Duncan McKenzie, Contributor
March 28, 2013 | 12 Comments
LONDON -- Ladakh, a remote district of India's northernmost state, is currently benefiting from the largest off-grid renewable energy project in the world. The Ministry for New and Renewable Energy (MNRE) is spending INR473 billion (US$88.8 million) on decentralized solar and hydro technologies to bring energy security to this remote mountain region. Why Ladakh?
“Because we Ladakhis are closer to God,” smiles Jigmet Takpa, project director of the Ladakh Renewable Energy Development Agency (LREDA). “Our sunshine is high quality. We have an average of 320 sunny days every year and the mountain air is thin and cold, making the operation of photovoltaic systems highly efficient. Ladakh is a solar paradise.”
Ladakh, known as the Land of High Passes, is a high-altitude cold desert region in Jammu & Kashmir state, neighboring China to the east and Pakistan to the north. It is a focus of the 3.5 year Ladakh Renewable Energy Initiative (LREI), a 28.3 MW energy revolution, now in its final year.
Ladakh is manifesting a flagship role in national renewable energy policy. Although Ladakh is a small district with sparse population, its rugged geography means that many dispersed communities are beyond the viable reach of the regional grid system. Stand-alone renewables are the obvious solution. “The harsh environment makes it the perfect test case for the technology itself, and for future policy: to prove to the government and the public that renewables have a valid role to play,” says Dr. Parvind Saxena, director of MNRE in Delhi.
Electrifying rural areas is a prime government concern. Prime Minister Manoman Singh gave his personal commitment to electrify every Indian household by 2017. The 2005 Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) program has pursued grid electrification of villages, and the 2009 Remote Village Electrification Program makes off-grid provision, but 400 million Indians still lack access to modern forms of energy, and 20,000 villages are too remote to ever realistically be grid-connected.
Displacing High-cost Diesel
Beyond the social expectations, there is also a financial incentive to this initiative. “We noted that, bar a couple of small hydro projects, almost the entire region, including the Border Defense Force, was using diesel generation (DG) for electricity and kerosene for space heating, and due to Ladakh's remote location, fuel is imported by road at a very high cost. Harsh winters close those roads for at least five months of the year, exacerbating energy vulnerability and deprivation,” says Saxena.
Prior to the LREI, Ladakh generated a total of 25 MW electricity. Of some 240 villages, 187 received electrification by micro-grid for a few hours each day, 75 percent by diesel and the remainder by small hydro. A few remote communities entirely lacked electricity.
“The high cost of DG in Ladakh, currently INR25-28/kWh (US$0.47-0.52), makes renewable energy very competitive,” says Takpa. “Off-grid solar PV-generated electricity worked out over 20 years' system-life in Ladakh currently comes to INR16-18/kWh ($0.30-0.34). And the cost of solar keeps falling due to technological development and scalability.
The International Renewable Energy Agency's (IRENA) November 2012 report confirmed renewable energy as the default option for off-grid electricity provision, with solar PV now a cheaper option than diesel in many locations.
The LREI's use of dispersed hydro and solar PV have rapidly replaced diesel to a large extent and avoided unnecessary extension of long, expensive grid lines. According to LREDA figures, the total expected saving of diesel in Ladakh from hydro and PV generation is 35 million litres per year or approximately INR1.6 billion ($32 million) annually, a substantial saving for the government.
Ankur Agarwal, CEO of Advanced Renewable Energy Technologies, says: “The increasing cost of diesel will be a key demand driver for solar PV installations in India,” a country which has an estimated 60 GW of diesel power capacity. Recent cuts in government subsidy for diesel will encourage this trend.
At LREDA's offices in Leh, Jigmet Takpa is consulting with senior project engineer, Reuben Gergan, a Cornell-educated Ladakhi. The dynamic team has strong links with India's main tech providers, collaborating on R&D and international scientific exchanges. LREDA is a state nodal agency of MNRE, born in 2000 from the Ladakh Autonomous Hill Development Council. Takpa joined in 2001 and oversaw the Remote Villages Electrification Project, the first of its kind in India. It supplied solar home lighting systems to 200 hamlets in the region. Its success led to a nationwide program.
LREDA's 2005 Ladakh Vision 2025 document highlighted the massive untapped solar, geothermal, hydro and wind energy potential of the region, from which Takpa successfully proposed the LREI as a catalyst for development.
Takpa's engineering and conservation background, and his role as conservator of forests, make Ladakh's fragile ecosystem his concern. Growing tourism and a cash economy have affected local ecology and living practice. He promotes rural livelihoods, eco-tourism, and ecosystem management and the LREI complements these needs through renewable energy and conservation techniques for housing and agriculture.
Central government funding came from MNRE's financing arm, the Indian Renewable Energy Development Agency (IREDA), a non-banking finance agency which funds mainly rural projects. Over half of IREDA's sanctions are for the wind energy sector, with the rest for small hydro, biomass and solar projects.
As an Autonomous Border Region, Ladakh receives Special Area Status (strategic, remote, underdeveloped) and the highest funding: hydro and solar PV hardware are 100 percent funded. Electricity is then charged from users. “Up-front costs of renewable energy access systems is the key barrier and therefore complementing subsidies with funds is a practical way to solve the first-cost capital financing problem. Subsidies for energy access projects are generally justified as a response to inequality and social expectations in energy provision,” says Gireesh Pradhan, secretary for MNRE.
Ladakh nonetheless suffers barriers to large investment. The lack of initial grid connectivity, the region's remoteness, and the small population's limited growth potential discourage large-scale solar projects. The small capacity of projects has so far restricted developers from benefiting from Renewable Energy Certificates, although a revision for hydro is proposed. LREDA has encouraged incentivization, including removal of entry tax on solar products and provision of district-level simple clearances.
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