Microgrids in India and Africa - how is space tech helping

Engerati assesses the impact of a new initiative with the European Space Agency on microgrid and mini-grid markets in India and Africa.

With more than 1.3 billion people without access to electricity and almost 3 billion reliant on unclean and ultimately unhealthy fuels for cooking, the potential of renewables-based mini-grids and microgrids as a clean energy solution is beyond doubt.

Indeed a 2012 estimate from the International Energy Agency (IEA) was that mini- and microgrids had the potential to bring electrification to about 40% of those without electrification.

Subsequently this number has been revised upwards to closer to 60% including other standalone systems. Given the pace of developments with fast declining technology costs and emerging business models in for example East Africa and India, and the speed with which such systems can be deployed compared with grid extension, it could go even higher.

To put this into perspective, Africa would need as many as 350,000 mini-grids to achieve universal electricity access, according to the Sustainable Energy for All (SE4All) initiative.

In India, in the quest to achieve universal energy access, at least 10,000 renewables-based mini-grids and microgrids with a combined minimum renewable capacity of 500MW are targeted for the next five years.

India mini-grids

India has been very much at the forefront of rural mini-grid development since the 1990s. The India Energy Storage Alliance (IESA) estimates that to date the country has installed more than 2,000 AC microgrids of over 5kW and more than 10,000 DC microgrids of mostly less than 1kW capacity.

However, not all the experiences have been positive and there have been financial, technical and social limitations which have restrained growth, according to the alliance.

On several occasions project operators themselves have not had clear answers as to why microgrids prematurely failed or were operating at lower efficiency. In many of the cases, the project owners and operators cannot be blamed as poor telecoms connectivity and the high cost of remote monitoring at distant locations had impacted the data acquisition and analysis.

Space for mini-grids

With its stated vision of making microgrids economically sustainable, IESA through its MICRO (Microgrid Initiative for Campus and Rural Opportunities) platform has entered into a partnership with the European Space Agency (ESA) under its Advanced Research in Telecommunications Systems (ARTES) programme to address these issues.

Specifically, the aim is to identify and explore business opportunities for deploying services based on satellite communications, Earth observation data and other space assets to support the decentralised management of microgrids in India and by extension, other developing countries.

The study is expected to culminate into a funded microgrid pilot project demonstrating the potential of these services.

IESA’s MICRO platform is aimed to bring together microgrid developers, technology providers, regulators and funding agencies to reduce microgrid customer electricity costs by 30-50% within the next three years through technology and policy innovation and to support the development of microgrids in underserved areas.

“The IESA team believes that microgrids have vast potential to transform the economic landscape in rural India as well as to provide improved power quality for consumers at critical infrastructures like hospitals and university campuses in urban townships,” says Dr Rahul Walawalkar, executive director of IESA.

ESA’s ARTES programme provides the funding, up to €200,000, for the first phase feasibility study and 50% of the funding for the follow up demonstration.

Commercial green mini-grids for Africa

Alongside India, which has about 300m people without access to modern energy services, the majority of the remainder, about double that number, are in Africa.

This has resulted in a strong push for the so-called ‘green mini-grids’ and the emergence – particularly in East Africa – of growing numbers of what have become known as ‘distributed energy service companies’ (DESCOs).

The experience of these DESCOs, which encompass local players, international innovators and multi-national companies, is that mini-grids are commercially viable but that the market must be segmented to identify sites and the type of mini-grid that is installed. Key considerations are the number of connections per site and the average return per connection (based on demand/willingness to pay, etc.).

A recent benchmarking of the DESCOs by the International Finance Corporation found that they are trending towards solar-hybrid systems – although this may change with the fast declining costs of storage – and smart metering technologies. They also prefer build, own, operate models with service bundles and prepay systems, and generally their breakeven times range between five to seven years.

However, a key concern is the absence of regulation around grid expansion and how the arrival of the grid at their area will be managed.

According to the IEC’s Pepukaye Bardouille and Dan Shepherd in the article, the benchmarking work was “a first step to identify best practices and approaches as a means of providing discipline to the business models and eventually leading to increased investment in the space.”