MNRE going slow on green energy schemes

A parliamentary panel finds 'glaring disparity' between targets set and achieved for the 11th Plan period.

While the government is pushing for the use of renewable energy in rural areas to address the twin problems of climate change and scarcity of power, the nodal ministry for carrying out the exercise has not been performing well.

In a major indictment of its lacklustre performance, a parliamentary panel has pulled up the Ministry of New and Renewable Energy for failing to meet project targets and stop disparities in utilisation of funds in its rural renewable energy programmes.

The panel has pointed out that its examination has revealed 'glaring disparity' between the targets set and achieved under different programmes on rural renewable energy being run by MNRE.

These programmes include Remote Village Electrification, Village Energy Security, solar power and hydro projects scheme.

MNRE had proposed a plan outlay of Rs 2,500 crore (Rs 25 billion) for its rural energy schemes for the current Plan period including Rs 650 crore (Rs 6.5 billion) for RVE, Rs 900 crore (Rs 9 billion) for non-electrical RE systems and Rs 250 crore (Rs 2.5 billion) for biogas scheme.

However, Rs 1,000 crore (Rs 10 billion) outlay was approved. The ministry has managed to electrify only 2,300 villages out of the targeted 5,000 since March 2007, with an expenditure of Rs 272 crore (Rs 2.72 billion) -- 90 per cent of the budget estimate of Rs 303 crore (Rs 3.03 billion).

"Under RVE, even 50 per cent of the villages earmarked under the target for first three years of the 11th Five-Year Plan (2007-12) have not been electrified and budget allocation of about 90 per cent has been eaten up.

Under biogas, only 250,000 plants have been established while the expenditure on the same has overshot the budgetary estimate," the standing committee on energy has stated in its report on "Renewable Energy for Rural Applications".

The ministry has also received flak from the parliamentary committee for setting up only 534 Mw of small hydro power capacity against the targeted 1,400 Mw for the current Plan period.

It noted that this target had been reduced to 1,000 Mw during mid-term appraisal without reducing the financial allocation of Rs 700 crore (Rs 7 billion).

The report adds that the sidelining of important programmes by not initiating any action regarding their implementation itself speaks about the poor and improper planning and mixing up of the priority areas.

"Despite this, there has been a 45 per cent increase in the budgetary allocation of the ministry for rural renewable energy programmes during the mid-term appraisal," the report, tabled in Parliament recently, adds.

Noting the prevailing "extreme incoherence in overall expenditure", the panel has warned the government of ill-effects. "With this attitude, it will be practically impossible to do something meaningful within the stipulated timeframe."

While the power ministry looks after the overall nationwide rural electrification programme through its flagship Rajiv Gandhi Grameen Vidyutikaran Yojana, MNRE looks after the implementation of schemes like RVE in rural areas.

MNRE cites lack of coordination between the implementing agencies of RGGVY and RVE as one of the constraints for meeting targets.

The panel has, however, disagreed and called the obstacles highlighted by the ministry as 'neither unforeseen nor insurmountable'.

The RVE programme of MNRE was planned to provide power to those villages which are not covered under the RGGVY scheme through small hydro, biogas and solar plants.

RGGVY is one of the six schemes under the UPA government's flagship Bharat Nirman Programme aimed at strengthening the rural power distribution backbone through installing sub-stations and transformers and setting up small-sized power generation plants.

Under RGGVY, while the government has so far awarded 573 projects worth over Rs 31,700 crore (Rs 317 billion), more than 35,000 villages in the country -- 30 per cent of the target for the current Plan period -- remain without electricity.

"The challenge is that the Ministry of Power and MNRE will have to combine their efforts to get that last mile connectivity for far-flung villages.

"The difficult terrain in such areas is a major challenge for the government which can be addressed by distributed generation plants," said Gokul Chaudhri, Partner, BMR Advisors.

MNRE states lack of approvals by the state governments as a major reason for its poor performance.

"We have pointed out that the state governments have not paid adequate attention to the implementation of the scheme," MNRE secretary Deepak Gupta said in his reply to the committee.

The panel has expressed 'surprise' over the fact that even in the VESP scheme, only test projects have been commissioned so far by the ministry while the original proposal was to cover 1,000 villages with a total outlay of Rs 225 crore during the current Plan period.

The panel has accused the ministry of poor performance and tardy implementation of projects.

"Moreover, the reasons advanced by the ministry for this state of affairs are superficial and not convincing. It appears that the problems enumerated by the ministry are meant to cover up their own failure in foreseeing the difficulty in remote areas and coming up with pragmatic remedial measures," it said.