Rural electrification in India is nearly complete—as per the Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) portal, “out of 597,464 census villages, 591,039 villages (98.9%) have been electrified.” Yet, as per a 2015 study conducted by Council on Energy, Environment and Water, a research institution, and the Columbia University, only 69% of rural households had electricity connections at the time (rural electrification was over 96%). This means many rural households, until a year ago, were dependent on dirtier energy sources than electricity for lighting, heating and cooking. Their numbers are sure to have thinned, given the push to LPG connections through the Ujjwala scheme and free electricity connections through DDUGJY for BPL households. Even so, the costs are prohibitive for many households that are not BPL but are still economically weak. Access, thus, would continue to lag electrification. While subsidies can be a solution, these are not sustainable. Here, India can learn from Senegal which, along with the World Bank’s Carbon Initiative for Development (Ci-Dev), has taken an innovative route to make the cost of access significantly lower.
The Rural Electrification Agency of Senegal (ASER) has entered into a contract with Ci-Dev, under which the latter buys the carbon credits earned when a houshold switches from a cheaper but more polluting fuel source like wood or kerosene. A prospective user gets a voucher that she uses to pay a large part of the initial costs of getting a connection from a private distribution company or concessionaire, drawing from the grid or off it. The discom/concessionaire presents the voucher to ASER which uses the money received from Ci-Dev to reimburse. Thus, access improves as the cost is lightened for both the rural user and the state. Helping a rural household make the shift ultimately becomes a lighter carbon burden for the world.