Beyond the grid

Beyond the grid

About 80, 000 of a total of 6,25,000 villages in India do not have electricity. In fact, connecting about 25,000 of them through the regular grid is economically unviable. These villages have to be provided electricity through alternative sources. Solar energy could be one such source. However, it is extremely capital-intensive and an expensive proposition. It does work out well in cases where providing conventional power is not technically feasible. So there have been successful experiments recently to provide solar power at affordable rates. One such project is currently functional at Sagardweep islands in south West Bengal.
At Sagardweep The cost of energy at the Sagardweep project is around Rs eight per kilowatt hour (kwh). This is almost double the tariff charged by conventional power operators. However, this rate has been accepted by people in Sagardweep who otherwise had to make do with kerosene or diesel fuel. There are 10 off-grid solar power plants in the area with capacities ranging from 25 kilowatt peak (kwp)to 110 Kwp. Number of consumers exceed 5000. One 25 kwp unit has been set aside for a local hospital.

The West Bengal Renewable Energy Development Agency (wbreda) -- a state government unit -- runs the project. The tarrif is determined according to a no-profit-no-loss basis. The capital investment on the project is about us $ 0.7 million per megawatt (mw). 90 per cent of this has come from a loan provided by the Indian Renewable Energy Development Agency (ireda) -- a government of India agency. The rest has been financed by grants and contributions made by state governments and local bodies. The loan bears an annual interest rate of 1 per cent and is repayable over 20 years; the principal can be paid back as a bullet installment at the time of maturity. This gives wbreda enough breathing space to develop surpluses at the end of 20 years.
Surplus? How? How does the agency ensure surplus income? Firstly, the contract it signs with power suppliers requires the latter to provide for the operation and maintenance costs of the plants for three years. This accounts for a nominal rise in project capital costs, but ensures assured functioning. The savings that ensue are put into a long-term fixed deposit. Secondly, the charges paid by consumers for initial activation of power supply are also invested in a long-term fixed deposit. Moreover, consumers are also required to pay security deposits to guard against non-payment of dues. This money is also put into a deposit. wbreda's calculations indicate that the cumulative savings at the end of the 20-year period would provide for almost 30 per cent of the principal loan amount.

Local people are involved in the financial management of the project. In fact, a local residents body, the Rural Electricity Consumers Cooperative Society, collects all tariffs. Each consumer pays Rs 100 per month for a 100 watt-connected load. The average monthly consumption is limited to 80 watts of demand, or 12 units of energy. This works out to be far cheaper than paying Rs 6 for using private local diesel generator sets to light a 40 watt lamp for five hours a day. The price for the latter comes to around Rs 25-30 per unit.

The power plants and the solar lighting systems have opened up employment opportunities for unemployed young people in Sagardweep. Research on cheaper spv modules is underway and it is expected that a 50 per cent reduction in their costs will bring down the per unit charge of solar power by 25 per cent, since solar module expenses are 50 per cent of the total cost. There are little prospects of a decline in costs of other equipment used by the system -- such as battery, charge controller and inverter. One only hopes that research and development in this area will reduce cost of batteries and inverters and also improve their life.

C R Bhattacharjee is a retired chief engineer associated with the power supply industry. He is currently a consultant on the economics of energy generation from renewable sources. 12jav.net12jav.net