Professional Documents
Culture Documents
Energy Policy
journal homepage: www.elsevier.com/locate/enpol
Nokia Siemens Networks, 438 B Alexandra Road, Alexandra Technopark Block B, Singapore 119968, Singapore
Department of Management Studies, IIT Delhi, New Delhi 110016, India
Indus Towers, Building No. 10, Tower A, 4th oor, DLF Cyber City, Gurgaon 122002, India
a r t i c l e in fo
abstract
Article history:
Received 31 March 2009
Accepted 11 November 2009
Available online 9 December 2009
A wireless revolution has transformed telecoms in India and in other emerging markets. The electricity
market, on the other hand, remains underdeveloped. We dene Wireless Electricity as renewable
energy produced within a few hundred meters of the point of consumption. A wireless revolution in
electricity would solve the problem of electricity decit, empower people at the bottom of the pyramid
and mitigate the environmental impact of bringing hundreds of millions out of poverty as the Indian
economy grows. Renewables are technically proven and economically viable in certain situations, but
their use remains peripheral. The stark difference in the diffusion patterns in telecoms and electricity
has been ignored by leaders in government, business and academics. We present common frameworks
to explain the different directions of reform in telecoms and electricity. We explain some of the
dynamics which prevent the diffusion of Wireless Electricity. We use a causal loop diagram to explain
the status quo in the off-grid electricity market and propose changes which will lead to the formation of
a market for Wireless Electricity. India has the entrepreneurial talent to develop this marketand the
largest number of potential customers. The world will benet as a result.
& 2009 Elsevier Ltd. All rights reserved.
Keywords:
Mobile communications
Decentralized electricity
Renewables
1. Introduction
A paradox is unfolding before us. Wireless communication is
connecting billions of marginalized people to the rest of the
world. But they remain deprived of other basic needs such as
reliable electricity.
The One Laptop Per Child initiative was launched with the
laudable objective of creating educational opportunities for the
worlds poorest children. Similar initiatives followed, including
one sponsored by the Government of India.1 We are gripped by
the possibility that digital technology will help us to leapfrog
deciencies in basic services. This leads us to be inspired by goals
such as giving each child a hand-cranked laptop for $20, when
what might be more helpful is a hand-cranked light for $2.
With more than four billion mobile subscribers worldwide, the
mobile phone is the most successful electronic gadget of all time.
An ecosystem of telecom regulators, operators and vendors has
pulled off a feat which was unimaginable even two decades ago.
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open up completely new vistas for economic growth. India has the
entrepreneurial talent to develop this marketand the largest
number of potential customers. The world will benet as a
result.
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A. Kumar et al. / Energy Policy 38 (2010) 15371547
1539
State Market
Transport:
Capacity:
Transport:
Coverage:
Coverage
Transport
Capacity
NLD and
ILD
Operator 1
Mobile Operator 2
Customers
National grid
Transport:
Capacity:
Transport:
Coverage:
Customers
State Market
Fixed Operator 1
State Market
Customers
to other networks
Transport:
Long Range
Capacity:
Transport:
Coverage:
Customers
Service Entity
State Market
Coverage
Transport
Capacity
Mobile Operator n
Coverage
Transport
NLD and
ILD
Operator m
Capacity
State Market
National grid
GenCo
m
Transport:
Capacity
Trans
Con
Capacity
GenCo
1
Capacity
Trans
Co1
Capacity
Coverage
Customers
Distribution
Co
Fig. 1. Different Strokes in Utility Network Reform in Telecom and Electricity. (A): Building Blocks of a Service Network, (B): The Pre-Reform Telecom Network, (C): the PreReform Electricity Network, (D): the Post-Reform Telecom Network and (E): the Post-Reform Electricity Network.
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1540
5.00
4.00
3.00
2.00
1.00
0.00
-1.00
Years
GDP
Population
2.70
15.50
% of Population
6.00
16.70
32.40
4.00
19.30
34.80
36.00
18.80
19.90
19.00
19.20
17.30
11.50
1993-94
15.40
8.70
6.40
1999-00
2004-05
Year of Survey
Extremely Poor
Vulnerable
Poor
Middle Income
Marginal
Hi g h Income
Fig. 3. Distribution of Population by Poverty Status, 199394 to 200405 (based on Sengupta et al. (2008)).
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A. Kumar et al. / Energy Policy 38 (2010) 15371547
Table 1
Classication of Indian Households By Consumption Expenditures, from Sengupta
et al. (2008).
Type of
Criterion Met
Household
Extremely
poor
1.3
1.6
2.2
4.0
10.2
Note: Poverty Line was Rs. 346.2 for rural areas and Rs 514.0 for urban areas (1 US$
PPP =9.12 rupees )
1541
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24
Mobile Network
BTS, Hospital
ICU, Cold
Storage Unit
Renewable
Energy
Sources
Hybrids
Grid
Supply
Hybrids
Fan
Inverter
and
Battery
Light
Diesel
Generators
Water Pump
24
Number of Hours of Grid Supply Per Day
Fig. 4. Whats The Good Fit? Suggested Appropriate Solutions from the Consumers Viewpoint.
200,000
NPV in US$
150,000
100,000
50,000
0
1
3
4
5
6
7
8
Number of Years Considered
10
Fig. 5. Overall Cost Performance in One CaseDiesel Generator (DG) vs. SolarDG
Hybrid.
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A. Kumar et al. / Energy Policy 38 (2010) 15371547
Solar/ Wind
System
Mobile
Network
Fuel
Cell
SIM Card
Channel
Minutes of
Voice
Mobile
Operator
Billing &
IT
1543
KWH of
Electricity
The
Missing
DG for
Standby
Controller
Operator
Interconnect
Billing & IT
Contact
Centre
Fuel
Channel
Fig. 6. The Case of the Missing Operator: A Comparison of Inputs and Outputs in the Wireless Telecom and Renewable Energy markets.
11
2009.
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1544
+
+
Scale of
Operations, DG
Availability of Service
Providers, DG
NETWORK EFFECT :
SUPPORT RESOURCES
ECONOMIES
OF SCALE
Diesel Subsidy
Cumulative
+ Experience, DG
Sales, DG
- Unit Cost, DG
-
LEARNING EFFECT
Perceived
Reliability, DG
DOMINANCE OF
DESIGN
Economic
Growth Rate
Market Share, DG +
+
-
+
Attractiveness,D
Demand for
New Off- Grid
Electricity
Generators
Attractiveness,
REN
+
+
Market Share, +
REN
Geographic coverage
of grid electricity
Perceived
Reliability, REN
DOMINANCE OF
DESIGN
Cumulative
+ Experience, REN
Sales, REN
LEARNING EFFECT
ECONOMIES
OF SCALE
Depreciation
Benefit
NETWORK EFFECT :
SUPPORT RESOURCES
Scale of
+ Operations, REN
Availability of Service
Providers, REN
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A. Kumar et al. / Energy Policy 38 (2010) 15371547
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Table 2
Split of Lighting Used in Indian Households (Source: Census of India).
Source of
lighting
Other
oil
Any
other
No
lighting
No. of Households, In
thousands
107,209
184
305
614
83,127
522
9. Concluding remarks
Experience in Indian telecoms has shown that corporates and
the state can interact so that the policy framework supports
market growth, consumer rights and societal benets. We hope
that with this article we have contributed to starting a similar
process for the electricity market.
McLuhan (1964) commented that message of electric light is
like the message of electric power in industry, totally radical,
pervasive, and decentralized. In India, the decentralizing effect of
electricity has been hampered by the two forces which blocked
the diffusion of telecoms in the pre-mobile era.
Firstly, being wired has meant that access to electricity is
through the grid (except for those who have captive power
plants). This is similar to the earlier situation in telecoms: some
entities had dedicated networks, but mostly communication
required a line. The line had cost and effort associated with it
and the infamous lineman was the king. Secondly, the lines are
added and maintained by monopolies which are not exactly
revered for customer orientation.
These barriers of technology and market can be smashed in the
electricity market, just as they were in the telecommunications
market, by going wireless. Interestingly, an Indian sage and
reformer, Swami Vivekananda (1985), had something to say on
the subject of wireless electricitybefore even the advent of
wireless telegraphy. Though he wrote in a different context, we
think it is relevant to quote him: Taking the analogy of
electricity, we nd that man can send a current only along a
wire, but nature requires no wires to send her tremendous
currents. This proves that the wire is not really necessary, but that
only our inability to dispense with it compels us to use it.
12
http://www.censusindia.net/ Website of the Census of India, accessed 2
March 2009.
13
National Council for Applied Economic Research (NCAER), The Great Indian
Market, available at http://www.ncaer.org/downloads/PPT/TheGreatIndianMarket.
pdf (accessed 2 March 2009)
14
NSSO , Report Number 477(56/2.2/1): Unorganized Manufacturing Sector in
India, available at http://mospi.nic.in/mospi_nsso_rept_pubn.htm (accessed 25
March 2009).
15
http://msme.gov.in/msme_ars.htm website of the Ministry of Micro, Small
and Medium Enterprises, accessed 25 March 2009.
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Table 3
Example Cost- Benet Analysis carried out in 2007.
Base Case: Site Running on DG- 4 Hr Battery
DG Run Hours per day
DG Run Hours per year
Diesel consumption, lt/hr
Diesel cost, Rs/ Lt
DG life, hours
DG AMC per month:
DG Servicing cost/250 h
DG major repair/ 5000 h
DG cost, Rs
Diesel Filling cost/ month
Annual costs
Diesel
Diesel Filling
DG servicing and repair
Annual Diesel price increase 200207
http://www.iocl.com/Diesel_prices.aspx
(% by which higher than 200207 CAGR)
Capex net of depreciation benet
AMC/ MS of equipment other than DG
Per AH cost of one cell
Battery cost (life 2 years), 600Ah
Annual increase in Battery and Price
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