Decentralised Distributed Generation Abridged


Electrification is a major driver for rural development and improved livelihoods. It enhances the quality of life of the rural populace and holds out hope for a better future. Grid Extension (GE) is the conspicuous stance used to electrify rural areas. This conception, that has been in existence for many years, and has been characterised for big generation plants, generally placed far from where the power demand is, and great transmission networks that carry the generated power to the demand sites and decisions come from a centralised planning generally placed inside a vertically integrated industry. Howbeit, it remains to be the onerous solution for connecting remote locations as it requires laying expensive distribution infrastructure in challenging conditions, may be from ecosystem, climate, landscape or location to reach habitat areas. In the circumstances the cost of extending lines to rural facilities can be prohibitively expensive. However, Decentralised Distributed Generation (DDG) may be another possibility or choice for rural electrification.

India is thus beginning a transition from a centralised power system delivering electricity to passive consumers toward a more decentralised power system relying to a larger extent on small-scale, sometimes intermittent generation from renewable energy sources (RES) and allowing greater active participation of consumers by becoming producers themselves and/or by smarter demand response management of their own energy use.

Decentralised Distributed Generation (DDG)

There is no consensus on a precise definition of DDG. It comprises small, modular, decentralised off-grid energy systems located in or near the place where electricity is used. DDG can be based on either conventional or renewable sources and is usually implemented in remote villages where connectivity to the grid is not feasible or cost-effective. DDG enables electricity generation at the local level using locally available resources ensuring reduced dependence on external resources. It is loosely defined as small-scale electricity generation within distribution networks or on the customer side of the network.

As the concept, DDG encompasses many technologies and many applications in different environments. These small modular power generating technologies are combined with energy management and provision of storage systems. These systems may or may not be interconnected to the electric grid.  The units are sited at or near customer sites to advance the operations of the electricity delivery systems at or near the end user. A distributed generation system can employ a range of options from renewable to non-renewable. These systems may or may not be interconnected to the electric grid and still have a capability to operate in a connected on-grid or off-grid mode. The object is to meet specific customer needs and to support economic operation of the distribution grid, or both.

When the definition is detailed, the concept is rigid and close. For the reason, there should be a wide open definition, qualitative, that assimilate the contextual validity of all the other in force concepts. The DDG may thus be defined as, the generation of electricity by facilities that are sufficiently smaller than central generating plants so as to allow interconnection at nearly any point in a power system.


Properly planned and operated DDG can provide consumers, as well as society, with a wide variety of benefits. DDG has the potential to solve addition of new generation capacity and expansion of the current transmission and distribution infrastructure particularly in remote areas. These include economic savings because of government subsidies and improved environmental performance. It also has a definite positive impact on the rural economy due to introduction of a new revenue generating entity.  The establishment of DDG unit creates jobs. Due to its “friendly” technologies DDG is environment friendly. These generation technologies are flexible in operation, size and expandability. The availability of clean electricity helps households to avoid the health risks associated with conventional forms of energy.  Generally, DDG systems are located near to region of power consumers. This reduces transmission and distribution losses. This also reduces the size and number of power lines that need be constructed. Distributed resources significantly and when deployed on a large scale comprehensively and profoundly improve the resilience of electricity. The diverse mix of energy sources is likely to reduce climate warming carbon emissions.

The vast majority of electric power generated by DDG is directly provided to consumers without being transmitted or distributed by means of the power grid. Such “stand-alone”, power supply achieves recognition for reliability of electricity. DDG aid the entire grid by reducing demand during peak times and by minimising congestion of power on the network. The distribution meets urgent power demands. DDG can also serve as a backup to the grid, acting as an emergency source for public services in the case of a natural disaster and with micro-grids can localise the impact of these failures, reducing the number of people affected. It could also be less vulnerable to hits from stormy weather, demand overload and other difficulties that have at times knocked out traditional systems.

Stumbling block

The rural poverty is the major obstacle for investing in clean energy technologies like solar home lighting systems. Access to credit becomes crucial for facilitating access to clean energy technologies, especially for relatively capital intensive DDG systems. Owing to cumbersome procedures involved in accessing formal credit and the reluctance of formal banking institutions to provide credit to the underprivileged, the poor have remained outside the mainstream, especially in terms of accessing clean technologies like solar home lighting systems, biogas plants, etc. The poor are unable to provide the required guarantees and hence, financial institutions do not develop packages for DDG. There is lack of information for rural energy entrepreneurs looking to enter the clean energy DDG market. Available data is neither shared nor collated into a single database for informed decision making. Security of supply remains controversial, with a number of conflicting influences and great uncertainty. Intermittent generation like wind can cause problems in grids, in physical balances and in adequacy of power. Without careful pricing and regulation, an overexpansion of DDG could drive up electricity prices and unfairly shift costs to customers who cannot afford to produce their own electricity. Technology choice, unproven technology, unpredictable local conditions slow down the effective functioning of DDG.

DDG technologies

Locally produced and resource-specific technologies for electrification reduce the need to import systems and facilitate their use in any given region. The main problem for electrification of rural or remote areas is the choice of the technology. Issues of customer and load density, relative distance to the national or regional grid, landscape, availability of natural resources such as wind, sun, water, forests, economic and financial aspects, availability and maturity of any chosen technology, all these factors influence the choice of the technology or technology mix. Each technology naturally varies in its generation technique, its costs, and in the quality of the service it delivers. The technology to be used for rural electrification through the renewable DDG route has thus to be selected based on the potential for each technology in the area, availability of feedstock, total demand, and cost of implementation.

Diesel generators despite all drawbacks still remain an attractive DDG technology in rural electrification. The Government of India (GoI) encourages its use only for standby options or in the case of temporary disruption of renewable energy supply.  Hydrogen “generators” small-scale portable power devices such as reformers and fuel cells may be substituted for the common diesel generators. Hydrogen can also be used as fuel to power backup devices the larger fuel cells and to provide combined heat and power (CHP). Renewable energies offer notable environmental advantages over conventional fossil fuel technologies. Photovoltaic (PV) power system provides electricity to relatively dispersed population and also to groups of houses or entire villages. The system is based on limited capacity mechanisms it often needs to prevent excessive consumption by users. Therefore, the move is towards solar-diesel hybrid-powered mini-grids. Wind energy is fast and simple to install. Small hydropower projects provide mechanical energy for small businesses, drinking water and irrigation through canals or pumps. Where adequate sources of biomass raw materials are available then these can also be used to generate electricity. Ocean energy plays a significant role in enabling sustainable energy for rural coastal and island regions by generating electricity. Combination of two or more different but complementary energy supply hybrid system located on the same site has advantage of to avoid fluctuations in the system’s energy supply.


In DDG projects of the Rajiv Gandhi Grameen Vidyutikaran Yojana (Rggvy) scheme the renewable technology with the lowest marginal cost and which is considered the most appropriate and effective technological option for the area is chosen. Under the Rggvy scheme, the first approach to village electrification is through grid extension. Where grid connection is either not feasible or not cost-effective, then stand-alone systems are considered and are powered by renewable energy sources or conventional sources through DDG systems. The Remote Village Electrification (RVE) Programme of the Ministry of New and Renewable Energies (MNRE) has been supplementing the efforts of the Ministry of Power (MoP) through complementary measures for the provision of basic lighting/electricity facilities through renewable energy sources. The RVE is responsible for electrifying remote unelectrified hamlets of villages where the grid connection is either not feasible or not economical because they are located in forests, hills, deserts, or islands and where DDG projects are not implemented by the Rggvy of the MoP. The Jawaharlal Nehru National Solar Mission (Jnnsm) does mention the use of solar energy as a means for rural electrification. Under the Decentralised Distributed Generation (DDG) of Deen Dayal Upadhyaya Gram Jyoti Yojana (Ddugjy), electricity access is provided to all the villages/habitations where grid connectivity is either not feasible or not cost-effective including those situated in backward and remote areas of the country. This includes mini-grids and stand-alone systems.


Generation directly installed in the distribution network, very near to the demand has been successful in areas where demand exists and DDG has been found to be economically viable. In case for DDG saying these types of projects are far reaching and can help ease the burden on both electricity supply shortfalls by serving rural areas and subsequently feeding back into the grid and reduce the urgency of costly grid extension. It all depends upon the economics of cost for a particular type of technology and its viability. Whilst putting a case forward for economically viable technology base along with organisational, policy and structural implementations still electrification needs of rural populace are not adequately met.  For every advantage that decentralisation offers, there is a disadvantage. DDG cannot be rated as clearly better or worse than a central grid. Much depends on other conditions, such as the operating conditions of the decentralised plants or the economic climate. Combination of technologies needs to be used in order to compensate for their individual advantages and disadvantages. Centralised and DDG has to be combined in the future in terms of sustainability, resiliency, economics of scale. Nevertheless promoting DDG options are needed to meet access goals significantly and have an important role to play in meeting the goal of universal electrification by 2030.

Harsha Rajwanshi is the Assistant Professor of Law, Gujarat National Law University & Faculty Advisor to GUVNL-GNLU Research Fellowship  on Energy Law and Policy.


One comment

  • Amazing…this technology will play a key role in future due currently radially rise popular so we need energy in every industry.

    the key benefit of DDG is its enables electricity generation at the local level using locally available resources.

    StraitsResearch offered lots of consulting services regards energy generation.

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