Small systems can be sized to cater to rural energy needs
Improving energy access in rural areas is possible by not only providing and expanding grid networks, but also by making reliable power available to most of the households in a village and its residents for the majority of the day through minigrids.
Due to limitations in extending grid networks to difficult-to-access locations, alternate means and combinations of locally available resources, such as hybrid systems comprised of solar, biomass, small hydro and possibly wind, must be explored and strengthened.
Such small systems can be sized to cater to rural energy needs. These systems are already in use, operating as minigrids, microgrids and standalone home systems. These are predominantly solar photovoltaic-based systems with and / or without storage.
Recently, I came across an article, India joins rush to renewables, but its rural solar systems fall off grid, which provided a very lopsided view of the developments and status of minigrids in the country.
I concur with the some of the observations in the article, but for the most part, it only talks about minigrid installations that have stopped working for various reasons such as a lack of community ownership, funding and technical support for operations and maintenance.
I believe the article presents a skewed view of distributed renewable energy (DRE) adoption and implementation and undermines its impact in India as a means to achieve energy access objectives.
The article further connects the observation from India to Africa, which in my opinion is highly unfair, as the conditions, aspirations, opportunities and resources are different in the subcontinent and in Africa. Nonetheless, Africa too has been seeing the evolution of DRE systems starting from standalone systems such as solar lanterns in the past to mini and microgrids at present.
These developments need not be looked at through the lenses of Global North and Global South, as the Global North does not have the solutions for all the obstacles Global South is facing, let alone the energy challenge. The article seems to indicate otherwise.
Minigrids have witnessed significant growth in India over the years. As of 2019, there were more than 14,000 minigrid projects operating in India, according to nonprofit World Resources Institute, against a mere 4,000 as claimed in the article.
Most of these minigrids are owned and operated by private sector developers. Minigrids have become a business avenue for the private sector that is now investing and bringing innovative technologies and measures to ensure access to reliable source of power to the target communities.
I would like to highlight some successfully operating minigrids that have changed the lives of the people by providing them with various opportunities for livelihood enhancement, income generation activities, access to primary healthcare, availability of vaccines and availability of clean and drinking water.
It has also led to higher access to market for processed agri-produce, increased shelf life of perishable items through community-level small cold storage and increased hours of study for the children. It has also given safety and security from wild animals and reptiles in the night due to well-lit streets.
Tata Power Renewable Microgrid Solar has been working in Uttar Pradesh, Bihar and Odisha, wherein communities have been using power not just for household lighting but shops, weekly markets, medical clinics (for refrigeration), electric mobility providers, telecom towers, teaching centres and roadside eateries in villages.
The company is exploring clustered smart meters and power generation from bio-compressed natural gas, among other technologies.
Mlinda Sustainable Environment Pvt Ltd is actively working with tribal communities in the most deprived areas of Jharkhand. It has provided opportunities to local entrepreneurs and helped them gain access to markets and financing for small village-level businesses and entrepreneurship.
It has helped set up flour and rice mills, oil expellers, small community-level storage and enabled local health centres through 24-hour power supply from the minigrids. The community is now benefiting from instant access to primary health services, availability of vaccines, etc.
Customised Energy Solutions has been tremendously working in the North Eastern states by setting up several mini / microgrids, which is helping the communities enhance their livelihoods, increase income, market access for locally processed spices, fruits and vegetables such as pineapple, turmeric and access clean drinking water.
SwitchON has been driving energy access related activities catering to the needs of communities and villages in West Bengal, including Sundarbans area.
These examples are just a few of the several mini / microgrid projects and operators that are working in tandem with the communities in various parts of the country.
Apart from the private sector driven interventions, “a total of 15 Indian states saw the installation of off-grid renewable solutions for electrification under the Deen Dayal Upadhyaya Gram Jyoti Yojana scheme. The highest such interventions were made in Arunachal Pradesh (555 villages). It was followed by Chhattisgarh (473), Odisha (399) and Assam (394),” Saur Energy International quoted the Union Minister for New And Renewable Energy as saying.
We cannot undermine the role of minigrids, developers and various stakeholders and most importantly, the impact it has on the communities, because the minigrids / microgrids as DRE systems are serving difficult geographies where the national grid cannot reach in a cost-effective manner.
However, it is worth acknowledging that there are challenges related to sustainability and affordability.
This calls for a careful evaluation of the energy access objectives, which must take into account local resources, aspirational demand of the communities and ways to deal with the uncertainties in operation mainly emanating from the possibility of grid extension.
This uncertainty can very well be addressed with flexibility for grid integration at both ends — minigrid and national grid infrastructure.
Nonetheless, the issue of achieving cost parity between the minigrids and the grid power is a much bigger challenge. This is partly because the minigrid tariff is decided primarily and predominantly by the operators / developers as it is not a regulated domain. Moreover, the tariff is based ontechnology / resources available and its intended use by the consumers.
Developers are forced to charge a heavy tariff in order to sustain themselves and be profitable. This, however, requires a deeper understanding.
Distribution companies could be instrumental in bridging the gap to achieve cost parity but these utilities either have limited or lack of capacity in providing energy services to rural areas through minigrids.
Energy charge of minigrids varies across states and locations within the same state and across operators, which could be as high as two times to six times that of the grid power. In some cases, it has been reported as high as Rs 40 per unit of electricity.
It makes commercial activities nearly unviable owing to high energy cost both for the entrepreneurs as well as for the customers. It is highly unfair for the minigrids connected consumers to pay such a high price, whereas, the grid connected consumer in the same state enjoy the benefits of either highly subsidised or even free electricity.
One of the many reasons for high tariff could be attributed to the uncertainty in terms of operations due to grid extension. In such cases, it has been seen that the off-grid systems become redundant once the consumers get connected to the grid which makes the proposition or business of minigrids very high risk.
Because of this uncertainty, developers expect and try to recover their investments at the earliest over a shorter span, charging a premium to consumers. This could be very well managed by having a robust institutional setup for minigrids involving local administration and local governance.
Certain measures to reduce perceived risk on project operations can be introduced/debated and applied thereby optimising the tariff. This requires regulatory attention.
Minigrids can play much bigger role by integrating various village level activities and services such as provision of cold storage, small capacity rice and flour mill, oil expellers, small irrigation systems either through community based interventions as well as empowering individual entrepreneurs.
However, the high tariff could be the only deterrent which requires to be addressed by optimising various input costs and revenue and feed-in tariff (FiT) as a means to narrow the gap.
Going forward, it would be prudent to have a FiT structure for minigrids to bridge the wide gap between grid tariff and minigrid tariff. It implies the need for a regulatory framework for minigrids, at least for some of its operational aspects.
Also, transparency in fixing the tariff by optimising cost and revenue under the existing or possibly new institutional framework, involving the user community as well, needs to be encouraged.
One of the plausible solutions to address the issue is to develop minigrid projects through public-private partnerships engagement and public bidding process.
Local administration at district or block level in consultation and guidance from SNAs can promote minigrid penetration through demand aggregation and competitive bidding process. Involvement of local administration / institution will ensure transparency in deciding the tariff structure.
The highly skewed energy cost being imposed upon the non-grid connected rural consumer as compared with the grid connected consumer affects the rights to live a good life in one way or the other. After all, energy deprivation and disparity in energy costs should not escalate into social injustice for rural communities.
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