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India’s ambitious developmental goals for the coming decades hinge significantly on how it addresses its growing energy demand. During the recently concluded G20 summit, India’s Prime Minister announced the Global Biofuel Alliance and highlighted the role of biofuels in securing the energy future of developing nations. Biofuels that are derived from biomass to produce energy have the potential to accelerate India’s energy transition by providing clean energy and reducing the nation’s reliance on fossil fuels. The rapidly growing demand for power in India underlines the need for robust power grids and flexible energy sources. The integration of biofuels or bioenergy into the energy mix will help in meeting this need, besides offering the added benefits of reducing carbon footprint and catalysing socioeconomic development in many parts of the country.

Bioenergy unlocking the potential of decentralised energy

Bioenergy can help India transition to decentralised energy systems. It can be used to supplement renewable sources in making three-tier cities as well as rural villages self-reliant. India’s predominantly centralised power grid grapples with challenges related to power availability and reliability in many regions. High transmission and distribution losses, coupled with aged infrastructure and adverse weather conditions, can disrupt power quality and supply in rural areas. While grid connectivity and rural electrification have improved, enhancing power quality, availability, reliability, and affordability for rural communities and businesses remains crucial. With nearly two-thirds of India’s population residing in rural areas, reliable decentralised energy solutions are essential to unlocking their growth potential.

In line with this, Decentralised Renewable Energy (DRE) systems have great potential to alleviate poverty; promote good health and wellbeing; enable access to education and healthcare; and catalyse sustainable economic growth. The establishment of decentralised power stations, and the provision, installation, and maintenance of related equipment and appliances can create entrepreneurship and employment opportunities on several fronts.

The DRE system could be of any type – solar, wind (or, even better, a wind-solar hybrid), or biomass or biofuel-based. Biofuel is a low-hanging fruit. India’s agriculture sector generates huge amounts of biomass every year, which can be used directly as biofuel or processed to produce other biofuels such as ethanol, bio-CNG, and biogas. Solar energy is the most logical and viable option in a country like ours where sunshine is plentifully available for most of the year in most parts of the country. Power producers and power distributors should also consider investing in wind-solar hybrid projects, which offer several benefits over standalone solar and wind projects in terms of cost, efficiency, and resource utilisation.

DRE projects, by and large, are cost-effective. A World Bank report last year stated that off-grid solutions were among the most economical solutions for providing energy to unelectrified rural regions across the world. Moreover, the installation of DRE systems and mini grids is much easier and quicker as compared to that of conventional power plants. And although DRE projects tend to be relatively more labour-intensive, it is more of a positive than a drawback because it boosts rural employment. From an environmental standpoint, the use of DRE systems and electrical appliances for cooking and lighting can greatly improve indoor air quality and reduce greenhouse emissions.

Making DRE central to achieving 500 GW of renewable energy

Despite their obvious benefits, DRE projects haven’t quite gained the kind of traction one would have liked. This is because most decentralised projects are small-sised while investors and policymakers tend to focus more on large, scalable projects. The reluctance of investors is understandable; investments in several small projects can lead to an increase in administrative and monitoring costs. Aggregating projects and using digital technologies to monitor them could be one of the ways to make DRE projects attractive for investors.

DRE projects may be standalone at the time of establishment, but they need to be assimilated into the existing state-and-national-level distribution infrastructure at some point. The integration of DRE mini grids with the national grid entails some technical challenges. However, these can be addressed by developing standards to define how the grids will interact with each other and to ensure interoperability between them.

DRE projects can accelerate India’s progress towards its target of installing 500 GW of renewable-energy capacity by 2030. The small size and easy installation of DRE projects, combined with the fact that they enable power generation close to the point of consumption, improve reach and affordability and reduce losses. DRE systems also strengthen the resilience of communities in the face of natural disasters as mini grids can be restored very quickly even if they get disrupted.

DRE thus ticks several important boxes from a developmental perspective – making energy accessible and inclusive for all; spurring rural employment and enterprise; enabling the delivery of education and healthcare services; and strengthening the foundations of the clean energy grid that India is aiming for. DRE is a worthy goal for a country like ours, which has both the resources and the demand for it.