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Rural Electrification in India: Economic and Institutional aspects of Renewables


  • James Cust

    () (Faculty of Economics, Cambridge)

  • Anoop Singh

    (Department of Industrial and Management Engineering, Indian Institute of Technology, Kanpur)

  • Karsten Neuhoff

    (Faculty of Economics, University of Cambridge)


The paper assesses the demand for rural electricity services and contrasts it with the technology options available for rural electrification. Decentralised Distributed Generation can be economically viable as reflected by case studies reported in literature and analysed in our field study. Project success is driven by economically viable technology choice; however it is largely contingent on organisational leadership and appropriate institutional structures. While individual leadership can compensate for deployment barriers, we argue that a large scale roll out of rural electrification requires an alignment of economic incentives and institutional structures to implement, operate and maintain the scheme. This is demonstrated with the help of seven case studies of projects across north India.
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Suggested Citation

  • James Cust & Anoop Singh & Karsten Neuhoff, 2007. "Rural Electrification in India: Economic and Institutional aspects of Renewables," Working Papers EPRG 0730, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
  • Handle: RePEc:enp:wpaper:eprg0730

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    References listed on IDEAS

    1. Banerjee, Rangan, 2006. "Comparison of options for distributed generation in India," Energy Policy, Elsevier, vol. 34(1), pages 101-111, January.
    2. Nouni, M.R. & Mullick, S.C. & Kandpal, T.C., 2006. "Photovoltaic projects for decentralized power supply in India: A financial evaluation," Energy Policy, Elsevier, vol. 34(18), pages 3727-3738, December.
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    5. Ashok, S., 2007. "Optimised model for community-based hybrid energy system," Renewable Energy, Elsevier, vol. 32(7), pages 1155-1164.
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    7. Bose, Ranjan Kumar & Shukla, Megha, 2001. "Electricity tariffs in India: an assessment of consumers' ability and willingness to pay in Gujarat," Energy Policy, Elsevier, vol. 29(6), pages 465-478, May.
    8. Ghosh, Sonaton & Das, Tuhin K. & Jash, Tushar, 2004. "Sustainability of decentralized woodfuel-based power plant: an experience in India," Energy, Elsevier, vol. 29(1), pages 155-166.
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    10. Chakrabarti, Snigdha & Chakrabarti, Subhendu, 2002. "Rural electrification programme with solar energy in remote region-a case study in an island," Energy Policy, Elsevier, vol. 30(1), pages 33-42, January.
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    Cited by:

    1. Harish, Santosh M. & Morgan, Granger M. & Subrahmanian, Eswaran, 2014. "When does unreliable grid supply become unacceptable policy? Costs of power supply and outages in rural India," Energy Policy, Elsevier, vol. 68(C), pages 158-169.
    2. Shahidur R. Khandker, Hussain A. Samad, Rubaba Ali, and Douglas F. Barnes, 2014. "Who Benefits Most from Rural Electrification? Evidence in India," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    3. Valeria Gambino & Riccardo Del Citto & Paolo Cherubini & Carlo Tacconelli & Andrea Micangeli & Romano Giglioli, 2019. "Methodology for the Energy Need Assessment to Effectively Design and Deploy Mini-Grids for Rural Electrification," Energies, MDPI, Open Access Journal, vol. 12(3), pages 1-27, February.
    4. Oda, Hisaya & Tsujita, Yuko, 2010. "The determinants of rural electrification in Bihar, India," IDE Discussion Papers 254, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Goel, Sonali & Sharma, Renu, 2017. "Performance evaluation of stand alone, grid connected and hybrid renewable energy systems for rural application: A comparative review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 1378-1389.
    6. Roy, Anindita & Kedare, Shireesh B. & Bandyopadhyay, Santanu, 2009. "Application of design space methodology for optimum sizing of wind-battery systems," Applied Energy, Elsevier, vol. 86(12), pages 2690-2703, December.
    7. Narula, Kapil & Nagai, Yu & Pachauri, Shonali, 2012. "The role of Decentralized Distributed Generation in achieving universal rural electrification in South Asia by 2030," Energy Policy, Elsevier, vol. 47(C), pages 345-357.
    8. Palit, Debajit & Malhotra, Ramit & Kumar, Atul, 2011. "Sustainable model for financial viability of decentralized biomass gasifier based power projects," Energy Policy, Elsevier, vol. 39(9), pages 4893-4901, September.
    9. Holstenkamp, Lars, 2019. "What do we know about cooperative sustainable electrification in the global South? A synthesis of the literature and refined social-ecological systems framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 109(C), pages 307-320.
    10. Oda, Hisaya & Tsujita, Yuko, 2011. "The determinants of rural electrification: The case of Bihar, India," Energy Policy, Elsevier, vol. 39(6), pages 3086-3095, June.

    More about this item


    Rural Electrification; Distributed Generation; Renewable Energy; India;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources


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