Friday, March 11, 2011

World's largest clean cookstoves program in India

From Mr. Lalloobhoy Battliwala

An ambitious pro-poor cleaner energy plan is under way in India.

The Energy chapter of the most recent Economic Survey describes (in the excerpt below) a vision of extending new LPG service to 55 million customers by 2015, to reach in total 75% of the population. (That suggests current household coverage of 50%, a bit surprising. Anyway, some 50 million households will still need kerosene and perhaps even improved woodstoves if available then.)

The avoided GHG emissions are staggering - additional 500 million tons CO2-e per year roughly in gross terms including all GHGs and black carbon, using 20-year GWPs, and ignoring the 'renewable biomass' theology). Benefits in terms of avoided disease and death - and improvements in the quality of life gained - incalculable.

And there is a particular capital subsidy program under consideration for Below Poverty Line households - some 20 million at around $30 each or $600 m total, HALF of which from the mandated CSR activities on the Indian oil companies.

For about the same sum - $600 m - financed in roughly the same manner - a half from the oil companies, the remainder from the budget (or other grant sources) - and the same period (if not less), about the same number (20 million) of BPL users of kerosene lighting (off-grid or victims of unreliable grid) can be given capital subsidies for changing to solar lanterns. (Say ~$20 each to BPL families on the grid to ~$40 each to BPL families off-grid).

And unlike the LPG program - which has a running budget of some $3.5 billion a year of price subsidy - there will be no operating subsidies. (Total kerosene and LPG "under-recoveries" will hit almost $10 b this year.

Rs 3 billion (~$600 m) price tag might also appeal the Finance Minister. (Because Pranab Mukherjee says 3 is his favorite number.)

Another measure of my ignorance and silliness. (Worrying about cleaner energy for the poor or saving the climate; what else do YOU worry about when vacationing like I am? :-)).

Note for non-Indians: Lakh = 100k; Crore = 100 lakhs = 10 m. ~ 45 Rs/US$


Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY)

11.48 The 'Vision-2015' adopted for the liquefied petroleum gas (LPG) sector, inter-alia, focuses on raising the population coverage of LPG in rural areas and areas where coverage is low. The RGGLVY for small-size LPG distribution agencies was launched on 16 October 2009. This scheme targets coverage of 75 per cent of the population by 2015 by release of 5.5 crore new LPG connections. Oil marketing companies (OMCs) have issued advertisements to set up 2329 LPG distributors in 22 States, namely Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Meghalaya, Nagaland, Orissa, Rajasthan, Tamil Nadu, Tripura, Uttar Pradesh, West Bengal, and Pondicherry. Out of this, 75 LPG distributors have already been commissioned. Selection for the rest of the locations is in progress as per policy. The price of administered pricing mechanism (APM) gas produced by ONGC and OIL has been increased from June 2010 to the level of US$ 4.2/mmbtu, less royalty, which is equal to the price of gas produced by NELP operators.

Free LPG Connections to BPL Rural Households

11.49 A proposal for providing one-time financial assistance to BPL households for acquiring new LPG connections is under consideration of the Government. Under the proposed scheme, the Government and Oil Marketing Companies would provide one-time assistance of Rs. 1400 for acquiring a new LPG connection to a BPL family. The scheme would cover all eligible households in the BPL list of the State Government/Union Territory. About 32-40 lakh new LPG connections are to be released annually under this scheme.

11.50 The annual financial implication of the scheme is estimated to be Rs. 490 crore. The proposed budgetary support has been restricted to the extent of 50 per cent of the total funds required. The remaining 50 per cent would be partly drawn from the Corporate Social Responsibility Funds (CSRFs) of the six major oil companies, namely ONGC, IOCL, BPCL, HPCL, OIL, and GAIL and partly borne by the three oil marketing companies (OMCs) namely IOCL, HPCL, and BPCL in the ratio of LPG connections released to BPL households by each company. It is expected that the OMCs will incur Rs. 6.00 crore during the current financial year.

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