Leading Digital:

Turning
Technology into The new-age rural electrification in India
Business
Transformation Arunava Mukherjee
G18062
 Timeline: Rural electrification

1950-60’s 1980’s 2019

Mere 0.6 percent of rural India Electric pole in two-thirds 26.02 million
had an electric pole in 1950. of rural India. households get
Coverage of India’s power Rural electrification drive electricity connections
network remain poor for next reached nearly 20,000 under ₹16,320 crore
two decades. villages every year Saubhagya scheme
.

1970’s 2004
Only 18% of India’s nearly one-fifth of
villages were India’s rural households
electrified in 1970. (an estimated 31
million) still do not have
access to electricity
Current state..
 With the “Saubhagya Scheme” announced in Sep’ 2017, government
promised to provide electricity to all households. Although, rural electrification
has expanded but access to power supply is still beyond reach of many
households.

 Critics argue that although there has been progress in providing

electricity to rural India, there have been no real efforts to improve the
quality of power supply with many meters not even connected to the grid.

Rural electrification pain points:

• Frequent supply cuts/load

shedding due to operation and
maintenance issues of
distribution networks
• Power supply and billing without
proper meters
• Lack of affordable power
• Miles of transmission and
distribution infrastructure to
distant rural areas leads to
losses by as much as 25%
• High electricity tariffs often leads
to electricity tapping and theft
How it works today? Fossil energy contribute to 81.9% and Renewable energy 15.3%

Electricity through renewable resources, particularly rooftop

solar feeds excess power back to the grid under net
The present day metering and the credits are adjusted in the bills, thereby
lowering consumers traditional electricity bill. But the
electric power grid consumer has no visibility of such adjusted credits.
is a synergy of
centralized Meter readings can be incorrect thus bills often
manipulated, forged enforcing rural people to often not use
production and electricity at all.
long-distance
transmission with Smaller population in parts of rural India coupled with
distributed their low WTP prevents Government to recoup
electricity generation costs resulting in a poor power
consumption. infrastructure in such areas.

Also traditional bills often fail to arrest issues

of defective micro-grid transmission or
power theft, thus giving consumer no option
other than debt of high bills.
Roadmap for Energy sector in India
• Projected power consumption of 1900 TWh by 2022 attributed to an increase in population, electrification and per-capita usage.
• Government extensively promoting renewable energy into electricity sector with solar power tariff caps at Rs. 2.5 and policies on
biofuels.
• Roadmap in place to achieve 175 GW capacity in renewable energy, including 100 GW of solar power and 60 GW of wind power by
2022.
• With infusion of technology and government backing, investments in power sector have bumped up to US$ 14.18 billion in FDI (as of
Dec. 2018), accounting for 3.48 per cent of total FDI inflows in India.

Opportunity for Blockchain

 Enable a decentralized energy marketplace providing a
secure transactional platform promoting P2P energy
trading.
 Blockchain will automate the processes and skip
intermediaries by triggering payments and energy
transactions through smart contracts.
 Whenever, more variable renewable energy is generated
than needed, smart contracts could be used to ensure
that excess electricity is diverted into storage
automatically.
 The primary tangible parts of his decentralized energy
marketplace will include components of:
• Renewable energy products: solar, biofuels, wind.
• Conventional thermal power generation.
• Internet of Things (IoT) appliances
 Benefits of blockchain-based model

Enable subsidies to economically

Pre-paid bill payment mode can be deployed
to address non-payment and late payment.
Tamperproof backward individuals through Aadhar
linked blockchain network.
Decentralized

Possibility of peer-peer energy transfers

Quicker bill payments, consumer Blockchain within blockchain infrastructure. Homes with
authentication through Aadhar linked
mobile phones & bank accounts.
Model rooftop solar can sell electricity to neighbors.

Excess energy fed into grid can be Reduction of power theft through real-time
converted to cryptocurrency and stored tracking of power consumption through
digitally in energy cards linked mobile/IOT enabled devices.
 Business opportunities
A decentralized energy marketplace will create a major disruption in the
electricity market creating value for millions of Indians in rural India:

• Combination of blockchain and communication technology will enable

secure transactions and payment through relevant cryptocurrency.
• Such a network has huge business potential as firms can enable P2P sale
of energy based on blockchain technology whereby owners of windmills
and rooftop solar can sell to electricity to consumers in the network.
• Due to the reality of electricity generation mostly remaining centralized for
years to come owing to the difficulty in implementing regulatory changes,
such potential exists in small and localized micro-grids (residential and
industrial).
• The implementation of Blockchain will lead to affordable energy and
generate significant jobs and investments in the distributed grid
infrastructure.
• Further, there would be a surge in technology penetration in rural India
with not only blockchain networks and devices, but also Internet of Things
(IoT) appliances.
• An expected boost to renewable energy industry such as rooftop solar,
energy storage products, and even fuel cells.
 Implications for Electricity market
The proposed business model comprising of conventional fossil sources, renewable sources, Blockchain and IOT devices has
three major implications for the electricity market.

IOT Blockchain Renewables

1 The business model makes use of the Blockchain technology to

automate processes and skip intermediaries, triggering payments and
energy transactions through smart contracts. Automation and
disintermediation reduce administrative costs and utility companies
will benefit from lower operational costs. In both cases, consumers
can profit from lower electricity costs, while producers can obtain a
higher remuneration. 2 Consumers can participate and experience a sense of belonging
to a community through the shared network, something that is not
possible in the current electricity market design. Consumers can
choose between supporting neighboring consumers or procuring
power from the utility company. Thus, they can independently set
their price preferences or negotiate the prices on the P2P platform
building flexibility and transparency.

3 The P2P energy-trading platform localizes the energy market

and consequently reduces the burden on the transmission grid,
therefore increase the overall grid efficiency.
 Blockchain in rural electrification
• Enable technological revolution in rural India.
• Enabling of a marketplace facilitating secure
energy trading amongst consumers as
excess energy can be digitally stored and
traded
• Integration of conventional and renewable
energy.
• Reduced electricity wastage & risk of theft or
fraud
• Increased transparency in electricity charges
SWOT
• With Government impetus on rural
electrification, modernization of grid via IOT
enabled devices & renewables enabled by
Blockchain can help create a decentralized
grid, reducing the present day dependency
on centralized thermal power plants.
• Attractive business opportunities and
creation of new jobs.
• Such an implementation is still in pilot
stage as Blockchain technology is still
new.
• Complex to integrate such models that
will require significant state and central
regulatory changes.
• Difficulty in technological adoption
associated with such models by
consumers.
• Significant initial costs involved.
• Governments unwillingness to support
such disruptive implementations.
• Power regulatory authorities unwillingness
to cooperate and adopt to changes.
• Blockchain technology not able to live up
to its promise of a reliable and secure
technology at a global stage.
 Closing Thoughts
Blockchain technology integrated with power grid is evolving and is the future of robust affordable energy.

To reduce the technology risk, it is

recommended to properly place policies
and frameworks before the mass
deployment. With immediate introduction
of effective policies, the transition will
become smooth with low risk.
The blockchain based renewable energy
networks powered with P2P transaction will
accelerate the adoption and deployment of
distributed generation like Solar Rooftop,
Micro windmill installations, Energy
Storage, Smart IoT Metering and other
Grid technologies that are at nascent
stages.

To leverage the potentials of these

technologies, there needs to be well knit
and integrated Blockchain platform.
These disruptive technologies are sure to
change the present ecosystem and
empower the end consumers.
 References

• https://www.slideshare.net/SandroSuzart1/federal-reserve-66731318

• https://medium.com/energy-bazaar/can-blockchain-help-reduce-energy-poverty-in-rural-india-3-3-98bbc16171c6

• https://www.livemint.com/Politics/oKTPIug2MPuP4KpRVU8kuL/How-every-village-got-electricity-and-why-that-is-still-not.html

• http://www.uperc.org/App_File/Compendium-pdf1010201860616PM.pdf