Mini-grids – Lessons From India

Almost two decades of mini- and microgrid implementation experience in rural India provides lessons.
Published: Fri 03 Oct 2014

Since the mid-1990s when the concept of solar PV mini-grids in India was pioneered in the Sunderban delta region in the state of West Bengal and in the forested region of Chhattisgarh state (then part of Madhya Pradesh state), these have proved successful for electrification in a country in which almost three-quarters of the population live in rural villages.

Since then, mini- and microgrids connected to solar PV, biomass or small hydro have been implemented in various states, notably Bihar, Chhattisgarh, Lakshadweep, Madhya Pradesh, Odisha, Uttar Pradesh, Uttarakhand and West Bengal.

Much of the initiative for these implementations has come from the state renewable energy development agencies, working under the aegis of the Indian Ministry of New and Renewable Energy (MNRE). NGOs have also implemented numerous pilot projects, and latterly has seen increasing involvement from the private sector, with the emergence of new business ventures. [Engerati-More Microgrids Coming To Remote Villages In India]

Depending on their capacity, the mini-grids provide electricity for households, small commercial activities, for community requirements such as the supply of drinking water, street lighting, vaccine refrigeration, and schools.

A new study from the Global Network on Sustainable Energy Development (GNESD) reviewing the development of mini-and microgrids in India, draws five main conclusions for energy development practitioners, project developers and policymakers.

Institutional issues

As mini- and microgrids in India are mainly community-centric projects or involve NGOs, they lack an organized delivery approach compared to utility-driven, conventional grid-based supply systems. The community-based service model also presents its own challenges. Most of the community-based projects were implemented on the premise that the community (through the Village Energy Committee) or the local panchayat owns the project and assumes overall responsibility for management and operations. However, in many cases the VEC is found to be weak and group activity can be minimal.

Service delivery models need to be designed and structured in such a way as to recognize the uniqueness of each region. While technical features will require a degree of standardization, a uniform delivery model might prove counterproductive. There is also a need for standard contracts and implementation processes for the mini-grid projects to keep transaction costs low. Alternative service delivery models could also be piloted using independent energy service providers.

Mini-grid technology choices

The choice of technology and design capacity of the mini-grids are seen to have been influenced by various factors, including the geographic and climatic conditions prevailing in the region, the prevailing policy and incentive frameworks for different technologies, the presence or absence of local supply chains for these technologies, and the socio-economic profiles of households at the micro level.

The study suggests that the selection of technology should be based not only on robustness, but also on the availability of knowledge and skill-sets of local people so that after-sales service and maintenance can be locally managed. For example, the storage batteries of solar mini-grids are found to be the technically vulnerable part of the systems, therefore requiring proper management and routine servicing.

Cluster approach for implementation

Renewable energy-based mini-grids require clusters or certain economies of scale to work properly.

Depending on the proximity of the habitations, the merit of establishing a standardized capacity of local mini-grids or centralized power plants of higher capacity could be beneficial over smaller capacity systems for certain technologies.

Policy and regulation for mini-grids

The rate of success of mini-grids is directly dependent on the government’s commitment to creating an enabling environment, which includes having a clear cut policy framework and milestones, systems for defining and enforcing appropriate standards, financial support mechanisms and support for capacity-building.

Enabling policies have been developed to mainstream mini-grid systems as an effective alternative to electricity supply. However, some lacunae continue to persist in the policy and regulatory sphere. For instance, the existing legal and regulatory enshrinements allow cross-subsidies to be limited to the grid-based consumers, while mini-grid consumers do not get the similar facility. Thus, mini-grid projects often become unviable, as they cannot compete with the tariffs prevailing in neighbouring grid-connected villages (which are cross-subsidised through regulatory intervention).

Local capacity building

The local capacity building of stakeholders has ensured better project performance. The operators of the power plants/mini-grids play a vital role in ensuring the plants’ long-term operation. In addition to good technical solutions, the dedication and skill, and the ability to make good decisions in daily O&M are crucial for the performance of a whole energy supply system. However, merely providing training to the remote communities may not address all issues, as community members may not grasp a proper understanding of the technology because of their lack of exposure and familiarity.

Further, the experience also indicates that there is a need to train operators not only during the initial phases of plant operation, but also provide them refresher-training programmes at regular intervals.

Further reading

Renewable energy-based rural electrification: The mini-grid experience from India