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Energizing rural India using micro grids: The case of solar DC micro-grids in Uttar Pradesh State, India

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  • NTPC School of Business

Abstract and Figures

Traditionally AC mini-grids have been implemented to provide electricity services in many un-electrified habitations in India, which are not covered through the main grid. However, with the advancement of LED technology and lowering cost of PV panels, the DC micro-grids seem to be coming up in a significant way to enhance energy access. Many initiatives, both in private and public sector, are now taking DC micro-grid route to provide energy for basic lighting and mobile charging. This paper attempts to examine nuances of solar DC micro-grid development in India with special focus in the state of Uttar Pradesh. The paper, drawing from literature reviews, interview with key stakeholders and field survey to selected sites, shares the experiences of the solar DC micro-grid programmes for rural electrification.
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Energizing rural India using micro grids:
The case of solar DC micro-grids in Uttar Pradesh State, India
Debajit Palit (debajitp@teri.res.in), Sangeeta Malhotra (geet360@gmail.com)
The Energy and Resources Institute, Lodhi Road, New Delhi 110003, India
Abstract
Traditionally AC mini-grids have been implemented to
provide electricity services in many un-electrified
habitations in India, which are not covered through the
main grid. However, with the advancement of LED
technology and lowering cost of PV panels, the DC micro-
grids seem to be coming up in a significant way to enhance
energy access. Many initiatives, both in private and public
sector, are now taking DC micro-grid route to provide
energy for basic lighting and mobile charging. This paper
attempts to examine nuances of solar DC micro-grid
development in India with special focus in the state of Uttar
Pradesh. The paper, drawing from literature reviews,
interview with key stakeholders and field survey to selected
sites, shares the experiences of the solar DC micro-grid
programmes for rural electrification.
Keywords: Micro-grids, Solar energy, Rural electrification
Introduction
Almost 96% of the inhabited villages in India are
electrified through conventional grid extension. However,
statistics indicate that almost 77 million households were
living without electricity in the year 2011. While 75% is
the average household electrification rate in India, the
rural electrification rate is only 67% (WEO, 2012). In
addition to the conventional grid based electrification,
renewable energy technologies (RETs) such as solar
photovoltaic (PV), biomass gasifier and mini/micro hydro
have also been used for providing electricity access in
remote areas, forested habitations, islands and hamlets
(Palit and Chaurey, 2011). These off-grid communities
are economically unattractive for electricity distribution
companies (discoms) to extend the grid due to their nature
of remoteness, low-income households and scattered
settlements. While discoms find grid extension
economically unattractive to remote rural areas, they have
also not attempted to electrify these off-grid areas with
distributed generation and supply systems, though they
are the licensees to provide electricity services in all areas.
The Ministry of New & Renewable Energy (MNRE),
Government of India and State Renewable Energy
Development Agencies (SREDA) in the different states,
has worked significantly to address this vacuum.
Specifically, Remote Village Electrification Program
(RVEP) has electrified 10,154 villages and hamlets as on
30
th
June, 2013 (MNRE, 2014). In addition, NGOs have
also implemented number of solar projects by raising fund
from donor agencies and Corporates. Entrepreneurs have
also ventured into providing access to solar lighting
foreseeing the business prospect (Palit 2013).
The high initial cost of extending grid to far-off remote
areas, growing recognition of the effectiveness of RE
systems, better modularity of RETs such as solar PV to
meet the energy requirement of small communities and
associated positive environmental effects have spurred the
expansion of mini and micro grid program in rural areas
of India (Bhattacharyya, 2006). Also, enabling policy
initiatives for RE based decentralized power production
and distribution have accelerated the electricity access
through RE based mini-grids in the last decade.
While AC mini-grids have been implemented in India
since the early nineties (details of AC mini-grid program
in India can be traced in Palit and Sarangi, 2014), the solar
DC micro grids are also being implemented in rural areas,
especially in the state of Bihar, Odisha, Madhya Pradesh
and Uttar Pradesh (UP). Especially in the state of UP,
thousands of hamlets which do not have grid access or are
not getting regular electricity supply during the peak
hours are now covered through DC micro-grids, set up by
private developers, NGOs and the SREDA.
Research Objectives
This paper attempts to examine the nuances of solar DC
micro-grid development in India with special focus in the
state of UP. The paper present an analysis of DC micro-
grids employed for rural electrification and analyzes
multiple dimensions such as technical features and sizing,
service delivery and financial mechanism, tariffs,
operation and maintenance aspects and social impacts.
Methods
A framework was developed to analyse the technical,
institutional, financial and household impacts of DC
micro-grids. A survey was conducted in the state of UP,
covering beneficiaries of solar DC micro-grids, operating
under different agencies belonging to private, NGOs and
government sector. Further, the districts were selected
where the DC micro-grids are in operation for more than
one year (Table 1). Finally, the actual households were
randomly selected from 2–3 villages/hamlets, from the
identified districts. An effort was made to cover equal
number of households being served by different type of
agencies so as to avoid predisposition of the results. The
analysis has been done for a total sample size of 250
households out of 2217 solar DC grid beneficiary
households in the selected districts, with confidence
interval of 2.55 at 95% confidence level.
Solar DC micro-grids in India
The first solar DC micro-grid of 5 kWp capacity was
reportedly commissioned almost 30 years back
in a small village in UP. It provided electricity for
domestic light connections using fluorescent lights,
streetlights, community television viewing facility, which
were considered state-of-the-art at that time. There was a
complete lull in DC micro-grid implementation till it
regained importance only during current decade especially
for providing lighting and charging mobiles, because of
introduction of highly efficient LED lamps and reduction
in the price of the solar panels.
Table 1: Village survey details
Type of Agency District
name
Villages Households
surveyed
NGO
-
TERI
Azamgarh
2
40
2
50
Government -
UPNEDA
Siddharth
anagar
3 38
Hardoi 2 17
Basti
2
15
Private
-
MGP
& Minda
Sitapur
2
40
Unaao
3
50
In 2010, Mera Gaon Power (MGP) piloted the DC micro-
grid technology in the village Swuansi Khera in Kanpur
Dehat district to provide LED based lighting (Jaisinghani,
2014). While the initial experience for MGP was not
successful and they had to withdraw from the village
because of social issues such as non-payment by
consumers. Thereafter, they re-launched their programme
in Sitapur district in the central region of UP to cover un-
electrified hamlets that are not likely to be covered
through main grid. MGP has reportedly set up DC micro-
grids in 900 villages covering around 20,000 households.
TERI also initiated a project during the similar time to
connect households and markets through solar DC micro-
grids following an entrepreneurial delivery mechanism.
The pilot project in 2010 was installed in Jagdishpur of
UP serving around 10 households. TERI then installed a
solar micro-grid plant in the same village providing
lighting to 40 shops and 8 more micro-grids to serve
around 20 households each in the year 2011. TERI further
had set up 30 DC micro-grids in the six districts across
UP under the Norwegian Framework Agreement (NFA)
connecting 130 households and 1,100 commercial units,
providing them with lighting and mobile charging facility.
The activity was further expanded through the Lighting a
Billion Lives (LaBL) campaign, which has till date
connected 11,040 households in 243 villages across six
states namely, Bihar, Jharkhand, Madhya Pradesh,
Meghalaya, Odisha and Uttar Pradesh.
Similarly, the Uttar Pradesh New and Renewable Energy
Development Agency (UPNEDA), developed a 1.2 kW
DC micro-grid plant in the year 2011-12 in an un-
electrified village called Mathia in Gonda district which
was designed to serve upto 200 households. With this
experience, UPNEDA further expanded the program to set
up 23 solar micro-grids in 11 districts in the year 2011-12,
covering around 4,000 families (Srivastava, 2013).
While an AC micro grid has a benefit to utilize existing
AC grid technologies, protections and standards but
stability and requirement of reactive power are the
inherent demerits of it. On the other hand, DC micro-grid
has no such demerits of AC micro-grid and assures
reliable implementation of environment-friendly
distributed generation sources. Literature also highlights
that DC micro-grids can provide a reliable, efficient and
sustainable smart grid, and often at a lower cost with
greater effectiveness than measures applied to the AC grid
(Savage et al, 2007). DC micro-grids also have a superior
compatibility of the DC power with electricity storage.
Further, in a DC system, only the voltage needs to be
considered, whereas AC systems require each element to
have identical wave shapes or have to be synchronized to
operate. The DC micro-grid is more flexible and
accommodating of the load and can create power systems
that are efficient and more compatible with the fastest
growing segment of the electronic devices load today.
A structured discussion on various aspects of solar DC
micro-grid developments in India is presented below:
A. Technical features and Sizing
Different agencies have attempted to differently design
the capacity of micro-grids. However, the underlying
principle seems to be that the micro-grids are designed for
providing only lighting and facility to charge mobile
phones. The micro-grids designed under UPNEDA
provide 4-5 hours of electricity in the evening from a solar
power plant of 1.2 kWp capacity (Srivastava, 2013).
During survey it was found, each household has been
provided with 2 LED lamps of 2W and 1W, which
provide brightness of 100lm/W, and a mobile charging
port. A prepaid meter and timer has reportedly been
provided for each connection, though during the survey
no such meter or timer was observed in the household.
TERI followed a flexible approach and implemented
micro-grids of different capacities to serve 20 to 100
households from each micro-grid. The supply is done at
24V for providing lighting services for 4 hours in the
evening using LED lamps of a total of 3-6W per
households (1-3 light points/household, 100lm/W) and
power to charge mobile phones. TERI considers 8% cable
losses for grid length of less than 200 meters, which is the
usual configuration. In case distribution length is higher,
say around 600 meters, then 20% loss is considered. As
per discussion with TERI field staff, the voltage drops to
around 20V at the end of 600 meters of grid.
MGP provides 5-7 hours of electricity through 1W LED
lamps (75lm/W), primarily for lighting and mobile
charging in the evening, with their DC micro-grids. Each
connection has two 1W LEDs and one mobile charging
point. Users may choose to pay extra for additional lights,
however, a maximum of eight 1W LEDs is provided.
Twenty households are usually connected from each
micro-grid of 240Wp capacity within a maximum grid
length of 90 metres to keep the technical loss and the
installation cost at the minimum. For MGP, the average
voltage drop to the final house is reportedly less than 4%.
The technical loss is less, as MGP has restricted the grid
length from the centralized solar panel, whereas, grid
length in case of TERI’s projects varies from 100 to as
high as 600 metres. This is because the TERI model is
based on individual village level entrepreneurs who
sometimes are unwilling to set up multiple solar panels in
a village as it is difficult to manage by them. Minda uses
240Wp solar panels and provides electricity for lighting
using 2 LEDs of 1.5W (100 lm/W) each with maximum
grid length of 250 metres.
B. Delivery models
The delivery model followed by UPNEDA is of Built,
Operate and Maintained by UPNEDA. They engaged
technology providers to install the micro-grids and then
engaged local operators to run them. The local operators
are paid salary and the monitoring is done by UPNEDA.
In case of TERI, local youths were identified and
motivated by TERI staff to become energy entrepreneurs
(EE) and invest in the micro-grid business. TERI also
provided all technical support, assisted in procurement
and installation of the micro-grids and trained the
entrepreneurs to operate and manage the micro-grids.
MGP has implemented the solar DC micro-grids using a
micro-utility approach, where they design, install, operate,
maintain and provide the service to consumers in lieu of a
fee or tariff (Palit and Sarangi, 2014). The MGP charges a
connection fee and a weekly tariff on a prepaid basis.
They formed Joint Liability Groups (JLGs) with all the
users of a single micro-grid acting as one JLG to ensure
timely collection. Minda installed the micro-grids and
handed them over to rural entrepreneurs after an initial
hand-holding by way of training. These rural solar
entrepreneurs are made responsible for all operations,
maintenance and revenue collection from end-consumers.
C. Financial Mechanism and Tariffs
TERI’s pilot model, which electrified 10 households and
40 shops, had 100% EE investment, while in the second
phase installation of 8 micro-grids, TERI provided 60%
subsidy and the remaining 40% was invested by the EEs
and the micro-grids installed under the NFA had 45%
financing shared by the EE and the bank or wholly by the
EE and the remaining 55% as subsidy given by TERI.
Under NFA project, out of total 30 EEs, 15 availed the
facility of 30% loan from the bank and the others invested
45% of the cost on their own. The average cost for plant
installation was INR 2,00,000 for covering 50 households.
In case of MGP, while they made the entire initial
investment, they have also been supported partially
through grants by different agencies towards the capital
cost. The average installation cost for MGP is INR 55,000
for connecting 30 households. A major component of the
capital costs for UPNEDA has come as a subsidy with
MNRE providing 30% of the capital cost and the balance
shared by UPNEDA. Similarly, Minda received around
30% of the project cost (INR 107,000 for connecting 40
households) as subsidy from MNRE and the remaining
70% was contributed by the local entrepreneurs. The
higher installation cost for TERI is due to use of higher
wattage as well as higher lumen output LEDs thereby
requiring higher capacity of solar panels and batteries.
The tariff for the micro-grids in the surveyed districts was
found be levied on a flat basis at INR 100-150/month/
household. The UPNEDA and Minda operator charges
monthly tariff of INR 150 and INR 100 per household
respectively. In case of TERI, the tariff is INR
5/household/day is collected by the entrepreneur or an
operator. The MGP charges a connection fee of INR 50
and a weekly tariff of INR 25 on a prepaid basis and the
JLG assures that the payment is made every week. While
for TERI, MGP and Minda, the survey result indicates
100% collection of tariff, in case of UPNEDA owing to
the absence of ownership, social awareness and training,
the service is poor resulting in low average collection
efficiency of only 56%. The better collection efficiency
except for UPNEDA may be attributed to easy mode of
payment taken on a daily or weekly basis.
D. Operation and Maintenance Aspects
In case of UPNEDA, a person from the community was
identified and deployed for operation, maintenance and
collection of user charges. This operator is responsible for
day-to-day repairs and maintenance and the collection of
monthly tariff. The onus of replacement of batteries has
been kept with UPNEDA, out of the accumulated user
charges (Srivastava, 2013). On the other hand, both TERI
and Minda model have stressed on the ownership by the
entrepreneurs, therefore, the operation and maintenance is
monitored by the locally operating EE who have also
partially invested in that plant.
During the survey, when asked about the training given to
operators, UPNEDA operators could not mention
anything about training received which shows that they
may not have been given any formal training. Whereas,
TERI and Minda operators were reported to have been
given formal training regarding operation and
maintenance such as panel cleaning, battery refilling and
replacement, checking of connections, simple
troubleshooting and understanding basic faults. As MGP
works on a micro utility model, they maintain a dedicated
team to take care of preventive and any breakdown
maintenance. During interaction with MGP team, they
reported that they try to respond breakdowns within 72
hours. In case they are unable to provide power supply for
more than 24 hours, they take less tariff for the weekly
proportionate to the time of downtime.
While the micro-grids under TERI, MGP and Minda are
found to be operating without any faults, in case of
UPNEDA, all plants have been found partially operating
with some faults. The households retaining connections
have thus come down to around 50% as compared to
originally connected. Some commonly faults found during
the survey are loose connection, decreased bulb
illumination and short circuits and it was found that these
are timely rectified by the local operators/technicians.
Project Impacts
During the survey, it was found out that the grid supply
has been very poor, providing electricity during the times
it is not usually required such as afternoon and late night
and not during the times it is mostly required such as
evening hours (Figure 1). Around 93% of the households
are reported to use lighting for studying and carrying out
household chores which on average takes about 2 and 3
hours respectively. The remaining 7% is used in business
such as weaving and small grocery stores, and agriculture
activities (Figure 2). While, 99% of respondents reported
spending of INR 80-150 towards kerosene before solar
light and 1% spent between INR 150-200, after solar light
this expense came down to nil for 68.4% users and less
than INR 50 for 31.6% households (Figure 3).
Figure 1: District-wise average grid supply
Figure 2: Number of respondents using solar light
Figure 3: Monthly expenditure on kerosene
As anticipated there is a positive impact in terms of
education and women’s health. Post solar light, on an
average children are studying for 2 hours and prior to that,
they were studying for only 1 hour in kerosene light. The
survey also indicates that women felt that after ceasing the
use of kerosene, their health problems such as red eyes,
blackened nostrils, headache, watery eyes and other
problems like coughing or breathing difficulty have
reduced considerably. Further, the results also indicates
that 94.4% of the households found the solar light quality
very good and the remaining 5.6% of the households
reported satisfaction with the quality of light.
Conclusion
The potential market for micro-grids in India, whether AC
or DC is huge with large number of population still living
without any electricity services. While more than half a
million villages have been electrified through
conventional grid extension, there is reportedly similar
number of hamlets where extension of the grid may not be
cost effective. The prospect of so many customers has
made development of micro-grids a good sector for the
private-sector and social enterprises to step in and serve
the population. A report by the World Resources
Institute and the Center for Development Finance
estimates that the market for micro-grids in India and
other clean energy consumer products could reach upto
$2.1 billion annually. However, these startups’ prospects
might be extinguished in a moment if regular power lines
marched into these hamlets, so appropriate and enabling
policies need to be developed for co-existence of both
main grid and micro-grids in the rural electricity sector in
India. With advent of new interconnection technologies
and more clarity on the policy front, the micro-grid and
the regular power grid might one day converge on the
same village and complement each other, making the
village’s power supply cleaner and more robust.
Acknowledgements
The authors gratefully acknowledge the funding support
received to undertake the study as part of the research
project titled “Decentralized off-grid electricity generation
in developing countries: Business models for off-grid
electricity supply”, funded by the Engineering and
Physical Sciences Research Council/Department for
International Development from the Research Council
United Kingdom Energy Program. Authors of reference
materials are also gratefully acknowledged
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The energy poverty cycle remains a twofold barrier as part of energy transitions. Nations must support the provision of affordable and reliable power and concurrently address nationally agreed carbon reduction targets. Decentralised solar photovoltaic (PV) is a viable option to achieve universal energy access in rural areas, while it concurrently decarbonises energy generation, but often remains in tension with traditional centralised generation and distribution systems. Lack of awareness of PV technologies is seen as one of the major barriers limiting the deployment of decentralised systems in rural areas. This study explores awareness of PV systems drawing from over 700 household semi-structured surveys within Uttar Pradesh, India. We found existing awareness-raising campaigns, and subsidies for promoting PV technologies in rural areas are not effective with households preferring word of mouth, experiential learning and village-level awareness programmes than conventional electronic and print media advertising, as preferred by the government and private sectors. This lack of awareness also extends to subsidies for solar PV otherwise used to support this technology deployment and transition. We suggest locally organised and locally delivered targeted campaigns covering product knowledge, functionality and information on financing provisions for procuring solar PV system including how this relates to subsidies could be more effective to promote solar PV in the rural market. As public awareness precedes solar PV adoption, these findings can be insightful for policymakers, investors and the private enterprises to improve existing informational programmes and devise effective campaigns supporting the demand and therefore development of rural solar PV market. Graphic abstract
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This study investigates renewable energy based rural electrification in India, with a specific focus on the mini and micro-grid experiences. Specific references are made to so­lar PV and biomass based technologies implemented under publicly supported programmes like the Remote Village Electrification programme and the Village Energy Security programme. Additionally, the study also focuses on mini-grids deployed by private companies such as Husk Power Systems (HPS) and Mera Gao Micro Grid Power (MGP). In order to better comprehend a comparative perspective of mini-grid variants, the report has analysed the mini-grid experiences by examining technologies adopted, policies and incentives, business models, financing and tariff structures, and community participation. The study also highlights trends in the implementation of mini-grids (both technological developments as well as institutional evolutions), and the evolving policy dynamics used to pro­mote and incentivise both private and publicly supported mini-grid developments in India.
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Mera Gaon Power: Low cost micro-grids for priority energy needs
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Jaisinghani, N. (2014). Mera Gaon Power: Low cost micro-grids for priority energy needs. Boiling Point, 63, 12 -15.
Solar minigrids in rural areas of Uttar Pradesh
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