Minigrids can power rural economic activity, says Smart Power’s Mukherji

Mini grids can spur economic activity in rural areas and accelerate the process of expanding mobile phone network across the country due to their large capacities and the ability to connect to the national grid, according to Smart Power India.
A mini grid, as defined by the Ministry of New and Renewable Energy, is an off-grid power system with a generation capacity of between 10 KW and 500 KW. There are a number of other solutions of smaller capacities that rural areas can use such as a solar lantern, a solar home solution, or even a community solution like a micro grid. But a mini grid is the only alternativethat provides the kind of electricity that can be used for business activities, Jaideep Mukherji , Chief Executive Officer (CEO), Smart Power India told The Hindu.
“One of the deficiencies of the other off-grid power solution models is that while these solutions are good in moving households away from kerosene and providing them with reliable and clean energy, they do not provide the energy required to fuel enterprise or commercial activity. You will not be able to power equipment, motors, etc,” Mr. Mukherji said.
“A mini grid is a larger system that converts direct current (DC) to alternating current (AC) and it provides safety as per REC and CEA standards,” he explained. “Usually, the power coming from the smaller off-grid solutions is DC energy. While it is good for lighting, it does not satisfy the community’s requirement to run any sort of business,” he said.
The power generated from a mini grid can be seamlessly transferred to the national grid since it is already going through a a charge controller which manages the flow of energy and an inverter which converts the electricity from DC to AC. It also has a storage facility to meet night demand as well.

No fluctuations

“The power that comes out is regular and standard with no fluctuations,” Mr Mukherji said.
Apart from commercial enterprises, rural banks or schools, Mr. Mukherji said that a large part of the demand for mini grids came from telecom service providers for powering mobile towers.
“They (mobile towers) have a presence across rural India and all of them suffer from inadequate power and so have to use diesel,” Mr. Mukherji said. “There is a national mandate to green 50–60 per cent of the telecom towers and also the cost of using diesel is very high and it (the risk) includes diesel theft and all the other nefarious activities that go along with it not to mention the pollution. The power demand of a telecom tower is 24/7.”
Even from his company’s point of view, one of the important criteria in selecting a village to install a mini grid is to see whether there is at least one customer in the area – like a telecom tower, petrol pump, school or bank – that could make up a significant portion of the energy demand from the mini grid.

Business potential

“The selection of the village is very important. We look at the number of households and the potential of existing commercial activity and the future potential demand. There should be a threshold amount of economic activity. And the other important criterion is the presence of an anchor-load customer, a single customer who can guarantee at least 25-30 per cent of the demand” he said.
A combination of flexible regulation by the government and erratic power supply from the national grid has meant that mini grids can complement the national grid and, according to Mr. Mukherji, often the mini grids are installed in places already covered by the national grid.
“Where the grid has reached, the power is inadequate, erratic and not able to meet the energy requirements of the village,” he said.

Flexible rules

Government regulations also provide complete flexibility to the investor, allowing them to compete with the grid, if they choose, sell their excess power to the grid or even exit by selling their assets to the distribution companies.
“Tariff flexibility is also given such that the tariff for the power coming from a mini grid is decided between the provider and the community served,” Mr. Mukherji said.
“At the moment, the government has not set the upper limit on the tariffs and has left it to the market. It’s not as if people will buy power at any price. At the lowest tariff level, they would pay 5–6 rupees a day to light up their home or shop using a mini grid. That is a big saving over diesel or kerosene and the power comes with the benefit of being regular and standard,” he said.

Rockefeller Foundation’s mini-grids operational in 106 villages in India

US-based Rockefeller Foundation’s (RF) subsidiary Smart Power India today said its mini-grids are now operational in as many as 106 villages in India.

The grids are operational across three states of Uttar Pradesh, Bihar and Jharkhand. In the long-term, Mukherji said these grids have the ability to integrate with the discoms’ grids and would help accelerate the realisation of the government’s ‘power for all’ vision.(Representative image Reuters)

US-based Rockefeller Foundation’s (RF) subsidiary Smart Power India today said its mini-grids are now operational in as many as 106 villages in India. Smart Power India is setting up these mini-grids under the Foundation’s Smart Power for Rural Development programme.

“The mini-grids are now operational in 106 villages in India. We are already in the process of building 125 new mini-grids with our partners … It is the largest privately operated mini-grids cluster globally,” Smart Power India CEO Jaideep Mukherji said in a statement.

The grids are operational across three states of Uttar Pradesh, Bihar and Jharkhand. In the long-term, Mukherji said these grids have the ability to integrate with the discoms’ grids and would help accelerate the realisation of the government’s ‘power for all’ vision.

He also said that the increasing affordability of solar equipment is a positive development for the mini-grid sector as it would help reduce the cost. “Our mini-grids are helping bridge energy access gap by supplying power not only to homes, but also for commercial and productive activities in the village,” he added.

Deepali Khanna, Director of Rockefeller Foundation said that they are aiming at powering 1,000 villages in the country. “Currently we are working with our partners to expand our work to Jharkhand,” she said.

The foundation has launched an initiative to use renewable power-based mini-grids to light up villages. It is working with the government to develop central and state policies that support growth of the mini-grid sector in India.

Rockefeller has invested USD 1.5 million to resolve the battery storage challenge.

RF’s mini-grids operational in 106 villages

Working with govt to support mini-grid sector: Rockefeller

New Delhi, Dec 25 (PTI) The Rockefeller Foundation, which has launched an initiative to use renewable power-based mini grids to light up villages, today said it is working with the government to develop central and state policies that support growth of the mini-grid sector in India.

Through its initiative, the US-based foundation currently has 94 fully operational plants that are serving about 30,000 people.

“Beyond our goal of electrifying 1,000 villages, we are working with government to develop central and state policies that support the growth of the mini-grid sector, providing financing and engaging other investors to encourage their participation,” the Rockefeller Foundation (Asia) MD Ashvin Dayal said. He said these mini-grids can be built in 2-3 months, which can rely on renewable power and provide enough consistent energy to light up multiple homes and businesses within a village. Currently, over 3,500 small businesses, 150 telecom towers and over 31,000 people are powered by mini grids under the Foundation?s Smart Power for Rural Development initiative. He also said there has been a rapid change in the policy and regulatory environment in India to support the deployment of renewable energy based mini grids. The drafting of a dedicated National Mini-grid Policy, state-level policy by UP along with keenness by Bihar, Madhya Pradesh and Odisha to introduce measures for such deployment reflects Indias intent to bridge the current policy gaps and create an enabling environment for entrepreneurs and investors, Dayal said. The Foundation has initially focused on states with the least access to electricity that includes Uttar Pradesh, Bihar, Jharkhand and Odisha. PTI RR ARD

RF’s mini-grids operational in 106 villages

New Delhi, May 18 (PTI) US-based Rockefeller Foundations (RF) subsidiary Smart Power India today said its mini-grids are now operational in as many as 106 villages in India. Smart Power India is setting up these mini-grids under the Foundations Smart Power for Rural Development programme. “The mini-grids are now operational in 106 villages in India. We are already in the process of building 125 new mini-grids with our partners … It is the largest privately operated mini-grids cluster globally,” Smart Power India CEO Jaideep Mukherji said in a statement. The grids are operational across three states of Uttar Pradesh, Bihar and Jharkhand.

In the long-term, Mukherji said these grids have the ability to integrate with the discoms grids and would help accelerate the realisation of the governments power for all vision.

He also said that the increasing affordability of solar equipment is a positive development for the mini-grid sector as it would help reduce the cost. “Our mini-grids are helping bridge energy access gap by supplying power not only to homes, but also for commercial and productive activities in the village,” he added. Deepali Khanna, Director of Rockefeller Foundation said that they are aiming at powering 1,000 villages in the country. “Currently we are working with our partners to expand our work to Jharkhand,” she said. The foundation has launched an initiative to use renewable power-based mini-grids to light up villages. It is working with the government to develop central and state policies that support growth of the mini-grid sector in India.

Rockefeller has invested USD 1.5 million to resolve the battery storage challenge. PTI RR MR

RF’s mini-grids operational in 106 villages

US-based Rockefeller Foundation’s (RF) subsidiary Smart Power India today said its mini-grids are now operational in as many as 106 villages in India.

Smart Power India is setting up these mini-grids under the Foundation’s Smart Power for Rural Development programme.

“The mini-grids are now operational in 106 villages in India. We are already in the process of building 125 new mini-grids with our partners … It is the largest privately operated mini-grids cluster globally,” Smart Power India CEO Jaideep Mukherji said in a statement.

The grids are operational across three states of Uttar Pradesh, Bihar and Jharkhand.

In the long-term, Mukherji said these grids have the ability to integrate with the discoms’ grids and would help accelerate the realisation of the government’s ‘power for all’ vision.

He also said that the increasing affordability of solar equipment is a positive development for the mini-grid sector as it would help reduce the cost.

“Our mini-grids are helping bridge energy access gap by supplying power not only to homes, but also for commercial and productive activities in the village,” he added.

Deepali Khanna, Director of Rockefeller Foundation said that they are aiming at powering 1,000 villages in the country. “Currently we are working with our partners to expand our work to Jharkhand,” she said.

The foundation has launched an initiative to use renewable power-based mini-grids to light up villages. It is working with the government to develop central and state policies that support growth of the mini-grid sector in India.

Rockefeller has invested USD 1.5 million to resolve the battery storage challenge.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Mines, Clean Energy and Investment: India’s Triple Bottom Line

he Kamuthi Project, one of the world’s largest solar parks, spread over 2,500 acres in southern India, was commissioned by Adani Power and completed in 2016.

By Joseph Kirschke

India is the world’s fastest-growing energy consumer and a global leader in clean energy — third only to China and the U.S. 

And by 2035, when non-fossil fuel capacity surges from 22 to 54 percent, India will have reached critical mass as the planet’s most populous nation.

India’s 1.3 billion people also offer investors an unprecedented opportunity to scale climate resilient communities, commerce, and industry in one of the world’s most dynamic emerging market economies where up to 460 million must survive without electricity.

And with prolific metalsminerals, and fuels including iron, steel, coal, lignite, aluminum and bauxite, one of the world’s largest mining industries offers a fast-evolving solution.

India’s government, with international help, is pushing hard for renewables: In fact, new coal-fired power plants are on hold until 2022 – the year 175 gigawatt of solar and wind power are projected to come online. Meanwhile, energy needs for India’s power-hungry mines remain at a premium.

Last month, state-owned National Aluminium Company Ltd. announced plans for 150 megawatts in solar and wind power. London-listed multinational Vedanta Resources had already entered the country’s solar sector by bidding for 500 MW in projects; then, in December, subsidiary Hindustan Zinc pledged solar deployments of 115 MW in addition to currently installed 474 MW of thermal power and 274 MW of wind.

Indian mining companies aren’t alone: Since 2011, mines worldwide are economizing through alternative energy. This subsector, expanding in ChileCanadaAustralia and Africa, is poised to save billions as installations are forecast to quadruple to $3.9 billion within five years.

Fossil fuels were the backbone of India’s commodity-driven supercycle of the 2000s which, together with China’s, was the greatest in modern history. Amid mounting smog, heat waves and droughts – and collapsing prices for clean technology – Indian coal and oil firms are now unlikely allies with solar.

Coal India Ltd., the world’s largest state-owned coal miner, is planning more than 600 MW of solar in four states, while NLC India Ltd. has tendered for 260 MW of grid-connected solar in two. Oil giants Indian Oil Corp. and Oil India Ltd. have similarly permitted a 1 GW solar farm.

But the true potential lies in integrating these deployments with existing clean-energy distribution in regions home to at least a third of the world’s population living without electricity. A prime example is India’s high-voltage Green Energy Corridor underwritten by the Asian Development Bank (ADB) which, despite some success, has officials concerned over uneven penetration in the poor states it aims to benefit.

Madhya Pradesh, where Coal India has signed for 200 MW of solar, is one. Rajasthan, home to India’s largest single deposit of lead, zinc and silver – and where Hindustan Zinc commissioned 15 MW of solar late last year – is another. Elsewhere, in Andhra Pradesh, Tata Power Renewable Energy Ltd. operates a 100 MW wind farm.

In Gujarat, Gujarat Mineral Development Corp. installed a 5 MW solar farm at a reclaimed mine. And in Maharashtra, under the U.N. Framework Convention on Climate Chang (UNFCCC), the renewable energy division of iron ore producer Essel Mining and Industries Ltd. installed 75 MW of wind in exchange for carbon credits.

The industrial-scale infrastructure associated with India’s mechanized mines — including extensive transportation systems — hold promise, too. In particular, efforts are underway to green segments of India’s railway network – one of the world’s largest – which consumes more diesel and electricity than any other part of the economy.

Indeed, as climate change is being recognized as an existential threat, India has seldom held more appeal for international asset managers – even among some of the biggest, normally risk-averse institutional investors like pension funds, banks and insurance firms. Yet amid green bondsclimate funds and other inventive mechanisms, large financiers still grapple with cohesive approaches.

Perhaps most onerous is India’s lack of development coupled with erratic policies and regulations. But a flexible and burgeoning impact investment market can stimulate matching finance from development agencies, lenders and large institutions. Take the Rockefeller Foundation’s Smart Power India initiative, the country’s largest “anchor-based” network encompassing telecommunications towers, which seeks to spread clean energy to 1,000 rural Indian villages this year.

Acumen is also India-focused and invests millions in off-grid clean energy for homes and businesses; Frontier Markets, a Rajasthan-based for-profit, seeks to provide clean energy access to 1 million Indian households by 2020. Last week, reports emerged private equity fund Actis will invest $500 million into a successful bidder for a World Bank-financed 750 MW solar park.

One nonprofit is advancing this narrative, if quietly, through a unique human capital approach.

Barefoot College is a pioneer which trains women from across the global south to become solar engineers and educators. After sponsoring their travel, the NGO — also Rajasthan-based — enabled participants from 77 countries to bring newfound technical skills back to their local communities.

One returned home to Ollagüe, Chile, where Italy’s Enel Green Power installed a solar plant with more than 1,600 photovoltaic panels through a partnership with Phoenix-based mining giant Freeport McMoRan Inc. Now the 150 families of the indigenous Quechua community are enjoying their first ongoing supply of electric power.

For all the challenges inherent in its extreme poverty, India is blessed with mineral resources, clean energy and an entrepreneurial spirit which may make it the planet’s ideal ecosystem in the fight against industrial carbon emissions.

And for investors striving to enact change through COP21 and its $13.5 trillion commitments, it cannot be overlooked.

Image courtesy of the author

Joseph Kirschke is a consultant who advises mining companies on sustainability and clean energy, is a former editor at Mining Media International, a Jacksonville-based publishing house

Energy Access Builds Inclusive Economies and Resilient Communities

More girls in rural Bihar, India are going to school after mini-grid-powered household lights give mothers and children two extra hours of evening work and study time. Credit: Manipadma Jena/IPS

NEW DELHI, Feb 16 2017 (IPS) – Jaipal Hembrum runs three one-man home enterprises – a bicycle repair shop, a tiny food stall and a tailoring unit in Kautuka, a remote village in eastern India. Sewing recycled clothes into mattresses late into the evening, the 38-year-old father of three girls says two light bulbs fed by a solar power system have changed his life.

Given the trajectory of development India is currently pursuing, energy access for its rural population could bring dramatic economic improvement. Yet 237 million people — a fifth of its 1.3 billion people, many of them in remote villages with few livelihood options — do not have any access to it.

The Delhi-based research organisation Centre for Science and Environment (CSE) stipulates that if even half of households deemed electrified through the national power grid are not receiving the guaranteed six hours uninterrupted supply, the number of people who are electricity-poor in India totals 650 million.

In this scenario, renewable energy-based mini-grids, particularly in remote villages, are considered the best option to manage local household and commercial energy demand efficiently by generating power at the source of consumption.

This is being proven true by the Rockefeller Foundation’s Smart Power for Rural Development (SPRD) initiative in two of India’s poorest states, Bihar and Uttar Pradesh, where 16 and 36 percent of households respectively are electrified. In India, 55 percent rural households have energy access, often of unreliable quality.

The challenge India faces is how to meet its energy requirements while also meeting its emission reduction commitment to the global climate deal.

Started in 2014, the SPRD project has helped set up close to 100 mini-grid plants, covering the states of Uttar Pradesh, Bihar and lately, in Jharkhand too. According to Rockefeller Foundation sources, these plants are serving a customer base of around 38,000 people. Over 6,500 households are benefitting, along with 3,800 shops and businesses, and over 120 institutions, telecom towers and micro-enterprises.

Over 2014 – 2017, the Rockefeller Foundation aims to make a difference to 1,000 energy-poor villages in India, benefitting around a million rural people. For this effort, the Foundation has committed 75 million dollars, partnering and funding Smart Power India (SPI) a new entity designed to work closely with a wide range of stakeholders who help scale-up the market for off-grid energy.

Jaipal Hembrum stitches old clothes mattresses in the evening by the light of a solar-powered bulb. The 50 dollars a day he earns is kept aside for schooling and marriages of his three daughters. Credit: Manipadma Jena/IPS

What can mini-grids can do? Plenty

A recent evaluation of the mini-grids’ impact on communities they serve in Bihar and Uttar Pradesh already show a broad range of economic, social and environmental benefits.

Entrepreneurship and new businesses have grown, with 70 percent existing micro-businesses reporting increased number of costumers after connecting to the mini-grids and 80 percent planned to expand.

Nine in 10 household users said their children’s daily study time has increased by two hours since they got the lights. Women said they had increased mobility after dark and theft cases had fallen. Use of kerosene and diesel has fallen dramatically — to virtually zero, according to Khanna.

Micro-businesses like cyber cafes, fuel stations, mobile and fan repair shops, banks, schools and hospitals are the fastest growing commercial customer section of mini-grids constructed under Smart Power India.

In Shivpura village of Uttar Pradesh, where TARA Urja, a small energy service company (ESCO), started providing reliable electricity from a 30-KW solar plant, Sandeep Jaiswal set up a water purification processor in 2015. In just over a month he was rushing 1,200 litres of water on his new mini-truck to 40 customers. TARA, also a social business incubator, has financially supported Jaiswal with 530 dollars, in return for a one-year contract to source electricity from TARA.

Smart Power India supports the development of rural micro-enterprises through loans, community engagement and partnerships with larger companies with rural value chains, for instance, city malls that source vegetables from rural farms.

India confronts a demographic youth ‘bulge’ with 64 percent in the working age group in 2020, requiring 10 million new jobs every year in the coming decade. Using green mini-grids to create rural livelihoods can also reduce urban migration.

Innovating a business model that propels construction of mini-grids

Mini-grids are a decentralized system providing a renewable energy-based electricity generator with a capacity of 10 kilowatts or more, with a target consumer group it supplies through a stand-alone distribution network.

The sustainability of private companies in the rural power supply sector depends on generating sufficient revenue long-term. To make it profitable for smaller-scale ESCOs to bring electricity to rural parts of the developing world, the Smart Power model ensures fast-growing sectors with significant energy needs such as telecom towers in rural areas, to provide steady revenue. In return, the ESCOs provide contractual guarantee of reliable power supply to the towers.

“There is an opportunity to catalyze the telecommunication and off-grid energy sectors. Currently cell phone towers in rural areas are often powered by expensive diesel generators and companies are looking for cheaper alternatives, thereby creating the possibility for a strong anchor,” says Ashvin Dayal, Managing Director, Asia, of the Rockefeller Foundation.

Telecom towers — by becoming the ‘anchor’ customers – help make ESCOs bankable. They then can expand supply into rural household lighting and local enterprises.

Government figures say 2 billion litres of diesel is annually consumed by the 350,000 existing telecom towers in India, including those in remote rural regions. The challenge India faces is how to meet its energy requirements without compromising environmental sustainability, while meeting its emission reduction commitment to the global climate deal.

Solar power cost per unit has fallen in India to 0.045 cents, which makes it increasingly feasible to shift to renewable powered mini-grids, saving substantial subsidies spent on fossil fuels. The government in 2016 decided to construct 10,000 mini-grids in the next five years of 500 megawatt (MW) capacity, but this is clearly not enough, say experts.

India has a potential for 748,990 MW of solar power. Fourteen states, including Bihar and Uttar Pradesh, receive irradiance above the annual global average of 5 kilowatt-hours per square meter per day.

Around the world, approximately 1.3 billion people lack access to reliable and affordable means of electricity without which, growing their incomes, improving food security and health, educating children, accessing key information services becomes a major challenge. Energy access is critical to achieving several UN Sustainable Development Goals by 2030.

Mini grids can power rural economic activity

Mini grids can spur economic activity in rural areas and accelerate the process of expanding mobile phone network across the country due to their large capacities and the ability to connect to the national grid, according to Smart Power India.
A mini grid, as defined by the Ministry of New and Renewable Energy, is an off-grid power system with a generation capacity of between 10 KW and 500 KW. There are a number of other solutions of smaller capacities that rural areas can use such as a solar lantern, a solar home solution, or even a community solution like a micro grid.
But a mini grid is the only alternativethat provides the kind of electricity that can be used for business activities, Jaideep Mukherjee, Chief Executive Officer (CEO), Smart Power India told The Hindu .
“One of the deficiencies of the other off-grid power solution models is that while these solutions are good in moving households away from kerosene and providing them with reliable and clean energy, they do not provide the energy required to fuel enterprise or commercial activity. You will not be able to power equipment, motors, etc,” Mr. Mukherjee said.
“A mini grid is a larger system that converts direct current (DC) to alternating current (AC) and it provides safety as per REC and CEA standards,” he explained. “Usually, the power coming from the smaller off-grid solutions is DC energy. While it is good for lighting, it does not satisfy the community’s requirement to run any sort of business,” he said.
The power generated from a mini grid can be seamlessly transferred to the national grid since it is already going through a a charge controller which manages the flow of energy and an inverter which converts the electricity from DC to AC. It also has a storage facility to meet night demand as well.

No fluctuations

“The power that comes out is regular and standard with no fluctuations,” Mr Mukherjee said.
Apart from commercial enterprises, rural banks or schools, Mr. Mukherjee said that a large part of the demand for mini grids came from telecom service providers for powering mobile towers.
“They (mobile towers) have a presence across rural India and all of them suffer from inadequate power and so have to use diesel,” Mr. Mukherjee said. “There is a national mandate to green 50–60 per cent of the telecom towers and also the cost of using diesel is very high and it (the risk) includes diesel theft and all the other nefarious activities that go along with it not to mention the pollution. The power demand of a telecom tower is 24/7.”
Even from his company’s point of view, one of the important criteria in selecting a village to install a mini grid is to see whether there is at least one customer in the area – like a telecom tower, petrol pump, school or bank – that could make up a significant portion of the energy demand from the mini grid.

Business potential

“The selection of the village is very important. We look at the number of households and the potential of existing commercial activity and the future potential demand. There should be a threshold amount of economic activity. And the other important criterion is the presence of an anchor-load customer, a single customer who can guarantee at least 25-30 per cent of the demand” he said.
A combination of flexible regulation by the government and erratic power supply from the national grid has meant that mini grids can compete directly with the national grid and, according to Mr. Mukherjee, often the mini grids are installed in places already covered by the national grid.
“Where the grid has reached, the power is inadequate, erratic and not able to meet the energy requirements of the village,” he said. “In fact, of the 95 mini grids operational today, technically, almost 80-90 per cent of the villages are electrified as per government standards!”

Working with govt to support mini-grid sector: Rockefeller

The Rockefeller Foundation, which has launched an initiative to use renewable power-based mini grids to light up villages, today said it is working with the government to develop central and state policies that support growth of the mini-grid sector in India.

Through its initiative, the US-based foundation currently has 94 fully operational plants that are serving about 30,000 people.

“Beyond our goal of electrifying 1,000 villages, we are working with government to develop central and state policies that support the growth of the mini-grid sector, providing financing and engaging other investors to encourage their participation,” the Rockefeller Foundation (Asia) MD Ashvin Dayal said.

He said these mini-grids can be built in 2-3 months, which can rely on renewable power and provide enough consistent energy to light up multiple homes and businesses within a village.

Currently, over 3,500 small businesses, 150 telecom towers and over 31,000 people are powered by mini grids under the Foundation’s Smart Power for Rural Development initiative.

He also said there has been a rapid change in the policy and regulatory environment in India to support the deployment of renewable energy based mini grids.

The drafting of a dedicated National Mini-grid Policy, state-level policy by UP along with keenness by Bihar, Madhya Pradesh and Odisha to introduce measures for such deployment reflects India’s intent to bridge the current policy gaps and create an enabling environment for entrepreneurs and investors, Dayal said.

The Foundation has initially focused on states with the least access to electricity that includes Uttar Pradesh, Bihar, Jharkhand and Odisha.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Working with govt to support mini-grid sector: Rockefeller

New Delhi, Dec 25 (PTI) The Rockefeller Foundation, which has launched an initiative to use renewable power-based mini grids to light up villages, today said it is working with the government to develop central and state policies that support growth of the mini-grid sector in India.

Through its initiative, the US-based foundation currently has 94 fully operational plants that are serving about 30,000 people.

“Beyond our goal of electrifying 1,000 villages, we are working with government to develop central and state policies that support the growth of the mini-grid sector, providing financing and engaging other investors to encourage their participation,” the Rockefeller Foundation (Asia) MD Ashvin Dayal said. He said these mini-grids can be built in 2-3 months, which can rely on renewable power and provide enough consistent energy to light up multiple homes and businesses within a village. Currently, over 3,500 small businesses, 150 telecom towers and over 31,000 people are powered by mini grids under the Foundation?s Smart Power for Rural Development initiative. He also said there has been a rapid change in the policy and regulatory environment in India to support the deployment of renewable energy based mini grids. The drafting of a dedicated National Mini-grid Policy, state-level policy by UP along with keenness by Bihar, Madhya Pradesh and Odisha to introduce measures for such deployment reflects Indias intent to bridge the current policy gaps and create an enabling environment for entrepreneurs and investors, Dayal said. The Foundation has initially focused on states with the least access to electricity that includes Uttar Pradesh, Bihar, Jharkhand and Odisha. PTI RR ARD

How Clean Energy Mini-Grids Can Empower Rural India

Far from the national power grid and without access to a reliable source of electricity, Sunil Kumar, the owner of a carpentry shop in Siwan, a district in Bihar, used to take three to four days to build a table. But when a solar-powered mini-grid was installed in his village, Sunil’s livelihood changed. Today his shop is buzzing with the sound of power saws and electric drills. He’s able do more work in less time and take on more customers. Business is booming.
Mr. Ban Ki-moon, UN Secretary-General, has described energy as the “golden thread that connects economic growth, social equity, and environmental sustainability.” These words—meant to spur action for the 1.2 billion people globally without access to power—couldn’t resonate more deeply from village to village in Uttar Pradesh and Bihar, two of the poorest states in India, and where less than 10% of rural households are connected to the national grid. It’s also where the Rockefeller Foundation has been spearheading an innovative, market-based initiative since 2014 to bring electricity to the rural poor at a scale capable of stimulating economic growth across the region.
“Mini grids are small enough to construct quickly, rely on renewable power such as solar, [and] provide enough consistent energy to light multiple homes and businesses within a village.
In just two short years, the Smart Power for Rural Development (SPRD) initiative has helped install 93 mini-grids in India. Mini grids, unlike the national grid or small home systems, are small enough to construct quickly, rely on renewable power such as solar, but provide enough consistent energy to light multiple homes and businesses within a village. This influx of reliable energy has given local entrepreneurs the means and confidence to start their own businesses—from cyber-cafes and convenience stores to manufacturing and water purifying plants. Shopkeepers once limited by diesel generators now keep their doors open longer. Today more than 3500 small businesses, 150 telecom towers and 31,000 people are powered by mini-grids.
Mini-grids are not a new phenomenon in India. A handful of villages have used them for years, albeit on a modest scale. But the SPRD initiative is the first to pursue the creation of a mini-grid sector big and robust enough to fuel commercial enterprises and drive economic development beyond one village to many villages.
To achieve this catalyst effect, to build a new sector at scale, the Foundation and its partners are working to support an enabling ecosystem where mini-grids can thrive. We’ve worked with government to promote policy and regulatory frameworks so energy companies and their investors feel confident making long-term investment decisions—such as the mini-grid policy in Uttar Pradesh. We have supported entrepreneurial energy companies to build mini-grids by providing low interest loans to support start up costs. We have also established a non-profit company, Smart Power India (SPI), which supports energy service companies to be successful, works with villages to ensure micro-enterprises can grow, and secures agreement from telecom and other growing sectors to be anchor customers – ensuring a steady flow of revenue to the mini-grid operators. On the policy front, SPI informs government about policies that will create a pathway for mini-grids to expand in tandem with and be mutually reinforcing for the national grid.
Each partner in this system plays a crucial role in supporting the growth of this new sector, and the Foundation’s ultimate goal is to impact more than one million lives and establish self-sustaining momentum in the energy market for a new rural electrification model.
A recent evaluation of the mini-grids’ impact in the communities they serve uncovered a broad range of benefits:

Economic Impact

•    70% of micro-businesses report increased numbers of customers
•    80% say they plan to expand their business
•    Entrepreneurship and the number of new businesses has grown, particularly among women who are having to spend less time on household work, freeing them to start new ventures.

Social and Environmental Impact

•    87% of household users say their children use light to study after dark, increasing their average daily study time by two hours
•    86% of women surveyed reported increased mobility and a reduction in theft
•    50% of household users reported reduced eye problems
•    A dramatic decline in the use of fossil fuels: kerosene use dropped from 21% to 0%; diesel from 52% to 0%.
Supplying rural areas with strong and reliable electricity is never a simple proposition. But as these initial outcomes show, it can be done if there’s an enabling ecosystem that allows renewable solutions like mini-grids to take hold and scale.
“Today more than 3500 small businesses, 150 telecom towers and 31,000 people are powered by mini-grids.
India’s rise as a global economic power—and its goal of delivering power to 237 million “energy poor” people by 2022—will depend on large-scale solutions to its energy infrastructure. On 2 October, India ratified the Paris climate agreement. Greater reliance on renewable energy will also reduce the country’s use of coal and other fossil fuels that contribute to climate change.
The experience in the lives of rural villagers in Bihar and Uttar Pradesh illustrates the power and potential of that golden thread of energy that the UN Secretary-General so profoundly envisions. We are committed to doing our part to spur renewable energy access and economic development in India by working with our grantees and partners to guide that thread through the needle.

UP becomes lab for green energy firms looking to tap rural market

Companies, non-profits are testing the viability of supplying power from mini-grids and solar-powered systems

New Delhi: Uttar Pradesh, home to about 16% of India’s 1.2 billion population, many of whom have poor or no access to power, is emerging as the preferred testing ground for non-profits and companies trying out new business models as they seek to tap rising demand for electricity in rural India.

Across the state, these organizations are testing the viability of supplying electricity from mini-grids and solar-powered lighting systems specially designed for villages and small enterprises.

The first customers are telcos whose telecom towers in remote parts of the country have, until now, been powered by diesel generators; and shops, even individual households, in villages that were hitherto illuminated by kerosene lanterns.

According to Zia Khan, vice-president, initiatives and strategy at the Rockefeller Foundation, which has committed $75 million of debt financing and early investment capital to energy services companies in India, the market for mini-grids in Uttar Pradesh is promising.

“More consumers are signing up, no one has dropped out of the mini-grid ecosystem and more energy service companies are coming up,” said Khan.

The foundation provides finance for setting up micro-grids, helps these utilities in finding anchor customers (mostly telcos), and in marketing power to households and small commercial establishments.

About seven utilities that the foundation has financed have so far set up close to 100 grids in Uttar Pradesh and Bihar. By 2018, they will connect around 1,000 villages.

For customers, the lure of renewable energy from micro-grids is in the cost.

According to Sunil Jain, chief executive officer of Hero Future Energies Pvt. Ltd, the cost of power from a diesel generator set comes to about Rs.22 a unit for telcos, which require higher capacity generators.

“Cost of solar power with adequate storage facility comes to not more than Rs.14-15 a unit. Innovation in solar power and storage facilities could further drive down the cost of off-grid power in the next few years and revolutionize the electricity sector,” said Jain, who is convinced that India’s mobile telephony story (in which competition, technology and enabling regulation combined to drive tariffs to the lowest in the world) could be repeated in energy.

For the non-profits and companies, Uttar Pradesh is a good testing ground for models they can apply elsewhere, in the country, and without—in other parts of Asia and in Africa.

According to the International Energy Agency’s World Energy Outlook 2015 report, India has 237 million people with no access to electricity. In many villages, power supply is intermittent.

According to executives in power companies, 70% of those without access to electricity or with intermittent access to it are in Uttar Pradesh, Bihar and Jharkhand.

In parts of Uttar Pradesh, where solar power is available to households and shops, consumption of electricity is growing steadily on the back of affordable solar-powered gadgets such as lanterns, mobile phone chargers and fans, even entire power systems suitable for a shop. To capture the market, solar gadget makers are tailor-making products for the rural consumer.

According to Nidhi Modi, executive director, RAL Consumer Products Ltd, which has so far sold 2.5 million solar lanterns in villages, a customer can recover the cost of a lantern in about four months from the savings made on the use of kerosene. A solar lantern providing 6-8 hours of uninterrupted lighting costs Rs.695, while kerosene costs a family Rs.150 a month.

Most consumers in rural areas can and will pay, says Modi. Her company designs solar-powered products based on expected hours of use, energy consumption and consumers’ ability to pay. “Then we arrange for loans for buyers from microfinance institutions without any collateral,” says Modi.

Encouraged by the response, RAL Consumer Products is preparing to sell these lanterns designed in India, but made in China, in similar markets in Asia, Africa and Latin America.

According to Jaideep Mukherji, CEO, Smart Power India, an entity established by the Rockefeller Foundation, the viability of a grid is determined by the number of households, shops and availability of an anchor customer that will buy about 25-30% of the power generated.

He said a two-room household that uses kerosene worth about Rs.180-250 a month could have a solar lighting and mobile charging facility for about Rs.110 a month. “Based on the wealth of experience in villages in India, we are looking forward to similar operations in other countries, too,” said Mukherji.

Zia Khan said the social impact of affordable renewable energy power is of immense importance to The Rockefeller Foundation. “Students are able to study for longer hours, women feel safer and micro enterprises stay open for more time,” Khan said.

In June, the central government set a target of installing at least 10,000 mini-grids, generating 500MW of power in five years and serving rural India.

Smart power programme boosts small biz in state

PATNA: Raj Kumar Shah of Siwan exemplifies entrepreneurs whose business has grown over the past few months owing to the setting up of a decentralised renewable energy (DRE) mini-grid plant under the Smart Power for Rural Development (SPRD) programme.

 

 

 

Raj Kumar owns a general store cum printing shop near the main village market.

 

 

 

Its being one of the few printing shops among the 150 other shops in Nabiganj village, he has a regular customer influx. However, till a year ago, his printing business didn’t reap desired profits; the technology was time-worn, electricity availability was a major hindrance and his financial condition didn’t allow for any kind of investment towards machine upgrade. He was losing business of close to Rs 5,000 per month because of his inability to deliver the services on time.

 

Now, there are 25 operational plants across East Champaran, West Champaran, Araria, Supaul, Gaya, Saran and Gopalganj districts in Bihar. Two plants are in the construction phase in Gaya and West Champaran districts. The 25 plants are being operated, managed and maintained by Smart Power India’s (SPI) partner Energy Service Companies (ESCO). These are based on solar, biomass and hybrid (solar+biomass) technology. Approximately, 800KW of renewable capacity has already been commissioned in the state.

 

The decentralized electricity generation can make use of different renewable energy sources available in the state. Since Bihar is an agriculture based economy, rural areas have readily available biomass and large surfaces in the rural areas can be used for solar energy generation under SPRD programme, says Disha Banerjee, director, policy & communications, SPI.

Banerjee told TOI that the Rockefeller Foundation incorporated the SPI to implement the SPRD programme, which is an innovative, market-based model that operates through decentralized renewable energy (DRE) mini-grids powered by sources such as solar and biomass. Sustainable DRE mini-grids go beyond household lighting with a focus on productive use by creating an ecosystem that drives socio-economic development, she said.

Currently, there is only one anchor customer (a telecom tower) at the Bheldi site in Saran district. This solar mini-grid plant of 30kW capacity was commissioned in February, 2015. However, even when a connection to the national grid is available, the service of electricity is inadequate. Multiple electrification options are currently being explored and the SPRD programme can substantiate and complement the state government’s efforts towards rural electrification, Banerjee said.

New battery tech to bolster off-grid solar plants

New technology for batteries will soon electrify India’s off-grid power facilities. The Institute of Transformative Technologies (ITT) is currently working on three different battery types in the hope of reducing cost and increasing the lifespan of batteries.

Sanjay Khazanchi, Chief Executive, Access to Electricity (India), ITT, explained that storage of electricity produced in off-grid solar power facilities is one of the biggest challenges in the uptake of solar power in rural areas. One of the challenges lies in the high cost and the other is the relatively short lifespan.

Weakest link
“In a solar mini-grid the pain area is storage. A solar plant lasts for around 25 years. The weakest link is batteries. They last for as low as two years and at most five-six years. For maintaining a solar plant for 25 years, you have to keep changing the batteries. It increases the cost of capex,” Khazanchi said. The institute is currently testing three new battery chemistries from across the world — lithium ion; advanced lead acid batteries being produced in Australia; and a sodium ion chemistry from a company in the US.

Lifecycle tests

ITT is attempting to create the environment of a rural solar mini-grid in the lab, with high ambient temperatures of 45 degrees Celsius, to conduct lifecycle tests, along with replicating the load profiles seen by batteries in rural environment to see which battery performs better vis-a-vis the baseline of the existing technology.
“The intent is to see that the value these new technologies bring in would be far superior to the existing technology (lead acid batteries). Lead acid batteries in rural environment have their own challenges in giving adequate life,” Khazanchi said.
Newer batteries with extended life spans have the potential to attract more investors in the market, which is currently lagging despite big potential and high demand.
“Globally, the industry is watching how India is going to do the off-grid rural electrification. Unfortunately, the volumes we have on the ground and the visibility of the volumes likely to be there in the future is still low. It’s a catch 22 situation. Maybe since the technology is not there and storage is expensive because of that the volumes are low but if we bring in a solution maybe that would solve the problem and make it workable,” he said.
Deepali Khanna, Senior Associate Director of the Rockefeller Foundation, explained that the uptake of renewable energy is still rather slow in India.
“By 2030, renewables would only be 17 per cent of the total energy mix in India. There is a lot more that needs to be happening here,” she said.

Energy efficiency

Rockefeller has invested $1.5million with ITT to resolve the storage crisis. Besides storage, Rockefeller is also looking at facilitating more energy efficiency appliances in an effort to make it feasible for citizen of rural India to use these.
“We have a situation where people want to go beyond light bulbs and productive use and are looking at if they could hook up a TV, a fan or a fridge. So, we are looking at how to get more energy efficient appliances because we know their capacity to pay for electricity is limited. They can’t pay more than ?500 per month and that is also a lot when you are taking about rural areas,” Khanna said.

India Matters: Solar Revolution In Uttar Pradesh

Nearly 20 million rural households in Uttar Pradesh have no access to electricity.
Over 90 per cent rural households in 5 districts of Uttar Pradesh are unelectrified. (Source: Census 2011)

In Hardoi district of Uttar Pradesh, private diesel generators power the rural economy. Noisy, polluting and expensive. The state electricity grid has reached some areas, but there is a chronic shortage of power. Those with connections get only a few hours of supply in a day and almost never during peak hours.

Businessman Pradeep Kumar Shukla had to produce his own electricity when he set up a petrol pump near Pipargaon village. The village is 110 km from Lucknow. ”

When we started the petrol pump, there were so many power cuts that we had to totally depend on generator sets. These filling machines are computerised and cannot be operated manually. It cost Rs. 1.25 lakh to install the generator and we spent an additional Rs. 18,000 a month to run it,” Mr Shukla Said.

Most of the 60 odd branches of Grameen Bank of Aryavrat in the district depend on diesel power. As do telecom towers, hospitals, colleges, small shops and other businesses.

But now that is changing. Companies based on renewable energy are bringing in a clean and reliable solution to these remote villages. One of these companies is Omnigrid Micropower Company or OMC. Founded by three former Ericson employees, OMC set up its first solar power plant in Jangaon village in Hardoi district three years ago. They received an overwhelming response and today they have 70 plants in Uttar Pradesh. Each plant has a capacity between 50 and 100 kw and each has a grid about one to 5 km long.

At the Pipargaon plant, we meet Rohit Chandra, Managing Director, OMC. He says the plant was commissioned eight months ago. “This place was taken on lease. The size of the plot will be about 900 sq m on an average and the technology has advanced so much that you can package a lot of solar power in a panel these days, which means you’ll require a smaller footprint. So, a size like this is good enough to take you to about 100 kilo watts. We have a large storage bank here where we store power. And every of the plant has about 300 amp hour of storage. So when the sun goes away in the evening, the batteries are charged and able to give energy after sunset. From here the energy goes into inverters and rectifiers and is pumped on a 24X7 basis. The inverters are used for converting DC to AC to 130 volts,” Mr Chandra said.

When this plant’s distribution network increases, it will cover nearly 2,000 households and small businesses. Mr Shukla’s petrol pump has an OMC solar power connection. Instead of the Rs. 18,000 a month he previously spent on diesel, he now spends only Rs. 4,000. “My electricity problem is fully solved. The company has stuck to its commitment of providing 24/7 power supply,” he said.

Shri Jagdev Singh Mahavidyalaya, a rural college, draws power from the plant at Attrauli. Students can now use the computer lab. A shopping complex is coming up near the Attrauli plant. Centred around the promise of uninterrupted solar power supply are ambitious plans to open a cyber cafe and tractor agency. The Jangaon branch of the Gramin Bank of Aryavrat is also an OMC customer. “We now spend around Rs. 3,000 a month. Earlier we would have to spend nearly Rs. 15,000 on the generator. The advantage is there is no noise pollution and air pollution,” Gramin Bank branch manager Ram Narayan Prajapati said

It all started with what was for OMC a clear business opportunity. There are nearly 5 lakh telecom towers in the country.50 per cent of them in rural areas. Most of them relied 20 hours a day on diesel generators. Telecom towers are one of the largest consumers of diesel in the country, consuming around 2 billion litres of diesel every year.

OMC entered into an agreement with telecom companies, setting up their plants near the telecom towers to provide them solar power. Telecom towers no longer have to maintain generators or hire people to run them.

The company calls it an ABC business model that is sustainable and scalable. A stands for the anchor load which are the telecom towers, B denotes the small and medium enterprises and C is the community, a majority of whom are below the poverty line. The A and B segments help in giving affordable services to C. Product packages have been designed for each segment in the village. Smart metering allows OMC to prefix loads and timings. The community pays for the subscription in advance. Rs. 110 a month gives them one 7 watt LED light from 5 pm to 11 pm and a mobile charging socket.

From 24 hour metered supply to the richest individual in the village to bite sized packages for the poorest consumers, there are packages that are relevant to each one.

At the busy Attrauli crossing, nearly 40 shops selling a variety of fruits, medicines, snacks and sweets have lights powered by the OMC grid. They said they would use battery operated lights till they got the LED lights from OMC that were brighter. Charging the batteries was a challenge.

Near the crossing, we come across three shacks lit by LED lights. In one of them 18-year-old Manisha is busy at work on her home science assignment. She says she would like to train as a teacher and the lights are helping her to study whenever she wants. “It’s been 3 months since this light was installed. It is now easy to cook food, as well as to study. We no longer face any problems,” the young student said.

However, there is another contradictory reality of families who live at subsistence level and cannot pay 100 odd rupees a month. At Jangaon village, we meet Nirmala as she cooks the evening meal using a kerosene lamp. She says they are unable to install OMC because there was never any money to spare. They ate only when they earned.

“I have small kids and my husband works as labour. We have to buy everything from the market since we don’t own any land,” Nirmala said.

In the next six months, OMC is planning to double its capacity from 2.5 megawatt to 5 megawatt, making it one of the largest solar mini grid operators in the state. Their grid is reaching high density areas, where there is economic activity. However, the activity is mainly non-agricultural. It is expensive to extend the grid to agricultural fields that are usually at a distance from the village and presently pumps used for irrigation are not being powered by OMC. Where the grid does reach, customers can get continuous power supply. The plants use diesel generators as a backup for those days when there is low solar power generation due to rains or fog.

According to the Ministry of New and Renewable Energy (MNRE), the ideal solution is to produce locally and distribute locally. It is extending support to private rural energy service providers like OMC. According to G Prasad, Director, MNRE, the government is extending a fixed capital subsidy which is approximately 25 per cent to 30 per cent of the total amount. “The remaining equity they have to bring on their own, maybe at the commercial rate of interest. Since they have to take bank loans, they have to maintain this as a commercial venture. Otherwise they can’t survive. After five years they have to replace the battery, they have to maintain the plant, pay salaries. They have to make profit as a company. This is the model we envisage.”

OMC is a for profit company with a significant social impact. What is interesting is that it is attracting funds from the commercial space as well as the social impact space.

For instance, Smart Power India, a new non-profit entity set up by the Rockefeller Foundation. With the help of a $75 million grant, it is helping companies such as OMC and others to set up mini grids to serve 1,000 villages in the next three years. “The philanthropic capital acts as a catalyst to allow this industry to emerge and sustain itself and yet at the same time allow for it to be a completely competitive source of power to go to the communities. It is a capacity enablement entity to provide the requisite support to market proponents. It is a kind of trying to create a platform in which a wide variety of mini grids can operate,” cKinetics Managing Director Upendra Bhatt said.

Private players have shown an increasing interest in solar mini grids in the last 4 years. There are multiple models operating in the state.

Some offer small solutions like pico grids which are of less than 1 kilowatt capacity and are usually DC systems. Others deploy micro grids which have a capacity between 1 kilowatt and 10 kilowatts. The Boond energy company deploys micro grids with less than 2 kilowatt capacity. “A 2 kilowatt microgrid system will electrify 40 to 45 houses and each house will get 2 to 3 LED lights and 2 plug points, one for a mobile and one for any other appliance. They would get a peak load of 40 watts. Some of our microgrids are owned by another person. We facilitate a bank loan for buying hardware as well as software and the person pays the EMI to the bank. So the goal is what he collects from 40 houses. Let us say he collects Rs. 100 from 40 houses that Rs. 4,000 should pay off his EMI and a profit for him. We believe that this is a model to grow and it is extremely scalable and it gives income to someone from the community.” Boond Engineering and Development CEO Rustam Sengupta said.

Another company, Ren-en-gen, has joined hands with an NGO to launch a 10 kw micro grid in Sitapur district. It offers 3 LED lights and a mobile charging point for Rs. 150 a month. According to Ren-en-gen, villagers were earlier using kerosene that cost them Rs. 250 a month. They also had to walk miles to charge their mobiles, for which they paid Rs. 10 an hour.

“Ren-en-gen made their own investments, along with the NGO, Sankalp Samarpan Samiti, and another investor, SCT. From the business point of view, the break-even may come somewhere around the 7th, 8th or 9th year, but what was important was the social impact and how it would lead to the growth of the rural economy. Right from the design innovation up to the operation, the plant is maintained by Ren-en-gen. At the same time what we did was train 3 local guys to handle the maintenance and daily collection from villagers,” Ren-en-gen Solutions Chairman Santosh K Lalwani said. In Kannauj district, the state government has set up a 250 kw solar mini grid to power villages. It is able to run flour mills and agricultural pumps. However, a key challenge for government owned projects is long term operation and maintenance by the contractor. The tariffs charged are low and unviable and the contractor does not sustain interest in the project.

For private rural energy service providers, who want to run a professional operation, the absence of a national or state level policy on mini grids leads to uncertainty. A 50 kw solar plant with a distribution grid can cost up to Rs. 1 crore. Since mini grids are not viewed as infrastructure, long tenure financing is a big challenge. If and when banks extend loans, they do so at high commercial lending rates. There is no tariff parity between mini grids and central grids. Central grid consumers get a host of hidden subsidies that make tariffs lower for them. The sector needs a great deal of investment and for investors to come in the state government needs to come out with a clear cut policy on mini grids. For one, there is no clear direction regarding the government’s electrification programme.

According to Debajit Palit, Associate Director, TERI, “So you set up mini grids in rural areas, and tomorrow the central grid extends to those areas. How do you interconnect your mini grid to the main grid and feed power to the main grid at a power purchase agreement? Or take power from the main grid in case there is a deficit from your mini grid system? There is still lack of clarity on how to do that in terms of both the technical consideration and also in terms of a proper exit mechanism for the mini grid developer. I think these are some of the challenges which are not allowing the scaling up of mini grids in India even though India has a huge potential for mini grids.”

To promote greater private investment in this sector, the Uttar Pradesh government is coming out with a comprehensive mini grid policy. It will be the first state to do so. According to Parth Sarthi Sen Sharma, Secretary, Non-Conventional Energy and Secretary to the Chief Minister, Uttar Pradesh, “One of the challenges is to balance the interest of the consumers and the interest of the investor. One challenge would be if the grid comes with sufficient number of hours of electricity and the villagers are no longer wanting this investor’s micro grid, then what kind of comfort can be given to the investor? How do we select the investors? There may be some villages in which it is just not commercially viable. In that case, how is the viability gap to be met by the Government? And if we are meeting the viability gap, we need to have a transparent system in place to select the investors.

Mr Sen Sharma also struck a note of caution, saying, “Whenever we are talking about increasing the share of alternative energy, and this is a worldwide discussion, the two major points in my mind is still the difference between the price of conventional and non-conventional energy and the grid stability. Alternative power typically requires some hours of production and some hours of non-production. Therefore, we can go up to a particular limit, but we cannot wish away conventional power. That will remain the mainstay in my opinion.”

Mini grid proponents believe this could be the view in the rearview mirror. But for those looking ahead, the picture is different. A renewable energy ecosystem is emerging even as Prime Minister Narendra Modi has announced the installation of 100 gigawatts of solar power by 2022. Innovative business models will lead to increase in scale and with the development of technology, solar energy is likely to become cheaper. The technology is robust and allows it to be integrated to the central grid based on conventional energy. With the support of an enabling policy, mini grids may be the best way to reach the over 300 million people in the country who are waiting for power.

Rise of the mini-grids

Rise of the mini-grids: Solar projects are lighting up households beyond reach of main electricity grids

For Mithilesh Kumar of Pachlakh village in the agrarian heartland of Bihar, it was a question of pratishtha or prestige. In a rural milieu it matters.

Kumar lobbied hard to ensure the first telecom tower in the village was erected on his land and the contract for the tower’s upkeep and operations was awarded to him. That was in 2007. Today, he operates a second mobile tower in neighbouring Bheldi, also in Saran district. Money really wasn’t the real issue as he hails from an affluent family; to be associated with something new is what propelled him.

When Tara Urja, an energy service company (ESCO), set up a 30 kW solar plant in Bheldi last year and proposed that he adopt solar to power his tower instead of firing a 20 kVA diesel generator, he quickly negotiated a deal. Again, he embraced the idea of aligning with an innovation which also fetched significant savings.

Tower companies, quaintly, continue to supply him the usual 29 litres of diesel a day for each of his towers. He merrily flogs it in the market. Between the two towers, he earns Rs 90,000 a month including rental for land and upkeep fees.

“Switching to solar has also gives me a lot of free time; else I was constantly tied down to the tower,” says Kumar. “I am scouting for new businesses to keep me engaged.”

In power-starved rural Bihar and even UP, telecom tower companies and ESCOs are fast turning into key players in a new genre renewable energy ecosystem that is emerging. India has 77 million households — about 360 million people — without access to grid-electricity and another 20 million underserved households — 95 million people — that receive less than four hours of power in a day.

While governmental efforts are on to improve grid connectivity, experts believe the number of underserved households are expected to decline by only 5% over the next 10 years. The gap remains. It’s not that nothing has been done to brighten the lives of people living in the dark. There has been a degree of governmental, NGO and private sector involvement in off-grid energy solutions —mostly the provision of solar lanterns, solar home systems (SHS) and delivering power through distributed renewable energy (DRE) projects. Selco, one of the pioneers in SHS, has installed over 125,000 systems, mostly in Karnataka.

Rise of the mini-grids: Solar projects are lighting up households beyond reach of main electricity grids

This first flush of off-grid solutions, however, is limited to household lighting with consumers paying around Rs 100 a month for a single bulb with mobile charging facilities; more if additional bulbs are included. These are the typical Business-to-Consumer (B2C) models. While this model has been proliferating, votaries of DRE are keen on taking off-grid solutions to the next level. Both ESCOs and consumers are apparently on the threshold of scaling up and climbing the energy ladder.

Why Just Households? Providing a couple of bulbs at home is fine, and needed. As aspirations soar, the need to examine the entire bouquet of power needs of a household – higher wattage applications like TV, fans, irrigation pumps – is being felt. Why ignore the commercial needs in a village – shops, hotels with chillers and freezers, flour mills, ATMs, a petrol station if near a highway? DREs projects, or mini-grids with capacities to do all this is seen as a solution whose time has come.

These mini-grids, primarily solar, mimic the main grid; power generated at a location in the village and wires strung across poles to individual homes and establishments. All energy needs of a community, not just lighting, are to be met. A Business-to-Business (B2B) component would be an ideal addition to prevalent B2Cs.

Mini-grid solutions with capacities exceeding 25 kW to cater to basic commercial applications not only bring in different tiers of consumers but also lend a degree of robustness and resilience to the model.

Again, it’s not as if mini-grids are a novelty in India. Sagar Island in the Sunderbans, for instance, has had a solar mini-grid since 1996. Mini grids cover over 1400 habitations in Chhattisgarh. These are largely governmental initiatives.

Now, a strong business case for off-grid energy is being promoted. The idea is to attract robust private sector involvement in the mini-grids space and run them on commercial terms as viable, scalable, bankable entities. Husk Power and Mera Gao Power are prime examples in this space.

A recent study by The Climate Group, an international non–profit focused on clean technologies and the Goldman Sachs Center for Environmental Markets forecast rapid growth in the installation of mini grid capacity. (see Green Light)

Rise of the mini-grids: Solar projects are lighting up households beyond reach of main electricity grids

“What India needs is a decentralised approach to energy access; let thousands of mini-grids emerge,” says Krishnan Pallassana, Executive Director- India, The Climate Group. It’s beginning to happen. “We want to impact the village GDP through energy access,” says Jaideep Mukherji, CEO, SmartPower India, a nonprofit company incorporated by the US-based Rockefeller Foundation and tasked with fostering a mini-grids ecosystem in India.

SmartPower, with an allocation of $75 million, is crafting coalitions of ESCOs, telecom tower operators and investors with the target of establishing 1000 plants in the next three years, impacting over a million lives. Over 70 grids are already up and running in UP and Bihar.

A large consumer — a telecom tower or a rural bank — functions as an anchor in this model which is often described as the ABC (Anchor-Business-Community) model in developmental parlance.

ABCs accord a degree of financial and operational stability to mini-grids as around 30% of power can be signed out to one anchor load. Along with households there is a clear focus on commercial users of power.

Reliable, uninterrupted power is therefore critical. “A household consumer can be forgiving, not the commercial user,” says Mukherji. Tara Urja, an ESCO, one of the five under the SmartPower fold, for instance, has incorporated a slew of measures to ensure grid reliability.

Each of Tara’s electric poles in Bheldi village — 41 of them, carrying transmission wires over 1.5 km — have programmable load limiting devices affixed to them. “It prevents over-drawing of power by consumers than what is assigned to them, and can be remotely switched on or off,” explains Binoy Kumar Sinha, Tara’s principal co-ordinator for Bihar. Indiscriminate drawing of power can destabilise a grid.

Most of the eleven solar plants run by Tara in Bihar are of 30 kW capacities. The cost of erecting a plant is around Rs 35-40 lakh. Of these, Bheldi has an anchor in Mithilesh Kumar’s tower, so does Fakir-Toli with the local SBI branch tapping into solar power.

The rest are still struggling to integrate ideal anchor loads. Though there are government guidelines to solarise rural telecom towers and many tower companies profess green intentions, on the ground there is considerable reluctance to switch.

Bheldi village, with 150 shops and 35 households is an interesting study on the relevance of solar mini-grids. The village is connected to the main electric grid and the only period it received 18 hours of supply was during the recent state elections in Bihar. It’s now back to the usual, erratic, four hours supply.

Bheldi is therefore served by triumvirate – the main grid. Tara’s solar mini-grid and a couple of entrepreneurs running diesel generators – and yet the mini-grid competes, and well.

The diesel operators charge Rs 7–15 a day (for three hours of supply.) Tara has pegged its tariff at Rs 120 a month for one 5W LED bulb and mobile charging (6 hours a day-primarily for households). “Tariff for commercial users for 10 hours of supply — from 10 am to 8 pm — is devised on a one-on-one basis depending on usage,” says Sinha. A grocery with a freezer, for instance, will pay around Rs 1,500 a month.

Seventy shops in Bheldi have subscribed for solar power. Only one household has signed up; a bit of an embarrassment. The challenges are many. Kasina village is not connected to the existing grid; yet, the initial response to the minigrid was quite frustrating. In the first six months, only 15 consumers had enrolled. Today, 130 of the 300 households are in.

The Kasina plant, bereft of an anchor or a surfeit of shops as in Bheldi, runs at a mere 30% capacity. In Madhopur, response was so poor that Tara had to dismantle 15 Kw of solar capacity and move it elsewhere.

Interestingly, the diesel operators in Bheldi are feeling the heat of competition. One operator is now sourcing power from the mini-grid and passing it on to his flock of 100 customers. “The other one also has sent us feelers,” says Sinha. Bheldi may soon become a diesel-free village.

It is not just the provision of power that SmartPower is keen on; it has a more expansive role to play given its philanthropic moorings.

Powerful Objectives SmartPower would like to spur and support a host of energy-driven economic activities from scratch. This would mean ferreting out potential microentrepreneurs from villages and putting them through training regimens and also enabling access to capital. For starters, one such session was held in Gopalganj. It’s still early days.

Identifying livelihood generation opportunities and skills building, evidently, has not been easy. SmartPower is also formulating a strategy that goes beyond individual-centric approaches; catalysing women’s tailoring enterprises, for instance, and linking them up with national or international value chains is a distinct possibility. “Wideimpact approaches are inevitable,” says Mukherji.

Meanwhile, entrepreneurial farmers like Satdev Tiwari of Hardia village are a solace. Tiwari has turned his water pumping needs into a business with a little help from Tara. He sources power from the mini-grid at Rs 45 an hour to run a new 3 HP irrigation pump to draw water from his tube well. Water is pumped to several farms spread over 20 acres. Tiwari charges farmers Rs 70 an hour for pumping water; Rs 100 if his labour is also solicited.

The vegetable farmer didn’t have Rs 15,000 to invest in a pump and accessories at one go. Tara crafted a scheme for Tiwari; he paid Rs 6,000 (Rs 4,000 as security, Rs 1,000 connection charges, and Rs 1,000 as power-usage advance.) Tiwari has been promised that the ownership of the pump will be transferred to him after running it for 400 hours. India has 7 million pumps that run on diesel.

The arrangement not only bolsters Tiwari’s earnings but also helps Sinha utilise his 30 kW plant capacity. A single irrigation pump takes 2.2 kW. Many others are queueing up for the scheme. Innovations on the ground are beginning to be thrown up but there are bigger issues to be tackled before mini–grids can really proliferate as sound businesses.

The big questions are: what happens to renewable energy mini-grids when the main grid is ubiquitous? If the mini-grids are grid-ready or grid-interactive and are eventually integrated what would be the buy-back tariffs?

There is a policy void today; a clear policy and regulatory framework are key for the long-term viability of the mini-grids business model. Only Uttar Pradesh is presently drafting a mini-grids policy. The issues are many: conversion of landuse; right of way issues related to stringing of electric wires across streets, fields; access to debt and working capital for entrepreneurs; the need to create conditions to attract investors to the nascent sector.

The RBI, earlier last year, accorded priority sector lending status to renewable energy but banks remain hesitant about embracing mini-grid entrepreneurs. SmartPower India is attempting to bridge the gap by extending ESCOs soft long-term debt at interest rates of 8-10%. “Our debt offering can be further leveraged by entrepreneurs to attract more financing,” says Mukherji.

The Ministry of New and Renewable Energy (MNRE) has also not accorded mini-grids the rightful place it deserves. “This is perhaps because the prowess of mini-grids has not been demonstrated fully yet,” says Krishnan. The effort has just about begun (see SmartPower’s Reach).

Rise of the mini-grids: Solar projects are lighting up households beyond reach of main electricity grids

Tarun Kapoor, joint secretary in the MNRE who also holds the mini-grids portfolio, concedes the government has been partial to solar home systems (SHS) as it is believed to be the ideal route to bring left-out areas and scattered hamlets onto the energy map.

Mini-grids too have a role to play in the energy matrix. “We have already written to all state governments prescribing mini-grid guidelines,” reveals Kapoor. It addresses some concerns.

When the main grid reaches areas where mini– grids are in operation, states have been advised to look at one of the three options: allow the minigrid to function as a licensee or franchisee of the power distribution company (discom); discom buys off the developer of the mini-grid; allow the mini-grid to operate in parallel, especially in situations where power availability from the main grid is unreliable.

Kapoor also maintained that the stage is not right to regulate the functioning of mini-grids and that he wouldn’t want to meddle with tariff fixing too. “That is best left to market forces.”

A grid that not just powers but integrates rural India

Around 80 mn rural households are estimated to have no access to grid power. Off-grid decentralised systems, based on renewable energy, are lighting up around 1,000 villages through government funding. In the first of a two-part series, Business Standard travels to remote villages in Bihar’s Araria district to see how micro-grids are providing a reliable source of power to small businesses and rural households

Till a few months ago, two litres of subsidised kerosene a month was all that was needed to light a bulb and charge a mobile phone for three hours in the evening. Not that kerosene was used to generate power; it was a barter of sorts, with kerosene traded for a few hours of electricity.

The owner of a diesel-powered genset would sell the kerosene in the open market at higher rates, turning subsidised kerosene into a booming business in this un-electrified village in Bihar’s Araria district. The barter translated into a payment of roughly Rs 32 a month.

In January this year, a lot changed. Mahalgaon got a 30-Kw photovoltaic solar power plant, with 100 panels. A local police station is one of the customers of Decentralised Energy Systems India Pvt Ltd (DESI Power), which runs the micro grid, just across the road. “We give power to 43 commercial establishments for the whole day and, at night, to 176 households from 6 pm to 10 pm. The police station is one of our anchor clients,” says S N Sharan, managing director, DESI Power. These are micro grids, used for the electrification of villages not yet connected to the main transmission grid. With renewable source of power, these are considered ideal off-grid solutions in a host villages, including those in Bihar, Uttar Pradesh and Madhya Pradesh. In Madhya Pradesh, for instance, 17 villages have micro grids under a programme funded by the Union government-controlled Rural Electrification Corporation (REC) and the state government.

According to an estimate by a senior REC executive, about 1,000 villages have been funded for off-grid renewable energy-based power systems since 2008. Another 600 are expected to be added to the list soon. “One of the criteria for approving the projects is viability. The operator has to maintain and sustain it for at least five years,” says the REC executive.

Sharan says though DESI Power is yet to completely recover its costs, it is likely to start making profits in three years. Its model is designed to cross-subsidise households with commercial connections; these charge households Rs 2 for two lights and a mobile charging point every day, which translates into Rs 60 a month. Commercial establishments have to pay at least Rs 250 a month for 10 units of power. “It is difficult to sustain only on domestic connections; so, we are looking for anchor load from mobile towers, petrol pumps, ATMs, pump sets and cold storages,” Sharan says.

By contrast, in Madhya Pradesh, where the systems are funded by the government, Rs 15 a month is charged from households below the poverty line and Rs 60 from those above it. Commercial establishments and water pump users have to pay Rs 800-1,500.

Dharam Nath Yadav and Sunil Kumar Yadav are two commercial customers of DESI Power in Mahalgaon. While Dharam Nath runs a mobile repair and computer shop, Sunil is a tailor. Now, they can work for longer hours. Since January when the micro grid brought them power, they have stopped using diesel gensets.

“I used to burn at least one to two litres of diesel in the genset earlier. Now, I hardly use it; I’ve kept it as a back-up,” says Dharam Nath. DESI Power is a partner of Smart Power India, an initiative of Rockefeller Foundation, which last year announced an investment of $75 million in micro grids across the country. “We have part funded 49 operational micro grids. We plan to take the number to 1,000 by 2017. We do it both as an investor and as part of philanthropy. Since there was no institutional mechanism available for mini grids, we launched Smart Power Initiative,” says Ashvin Dayal, president (Asia), Rockefeller Foundation.

Jaideep Mukherjee, chief executive of Smart Power India, says cell towers could be anchor customers to make business sustainable for micro grids. “We want to create energy supply companies. The effort is to build and operate these in a way that these should be making profits; otherwise, a lot of companies find it difficult to sustain.”

The advantage of such solar power micro grids lies in the fact that these are modular and can be scaled up easily. DESI Power earns Rs 40,000-42,000 a month from the Mahalgaon unit. It has 22 such units, some of which work on a hybrid of biomass and solar. At Bhebhra in Jokihat, DESI Power runs a biomass plant that feeds the micro industry and supplies power for evening lighting. Mohammad Qasim, who runs a small flour mill and masala unit, is a commercial customer. He doesn’t mind paying Rs 16.50 a unit for power, as it is reliable. He employs six people and says he makes Rs 40,000-50,000 a month during the busy season. With 20-50-Kw capacity, DESI Power’s micro grids run efficiently only within 800 metres. For households outside this area, the company looks at tiny grid solutions with a capacity of 1.5-3.5 Kw, unlike rooftop solar, which is usually used in urban areas and has a capacity of 3.5-10 Kw.

Sharan says their only competitor, whenever it emerges, will be grid power, for which, rural electrification is more of a loss-making business. Compared to grid power, such electrification is more expensive for consumers but even in an electrified village such as the neighbouring Lokhariya, a micro grid is perceived as more reliable, especially in the evening, when grid power is switched off. Besides, as Sharan puts it, the purpose of running these systems is not only energy solution, but integration of a village.

Smart Power: Rockefeller Steps Up Its Fight Against “Energy Poverty” in India

Sue-Lynn Moses The Stanford Social Innovation Review recently published a smart analysis by Rachel Pritzker and Mike Berkowitz about why it’s so important for philanthropy to focus on energy. The authors write:

We have come to believe that energy is not—and cannot be seen as—just an environmental issue: It is fundamental to the wide array of issues that contemporary philanthropy is concerned with, including health, education, women’s empowerment, and poverty.
Of course, anyone familiar with America’s own story of development will know how crucial rural electrification was for lifting millions out of poverty—and, in particular, liberating women from the unending drudgery of manual domestic labor.
Still, as Pritzker and Berkowitz point out, most funders don’t see energy as the linchpin issue that it is, and it’s mostly environmental funders that give this area any thought at all. “Even among sophisticated donors, very few seem to consider the relevance of energy to their non-environmental issue interests.”
One notable exception to this generalization is the Rockefeller Foundation, which has been working on what it refers to as “energy poverty” since 2010. The foundation has poured millions of dollars into this area in India, which has the largest unelectrified population in the world. Some 290 million Indians live without electricity, and pay a steep price. Rockefeller notes that “electricity can increase household per capita income by 39 percent.”
We’ve written often about Rockefeller’s energy efforts in India, and now the story is taking a new turn as the foundation doubles down in this area with a big new $75 million commitment. Rockefeller’s Smart Power for Rural Development Initiative hopes to reach one million people across 1,000 villages in India within the next three years.

Related: Rockefeller’s Plan to Light Up Rural India

The initiative will start moving toward its goal by first engaging all of the energy stakeholders in India from smaller scale energy service companies (ESCOs) to local community leaders and residents. Here’s a peek at what the Smart Power’s blueprint looks like:
•    Offering development support to help ESCOs get their financing, business modeling, area selection, and training underway.
•    Facilitating agreements between ESCOs and investors, telecommunication tower companies, investors and technology equipment providers.
•    Engaging local communities to help ensure buy-in, promote economic development, and create a sustained demand for power.
•    Aligning incentives between governments, investors and ESCOs to reduce long term risk
The project will launch in rural Bihar and Uttar Pradesh, which are among the poorest districts in India. Not only are these two states among the most impoverished financially, but fewer than 10 percent of their rural populations are connected to a national energy grid.
Rockefeller has partnered with Smart Power India, a newcomer on the Indian power scene, to develop the infrastructure and networks necessary to help build its mini-grid energy projects to scale. Ever conscious of the environmental impact of increased energy use, Rockefeller’s initiative will focus on funding ESCOs with sustainable business models using renewable energy sources. Of course, that last piece is key, since an overriding question of our time is how to raise living standards for the world’s poor without also raising global temperatures.
By focusing on the use of sustainable and renewable energy, Rockefeller is not only addressing the ecological damage that is often the result of increased energy usage, but also diminishing the use of fossil fuels such as gas, kerosene, and coal on which rural communities largely depend for their energy needs. Those energy sources, it should be noted, don’t just produce greenhouse gases; they also produce air pollution, with negative health effects.
Bringing clean energy to the world’s poor is so obviously an urgent priority, for so many reasons that we can’t help but return to the issue that Pritzker and Berkowitz flagged in their article: the lack of funder interest in energy. When are more foundations going to get with it?

Related: Rockefeller Foundation: Grants for Global Development

Smart Power India: Economic Development Without Dirty Fuels

When Earth Day was first established 45 years ago, a negligible amount of the world’s electricity was generated by renewable energy sources. Today, it’s more than 22 percent, and it’s growing at a faster rate than any time since. This is undoubtedly a good thing for our planet—although more progress is needed to get the world off of our reliance on dirty fuels. But it’s an equally positive force for economic development in places where people are still living without—or with very little—access to electricity.

For example, in India, more than 300 million are currently living in energy poverty, mostly in rural villages where the national grid does not yet reach. Prime Minister Narendra Modi and his government have a strong commitment to bringing “24/7” power to all. But while the government works to expand access to the grid, the growth of renewables—including solar, wind, and biomass—has opened up new frontiers of decentralized energy models to bring electricity to households and business enterprises now.

Not only are these models healthier and safer alternatives to dirty diesel fuels or dangerous kerosene lamps, but they can connect to and strengthen the national grid later. But most importantly, these technologies can help unleash economic opportunities enabling India’s poorest people to escape the cycle of poverty, increasing household incomes as much as 39 percent in some cases. As a report from The Climate Group shows, these solutions “have much broader social, environmental, and economic impacts” than solutions that only provide for lighting.

For the last three years, The Rockefeller Foundation has been focused on developing a model of decentralized renewable energy that is commercially viable while also able to address the problems of poverty. Here’s how it works: Under the Smart Power model, an anchor tenant, such as a telecom company operating local cell towers, can serve as the base demand for power, making it profitable for energy-services companies (ESCOs) to build clean energy plants, including wind, solar, and biomass, large enough to serve both lighting and productive energy loads for business use. With this structure in place, ESCOs are able to sell electricity to households and local businesses in rural communities, meeting various needs for power from carpenters, farmers, health care workers, and others—benefiting these communities well into the future.

We have spent three years piloting this model. We have seen farmers able to irrigate their fields in the half the time, with great cost savings. We have seen bakers able to increase their inventory because they are now able to power larger freezers for more hours, or photographers able to expand their businesses. We have seen children studying longer and women feeling safer.

Last week, I was thrilled to stand with the Minister of Power in India to announce Smart Power India, Rockefeller’s $75 million commitment to scale this model quickly to electrify 1,000 villages in two of India’s poorest states, Bihar and Uttar Pradesh. By proving the model in 1,000 villages, tens of thousands aren’t far behind. In fact, we think it could help to accelerate access to power to the 1.3 billion people who live without it around the world.

Achieving these significant social and economic advances through clean energy solutions shows that the use of dirty fuels is not essential for economic development. And three Earth Days from now we believe there will be 1,000 villages in India proving that renewable energy is not only good for the planet, but a powerful tool to lift people out of poverty.