The rise of the microgrid

India proposes to install 10,000 renewables based microgrids and minigrids in the next 5 years.
Published: Thu 16 Jun 2016

Mini- and microgrids are very much on the ascendancy – and for a variety of reasons. In the US and Europe, for example, the primary driving forces appear to be building resiliency into the grid (especially in the US) and developing community and campus-type energy systems. [e.g. Engerati-Community Microgrids Coming To New York, New Li-ion Battery Storage for San Diego Microgrid]

But where these technologies should come into their own is in small island communities and especially rural areas which require electrification. [e.g. Engerati-Africa’s Largest Microgrid Takes Shape In Equatorial Guinea, Solar Microgrids For Fiji] In Australia, AusNet Services has just launched the first community minigrid trial in a suburb of Melbourne but remote microgrids have been under development for some years already. For example, the King Island Renewable Energy Integration Project was initiated as far back as 2011. [Engerati-Grid Integration Of Renewables – Five Top Projects]

In Africa clean energy microgrids also are being viewed as a viable solution for remote mining operations. [Engerati-Clean Energy Microgrids - The Future for Africa’s Mines]

Navigant Research projects that microgrid capacity globally will increase almost seven-fold from a little under 1,500MW to about 7,500MW in the decade to 2024 – or an average CAGR of over 20% – driven mainly by the North American and Asia Pacific markets. It will also clearly be driven principally by the remote power systems requirements. In an earlier study the company found that remote microgrids and nanogrids should reach almost 4,000MW of capacity by 2024 – more than half the total – primarily in Asia Pacific, the Middle East and Africa and North America. Navigant defines a nanogrid as a system of 5kW or below.

Microgrids for electrification

The Sustainable Energy for All (SE4All) initiative in one of its earliest reports stated that mini- and microgrids could provide more than 40% of the generation requirements to meet the electrification for all needs globally. To this end they have been given High Impact Opportunity (HIO) status with the aim that barriers are addressed and their deployment is accelerated. [Engerati-Minigrids - A High Impact Technology For Rural Electrification]

In their work to date, the HIO members have identified the key policy issues as permits and licensing, tariff setting that is affordable for users while also being attractive to investors and operators and possible (future) grid integration. A start has been made on identifying opportunities to integrate minigrids into national planning and a draft standards document has been completed. Business models are also being investigated with opportunities for novel and community-based initiatives emerging. [see e.g. Engerati-Minigrids Demonstrate Potential For Rural Power Delivery]

10,000 microgrids and minigrids for India

While new mini- and microgrid announcements in countries in Asia or Africa appear almost daily, India – with a two-decade experience in their implementation [Engerati-Mini-grids – Lessons From India] – has once again taken the lead with the first large-scale announcement: a proposed minimum 10,000 renewables based micro- and minigrids with a minimum installed capacity of 500MW in the next 5 years. In the sights is electrification for the 237 million people currently without access.

In a proposed national policy for renewables-based micro- and minigrids, India’s Ministry of New and Renewable Energy (MNRE) envisages these as “a promising solution to the access to energy challenge in the country” and commits to support their large-scale expansion.

Microgrids are distinguished as systems with a capacity of less than 10kW and minigrids of 10kW and above.

The MNRE estimates the average size of the systems that will be implemented at 50kW, with larger sized minigrids the preferred option. They should have the ability to meet the basic needs of all households in the vicinity for lighting, mobile charging and use of TVs, fans and other appliances.

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ESCOs to deliver

The systems will be delivered by energy service companies (ESCOs), as they are being currently. To fast-track the process, the ESCOs will be empaneled as Rural Energy Service Providers (RESPs), i.e. installer, owner, operator and service supplier.

Seven categories of consumers are defined for fixed tariffing/billing: Households; Agriculture (i.e. irrigation pumps); Commercial (e.g. shops, telecom towers, ice-makers, battery/lantern charging, etc.); Productive (e.g. milling, rice de-husking, wood/metal workshops, foundry, small and micro industries, etc.); Social institutions (e.g. schools, medical centres, public buildings, etc.); Government offices; and Municipal functions (e.g. street lights).

The possible revenue sources for mini and microgrids are fee for connections, sale of electricity and grants/subsidies (if available). As communities in rural areas are very sensitive to price, project designs need to be extremely thoughtful ensuring affordability of the service, advises the MNRE.

Where possible the microgrids and minigrids should be installed in a cluster format, i.e. in contiguous areas, to improve operational and cost efficiency, but also to offer the possibility of interconnecting projects in the future.

The draft policy, which runs to a mere 25 pages, is clearly a starting point and, as stated in the introduction, many more supporting and practical measures will be required to encourage ESCOs and investors into the micro- and minigrid space. While no other countries have the scale of the electrification requirements of India, those elsewhere in Asia Pacific and Africa should take note. A microgrid policy is as important in a state in the US as it is in a country in Africa to enable the technology to help to meet the specific local challenges.

Further reading

Ministry of New and Renewable Energy: Draft National Policy on RE based Mini/Micro grids