Mapping Power: Electricity Distribution in Gujarat: A Sustainable Energy Future Roadmap?

3 October 2018
Mapping Power: Electricity Distribution in Gujarat: A Sustainable Energy Future Roadmap?

In the era of the unbundled electricity sector, Gujarat’s emergence as India’s leading light is premised on its early recognition that energy policy must engage meaningfully with politics. A steady, coordinated approach characterised its trajectory in the early 2000s, gradually separating the black box of electricity into electric generation, transmission and distribution. Unlike the travails of distribution faced by many other states, Gujarat benefitted from implementing the jyoti gram yojana. It accompanied this innovative material intervention with the political savvy of crafting a compromise with key farmer constituencies, convincing them that their electricity access quality would be enhanced. During the mid-2000s, it put in place a parallel distribution network based on feeder separation and a specially designed transformer, supported by the deployment of dedicated power sector police units. This technologically and administratively addressed the problem of line theft, especially in remote rural areas where leakages persist in many states, ostensibly based on political patronage.

Both measured action between the finance and energy departments to restructure accounting practices during unbundling, as well as enhanced revenue recovery, provided Gujarat’s distribution sector bottomline with cushioning. This enabled foresightful investments: for instance the state, long known for its wind energy capacity, championed solar uptake. A decade ago, well before India’s first solar policy of 2011, Gujarat incentivised solar developers with attractive 25-year feed-in tariffs. While locked-in high-cost contracts placed a significant financial burden on state coffers, this nonetheless ensured quick response in a sector that has since undergone rapid expansion and become key to our national energy future. Evaluating bidders on their techno-managerial capacity, the state saw stalwarts from sectors like jewellery and pharmaceuticals step into solar energy. More recently, under the UJALA programme, Gujarat’s manufacturing sector made a strong national contribution on energy efficient lighting for demand side management. Large photovoltaic module factories have begun emerging, too.

Currently sixth in terms of installed solar capacity, Gujarat has the largest solar pipeline in India. While solar parks set up in dedicated remote areas require new transmission infrastructure investment, there is still enormous untapped scope to increase small-scale rooftop solar uptake. For growth in decentralised solar generation, grid coordination logics must be geared towards renewable energy integration. With rapid technological evolution and falling costs in energy storage, India has the opportunity to ensure revenue sharing with prosumers and revolutionalise the changing energy sector. By leading on renewable energy integration, Gujarat can become a role model for sustainable energy transition.

The conditions that have enabled these recent successes are closely linked with the state’s political economy. Gujarat has traditionally hosted a strong business orientation, a culture that attracts investment and assures promoters and developers of smooth project implementation. This requires smooth tendering and licensing processes with transparent criteria that lower risk and thereby project financing costs. Continuous rule by the same political party has allowed an element of long-term planning that has benefitted the electricity sector. Weakening support for the political coalition, however, could unravel cooperation with key farmer constituencies. How will continued expansion and improvement of electricity access be secured for the millions who continue to live in energy poverty, without electrified households, despite electric lines having reached their villages? GUVNL has been sub-contracting on-gridding to increase coverage to the tune of a lakh households annually. Yet dependence on dirty fuel sources with adverse health impacts persists, from large factories to poor villagers who use labour-intensive practices to cook a basic meal. The stakes remain high and micro-grids must be part of the solution. This urgency warrants an enhanced role for the Gujarat Energy Development Agency.

A mix of long-standing private sector distribution utilities in urban areas and four large regional public utilities across the state has worked well in tandem with a state regulatory body that mandates gradual improvements in efficiency. In recent years, having installed sufficient generation capacity after private sector entry has allowed consistent focus on tackling problems in electricity distribution, and the largely top-down approach Gujarat has followed has enabled a coordinated, functional effort. This is no mean achievement; it warrants praise. These advantages put the state in a position to lead by example on the many challenges that will modulate India’s energy future. The rapid shift to renewables and particularly solar energy sources requires regulation to stay ahead of current developments to ensure optimal evolution towards sustainable energy systems. A stronger national grid is key, and the announcement of a nationwide solar energy price ceiling, and players like NTPC with its recent 2 GW solar energy auction, constitute clear signals that solar uptake can help shape new electricity markets and logics. How this will play out with ambitions of electrifying transportation is a key question going forward.

In sum, Gujarat’s electricity distribution sector has progressed against formidable odds. It has generated public benefits – energy efficiency and access – and led on renewable energy adoption. Yet steep challenges remain and demand similar political economic acumen and gumption. As floods in Kerala and wildfires in the Arctic add political pressure for global action on climate change, places like California and Sweden are leading by example. States such as Gujarat can expand such initiatives and showcase prowess in the politically fraught context of India’s electricity distribution sector.

Siddharth Sareen is a researcher at the Centre for Climate and Energy Transformation, University of Bergen, Norway, where he works on the governance of energy transitions. This research is based on work presented in full in the book Mapping Power, edited by Navroz K Dubash, Sunila S Kale, and Ranjit Bharvirkar.

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