Rural Electrification in India: Biogas versus Large-Scale Power

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ONE POSSIBLE MEANS of providing electricity to India's 550,000 villages is the use of animal, human, and perhaps some forms of vegetable waste to make methane, a fuel that can be employed in small generators located in or near the communities to be served. This method is often called the gas process in India because gobar -cattle dung-is the main ingredient. The principal alternative, and the one that has been pushed in recent drives for rural electrification, is large-scale power works using coal, hydroelectric potential, atomic energy, or now possibly oil or gas. The large-scale system mandates an extensive power grid, but the local system does not. The Indian government is considering a commitment to a sizable small-scale power program, perhaps assisted by multilateral foreign aid. The economic basis of this decision and its ramifications for rural society have not, however, been systematically assessed. In this paper we will undertake a cost analysis of the two major rural power options: central power facilities and biogas units. We will contrast our findings with the estimates of the major previous studies of biogas electrification. In our judgment, their cost estimates have been substantially biased towards local units. Our conclusion is that, on average, centralized power production and distribution have an appreciable cost advantage over local units. Where villages are remote from transmission lines, however, small scale units may provide a cost savings. There are thus numerous locations in rural India where gas facilities may serve at least as a transitional source of power. We will comment upon the administrative problems associated with providing and servicing these decentralized generators and mention some of the implications of implanting this new technology in the Indian village setting.