Disruption in supply of clean energy products and services by DRE enterprises will impact reliable energy supply and energy-dependent sectors like healthcare, agriculture, livelihoods, and others.
As India headed towards a nation-wide lockdown to contain the spread of COVID-19 two weeks ago, the local administration in Gumla, Jharkhand set about assigning essential status to several services for the villages in the district to ensure minimal disruption. One of these was Mlinda’s minigrids that provide electricity, irrigation services, and powering loads for livelihoods, recognizing that decentralized power solutions play an integral role in complementing grid connectivity in the area.
Worldover, there have been several examples where decentralized renewable energy (DRE) solutions are being deployed and used to ease the impact of COVID-19. In Nigeria, for instance, the Rural Electrification Agency plans to light up homes, primary health centres and other related facilities using decentralized solutions, working with the World Bank and the African Development Bank to accelerate grant disbursement to qualifying developers to support this process.
While it is encouraging to see DRE services being awarded essential services status, acknowledging the impact these services have on public life, the sector as a whole is still faced with several challenges amid uncertainties of these times. According to a survey conducted with 60 DRE enterprises in India by CLEAN, 71 percent of DRE enterprises reported that they would be unable to sustain themselves beyond 2-4 months. Only 5 percent of enterprises said they would be able to sustain beyond 18 months.
As the number of confirmed cases of COVID-19 inches upwards, with more than a million confirmed cases worldwide, experts fear that the global economy could shrink by 1 percent as opposed to the earlier prediction of 2.5 percent growth with closed borders, disrupted supply chains, and business shutdowns. While the nation-wide lockdown measures undertaken by the government are much-needed, there will be consequences for businesses, especially small and medium enterprises. For enterprises in the DRE sector, the impacts will be far-reaching.
“With over 100 field workers working across 45 villages in Gumla, Mlinda has been working hard to put in place systems and processes that ensure safety of staff and the general public, as well as prioritizing preventative measures to keep the grids and productive loads running smoothly,” said Vijay Bhaskar, Mlinda. Other enterprises like DESI Power and Husk Power Systems are also facing similar challenges but continuing to provide power services to villages under their operations. For young entrepreneurs and start-ups in the sector, a big challenge has been the lack of comprehensive risk analysis and planning. “Early stage entrepreneurs should quickly do scenario planning and understand their burn rate,” said Ananth Aravamudan, Villgro, an incubator based in Bengaluru. “They should be in touch with their investors and develop a blueprint post-lockdown to catch up with their losses,” he added.
Apart from an obvious reduction in income for enterprises and their customers, respondents of the CLEAN survey also reported obstacles in production and delays in project implementation or completion, as well as disruptions in supply chain and marketing.
“It’s important for enterprises to recalibrate away from growth to protecting the existing business, focusing on servicing existing customers as meaningfully as possible. For those in retail, focus on post-sales service rather than on funding new customers,” said Piyush Mathur, Board Member, CLEAN.
Access to finance continues to be a pressing issue, especially for supporting business operations and paying fixed costs like rent and salaries. “At this hour of crisis, enterprises at various levels of their businesses need to plan accordingly. For example, enterprises who have no support should look for philanthropic support, firms having institutional tie-ups have some breathing space and those engaged with government orders falling under force majeure have potential for pathway forward,” according to Upendra Bhatt from cKinetics.
Addressing disruptions in local supply chains, Gaurav Mehta, Dharma Life stressed on the importance of developing effective communication channels at the ground level – local, district and state levels – to aid improved coordination. “The cost and risk involved should be taken into account. The use of existing technology or new ways to use technology should be explored, like contactless delivery,” he said. “Post lockdown, enterprises should have a geographical outreach plan”.
It is imperative that the sector receives immediate financial support from financial institutions, donors, philanthropic organizations, development agencies, and access to CSR funds corporations. In addition, support from the government at various levels will be required given the difficult terrain and remote geographies that many enterprises work in.
Disruption in supply of clean energy products and services by DRE enterprises will impact not only reliable energy supply, but also energy-dependent sectors like healthcare, agriculture, livelihoods, and others. The sector plays a crucial role in complementing the country’s energy systems, ensuring reliable and quality energy supply to underserved regions, collectively impacting over 10 million individuals. Moreover, the sector provides over 95,000 direct formal jobs and 210,000 informal jobs in addition to over 5 million productive use jobs. Each of these solutions contribute to national and state mandates, including livelihoods missions, rural health missions, doubling farmers’ incomes, and others.
What lies ahead is uncertain. However, the sector as a whole needs to continue to engage and serve its customer base because the impact of poor electrification reaches beyond just the energy sector and has consequences for health, education, livelihoods, agriculture, and food security.
[The author is Manager, Policy & Finance at Clean Energy Access Network (CLEAN). This article is published as part of a series titled Energizing Rural India under an editorial partnership between ETEnergyworld and Power for All]
Source: energy.economictimes.indiatimes
