Project Closure Report

1.ACRONYMS

ACE Access to Clean Energy

ADB Asian Development Bank

AWB- Annual Work Plan

BPL Below Poverty Line

CAGR Compound Annual Growth Rate

CDM Clean Development Mechanism

CPAP Country Programme Action Plan

EE Energy efficiency

EPC Engineering Procurement Construction

FACE Fund Authorization and Certificate of Expenditure

GHG Greenhouse gas

GOI Government of India

IEP Integrated Energy Policy

JNNSM Jawaharlal Nehru National Solar Mission

kWh kilowatt-hour

MW Megawatt

MNRE Ministry of New and Renewable Energy

NABARD National Bank for Agriculture and Rural Development

NAPCC National Action Plan for Climate Change

NGO Non Governmental Organization

NPC National Project Coordinators

NPD National Project Director

NPV Net present Value

NSM National Solar Mission

PEC Project Executive Committee

PMU Project Management Unit

PSC Project Steering Committee

QWP Quarterly Work Plan

RET Renewable Energy Technology

SHG Self Help Group

SPV Solar Photovoltaic

SNA State Nodal Agency

UNDP United Nations Development Programme

UNDAF United Nations Development Assistance Framework

2.Executive Summary

1. 
   In December 2009 UNDP in partnership with Government of India’s Ministry of New and Renewable Energy (MNRE) initiated programme on accelerating Access to Clean Energy to provide clean and renewable energy in remote un-electrified villages of the seven United Nations Development Assistance Framework (UNDAF¹) states and explore possibility of developing business models for replication throughout India.
   

2. 
   The project set forth with four targets namely;
   
   1. 
      Review existing policies, pilots and experiences
      
   2. 
      Design framework for inclusive planning and implementation in 350 villages
      
   3. 
      Pilots to address gaps and up-scaling
      
   4. 
      Inputs for a policy on Accelerated Access to Clean Energy
      

3. 
   Review existing policies, pilots and experiences
   

1. 
   Access to Clean Energy – A glimpse of off-grid projects in India: This compendium captured 26 case studies. 3000 copies of this compendium were disseminated. The book was released at DIREC 2010 and 1000 copies were disseminated at the event. Further another 2000 copies were disseminated directly and through State Nodal Agencies (SNA). This has been uploaded on website in the link
   

2. 
   “Empowering Rural India the RE Way”
   

http://www.undp.org/content/india/en/home/operations/projects/environment_and_energy/access_to_clean_energy/

3. 
   GEAC
   

A background document on the ‘Global Energy Access Centre (GEAC),’ was prepared.

4. 
   Design framework for inclusive planning and implementation in 350 villages
   
   1. 
      PMC designed the framework for pilot projects. Project Steering Committee (PSC), with representatives from MNRE, IREDA and UNDP, approved the guidelines and procedures for management of funds & due diligence process for selection of proposals. The Annual Work Plans (Attachment 4) were finalized to support implementation of projects activities based on the requirements and priorities. Pilot projects were categorized into three areas covering demonstration of scaling up of business model, market development. The scaling up and market development was to be focused only in UNDAF states, whereas new technology could be considered even out of the UNDAF states. These pilots have provided some noteworthy learning which contradicts the common perceptions. Seven RET projects received MNRE grant sanction to demonstrate innovative technology, business models, market development and scale-up. These are listed below with brief description of achievements made so far;
      

Scaling up of business model

1. 
   Humana People to People India (HPPI) has proposed to install 41 micro-grids of capacity powered by Solar Photovoltaic (SPV) system in villages of four Unnao, Hardoi, Badayun, Sant Ravidas Nagar districts in Uttara Pradesh. Each micro-grid will serve maximum 40 households. The micro-grids (MG) will be owned and operated by local entrepreneur who will invest 65% of the total cost of the grid. The remaining 35% cost will be covered by MNRE through the grant support provided to HPPI.
   
2. 
   Dinkar Solar Power Station and Rice Husk Gasifier by Shramik Bharti, Madhya Pradesh: Shramik Bharti a Kanpur based NGO has proposed to set up Dinkar Solar Power Station consisting of a 10 kW SPV and 24kW rice husk gasifier. With about 300 sun shine days in a year, the station will depend on producer gas from rice husk to generate power during remaining 65 days. The expected use of power generated will be for supply to households and select shops/enterprise in the adjoining village, farmers to run the irrigation pumps, and for the community radio station operated by Shramik Bharti.
   
3. 
   PYRO Multipurpose stove by TIDE [Rajasthan]: Project aims at up-scaling fuel efficient stoves (PYRO multipurpose stove) for commercial kitchens in Kishangarh and semi-rural regions around Ajmer, Rajasthan. The target is to install 200 stoves in two years to meet cooking needs of road-side eateries/restaurants, hotels, sweet-shops and school messes. The cost of stove is about Rs 12,000 and will have a payback period of 8 to 10 months due to savings in fuel consumption. However, only preliminary survey was conducted by TIDE and project intervention arrangements with local people set up during December 2012.
   
4. 
   Saran Renewable Energy (SRE) biomass gasifier, [Uttar Pradesh]: SRE has proposed to generate and supply reliable electricity to small businesses by setting decentralized power plants using biomass gasifier technology. It will also grow biomass which will serve as feedstock for the power plant. SRE proposes to set up a 32 kW power plant at Galimapur, 24kw power plant in Qutabpur and two units of 32kW in Ramnagar in Ballia district in Uttar Pradesh. The project aims to reach 3,500 households in 12 villages of Bihar and U.P. states. SRE will educate the farmers on how to grow the crop (feedstock) for the gasifier and guarantee purchase of the biomass grown.
   

Market development

5. 
   ONergy is setting up One Shakti Kendra (renewable energy centers) to deploy renewable energy products to the bottom of pyramid communities in the rural Odisha covering 20 villages, creating 100 rural enterprises with in the first year of operation. The project will develop a strong network of entrepreneurs who will be trained by the Shakti Kendra and empowered to assemble, sell and service the RET devices which will be sold through Shakti Kendra. awareness about RET as well as serve as point of sale of renewable energy devices, training of local people to manage sales and after sales maintenance. The RET products promoted by the Shakti Kendra will be SPV based LED lighting systems, solar lantern, solar home electrification system and improved cook stoves.
   
6. 
   Small Scale Sustainable Infrastructure Development Fund (S3IDF): S3IDF has proposed to set up Urja (energy centers) which will be used to spread the awareness about RET as well as serve as point of sale of renewable energy devices, training of local people to manage sales and after sales maintenance. Villages and hamlets in the selected block of the district in focus would be examined for electrification status and reliability and feasible RET which can be sold by the energy centre. Suitable RET will be promoted and installed in the villages with an aim of economic and social development. Potential RET identified are SPV based lighting technologies and improved cook stoves for domestic and institutional use.
   

New technologies

7. 
   Emerging Energies Private Limited (EEPL) has proposed to set up pilot projects of its hydro kinetic technology for village electrification in two villages in Rae Bareilly district of Uttar Pradesh. The mission of the pilot project is to demonstrate a full business model utilizing technological innovation that harnesses the velocity of water to generate electricity. EEPL has surveyed the area and found a total existing demand of 48kW. To meet some of the demand, EEPL proposed to set up a 2 x 15kW plant which will service over half of the customers in demand and then add additional 20kW after the first year of successful operation.
   

2. 
   Broad observations from field visits to pilot projects: Field visits were carried out to all the pilot projects. The response received can be summarized as follows: It appeared that the willingness of people in rural area to use RET is very high. They feel RET are more dependable and realize that there are no operating costs is involved particularly in case of solar based RET. It allows them to greatly reduce and even relinquish the use of kerosene. SPV based lighting systems and home lighting systems are being bought by the villagers despite the fact that they have access to grid electricity. Rural households with limited income also have come forward to purchase of RET as they realize that compared to kerosene, there are no daily operating expense of a SPV lighting system. Finally, there is gradually growing awareness that the use of an improved cook stove leads to perceptible reduction in smoke emission and saving in fuel usage even though the fuel wood is freely available to villagers.
   

These pilot projects provided two very important leads. First, the use of SPV based lighting products can reduce and even eliminate demand of kerosene for the same end use i.e. lighting. This is an important finding since Kerosene continues to receive heavy subsidy from the government, much more than any other fossil fuel and is therefore a major drain on GOI resources. The villagers who have experienced the benefits of SPV based lighting are reluctant to use kerosene lamps or lantern not only due to associated cost factors but also due to its inferior illumination levels and safety issues.

5. 
   Inputs for a policy on Accelerated Access to Clean Energy
   
   1. 
      Renewable Energy Plan for Chhattisgarh and Odisha were carried out. The report provides an overview of energy access and use in the country detailing the status of energy demand under growing economic conditions and the issues and concerns around access to energy. It also provides details of the barriers impeding the scaling up of renewable energy technologies and includes a detailed assessment of the energy access and use of energy with particular reference to remote rural pockets of Odisha and Chhattisgarh. The report finally provides recommendations on proposed strategies that are needed for promotion of renewables at the state level with special emphasis on the UNDAF states that can be applicable to other states as well. The key recommendations are around enabling policy framework included need for cohesion in government of India policies- aligning the low carbon growth strategy with the National Action Plan on Climate Change with regards to targets of renewable energy in fuel mix during 2010-20.
      
   2. 
      National Strategy for Accelerated Access to Clean Energy prepared suggest that Renewable technologies are suited to distributed applications, and they have substantial potential to provide a reliable and secure energy supply as an alternative to grid extension or as a supplement to grid-provided power. Because of the remoteness of much of India's un-electrified population, renewable energy can offer an economically viable means of providing connections to these communities. Some of the key barriers to large scale deployment of renewable energy are information and awareness; financial; technological; institutional and; market. The report further suggests that if technology outreach is improved, organisational and policy support strengthened, institutional financing encouraged, and all these measures are backed up by strategic training and capacity building efforts, renewable energy can make a significant contribution in meeting country’s energy needs.
      

6. 
   Lessons
   

1. 
   The programme could not start on time: The programme was planned for five years under the Country Programme Action Plan (CPAP) from 2008 to 2012. However, the approval on the programme was secured only in November 2008 and the first Annual Work Plan could document was signed between UNDP and MNRE in Dec 2009. It is important to start off the programme coinciding with programme start to leverage full project period to complete all the activities and capture the impacts.
   

2. 
   Delay in start of pilots: Significant time was spent in DPRs preparation, and approval of DPRs translating to pilot projects. By the time few pilot project received sanction the original duration of project implementation was reduced to half. This gave very little time to the project proponent to implement the projects on ground, gather lessons and provide inputs for up-scaling. Typically pilot projects, such those being supported under ACE test new concepts and business models, and thus face unforeseen challenges over and above the identified risk factors. Therefore they require flexibility in implementation and financial support and longer gestation period before results are visible. The process of selection and approval of pilot projects should follow a firm time table so that the performance period is not reduced.
   

3. 
   No scope for quantification for tangible outcomes/impacts: Due to delayed start of pilot projects, these projects were given did not sufficient time to take the pilot projects to the defined end-point within the life of ACE project. Few pilots faced unforeseen difficulties and have not even started. Furthermore, there was no plan put in place to quantify the impact of projects such as quantity of kerosene consumption reduced in the service area during the life of pilot or amount spent by per household on a SPV lighting product or improved cookstove, or total investment made by local banks to finance SPV lighting system or institutional cookstoves. These quantifiable numbers are useful pointers and indicators of a trend for state government as well as MNRE and serve as useful inputs for future policy formulation.
   

4. 
   Market development programmes: The limited pilot showcased that there is enormous scope to proliferate clean energy through market development programmes. Very little financial inputs helped leverage significant private investments. Hence there has to be concerted market development efforts.
   

5. 
   Project implementation structure: The project set out to carry out something innovative in terms of pilot implementation to lead to upscaling which require commitments from implementing agencies. During the present cycle of the programme, RFP was floated and proposals sought and awarded in business as usual manner. The financial allocation provided by UNDP could not be fully utilised. The project team should review if an alternate method of commitments from partners is sought at an early stage with set of outcomes, outputs, activities and deliverables.
   

7. 
   Way forward
   

1. 
   Continue to nurture the Pilots undertaken: All the seven pilots chosen were applying significant due diligence representing variety of issues, proposing range of solutions. The NGOs carrying out these projects have been on-ground for several years, and they have spent significant time in community mobilisation for ACE pilot project. However, since the approval has come only in 2012, they were unable to complete the tasks set forth. Hence, it is highly recommended that they are supported to complete the tasks they set forth, and they provide in quantifiable terms, the impact of the pilot project.
   

2. 
   Continue upscaling efforts for RE appliances for domestic applications: Despite several government programmes, villagers are yet to get adequate lighting and clean cooking fuels. Few interventions of solar lights under this project have replaced kerosene lamps and lanterns; replaced traditional Cookstoves with improved Cookstoves and people appeared to be happy with these interventions, and made financial investments. Thus showcasing readiness for market to absorb such interventions. Significant efforts are essential to upscale RE appliances for domestic applications.
   

3. 
   Support initiatives of clean energy for thermal applications: Thermal application encompass Cook stoves heat applications for enterprises. There are many interesting examples and designs among improved Cookstoves and gasifiers for process heat applicaitons. Gasifiers for some applications such as textile processing, food processing have been proved viable options. They have potential to reduce the biomass consumption by 50%, replace fossil fuels such as LPG, furnace oil, kerosene, etc. They have also been able to provide improvement in quality in many instances. In some countries cook stove projects were implemented at larger scale and globally there is interest in at more such opportunities. Efficient stove programme have a great potential for GHG emissions reduction, particularly as scientists are paying more attention to black carbon.
   

25% of primary energy in India is used in the form of biomass largely feeding as fuel for cooking and some in unorganized enterprises. Most of these devices used for cooking run at very low efficiency, just by doubling their efficiency it can lead to reduction in energy significantly and reduce the stress on forests from where often biomass is harvested unsustainably. Though the designs for thermal gasifiers are matured, awareness, packages suitable to different capacity, different end uses; technical assistance, supply chain are yet to be provided on sustained basis.

4. 
   Off grid solutions to electricity generation: in the beginning of 11^th FYP over 100,000 villages were not connected with electricity. GoI’s concentrated efforts helped to connect most of the villages with electricity. However, there are significant number of villages which are still not connected. Some estimates indicate, over 300 million people still do not have electricity. It is important to ensure that they get minimum electricity of 1 kWh per family per day (minimum standard set forth in Rural Electrification Policy). 1 kWh per day per family can only provide electricity required for domestic applications, not much for productive uses. However, even this is important to start with. Significant efforts are required to ensure this to happen. Also assuming 300 million people, 5 persons per family, 1 kWh of electricity required per day, it would translate to 21.9 billion kWh of electricity per year. Assuming 0.82 kgCO2 per kWh as emission factor, it results into 20 million tCO2 annually. At the outset, looking at potential for renewables, it appears that this requirement can be met by Renewable Energy alone.
   

At the outset, it appears that all the additional electricity required can be met by just 25% of renewable resources available. However, the infrastructure, resource availability, availability of technology packages, enabling financial structure to provide healthy field vs conventional grid, etc. are essential.

The next phase of UNDP can take up efforts in this direction as it directly addresses the mandate of UNSG initiative ‘Sustainable Energy for All’ (i) Energy Access for all by 2030, (ii) doubling share of renewable by 2030, and (iii) doubling energy efficiency by 2030.

5. 
   Focus on RE linked income generation: During the current phase, not much has been done to link Renewable Energy as driver to provide energy to income generating activities. The next phase of UNDP-MNRE projects should test various models of linking RET to accelerate Access to Clean Energy with livelihood and income generating activities. The pilot testing should preferably be carried out in states/locations where ACE or similar programmes have successful pilots, as it can help kickstart interventions. This would serve as a logical next step activity for widening the base for the entrepreneurs, SHG, NGO who have undergone training on benefits of RET.
   

6. 
   Support Global Energy Access Centre [GEAC]: GEAC is conceived to provide infrastructure and nodal support to MNRE and other agencies in the country in the area of Energy Access and dissemination of Renewables and expand the support to other countries. This is an important initiative and UNDP must consider collaborating with GEAC appropriately to leverage the support to their ongoing initiatives and contribute to strengthen GEAC as well.
   

7. 
   Standardisation of RE product and communicating it to customer to make informed choice:
   

As State Nodal Agencies (SNA) are actively promoting some of RETs such as solar photovoltaic lights using Light Emitting Diode (LED) in their respective state, there is wide variety of products with differing configuration are available in the market having different prices. However, a buyer is not aware if these RET meet any standard – Indian or International. Also, since the sales of RET are picking up, there is an urgent need to regulate the market through Standards and awareness campaign so that consumers get product of good quality.

Independently MNRE may issue directive for compliance with above referred Indian Standard to the channel partners and vendors registered in its SPV programme, and to all the SNA to make compliance to Indian Standards a mandatory requirement in all future procurement starting sometime, say, during the next financial year 2013-14. This methodology will help in avoiding sub-standard and low cost products being sold that have higher likelihood of failure and will send the signal in the market for adhering to Indian Standards.