Micro grids offer solution to 400 million 'powerless' people

This cluster of three villages with approximately 350 households lacks connection to the power grid despite having made many appeals to the state government.

The residents burn kerosene for two to three hours a night just to produce enough poor quality light to eat their dinner before blowing out their lanterns and heading for an early bed.

About 42 per cent of Uttar Pradesh’s villages are off-grid. Orissa, Bihar, and Jharkhand are in even worse condition with fewer than 35 per cent of rural households having electricity. As of 2010, it is estimated that 48 per cent of rural households are unelectrified nationally leaving approximately 400 million people without electricity.

While India makes global headlines for its impressive economic growth, the majority of Indians continue to live in poor conditions. Power is not by any means the only or biggest challenge of rural life in India; India has a higher malnutrition rate amongst children than Sub-Saharan Africa and India has more poor people living on less than $1 a day than Sub-Saharan Africa. These are enormous issues, but what makes the lack of power so unfortunate is that solutions exist and when implemented they enable economic opportunities that allow people to climb out of poverty.

When we think of economic opportunities that power provides, we think of irrigation and electrical machinery; but in fact for most rural Indians it is simply the luxury of light which allows them to work later into the evenings. With competing demands on public resources, it is understandable that the national grid model of power delivery, which requires enormous public subsidies to build and operate, has yet to meet the country’s full demand. The government may have to prioritise on generation and transmission investments, providing power through the grid to only those it can do so economically, finding an alternative solution to powering the lives of those that live beyond the grid’s edge.

Traditional thinking tells us that there should be efficiencies of scale in power: larger generation facilities feeding into larger transmission lines serving a larger customer base will be more efficient than smaller power generation that is distributed locally to serve only a small number of customers. But that argument rests on a model of demand that fairly accurately describes India’s more power hungry and more densely located urban consumers than it does the majority of the country which is rural with more modest power demands. Because of the minimal power consumption requirements of poor, rural households, the costs of extending the distribution system multiple kilometres cannot often be justified by the minimal projected revenues.

Rather than producing power in Gujarat and delivering that power to a small village in Uttar Pradesh, transmitting power hundreds of kilometres to do so, power can be produced locally in smaller quantities and distributed very short distances.

Testing ground
India has been a testing ground for innovations in off-grid, rural power. Solar lanterns and solar home systems have been designed for India and then taken to the rest of the world. Another innovation, the micro grid, has been demonstrated on a commercial basis only in India. Desi Power, Husk Power Systems, Saran Renewable Energies, Mera Gaon Micro Grid Power, and Naturetech Infra all operate micro grids on a commercial basis.

While India offers an opportunity for commercial micro grid operations where other countries do not, there are still unnecessary risks to micro grid operation which inhibit adequate investment into the sector and limit the extent to which these companies can serve off-grid customers.

In every meeting I have attended on micro grids and off-grid distributed energy, the issue of grid tie in consumes the discussion. The assumption is that the grid will very soon reach each and every village and at that point the micro grid will be redundant. This mind set is probably the greatest contributor to hesitant investors.

“If I invest my money now, what happens when the grid reaches the village before I have recouped my investment?” We need to change the discussion. 400 million people in India lack electricity, more than at any point in history. Grand programs to reach the rural poor have generally fallen far short of expectations. Approximately 30 per cent of India’s generated power is lost in transmission. Most on-grid households still have to deal with power cuts, many get only a few hours of power at odd times of the day.

The government has plenty of challenges to overcome before reaching the tens of millions of new customer households it has yet to reach. So let’s be frank: 200 million people will still be off-grid in 2020. If we can admit that, than we can also agree that when the grid extends, it should extend to villages that are not currently served by micro grids. It isn’t that there is a lack of new villages to connect, so why not focus on expanding the grid to villages with no option at all?

That would provide micro grid companies and their investors with the security that they will not be displaced by a highly subsidised service that they cannot compete with. It would also put the issue of grid tie-in to rest, allowing micro grid companies to focus on their core business – serving the rural poor.

The people of Kanpur, who will get more stable power when generation and transmission issues are resolved, hope we can get to that point. And the people of Suwansi Khera, who have no real hope of grid connection any time soon, also hope we can get to that point. These are India’s constituents. These are the demands we must aim to serve. But to get there, we need to work together better.

(The writer is the coordinator of the Micro Grid Operator’s Network) 

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