Mini-Grids And The Rockefeller Experience

Jharkhand Invites Bids for Solar Plants in Tribal Villages Under PM-JANMAN

Even as India made commendable progress connecting almost all households to the grid, the larger aim of 24×7 power for all is still some distance away. With a twin challenge of rising demand and the need to transition to a cleaner grid powered by renewables, the hopes of millions for continuous, dependable power are still some way from being fulfilled.

For the Rockefeller Foundation, this became a challenge worth tackling globally, a challenge where their India experience has provided some notable learnings. Microgrids or mini-grids powered by renewable energy have always promised a solution to these gaps in energy access in a developing market like India. The only challenge was funding, in turn, linked to market viability that was preventing significant interest in the space. That made it an ideal test case for the Foundation to support this last-mile push for energy access through distributed renewable energy.

Today, the results in UP and Bihar, two of the poorest states in India, make a strong case for the relevance and viability of mini or microgrids. Heading into close to a decade after the Foundation’s earliest moves in these states, a viable market case for these distributed renewable energy options has emerged, achieving a key objective – to impact lives in rural areas in a way that is positive for the beneficiaries and the environment. A big winner along the way is a firm like OMC Power, which has mastered the science and art behind making a viable mini-grid in these parts.

Deepali Khanna, Vice President Asia Regional Office at The Rockefeller Foundation, says, “What is absolutely key to us is to ensure that energy access is taken off the list of possible reasons holding back a family from progressing, achieving more. Be it education, a small income generating business, or just the bare comforts in hostile weather, energy access can make a massive impact in these areas”.

Our correspondent visited a few sites in Uttar Pradesh, along with the Rockefeller team and their partner on the ground, OMC Power, to see firsthand the evolution and impact of these early mini-grids. The first stop was Pipargaon, a tiny village less than 50 kms from the state capital, Lucknow. The pivot around which the mini-grids are working is the ABC model, or a model built around supplying power to an anchor tenant(A), usually a telecom tower, followed by the local business community (B) and finally, the community (C) residents.

A typical 50 kW mini-grid can serve up to 300 members like these, including the key anchor tenant. With costs benchmarked to diesel costs effectively, getting buyers on board has been easier than many imagined. In each case, the promise is dependable power (24 hours for the anchor tenant) when it is most needed, including in the evenings. The latter is the one part of the arrangement that still uses fossil fuels in the form of DG sets when required, although plans are afoot to replace those with high-capacity batteries soon more widely. House owners typically pay Rs 125 per month for a 15 Watt connection for 5 hours in the evening or Rs 149 for six hours in the case of small business establishments.

Deepali Khanna, Vice President, Asia Regional Office, The Rockefeller Foundation

Deepali Khanna says, “Our experience in India has been standout when we compare it to many other regions. There are many reasons for that, but a key one is aspects like higher population density that enables more efficient distribution, availability of skilled manpower to execute these projects, and in recent years, strong policy support at the government level”.

Natalye Paquin, Chief Operating Officer of The Rockefeller Foundation

Natalye Paquin, Chief Operating Officer of The Rockefeller Foundation, who also made the trip, said, “It is humbling to see the impact of the work on energy access being led by OMC on the lives and livelihoods of communities in Uttar Pradesh. The Rockefeller Foundation takes a human-centered approach as we fulfill our commitment to making opportunity universal and sustainable. To see how this project has impacted each life uniquely keeps us inspired and motivated as we continue our work to transform energy systems.” Rohit Chandra, Founder and CEO of OMC Power, which has set up over 300 mini-grids in the region so far, is optimistic about the future too. “We have worked relentlessly to optimize this model and see a massive opportunity in just these two states, besides other regions where this model can be taken.

Chandra’s firm has done such a good job that it has attracted Japanese firms Mitsui and Chubu Electric to pick up a substantial stake in his firm at a valuation of almost $200 million. Not bad at all for a business that was considered unviable without grant support until a decade back. This viability has been achieved by making the mini-grids more effective at delivering power at an acceptable cost in tune with the changing market needs.

Be it the explosion in mobile phones that created the demand for dependable charging for handsets to rural families that want to see their daughters and sons educated further now, using dependable power in the evenings too. The mini-grid model seen in these states has evolved primarily by reducing the operating costs of running each site. With plans to shift to higher capacity lithium-ion batteries in the future, they offer an even cleaner energy source from these grids for the communities that stand to benefit. From sourcing more equipment locally to a simple shift from high brick walls to barbed wire fencing, no option has been left out in reducing costs.

A householder we spoke to at the village explained why she saw value in the offering. “My daughter needs to have a functional evening light to study. Studying with kerosene-powered lanterns was dreary and dangerous, making it needlessly tougher for our children. With this connection, we have a strong, affordable backup to the grid connection”.

Similarly, a shopkeeper we spoke to pointed out how the power backup helps. “This is cheaper than maintaining our own backup power. As the grid also improves further, it gives us the confidence to stock and store goods that are otherwise at risk of perishing due to a prolonged power cut. Now, we can meet more local demand for such goods instead of people travelling to the nearest town for them”. What is interesting is how costs such as security of the sites, or theft of diesel etc have also been brought down with a combination of technology and better community ownership of these vital installations today.

“As we connect more and more people, the grids are seen as a key local infrastructure by the locals themselves, reducing the need for permanent security presence. We have also innovated to find better and more ways to secure equipment as well as diesel, for instance”, adds Chandra.

With an over 99% collection rate, an enviable achievement by any standard in a region, and country where distribution’ losses’ of over 15% are common due to theft or non-payment, these grids make their case very strongly. Some of the learnings will no doubt help formulate policy and approaches at the Global Energy Alliance for People and Planet (GEAPP), the much larger initiative The Rockefeller Foundation has launched along with the Bezos Earth Fund and Ikea Foundation, among others.