Mini grids equipped with smart meters have been lauded as the next big revolution in the renewable energy arena. In the policy sphere it is believed that there is an urgent need to come up with a viable model of mini grid development, scaling up and financing as it is perceived to be effective in meeting the goals of energy access for all. The direct involvement of communities and further contributions to rural electrification is believed to place mini grids in the limelight for the coming years. The sector mainly driven by a few players’ viz social entrepreneurs and independent power producers has become the favourite of bigger corporations off late due to the perceived impacts on the ground and a growing rural market in the country. Certain Government programmes like DDG* (Under RGGVY**) and Remote Village electrification programme also promote mini grids to some extent. At this juncture there are certain important factors to be considered before we move on to the scaling up and policy design for such projects.
A recent visit to Darewadi solar project, a village situated 140 kms away from pune (9.4 Kw Solar PV) by Gram Oorja is worth mentioning at this point when we critically think about developing various aspects of a proper mini grid framework. The 40 households in this small hamlet were completely dependent on kerosene till the execution of the project in 2012. The Project is one of the most efficient Mini grids I have ever visited throughout the country with its quality components and individual metering systems for each Household. In sizing the equipment the growing aspirations of people (anticipating the addition of new equipments in future) have been taken into consideration unlike most of the undersized ‘only for lighting’ projects in the country. This is indeed a welcome step when we talk about decentralized systems moving from a stop gap measure to the long term solution for energy access.
A village electricity committee is managing the tariff collection, decision making and acts as a regulatory mechanism within the village. Every month the collected amount is remitted in the nearby bank even though the collection efficiency is average. This is to be used for the replacement of the battery and other maintenance charges. In a way previous experiences shows that imparting the sense of ownership with proper tariff collection has long lasting impact on the sustainability of the projects. Many free projects in the past have failed due to the issues with battery and maintenance and the lack of corpus amount for maintenance . In the case of productive loads two pumps and an Atta chakki is being put to use with the electricity from the project. The maintenance of the system is also carried out properly with a person form the company visiting the site at least once in a month or in case of emergency repair. But during monsoons power failures and low power production used to be a major constraint.
From a complete technical perspective such projects can be a model for future mini grid development and replication (in many ways scale up doesn’t make any sense in this perspective) but the monthly tariffs are something to be worried about. In effect the tariff comes to around R.s 20/unit contrary to normal grid connected supply comes to around on an average 5 R.s /unit. It is true that the willingness to pay in these remote locations are calculated relative to the money spent on kerosene but that doesn’t justify this huge difference of extra 15-20 R.s)unit a poor customer has to pay to obtain energy access. Moreover the nearest grid connected village is less than a km away from the project site and has a quite reliable grid supply. So grid extension won’t be a big constraint here.
It is quite evident that the selection of the site becomes important when such projects are implemented. The idea of mini grids and renewable energy in itself should not be an end point because for our country the larger goal is to provide reliable energy access to millions of people. So wherever grid extension is possible that should be the first priority but provided the mini grid operators should be protected in a way that grid connectivity is ensured. This is important because we are talking about the efforts of numerous entrepreneurs, NGO’s who have taken the challenge of providing energy access to extremely remote areas where government agencies have failed miserably. The Grid should be strengthened in a way we can facilitate tail end generation from these projects that can reduce the cost for storage systems and increase the reliability of supply. This can also be used by utilities as means to comply with their RPO (Renewable purchase obligation ) target which needs a tight monitoring mechanism in the coming years.
On the financial part the extra burden on the rural consumers can be shared across all the grid connected consumers by levying a small surcharge (if it can be implemented throughout the country which would come to few paisas) in the electricity bills. This fund should be used for the viability gap funding of these projects. Such a system can exist only when there is a regulatory mechanism in place with proper coordination between Ministry of power and MNRE. Presently there are delays in disbursing the already allotted subsidies for such projects which has impacts on the availability of loans for covering the high upfront capital expenditures. The regional rural banks are already showing the way for nationalized banks in terms of prioritizing lending to renewables in villages.
The conversion of existing pumps from diesel to electricity from these projects can act as a proper load management mechanism wherever inadequate loads are becoming an issue for capacity utilization. Additional interventions coupled with such projects should be completely based on need assessment. Ideally, involvement of local groups and NGO’s are highly advised while coupling energy with allied development activities of productive loads, computers for education, clean drinking water provisions etc. Above all the routine maintenance should be given high priority.
Mini grids can actually revolutionize the energy access and renewable energy scenario in the country. But in some way it is unfortunate that people have now started talking about an approach of Grid extension V/S Isolated mini grids. In a long run this aspect won’t be desirable for our country. Mini grids should be seen largely as complimenting the existing grid wherever it is possible and elsewhere it can be an isolated model. This would also mean that even with in the grid tied scenario the aspects of people’s participation, ownership etc. can be exercised. Finally it’s a decision about our priorities – are we really interested in providing energy access or merely increasing renewable deployment?
*DDG- Decentralized Distributed generation
***RGGVY- Rajiv Gandhi Gramin Vidyuthikaran Yojana
MNRE- Ministry of New and Renewable Energy