, the virtue of increased sales turns into the vice of greater losses, creating a significant disincentive to extend electricity to new customers, especially poor rural people. The contradictory signals to management make proper running of the organization impossible. For example, where the rural energy program depends on the availability of grant funds from donors, progress has been slow and intermittent. The state electricity boards flatly state that it has no interest in rural electrification, because electricity prices, by government order, are too low to cover even operating costs. Capital investment subsidies raise different questions. In most successful programs, a substantial proportion of the capital has been obtained at concessionary rates or in the form of grants; at commercial rates of return a substantial proportion of the rural areas would never be electrified. Provided it is used wisely, and operating costs are covered, having access to such concessionary capital need have no illeffects on the implementing agency or the rural electrification. program. But concessionary capital should never be provided to organizations, which are not covering their operating and maintenance costs; it will simply worsen their financial position.
CHARGING THE RIGHT PRICE FOR ELECTRICITY

television, refrigeration and motive power. In the absence of a grid supply, these services are obtained by spending money on kerosene, LPG, dry-cell batteries, car battery recharging and small power units, all of which are highly expensive per unit of electricity supplied. Recent surveys in regions without electricity in Uganda and Laos indicate that people spend approximately 5 dollars per month on these energy sources. Private suppliers often find a ready market for electricity at more than one US dollar per kilowatt hour. Rural electrification tariffs set at realistic levels do not prevent people making significant savings in their energy costs, as well as obtaining a vastly improved service. Charging the right price allows the electricity companies to provide an electricity supply in an effective, reliable, and sustainable manner to an increasing number of satisfied consumers. In Costa Rica, the price of electricity is set through a regulatory process, but it is high enough for the cooperatives to make a modest profit. In 1996, the price for residential electricity starts with a fixed charge of USD 2.59 for the first 30 kilowatt hours of service, and increases steadily to over 25 cents a kilowatt hour for people consuming over 150 kilowatt hours of electricity per month. This also focuses the attention of the electricity company on consumer service and the need to provide value for the price it charges.
LOWERING THE BARRIERS TO OBTAINING A SUPPLY

The initial connection charges demanded by the utility are often a far greater barrier to rural families than the monthly electricity bill. Reducing these charges, or spreading them over a several years, even if it means charging more per unit of electricity, allows larger numbers of low-income rural families to obtain the supply. In Bolivia, for example, a small local grid, in spite of charging 25 to 30 cents per kilowatt hour, immediately doubled its number of consumers when it offered them the option of paying for the connection cost over 5 years. By contrast, in Malawi where the electricity company charges the full 30- year cost of line extension to new customers, the rural electrification rate is just 2 percent.

There is a widespread belief that electricity tariffs need to be extremely low, often well below their true supply costs, if rural electrification is to benefit rural people. The facts do not support this. Rural electrification only makes sense in areas where there is already a demand for electricity-using services such as lighting,

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BENEFITS OF COMMUNITY INVOLVEMENT

Traditional thinking in many utilities is often oblivious to the importance of local community involvement. Rural electrification is seen simply as a technical matter of stringing lines to grateful consumers. The experience world over clearly shows that rural electrification programs can benefit greatly from the involvement of local communities - or suffer because of its absence. Setting up a rural electrification committee to represent the local community can do, much to smoothen the implementation of the program. The committee can play a crucial role in helping assess the level of demand, educating consumers in advance, encouraging them to sign up for a supply, and promoting the wider use of electricity. In Bangladesh consumer meetings are held before the arrival of the electricity supply, helping to avoid costly and timeconsuming disputes over rights of way and construction damage. Community contributions, in cash or kind, were often the decisive factor in bringing areas within the scope of the rural electrification program in Thailand. The efforts to recruit customers made by parish rural electrification committees in Ireland ensured that the utility received an adequate return on its investment and contributed to the rapid implementation of the country's rural electrification program.
PARTICIPATORY APPROACH

energy and resource management and will emphasize continuous interaction with local farmers and their full-fledged participation from the very beginning to the end of resource management process. The participatory approach will help to: * increase farmers skills and knowledge of rural environmental condition and energy-environment linkage; * enhance their capabilities in organizing and decision making in resource management and rural energy development programs; * make farmers more aware of their participatory role in rural energy access and rural development; * enhance participatory approach for designing, formulating and implementing plans and programs related to rural energy and rural development promotion Participatory approach in natural resource management for rural energy program demands involvement of the rural poor in planning and undertaking additional income generating activities. The participatory approach may help in the following for better and sustainable benefits to rural poor. * assessing the condition of natural resource and existing energy use pattern * identifying problems, constraints and opportunities of income generating activities * role of suitable energy system in increasing the opportunity of income generation for rural poor * importance of reliable and quality electricity supply to rural areas in promoting rural industries and thereby creating opportunities for rural entrepreneurships and rural employments for income generation * identifying and making provisions of critical inputs, e.g., training, finance, raw material availability at reasonable prices required for taking up activities to enhance the income generation * helping in setting up system so that the rural poor can get fair prices for their produce

People's participation requires organizing community, empowering them for contributing collective actions to achieve a common goal. Therefore, participation is the combination of following three elements. Organization + Empowerment + Contribution = People's Contribution Participatory approach in natural resource management and energy development empower the local people in utilizing their knowledge, skills and experience. The program will facilitate people to identify and prioritize their problems and needs on

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The local NGOs play a vital role in educating and persuading the rural poor to effectively participate in the rural programs. NGOs would carry out community mobilization in order to mobilize local resources, skills and experience for implementing energy development activities, natural resource conservation and overall environmental management. They would assist the rural consumer to actively contribute to develop and implement activities in areas like community forest management, environment, health, income generation, infrastructure and development of institutions at the grassroots level for poverty alleviation. NGOs will provide training and educate people through sensitization on various issues by using posters, pictures, and audio-visual tools. The followings are the objective of mass sensitization: * recognizing the importance of energy to household, community development, and income generation * identifying the need for energy on the top of the priority list by the local people * emergence of rural poor groups to have a say in rural development planning and implementation * emergence of various functional groups in relation to various economic and social activities
CONCLUSION

* Policy makers of national and NGO development agencies should be encouraged to participate in dialogues on the need for the adoption of policies favorable to participatory development. These policies include appropriate legislation to promote rural people's organizations, including freedom of association as well as reorientation of delivery systems towards the needs of the rural poor. Other policies should promote full integration of women in development, decentralization of decision-making, planning and resource allocation, and expansion of nonagricultural employment. * Influencing development planners and administrators. Many of the development agencies involved in implementation of large-scale programs and projects may have little or no experience in participatory development. Development planners and implementation agencies can be influenced through meetings and field workshops, periodic informal exchanges of views, briefings on participatory projects, and incorporation of participatory issues in project identification, preparation, appraisal and evaluation missions.

INFLUENCING

LOCAL LEADERS

Finally, in planning and implementing rural development programs, the participation of rural poor is most critical in sustaining such programs. Incorporating participatory elements in large scale rural development programs, rural developments projects may not pursued as ends in themselves, but rather to demonstrate to donor, government and NGO decision makers the benefits and cost-effectiveness of using group-based participatory approaches. These decision makers are best convinced by concrete results achieved in the field. Therefore, results must be communicated to them effectively. However, other strategies may also be needed. They include:

The support of village leaders is often crucial to a participatory project. This support should be obtained through meetings and project initiation workshops aimed at convincing local traditional and administrative leaders that the project is in their own shortand long-term interest. Influencing donors and international development agencies. The support of donors, development agencies and international financial institutions is essential for widespread adoption of the participatory approach. Efforts to obtain this support should aim, first, at convincing those donors and agencies that support participatory projects to continue their assistance. Other donors, development banks and agencies should be influenced through policy dialogues and field workshops to support the participatory approach. It will be crucial to demonstrate the achievements of participatory projects, through effective monitoring and evaluation systems and case studies on their benefits and cost-effectiveness.

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THE ROLE OF SUBSIDY SERVICE INITIATIVES SUBSIDY ISSUES


FOR

PRIVATE SECTOR LED RURAL ENERGY

* One-time grant for setting up the utility * Electricity generation tax; For consumers, RE subsidies are usually limited to three main forms: * Ongoing subsidy to RE consumers * Subsidies for the capital component of either a grid connection or for the purchase of distributed generation equipment; and * Low interest and/or moratorium on interest for some period by domestic development banks on loans to rural electricity providers under a government scheme for rural electric service companies. Sources of funds for RE will vary a great deal by country and even program, but normally include one or more of the following: * Subsidy by multilateral and bilateral donors in the form of grant and low interest loans; * Suppliers credits at low or no interest for equipment and engineering; * Taxes on generation or transmission to provide for RE fund.
EVALUATING SUBSIDIES

RURAL ELECTRIFICATION

This paper follows closely the presentation on subsidies made by CORE International at the Colombo, Sri Lanka Workshop on October 29, 2003. The key issues explored in this paper are the following ones: Establishing an effective and transparent system of Rural Electrification (RE) subsidies Creating performance indicators to monitor programs Regulating and adjusting subsidies

SUBSIDIES

FOR

RE

ARE

COMMONPLACE THROUGHOUT

THE

WORLD

Subsidies are believed to be needed for RE systems for the following reasons: * Costs of providing electric service to rural areas is high because of low density * Low purchasing power of rural population, makes the provision of electric service to rural areas generally not commercially viable * Lack of industry causes demand to sparse and concentrated around peak hours * Collections from rural consumers may be difficult Subsidies can take many forms, both rural electricity utilities (REUs) and consumers may receive subventions. The following are a few of the most common forms of subsidy that most governments provide to promote and accelerate RE: For the REU, subsidies take a variety of forms: * Corporate tax holiday for a pre-defined period; * Other tax benefits such as sales tax relief on imported equipment used for providing electric service; * One-time grant based on the number of consumers served * One-time grant based on equipment purchased

Eventually, a government that wishes to both provide RE services and remain financially solvent will need to assess its RE subsidy programs. There are three essential criteria for the financial and technical efficacy and sustainability of such programs: * Is the subsidy affordable? * Is the subsidy sustainable - i.e., can you keep meeting the subsidy requirements if demand rises over time? * What type of behavior does the subsidy promote constructive or destructive? In assessing whether the subsidy is affordable, government and regulators usually need to look at the following issues: * Subsidy as a proportion of value of REU sales

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* Sources of funds for subsidy Affordable in the context of a RE subsidy usually means at least two criteria are met: * Subsidy is strictly less than annual debt service on sunk costs; and * There are no operating cost subsidies Important here are the trends - are demands for RE subsidies rising or falling as a proportion of total costs? Are sources for subsidies broadening or becoming more narrow? Is the Ministry of Finance concerned about RE subsidies? How about the International Monetary Fund (IMF)? Is there a path for consumers to gradually convert to a commercial tariff basis? Closely related to affordability is sustainability. A system of RE subsidies can be sustainable only if certain traits characterize such subsidies. These traits include the following ones: * Can the subsidy demand be met now and in the future? * Are the funding sources, known and secure? * Does the balance of internal and external funding for RE subsidies move away from external/donor sources over time? * If operating costs are now subsidized, what is the plan for eliminating this over the next 5 years? Unfortunately, most current subsidy programs have trouble with one or more of these questions. In particular, the operating cost subsidies and the sources of funds, whether they are domestic RE levies or external financing, are usually not sufficient to provide for a large scale program over a period of many years. Governments are loath to tax electricity heavily, for fear that a program of sufficient size to truly benefit RE consumers will raise electricity prices enough to make the economy uncompetitive. This fear is well-founded, and thus, even domestic sources for RE subsidies cannot be considered reliable over the long term. Operating cost subsidies are both pernicious in their effects on utility performance and on the customers that are supposed

to benefit from the subsidized electricity. Where electricity tariffs do not cover the cost of fuel or other variable elements, the REU will have a strong incentive to minimize its supply to such customers. As demand by such customers grows, the financial position of the REU will tend to worsen. Eventually, either the subsidies will bankrupt the REU, service will be cut back or dramatic tariff increases will loom. Foreign donor sources are even more problematic. Where funds are tied to commodity purchases, the cost of the commodities, their suitability, (or not), and their economic lifetimes may be insufficient to outweigh increases in operating costs, additional spares and maintenance and fuel savings, if any. Grant funding is at best an episodic measure, incapable of providing long-term sustainable funding for the RE sector. It is no wonder that eventually governments look to the reduction, withdrawal or modification of RE subsidies as the only viable long-term alternative Finally, many RE subsidy schemes are initiated without significant thought to the incentive structure that they promote. If subsidies are to be eliminated or reduced, then performance by all of the parties must follow a path of increased productivity, efficiency and financial sustainability. Designing and enforcing such behaviors will probably fall to the regulator. This subject is addressed in greater detail toward the end of this paper. The next section shows how better program design and performance monitoring allow a greater impact form a given subsidy budget.
METHODS OF GRADUAL WITHDRAWAL OF SUBSIDY

The problem with government subsidies is that no one usually plans an exit strategy. Once the subsidy is put in place, it typically remains there and the governments find it, politically, very difficult to remove the subsidies. No matter how the subsidy is designed and targeted it does have an impact on the performance of the market. Governments, therefore, find themselves in a dilemma how to design subsidies without affecting the market. The World

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Bank has done considerable work in this area and offers approaches for subsidy design without distorting the market. The grid or offgrid electricity providers cannot remain commercially viable if they provide subsidized power and the electric service would deteriorate over a period. Some of the findings of the Bank's work should be considered by SARI members in designing their RE subsidies. Indeed, many of these measures have already been adopted in one or more of the SARI/E participants. The following offer a few options for consideration: * Initiate other rural development programs for poverty alleviation of rural population * Train and employ rural populations in the activities of rural electricity providers * Create an environment for rural industries that can employ rural populations and encourage rural cottage industries * Improve educational and health facilities in rural areas * Involve local NGOs in all aspects and activities for poverty alleviation programs Involve local rural populations in decision making in developing and implementing rural development programs * Develop a targeted Rural Consumer Education Strategy to emphasize that (i) electricity cannot be provided to them on subsidized rates forever, (ii) the subsidy would be withdrawn over a period in a gradual manner, and (iii) they have to increase their economic condition to afford electricity after the subsidy is completely withdrawn * Initiate a pricing policy that allows the regulator to set the tariff at a level that protects consumer interests while simultaneously protecting the utility/provider's financial viability
REVENUE COLLECTIONS

commercial losses, any subsidy program, no matter how well thought out, will fail. The governments can initiate a number of rules and actions to affect adequate levels of revenue collection from the rural consumer. Some of the mechanisms could include the following: * Develop and implement a mechanism for consumer participation, disclosure and procedures for addressing consumer complaints regarding metering and billing * Provide a meter reading and billing frequency that suits the consumer and the electricity provider (preferably monthly or bi-monthly) * Change the working route of meter reading and bill serving regularly * Tie the sale of technology such as solar home systems (SHSs) to a maintenance contract, which stipulates inspection of the system at a regular interval. The maintenance crew may tie up the collection of the due payments during the nspection visit * Tie loan collections to the income cycle of the communities (e.g. Bi-monthly, quarterly, or six-monthly)
TRANSPARENCY, SUBSIDIES AND REGULATION - ELEMENTS OF IMPROVED PERFORMANCE

There are many elements involved in improving the performance of REUs. As regards to the role of subsidies, the key elements include the following ones: * The subsidy is applied in a well-understood and publicly acceptable manner, and * The desired changes in both REU and consumer performance can be quantified, measured over time and included in tariff and subsidy decisions. In order for these two elements to be effective, the design and implementation of subsidies should follow the general path listed below: * The amount is known in advance and is budgeted * The mechanism for obtaining the funds is understood

One factor not mentioned in the overall issue of subsidies is revenue collection. Without an ongoing commitment to reducing

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* A phase-out plan is included in the program design * Regulators understand the subsidy and its application A key element is transparency. Both consumers and the REUs should understand both the financial and performance issues inherent in a particular subsidy program. In particular, there should be clearly defined financial and technical indicators, along with timetables for implementation or achievement of certain targets, to trigger further subsidy and tariff program elements. Some examples include the following ones: * Cost targets * Service extension * Reliability and safety * Investment by new participants Approvals for new subsidy schemes should be keyed to meeting targets. Such a regulatory approach, now known as "Performance Based Regulation" has been implemented around the world. In this region, PBR has even been adopted as a part of one country's new transmission tariff approach. That is, the tariff moves the transmission system from one with numerous implicit and explicit subsidies to one that is characterized as follows: * Unbundled costs * Clear performance targets * Timetables for achieving these targets * Incentives for good performance, penalties for missing targets or dates * System of shared savings for system owners, users of system and customers. Each stage of the tariff is explicitly described, along with the regulatory, technical and financial elements of meeting the approved targets. This system, which will eliminate subsidies in the transmission system within 3 years, exhibits transparency, fairness and rule of law. Similar approaches in RE will bring great benefits to the countries of the region. Energy is a vital component in rural industries such as the Agro processing industries and the brick and tile industries. In rural areas, population pressure and low agricultural productivity are among factors forcing people into marginal and ecologically fragile lands. Forests are being logged to meet the energy demand of a region in addition to clearing forests for agricultural purposes to meet the demand of food. Soil erosion, siltation and floods are a consequence of the destruction of forests. The low productivity in agricultural lands and the lack of alternative employment opportunities in rural areas has resulted in large scale migration to urban areas in search of jobs. In this context, industries in rural areas would help in arresting rural migration to urban areas and help to improve the economic status of local people in the region. For the sustainable development of a region, industrialisation is to be supplemented with integrated energy planning approaches. It is therefore necessary to look for alternative sources of energy which are renewable in nature and which could be harnessed in a decentralised way. The energy efficiencies of end use devices could be improved and numerous opportunities exist for the development of industrial process with greater efficiencies. Energy auditing carried out in sample rural industries has revealed a wide disparity in energy consumption to produce the same quantity of similar products. About 60% of the sample units have Percentage Production Capacity Utilisation (PPCU) less than 50% and higher Specific Energy Consumption (SEC) and Energy

9
ENERGY UTILISATION IN RURAL INDUSTRIES IN KARNATAKA

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Intensity (EI). The wide variations in EI in the Cashew Industries from 4.49 kg of fuelwood per kg of kernel to 8.66 kg of fuelwood per kg of kernel reveals the scope for energy conservation to be in the order of 30 to 48%. It has been noticed that optimal utilisation of installed capacity (better PPCU) would help in energy conservation. The energy analyses carried out reveals that the relationship between SEC and Production (Pr) fits a power law with an exponent less than one. This indicates an improvement of SEC with increase in production which, in turn, implies the optimal utilisation of installed production capacity. An overview of the Small Scale Industries in Karnataka State, India, is also given in this paper from the point of their spatial distribution, investment costs, industrial growth rate and employment generation. Even though these aspects are not directly connected to the energy consumption patterns, they throw light on developmental aspects and hence indirectly influence energy and the environment.
INTRODUCTION

only if our annual consumption equals or is less than the annual production. To cater for the needs of a growing population for cooking and rural industries it is necessary to: Improve efficiency of end use devices, e.g. improve stoves for cooking, improved boilers, driers and other machines which enable sustainable fuelwood production. Thus the energy has been a dynamic force in accelerating the growth and development of human society. The demand for energy is not an end in itself but for the services such as heating, lighting, mechanical power and other services that satisfy human needs. This necessitates the need for proper energy management taking into consideration the satisfaction of basic human needs through economically feasible, energy efficient, environmentally sound and viable options. These include: Promoting energy efficient improvements. Beginning a transition to renewable energy sources. Optimising energy source - end use matching. This highlights the need for integrated regional planning, based on a detailed look at how energy is used rather than the traditional preoccupation with energy supply and aggregate demand. Maximum thermodynamic efficiency and maximum cost effectiveness in energy use are the two principles that govern energy conservation policies. The efficiency of energy use depends on thermodynamics, and the cost of energy use responds to the economics of resource allocation. In any region where the energy supply structure is vulnerable, the conservation of energy is a very effective way to alleviate energy constraints.
KARNATAKA'S ENERGY SCENE

Our primary needs for energy - heat and light to sustain life on earth - are obtained from the sun. With increasing dependence on acquired forms of energy, energy has become an important need in out life. Generation, transportation/transmission, distribution and usage in end use devices are the main components in the energy system. Energy is obtained from resources, which can be broadly categorised as renewable and nonrenewable or depletable. These resources are converted in to a form desired by the end user. The conversion of energy from one form to another form results in a loss of some useful energy (law of entropy). In a complex system with a large number of conversions, the losses are considerable. Renewable sources are available all the time, while the depletable resources such as coal, oil, or uranium, were stored over a period of millions of years. Renewable energy can be obtained from the sun either directly (providing light and drying of grain and other materials, heating of earth), or indirectly (wind, hydro, biomass and firewood). Firewood is a renewable resource,

Karnataka does not have any coal deposits. It gets its coal from external sources. Electrical energy for Karnataka was purely hydro, but with the commissioning of the Raichur thermal power station, it also gets electrical energy from coal. The other major source of commercial energy - oil - is also not available in Karnataka.

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Hence the main source of commercial energy for the state comes from hydroelectric plants. These plants have large reservoirs to store rain water throughout the year, the dams being built in prime forest areas thereby submerging sizable areas of forest. It is shown by a study that we can obtain a comparable quantity of energy from forest biomass instead of water from the submerged areas. An ideal solution would be to go in for a set of peaking power plants with minimum storage which utilises rain water during the monsoon period and supplemented by firewood-based thermal power plants. It can be seen that Karnataka State depends both on commercial and non-commercial forms of energy. Non-commercial energy provided over half the supply from sources such as firewood, agricultural residues, charcoal and cow dung. Commercial energy provided the rest, mainly through electricity, oil and coal. Table 1 lists the energy sources meeting the demand for energy during the year 1990-91. The largest single source is firewood. Electricity represented over half the commercial energy demand for 199091. Agro wastes are also used for energy purposes. The total share of industries in energy demand is around 44%. The state generated 12,430 million units of electrical energy in 1990-91. Irrigation pumpsets used 36.26% of total electrical energy. This was followed by heavier industries with a share of 34.34%, domestic lighting 15.35%, light industries 9.90%, commercial lighting 2.23%, public lighting 1.24% and others (0.68%). The present study mainly concentrates on the energy use pattern study in rural industries in Karnataka State, India, by collecting secondary data from various government agencies and conducting a primary survey of a sample at Kumta taluk in Uttara Kannada District.
INDUSTRIES IN KARNATAKA

about 6.4% as against 7.9% in the country as reflected in the index of industrial production. Small Scale Industries: an Overview. The basic framework for the industrial policy of the government was first spelled out in the industrial policy resolution of 1956, with an emphasis on the development of small scale industries. Small, medium and large industries have been assigned a mutually complementary role with a view to facilitate an integrated and harmonious growth of the industries sector as whole and with the objective of economic growth with social justice. The policy measures, announced in 1991 by the government provided further impetus to the growth of the small sector. The primary objective of the 1991 policy measure was to impart more vitality and growth impetus to the sector to enable it to contribute fully to the economy, particularly in terms of growth of output and employment. As per the recent policy (1991), in small scale industries undertaking the investment in fixed assets in plant and machinery whether held on ownership terms, or on lease or by hire purchase does not exceed Rupees (Rs) 60 lakhs(One lakh = one hundred thousand or 105). The spectrum of industries ranges from unorganised traditional sectors and modern small scale sectors to large and medium scale industries. The traditional sector and small scale sector provides maximum employment (413.39 lakhs in 1989-90) and constitutes an important component of the economy. In terms of value added it is estimated to contribute 50% of the value added in the manufacturing sector. The uniform distribution and growth in this sector besides resulting in a preponderance of self employment and under dispersal of industrial and economic activities, ensures maximum utilization of both human and material resources. The economics of production is important in small scale industries. Energy consumption plays a key and dominant role in the production economics of these industries. The small scale industries sector plays an important role in the industrial economy of the state. It contributes substantially to the industrial production and in generating employment. These industries are dispersed all over the state, however there is disparity in regional distribution.

Industry is playing a pivotal role in the development of Karnataka State. The secondary sector in the State accounts for nearly a quarter of the State income (in real terms) of the total output in the economy. The average annual growth rate of industrial production over the period from 1981-82 to 1990-91 was

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The increase in the number of industries in the decade is given in Table 5a. Belgaum has annual average growth of 18.61 % while for Bangalore it is 9.31 %. The percent number of units varies from a low value of 1.15% (for Kolar District) to a high value of 21.97% (for Bangalore district). Investment per job computed for each district reveals a variation from Rs.9539.20 per person for Dharwad to Rs.22652.09 per person for Dakshina Kannada, indicating that some industries are capital intensive. The share of manpower in SSI to the total manpower in the industries sector shows a variation of 16.67% for Chitradurga and 18.27% for Dakshina Kannada to 88.34% for Dharwad, 93.74% for Chikmagalur and 97.08% for Raichur. The lower values for Chitradurga and Dakshina Kannada are mainly due to the presence of large number of household industries in these districts. Most of these units are located in rural areas. Dispersal of small scale units. The second census of registered small scale units conducted by the Directorate of Industries and Commerce of 40,525 industries reveals that 38.14% of total Industries are located in rural areas, while 49.97% in urban area and 11.86% units in metropolitan city of Bangalore. A look at the employment generated in these industries reveals that 40,525 units have provided employment to 244,039 persons. The food products sector (National Industry Code: NIC 20 &21) leads with 19.4% of total employment. This is followed by machinery and parts units (8.65%), Non metallic mineral products 8.33%. Table 6b gives information regarding dispersal of units in nature of activities (major activities such as repairing, servicing etc). The total production of the 40,525 units surveyed was Rs. 2,52,687 lakhs. Out of this 28.32% is by food products, metal products (12.39%), and paper products (11.46%). This is illustrated in Table 7. The food products sector constitutes a major component in the SSI sector and most of these units are located in rural areas of Karnataka. As rural industries are one of the prime actors in the rural energy scene, further study is carried out on industries located in rural areas.

Rural Energy Scenario. Rural energy supply is closely tied in with agricultural and forest production, and with an overall crisis of agricultural productivity and environmental degradation linked to modernisation and changes in land use. The rural community depends mainly on non-commercial energy for domestic and rural industrial needs. If new energy strategies are to be successful, rural energy needs will have to be placed squarely in the context of integrated approaches to rural development, basic needs and general questions of rural poverty, land and other scarce resources. With the emphasis on rural development by the government, rural industries are gaining importance. This paper attempts to focus on the various ecological parameters, such as energy conservation and raw material availability, involved in the successful functioning of rural industries. The rural industries are important to the stability and growth of the regional economy. They have a significant role in averting migration of rural people to urban areas and cities which in turn cause the start of new slums and hence lead to environmental and ecological problems. The rural industries thus help in the wellbeing and survival of rural communities. The rural industries process local raw materials, they also tend to rely on local sources such as firewood and agricultural residues for the heat energy they need. Wood is the traditional domestic fuel in rural areas. With the depletion of forest resources, the financial viability of many industries is threatened due to the increase in fuelwood prices and the lack of technical and financial assistance to switch over to alternate fuels. Although conventional fuels are available in many rural areas, their cost per unit of useful energy is usually much higher than that of traditional sources. With the use of conventional fuels, industry becomes more dependent on distribution networks which are liable to interruption and it is not desirable to use high quality energy, such as electricity, for low quality work such as heating. This unreliability in supply and the high cost of conventional sources of energy creates a demand for viable alternatives to meet

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the needs of rural industries locally. The supply of energy from wood and residues are more flexible and reliable. With increasing industrial demand for wood and residues, both for energy and for other domestic applications, agricultural and industrial purposes puts further pressure on traditional sources, often with adverse effects on other end users, on the stability and productivity of the rural environment. This in turn results in a demand for increasing biomass stocks by raising energy plantations to meet the growing needs of the population for fuel, for domestic use and in rural industries.Rural industries provide the majority of offfarm employment and income generation in rural areas. In Karnataka there are 27,028 villages with 175 taluks (A taluk is a district or tract of proprietary land in India). The population of the state is 44,817,398 with a density of 234 persons per square kilometre and 71.1 % of total population are in rural areas. Deforestation and loss of soil fertility has resulted in a serious reduction in food production by traditional agriculture. Increase in population, leading to fragmentation in land holding, has resulted in further degradation of agriculture land. Fuel shortages are usually tied with environmental deterioration and have also affected food production. Rural industries in this regard are playing a significant role by providing employment to poor peasants especially women. This sexual division of labour has influenced women's ability to produce food and provide the nutrition required for their family. The cashew processing industries are taken up for further studies among rural industries to explore the role of rural industries in the rural economy and role of traditional fuel in the survival of these industries. Cashew processing industries are mainly located in the rural areas and are labour intensive as well as energy intensive. Cashew processing mainly depends on fuelwood and other agriculture residues for the heat energy required. These industries employ mainly women and hence have helped the village women to attain economic independence and hence self sufficiency. Cashew industries are located mainly in the coastal belts of Karnataka, due to the availability of raw material (namely cashew nuts) in the region. Coastal areas are densely populated

and relatively biomass scarce areas. The nonavailability of fuelwood and agricultural residues have often caused serious problems.
ENERGY STUDIES IN CASHEW PROCESSING INDUSTRIES

Objectives of the study: The objectives were to: Explore the relationship between the energy consumed and production in rural industries based on the data collected from the rural industries. Identify the patterns, type and efficiency of energy use in the rural industries, particularly in its more energy intensive processes such as heating. Study ecological perspectives of rural industries. Identify technical measures for improving energy efficiency.

METHODOLOGY: THE STUDY

WAS

CARRIED

OUT IN

FIVE STAGES

Initial information was collected from the Government agencies such as the Department of Industries, Directorate of Economics & Statistics and Districts Industries Centres regarding many cashew industries in Karnataka. A questionnaire-based survey covering firms and units in the Cashew processing industry sector was conducted in Kumta taluk of Uttara Kannada district (of Karnataka State, India) to determine the levels and patterns of energy consumption and the technologies in use. Brief (one to two days) energy audits, management and employees interviews were conducted in representative firms to check and cross verify the data collected from the secondary sources and to identify opportunities for energy efficiency improvements. Computation of Specific Energy Consumption (SEC) and Energy Intensity ( EI) to find out the level of disparities among firms. Establishment of quantitative relationship among various parameters such as Energy (En), Production (Pr), Specific

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Energy Consumption (SEC) and Percentage [percentage installed] Production Capacity Utilisation (PPCU). Study Area: The primary survey was carried out in industries located in the Kumta taluk of Uttara Kannada district. Kumta taluk is located in the coastal tract of Karnataka [7]. It lies between 74 24' to 74 45' east longitude and 14 17' to 14 35' north latitude and extends over an area of 582 square kilometres. With a population of 107,963, Kumta taluk is one of the densely populated regions in Karnataka. Cashew Industries: Cashew processing industries were selected for this study mainly because: The processing industry being mainly located in the rural areas depends on local raw materials, tends to rely on local resources for heat energy needed, and employs local youth. 85% of the labourers are women. Rural women who form the major labour force, also endure the burden of domestic drudgery. Fuelwood is used as main source of heat energy in the processing. The quantity of fuelwood required and its impact on the environment is enormous. The rising cost of fuelwood and scarcity of fuelwood has forced industrial entrepreneurs to think in terms of better processing devices e.g. boilers, improved driers as well as growing fuelwood in the indigenous way. The raw material rquired for the industry could be grown on the barren and already degraded land, unfit for habitation or tillage. The crop does not require any fertilizer or pesticide application or even nursing. Cashew growing provides employment to rural youth. Cashew growing helps in restoring the soil condition. The industry is labour intensive (and helps with rural employment generation), the raw materials are processed by hand which helps in yielding better quality nuts. The main function of the cashew processing industry is the recovery of the kernel from raw nuts by manual or

mechanical means. Processing consists of moisture conditioning, roasting, shelling, drying, peeling, grading and packing. The present study covers 142 sample industries from all districts in Karnataka. Also detailed investigations of processing were carried out for ten industries in Kumta taluk of the Uttara Kannada (North Kanara) district of Karnataka.Some of these processes are illustrated in the flow diagram on the next page and all terms are explained in the text which follows. Conditioning: Conditioning involves sprinkling of water on dried and stored nuts to bring them to an optimum moisture level of 20% - 30%. To make the shell brittle, roasting is done. The mesocarp of the shell consists of honeycomb like cells containing a viscous liquid called the cashew nut shell liquid (CNSL) which provides natural protection to the kernel against insects. CNSL is a valuable raw material for some polymer based industries such as paints, varnishes, resins and brake linings. Industries in Kumta export and sell these shells to Goa and Ankola where boat manufacturers use the CNSL as paint. Roasting: Drum roasting is done in most of the industries. The capacity of the drum is 320 kg. Shells are roasted in steam at 1000C, for about 22 minutes. In most of the industries during the course of our survey, workers were instructed to load nuts to the full installed capacity of the drum. The nuts are kept aside for a day for cooling. Then Shelling is done using hand and leg operated shelling machines. For this purpose female labourers are employed. Normally a worker shells 17 kg/day. The wages paid on pro rata basis at the rate of Rs. 1.5/kg plus Rs. 1.5 towards transport allowance. One sample industry surveyed had 12 female workers in this section. Most of these workers were in the age group from 15 to 25. The kernel is scooped out by means of a sharp needle. After

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shelling the kernels are dried in the drier to reduce the moisture (approximately 10%) and to loosen the adhering testa. After drying for 8 - 12 hours the peeling is done by hand, using a knife. 25 female workers were employed in this section. A minimum of 8 kg of kernels is given in the morning for peeling per person, which has to be completed and the same quantity is to be returned, when the worker leaves the work place. Workers were paid on the pro rata basis at the rate of Rs. 1.5/kg to Rs. 2/kg. The next stage is grading of kernels, depending on the specification for exportable grades. The wholes are size graded based on the number of kernels per pound as W320, W240, W210 and W180 (means 180 kernels/ pound). Damaged kernels were graded as TH (1/2 size), KH C/ 2 TH), LWP (small size) SWP & SSP respectively. This grading is done by the experienced female labourers who were paid Rs. 300 - Rs. 400 per month. Packing is usually done in a tin, which holds 11 kg 340 gms Net, which are subsequently evacuated and filled with carbon dioxide. A rehumidification process is introduced before packing to overcome the possible overdrying. This whole operation has a higher yield rate of 90 to 95% of wholes. The raw materials required for these industries can be grown locally. In the next section cashew plantations are discussed from an ecological perspective in order to assess their ecological viability.
CASHEW PLANTATION: AN ECOLOGICAL PERSPECTIVE

grows well; it is tolerant of saline and heavy clay soils; it grows on red and laterite soils. It cannot withstand water stagnation, flooding or bad drainage. In Karnataka, cashew is planted mainly in the coastal belt which receives an annual rainfall ranging from 1300 to 3500 mm. The area under cashew plantation at the end of 1984-85 in Karnataka was 47,442 hectare. The productivity in Kumta tal uk of Karnataka on an average is 13 quintals per hectare. This data regarding productivity was collected by interviewing some farmers randomly selected in the Kumta tal uk. The total production from the Government Horticulture Department estmimates was 22,115 qtl. in Kumta taluk during 1992-93 (the area under cashew cultivation is 1595 hectares). Due to favourable weather and rainfall the scope for increasing the yield is more in the hilly region of the west coast. Definitions: Specific Energy Consumption (SEC): SEC can be identified as the ratio of Energy Consumption in rupees to Production in rupees. Thus: SEC = En / Pr (Rs. 1 Rs.) Energy Intensity (EI): EI is the ratio of Energy Consumption and Production in "per unit" terms. EI would be helpful in industries where the end products of a industry are cash products. EI = En / Pr (kg/kg) or (kWh/kg) The intra and inter variation in SEC and EI among the industries producing similar products reveals the extent of inefficient/efficient energy consumption. The higher the variation in the value of SEC and EI for the same amount of Production among industries producing similar product reveals the extent of disparity in energy consumption.

A cashew crop among plantation crops has the unique distinction that it can be cultivated in a wide variety of soils. It can survive on lands of low fertility and can be grown in all soil types from sandy sea coast to laterite hill slopes, but the best soils are deep, triable, well drained sandy loams without a hard pan. It grows and yields well in shallow and impervious soils such as sand hills where no other economic crop generally

PERCENT PRODUCTION CAPACITY UTILISATION


(PPCU) = ratio of actual production to the total production / installed capacity If Pr is actual Production, P is total Installed Production capacity then PPCU = (Pr/P) * 100. Relationship between variables:

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Applying standard statistical techniques, the relationship between the variables En and Pr can be represented by any of the following mathematical models depending upon the best fit (least error techniques). (i)The linear En = A + B Pro (ii) The parabolic En = A + B (pr) + C (Pr)2 (iii) Exponential En = A Exp (B.Pr) linearized form: Ln (En) = Ln (A) + B (Pr) (iv) Power law En = A * (pr)B l0inearized form: Ln (En) = Ln (A) + B Ln (Pr) Ln = natural logarithm The En: Energy mix in rural industries comprises of mainly (a) fuelwood for heat and (b) electricity for lighting purposes [very minimal]. Regression analysis is carried out to look at the role of Energy Consumption and Specific Energy Consumption in this sector.

data. The probable relationship based on the least % error of best fit is: En = 2.36 (Pr) O.3983 The 'generalised form of the relationship is written as: En = A. (Pr) C where C = Energy coefficient, A = constant Equation (1) could be written as: C = (dEn/En ) / (dPr/Pr) ----------(2) That is, the Energy Coefficient expressed in terms of the proportionate change in En to the proportionate change in Pro The lower the value of "C", the lower is the change in En for the corresponding change in product. Differentiating Equation En = A (Pr)C with respect to change in production, we get the dynamic consumption rate that is: d En/d Pr = A x C (Pr) C-1 -------------------(3) The value of the Energy coefficient "c" being less than one, which means dEn/dPr declines sharply with increase in production in a industry. This might imply better utilisation of the installed production capacity of boilers and driers. Specific Energy Consumption and Production. Specific Energy Consumption is the ratio of Energy Consumption (in Rs) to the Production (in Rs). This ratio would help to predict the minimum energy required to operate an industrial plant efficiently. The relationship between Specific Energy Consumption (SEC) and Production (Pr) for the cashew processing sector is tried by the least square method.A best fit with least % error of Y est is chosen, and is: The relationship from least square method is: SEC = 2.35 (Pr)-0.62 The results of the analysis is listed in Table 9. The general form of relationship: SEC = A' (Pr)-c' -----------(4) -------(1 )

RESULTS AND DISCUSSION


(1) The rural energy consumption model. To study the dynamics of the energy utilisation patterns in any industrial plant, the SEC (Specific Energy Consumption) and EI (Energy Intensity) would help in predicting minimum energy required to operate an industry efficiently. (2) Statistical analysis of energy coefficients Energy consumption and production. The relationship between the variables Energy Consumption (En) and Production (Pr) is determined by the least squares method. The best fit is of the form: En = A. (Pr) C where "A" is the constant and the coefficient "c" is commonly known as the Energy Elasticity. The data collected from both secondary (for 136 industries) and primary sources (energy auditing in six industries) were compiled. The regression analysis was done for this set of

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The negative exponent c' shows a decline in the value of SEC with increase in Production. This again may be inferred, as the energy efficiency improves with better efficiency utilisation of the installed production capacity. In order to look at the role of installed Per cent Production Capacity Utilisation (PPCU) on the energy utilisation, Specific Energy Consumption and hence on the energy efficiency of the operation, further analysis is carried out between the variables En and PPCU, SEC & PPCU. From Equation (3) and Equation (4) we noticed that the Energy Efficiency Improves with the increase in Production. Normally with increased production capacity utilisation, production of an industry increases. Regression analyses were carried out to explore the relationship between EI and PPCU, and SEC and PPCU. By the least square method, based on less percentage error of Y est, the best fit relationships are: EI = 56.34 (PPCU)-0.56 SEC = (PPCU)-0.76 ---------(5) ---------(6)

production capacity. Figure 1 gives the plot of SEC and number of firms with Percent Production Capacity Utilisation. A declining trend of SEC with increased PPCU is evident from this Figure. The frequency of the number of firms in each PPCU range is a bell-shaped curve, which clearly shows about 69.72% of the total samples are in PPCU range less than 60%. This gives considerable scope for saving fuelwood with better utilisation of installed production capacity. Energy Auditing. Detailed energy audits were carried out in six cashew processing industries located in the Kumta taluk of Uttara Kannada (North Kanara) district on the coastal belt of Karnataka, by spending one to two days and measuring actual fuelwood consumption, raw materials etc. The energy analyses were carried out to explore the variation in SEC, EI and PPCU in these industrial units. These industries are labour intensive and mainly employ women. Since the wages paid are based on the amount of work done (that is quantity of nuts dehusked/peeling of kernels, etc.), these labourers seem to be one of the most efficient. The employment opportunity in these industries has created a new kind of social awareness among the women. Since cashew is a cash crop, the SEC computed shows very small values. The discussion based on SEC seems to be insignificant. Hence EI (Energy Intensity) is computed which reveals distinctly the disparities in the level of fuelwood consumption in the other sector. It is noticed that the variation ranges from a minimum of 4.49 kg fuel wood per kg of cashew kernel processed to the maximum of 8.66 kg. The PPCU computed reveals that the high level of fuelwood consumption is related to the lower installed production capacity utilisation. Figure 2 is the pictorial representation of SEC/EI with the PPCU of firms where the detailed survey was carried out. It is evident that an industry with PPCU 52% consumes 8.32 kg of fuelwood while an industry with a PPCU of 84% consumes

These two relationships confirm the earlier conclusions, that to improve the energy efficiency of an industry, it is very essential to match the production of a industry with installed production capacity. The next logical question which arises from these analyses is how much energy can be saved by optimal utilisation of the installed production capacity. Table 10 lists the SEC and PPCU in the Cashew processing sector. Out of 142 industries, it is seen that in 99 industries the percent installed capacity utilisation is less than 60%. Examining the two industries with PPCU of 50 and 80, the SEC for respective values would be as shown in Equation (6) as: SEC = 2.15 (50)-0.76 = 0.109 SEC = 2.15 (80)-076 = 0.076 That means there is 30.27% variation in SEC, which means 30.27% of the energy can be saved by proper utilisation of installed

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4.49 kg of fuelwood. This means there is a 46% variation in the quantity of fuelwood consumed for processing cashew. This is mainly due to the non-utilisation of installed production capacity. Roasting of raw nuts and drying of the kernel are the two energy intensive operations in these industries. The drier is used mainly to remove the moisture (in the order of 10%) in the kernel. High thermal efficiency could be achieved by the combustion of fuelwood in an enclosed chamber over a suitable grate with a proper opening for primary and secondary air to generate the highest combustion temperature and thus maxi mise the heat transferred to the trays. Proper insulation of the drier doors and a chimney of suitable height and diameter to create a draught and disperse smoke are the other essential components in cutting down the fuelwood consumption. In two out of six firms, the combustion was done in an open chamber and the drier doors were poorly insulated. Apart from these, the drier is not loaded fully in these firms. (a) The fuelwood cost is relatively small in the processing of cash crops such as cashew compared to the value of the end product. This is one of the reasons for not taking up energy conservation measures in these industries. (b) Easy access and availability of fuelwood both on a commercial and non-commercial basis are the main reasons for the rural industries to use fuelwood. However, the fast depletion of forests has caused a fuelwood scarcity which affects the domestic consumer severely while these industries continue to get fuelwood at higher or increased cost. Nevertheless, the cost of fuelwood in the total production cost is very small in this sector. The inefficient usage of fuelwood, in the order of 46 to 50%, could be conserved by proper maintenance of equipment, better utilisation of installed production capacity and use of renewable sources of energy such as solar energy for steaming raw nuts.

1. The wide variations in EI from 4.49 kg of fuelwood/kg of kernel to 8.66 kg of fuelwood/kg of kernel reveals the scope for energy conservation to be in the order of 30 to 48%. 2. The relationship between SEC and Pr being a power law with an exponent less than one indicates an improvement of the SEC with increased production in a industry. Computation of the dynamic SEC (dEn/dPr) reveals that the rate of energy consumption is less than the production. The relative energy consumption rate decreases as the firm's production increases. 3. The use of fuelwood for domestic and rural industries applications will continue in this region for at least another decade. This study and earlier studies in the domestic sector have revealed that the present usage is very inefficient in these sectors. About 40-45% of fuel wood is saved in domestic cooking and water heating purposes. This necessitates a wider use of energy efficient end use devices to conserve energy. This helps in meeting the growing demand of energy in a region. 4. Fuelwood consumption in cashew processing industries could be brought down by: (a) use of solar water heating devices for roasting the raw nuts, and (b) the use of insulated, properly designed driers for drying the kernels. 5. Encouraging enterpreneurs to grow energy plantations on already degraded and unused lands to meet the fuelwood requirement for the industry in a sustainable way (while setting up energy intensive rural industries), could help to improve the soil condition by avoiding further degradation and generate employment to rural youth. 6. Decision makers should take into account the energy requirements of the industries while emphasising the industrialisation of a region. The decentralised way of meeting the energy requirements of industries, e.g. solar, wind (depending on availability of source), small hydro

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and energy plantations, would be the most appropriate way of handling the energy situation in a region. Cashew (Anacardium occidentale L.), is a small tree, crooked; originally introduced from South America. Every part of the cashew is useful to man. The kernels are of high nutritive value. It is rich in carbohydrate (22%), unsaturated fats (47%), minerals such as Calcium (0.55), Phosphorous (0.45%), Iron (5.0 mg/100gm), Vitamins (Vitamin B, 630 mg/100gm) and Riboflavin (190 mg/ 100gm). A kernel supplies about 6000 calories of energy per kg as against 3600 by cereals, 1800 by meat and 650 by fresh fruit. The cashew apple juice is rich in vitamin C (261.5 mg/ 100gm) content and contains 10.15 to 12.5 per cent sugar and about 0.35% acid (as Malic). The mesocarp of the shell contains black, caustic, oil juice which is rubefacient and vesicant. It contains phenolic compound cardol, anacardic acid and an ether soluble substance. It is a valuable raw material for a number of polymer based industries e.g. for paints, varnishes, resins, industrial and decorativelaminates, brake linings and rubber compounding resins. Cashew nut shell liquid (CNSL) is used extensively in boat manufacturing industries and carved wood works as it effectively prevents white ants. The delicious and nutritious kernel is commonly eaten roasted, a process which improves the flavour. Coating on the kernel yields tannins (24-26%) which is used in the leather industries. The cashew apple and its juice has a medicinal value for scurvy, cough and colds and is an excellent purgative. The juice is used as an antiscorbutic and diuretic; given in kidney troubles and cholera. The bud and young leaf is used as a vegetable and as green manure; the leaf contain tannins (23%) used in skin diseases; the alcoholic extract shows hypoglycemic and anticancer activity. In addition, cashew trees are used for firewood or charcoal. The pulp from the wood is used to fabricate corrugated and hard

bound boxes. The bark of the tree yield& tannins (9%), and possesses an antihypertensive and hypoglycaemic properties; the milky sap, on exposure becomes black, useful in indelible ink. Gum from the bark, has insecticidal properties useful in book binding and pharmaceutical industry. Cashew is familiarly known as "money spinner" among plantation crops due to the various uses of the tree ranging from land reclamation to medicinal purposes, and finds a unique place in our ecosystem. In Karnataka 4.04 lakh hectares of land are barren, sandy, slightly alkaline and poor in nutrients. Of this, 14,000 hectares is in the Uttara Kannada District. This could be used for cashew plantation and energy plantations. Casuarina equisetifolia, Acacia auriculiformis, Anacardium occidentale are best suited for this soil. Cashew because of versatility, and its ability to survive on saline land, laterite and red soils, is a very important tree in Agro and social forestry because of its distinctive role in land reclamation. It is usually closely planted for effective wide breaks for orchards and as soil binders.

BIBLIOGRAPHY
Ariel Buira: Challenges to the World Bank and IMF: Developing Country Perspectives, London, Anthem Press, 2003. Besley, T.: How do Merket Failures Justify Interventions in Rural Credit Markets?, Washington, D. C., World Bank, 1994 Davidson, P.: Money and the Real World, London: Macmillan, 1978. Desai, Vasant: A Study of Rural Economics: A Systems Approach, Bombay, Himalaya, 1983. Guhan, S.: The World Banks Lending in South Asia, Washington, Brookings Institution, 1995. Jack Kemp: A Monetary Agenda for the World Economy, Boston, Quantum, 1984. Le Prestre, Philippe: The World Bank and the Environmental Challenge, London, Associated University Presses, 1989. Magliveras, Konstantinos D.: Banks, Fraud and Crime, Lloyds of London Press, London, 2000. Peet, Richard, Born, Beate: Unholy Trinity: The IMF, World Bank, and WTO, New York, Zed Books, 2003. Ranade, Sudhanshu: Rural Banking Adrift, Bombay, Jaico Publishing House, 1984. Swoboda, A. : Monetary Problems of the International Economy, Chicago, University of Chicago Press, 1969. Wolfe, J.N.: Value, Capital and Growth, Chicago, Edinburgh University Press. 1968.

INDEX
A
Applications, 2, 3, 7, 30, 41, 49, 55, 56, 60, 61, 65, 71, 74, 80, 84, 85, 90, 92, 95, 100, 109, 110, 111, 112, 114, 115, 124, 125, 130, 135, 138, 175, 188, 191, 195, 246, 257. Approach, 31, 58, 91, 157, 162, 167, 170, 179, 183, 185, 188, 199, 200, 201, 202, 205, 206, 224, 225, 228, 229, 231, 238. Arrangements, 46, 65, 67, 88, 105, 165, 166, 198, 199. 89, 90, 92, 94, 96, 101, 102, 103, 105, 108, 109, 111, 112, 116, 117, 118, 120, 123, 125, 126, 127, 130, 131, 133, 135, 139, 140, 141, 143, 157, 159, 160, 161, 167, 168, 172, 173, 180, 183, 184, 185, 198, 199, 200, 201, 211, 213, 214, 217, 222, 223, 224, 225, 230, 231, 233, 236, 242, 243, 245. 99, 106, 113, 121, 128, 137, 146, 162, 175, 186, 209, 219, 228, 239, 100, 107, 115, 122, 129, 138, 154, 164, 179, 189, 210, 221, 229, 241,

C
Collections, 232, 236, 237. Cooperation, 124, 126, 129, 133, 225. Coordination, 10, 173, 210.

E
Electricity, 1, 4, 11, 14, 25, 29, 30, 33, 50, 60, 73, 74, 79, 80, 81, 82, 88, 89, 92, 100, 108, 116, 140, 141, 143, 149, 153, 154, 156, 157, 160, 164, 170, 171, 172, 173, 176, 177, 179, 186, 188, 190, 191, 192, 195, 196, 204, 206, 210, 211, 213, 217, 218, 219, 226, 227, 229, 232, 233, 234, 235, 237, 242, 245, 252. Electrification, 64, 65, 66, 15, 61, 87, 115, 150, 163, 175, 189, 200, 214, 228, 236, 67,

D
Data Bank, 15. Development, 1, 2, 7, 8, 10, 11, 18, 20, 25, 26, 30, 33, 34, 35, 39, 40, 43, 44, 49, 50, 56, 57, 61, 62, 65, 67, 71, 72, 73, 74, 78, 79, 84, 85, 3, 12, 27, 36, 46, 58, 68, 75, 86, 4, 5, 6, 15, 17, 28, 29, 37, 38, 47, 48, 59, 60, 69, 70, 76, 77, 87, 88,

262 74, 78, 79, 91, 92, 95, 98, 129, 130, 132, 133, 141, 142, 143, 145, 162, 163, 164, 165, 166, 168, 170, 172, 173, 174, 175, 176, 177, 178, 189, 190, 191, 192, 194, 195, 196, 197, 199, 200, 201, 202, 203, 204, 207, 208, 209, 210, 216, 219, 223, 225, 226, 227, 228, 232. Energy, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 33, 36, 38, 39, 40, 41, 44, 45, 46, 47, 48, 49, 50, 54, 55, 56, 57, 58, 59, 60, 61, 62, 64, 65, 66, 68, 69, 70, 73, 74, 75, 77, 79, 80, 82, 85, 87, 88, 89, 91, 92, 93, 94, 95, 96, 99, 100, 102, 103, 104, 105, 106, 107, 108, 110, 111, 112, 113, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 129, 130, 131, 132, 133, 134, 135, 138, 139, 140, 141, 142, 143, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 159, 160, 161, 162, 163, 164, 165, 166, 168, 169, 170, 171, 172, 173, 174, 175, 177, 178, 179, 180, 181, 184, 185, 188, 189, 191, 194, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 213, 214, 219, 221, 222, 223, 225, 226, 227, 228, 229, 230, 232, 239, 240, 241, 242, 243, 244, 245, 246, 247, 248, 251,

Rural Energy Management 252, 253, 254, 255, 256, 257, 258, 259.

Index Institutions, 5, 11, 12, 17, 21, 22, 23, 24, 26, 28, 33, 39, 40, 46, 47, 53, 58, 71, 84, 87, 88, 93, 102, 104, 108, 111, 117, 128, 129, 134, 135, 138, 166, 175, 176, 178, 199, 201, 202, 203, 204, 205, 209, 221, 222, 224, 230, 18, 29, 57, 99, 121, 140, 200, 206, 231.

263 100, 110, 119, 120, 121, 123, 133, 134, 135, 136, 146, 160, 192, 199, 205, 229, 247, 249, 253, 259. Plantation, 40, 85, 148, 223, 250, 251, 259. Policy, 8, 11, 13, 14, 15, 18, 26, 79, 88, 99, 108, 117, 126, 127, 135, 141, 162, 163, 164, 165, 166, 167, 169, 172, 174, 176, 179, 185, 199, 203, 206, 215, 217, 222, 231, 232, 237, 243, 244. Power, 1, 3, 4, 14, 15, 17, 23, 25, 27, 28, 29, 33, 38, 47, 49, 59, 60, 61, 62, 63, 64, 65, 66, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 94, 95, 96, 97, 98, 99, 101, 102, 103, 104, 105, 106, 107, 109, 110, 115, 116, 118, 119, 120, 121, 123, 124, 125, 127, 130, 131, 132, 135, 136, 137, 138, 140, 141, 142, 143, 144, 145, 148, 149, 150, 154, 167, 174, 176, 179, 180, 181, 182, 184, 188, 189, 191, 194, 195, 197, 203, 209, 211, 214, 216, 219, 222, 227, 232, 236, 240, 241, 242, 252, 257. Private Sector, 14, 74, 75, 79, 80, 97, 98, 99, 101, 102, 128, 139, 163, 164, 165, 166, 167, 168, 169, 171, 177, 178, 199, 201, 202, 203, 204, 205, 206, 209, 210, 232. Projects, 7, 8, 15, 16, 17, 21, 22, 24, 26, 35, 36, 38, 39,

F
Financing Rural Energy, 162, 164, 198.

G
Government, 1, 5, 14, 18, 34, 40, 45, 57, 59, 66, 78, 79, 82, 85, 99, 123, 136, 139, 151, 152, 157, 164, 165, 166, 167, 168, 171, 173, 174, 175, 176, 189, 203, 204, 210, 211, 216, 217, 221, 226, 230, 235, 242, 243, 245, 247, Grameen Shakti, 179, 180, 183, 185, 186, 188, 213, 19, 67, 125, 163, 169, 177, 213, 233, 251. 181, 215.

M
Management, 28, 29, 38, 39, 40, 47, 57, 70, 73, 75, 92, 93, 103, 118, 120, 133, 134, 150, 157, 166, 167, 169, 170, 179, 187, 205, 208, 209, 212, 213, 217, 218, 219, 221, 226, 228, 229, 230, 241, 247. Mission, 1, 39, 62, 110, 113, 115, 117, 125, 130, 133, 180, 188.

H
Hydrogen Energy, 108, 110, 111, 113.

N
National Biogas, 28, 29, 150.

I
Industry, 3, 5, 18, 26, 27, 37, 58, 76, 77, 81, 84, 87, 88, 93, 102, 106, 107, 108, 124, 127, 132, 133, 135, 136, 137, 138, 139, 147, 152, 172, 179, 219, 232, 242, 244, 245, 247, 248, 249, 251, 252, 253, 254, 255, 257, 259. Information, 15, 16, 17, 18, 19, 34, 47, 76, 92, 97, 110, 119, 121, 124, 125, 126, 127, 134, 135, 139, 142, 146, 161, 181, 199, 214, 244, 247. Innovations, 188, 189, 190, 191, 193, 196, 197.

O
Operation, 16, 23, 24, 26, 40, 56, 58, 62, 70, 76, 86, 87, 90, 92, 93, 94, 114, 117, 118, 120, 124, 125, 129, 132, 133, 134, 136, 149, 150, 153, 166, 167, 170, 177, 191, 196, 209, 215, 217, 218, 225, 250, 254.

P
Performance, 1, 14, 23, 27, 55, 59, 60, 71, 73, 74, 2, 35, 64, 78, 3, 4, 5, 36, 37, 67, 68, 80, 81, 6, 51, 70, 87,

264 45, 46, 47, 48, 49, 55, 57, 58, 66, 67, 72, 74, 75, 76, 77, 78, 79, 80, 81, 83, 84, 85, 86, 87, 88, 90, 91, 93, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 115, 121, 123, 125, 127, 129, 130, 131, 132, 133, 135, 136, 137, 140, 141, 142, 143, 144, 148, 153, 157, 170, 173, 199, 202, 206, 213, 223, 224, 230, 231.

Rural Energy Management 175, 199, 205, 221, 244, 177, 200, 206, 223, 245, 178, 179, 201, 202, 207, 208, 225, 226, 252. 185, 203, 209, 229, 198, 204, 210, 232,

Rural Energy Management

265

S
Solar Thermal Energy, 49, 50, 56, 122. Sustainable Rural Energy, 162, 169, 177, 199, 201, 203, 206.

CONTENTS
Preface 1. Introduction 2. Rural Energy 3. Power from Renewables 4. International Cooepration 5. Rural Energy Scenario in India 6. Financing Rural Energy Services 7. Grameen Shakti - A Model for an Integrated Approach to Rural Energy Service 8. Innovative Approaches for Financing Rural Energy Services 9. Energy Utilisation in Rural Industries in Karnataka Bibliography Index 1 28 73 129 155 162 179 198 239 260 261

T
Technology, 1, 2, 5, 7, 9, 12, 15, 16, 17, 18, 29, 33, 34, 36, 39, 47, 49, 50, 51, 54, 55, 57, 58, 59, 60, 67, 73, 74, 77, 79, 85, 89, 90, 91, 92, 94, 95, 105, 109, 110, 111, 112, 113, 115, 116, 117, 119, 124, 131, 136, 138, 139, 142, 152, 159, 165, 173, 175, 180, 181, 184, 185, 202, 203, 205, 213, 214, 224, 237.

R
Research, 2, 4, 5, 7, 8, 12, 23, 26, 33, 34, 35, 36, 37, 39, 40, 41, 47, 49, 58, 59, 60, 62, 64, 67, 70, 71, 72, 77, 84, 85, 91, 93, 95, 101, 102, 108, 109, 111, 112, 113, 114, 115, 116, 117, 118, 120, 121, 122, 129, 138, 180, 181, 184, 185, 205, 213, 214. Rural Energy, 8, 28, 38, 39, 45, 46, 47, 48, 134, 135, 143, 150, 155, 156, 157, 160, 161, 162, 163, 164, 165, 169, 173,

W
Wind Power Programme, 75, 76, 142.

Rural Energy Management