Rural electrification in India: Galilee Basin coal versus decentralised renewable energy micro grids

The state of Bihar in India has approximately 75 million people with no access to electricity. The government of India has pursued a policy of rural electrification through the provision of centralised coal-fired power which has been unable to resolve the low levels of electrification. Coal supply woes in India have led Indian companies to pursue new coal mines in Australia’s Galilee Basin. The costs of these mining ventures will be high due to the mining infrastructure required and long transport distances to rural India. A high level analysis of mining, transport and power station investment to meet rural demand in Bihar shows that the absolute investment requirement using coal, especially coal sourced from Australia, as an expensive option. Pursuing electrification through village level, renewable energy micro-systems requires lower financing and provides more flexibility. Pollution costs associated with coal-fired generation, employment benefits associated with many village implementations and a rural load unsupported by industry load, show the benefit associated with decentralised, renewable energy electrification.