How will India install 10,000 micro-grids over the next five years?

Tuesday July 4th, 2017 - Smart Villages

Dr. Rahul Walawalkar, President & MD, Customized Energy Solutions India (CES) and Executive Director, India Energy Storage Alliance (IESA)

Harsh Thacker, Project Manager for MICRO, the Microgrid Initiative for Campus and Rural Opportunities, Customized Energy Solutions India (CES)

Location: Pune, Maharashtra, India

“Learning should not be proprietary; we have to learn from each other’s mistakes”

In hamlets across rivers, mountains, and by the forests, Harsh Thacker meets people who have never had access to electricity at home. He remembers one blackout in his coalfield hometown, in Jharkhand in eastern India, lasting a whopping 51 days. Thacker is part of a growing team of people working on rural micro-grids in India. They aim to reduce the cost of electricity by 30-50% within the next 3 years. In August 2016, this ‘MICRO‘ initiative launched under the India Energy Storage Alliance (IESA), ensuring the stamp of an umbrella group of more than 60 diverse technology companies run by ‘thinker-in-chief’ Rahul Walawalkar.

A specialist on emerging technologies, Walawalkar studied for degrees in electrical engineering, energy management and engineering and public policy in the US. Customized Energy Solutions (CES), which he joined in 2004 to start a demand response practice, shared his interest in transforming the energy sector in India. Founded in 1998, the energy consulting and services company is headquartered in Philadelphia. It has over 500 clients on its roster, “from utilities to energy companies to commercial industry”. There are 150 member of staff worldwide, and a team of 25 who work in India. Walawalkar moved to India to launch CES operations in 2010.

“Rural electrification was one of many “unique” issues in India where we believed that emerging technologies can help India in leapfrogging development,” says Walawalkar. Over 200 million rural Indians do not have access to the grid access, whilst just over another 200 million have a poor connection to the grid. “These far-fetched places have the largest potential for micro-grids to give a return. This invites more capital, but it can be a vicious cycle – there has to be a marriage of micro-grids with the grid in general,” says Thacker. The Indian government wants 24/7 energy access for everyone by 2019. “We cannot just wait and see if grid expansion can achieve this goal,” says Walawalkar, who believes there is no “one size fits all” solution. He points out until recently, the definition for energy electrification in India comprised the key utilities of a village, as well as 10% of household electrification.

CES at work

CES at work

“There have been micro-grid programmes in India since the mid-70s, across all levels from the government, UN, to local companies,” explains Walawalkar. In 2015, the CES and IESA teams spent nine months gathering feedback from stakeholders. The standpoint was to be “technology neutral”. The challenge was to discover the gap between consumer and developer. They took an extensive look at batteries, how a grid was designed, and what maintenance factors were needed. “What was missing in the field?,” says Walawalkar. “Why weren’t micro-grids working on the ground, despite years of funding and studies by various NGOs and government programmes with the right intentions?”

The lack of success of the micro-grids is attributed to the failure of batteries, which Walawalkar agrees with – to an extent. “People might not have understood the technology’s limitations, or sized it properly to the grid, with the voltage of a distribution network – operations and maintenance is a problem.” Incentives to keep the micro-grid running is one problem, and a mismatch in policy considerations are another.

Data transparency is key to driving change, particularly since the issues above are “plaguing” the grid, say Walawalkar and Thacker. With partial funding from USAID’s PACESetter, the MICRO platform is trying to bridge the information gap in the industry over the last few months. So far, the team has gathered data on five grids, including in villages such as Jawhar and Mulshi in Maharashtra. The team has audited a further five of more than 10kw.

“As we are planning work for over 50 micro-grids or mini-grids in some way or another, we may be improving assets which will be serving 5,000 to 10,000 people in general,” says Thacker. “We want to bring transparency in the sector, and there is no data on how the batteries are performing, or on daily output. People at most send their security guard onsite to do handwritten readings, which is hard to build an analysis on.” The platform has been lauded by various agencies including the Rockefeller Foundation. It has led to a new partnership with the European Space Agency. There is also interest from the Global Energy Storage Alliance (GESA) and the Alliance for Rural Electrification (ARE).

There are challenges despite the interest shown in the platform. Thacker describes the resistance and false perceptions that his team is coming across, particularly in following the money. “In one instance, free monitoring devices were given to a couple of micro-grids as a demo, but were promptly dismantled,” he says. “People fear that if all these things come out, then the government would say the micro-grids aren’t working; the funding agencies would want their money in different hands – perhaps in grid expansion instead.” Conversely, he argues, a second round of funding could help a plant to keep going for a further five years.

To fulfil the goal of installing 10,000 micro-grids over the next 5 years in India, Walawalkar says scale is necessary. First off, dealing with the business model. “India has more than 2,000 AC micro-grids of over 5-10 kW, and more than 10,000 DC systems at under 2-3 kW. Crucially, there is no performance clause, points out Thacker. “The onus should be on a developer, tying incentives with performance.” Currently, 70-90% of one system is usually funded by government programmes via the Rural Electrification Corporation. The rest is collected by the village itself, although there is a lack of ownership despite the existence of village energy management committees. Rural Indians cannot be expected to pay for the entire cost of a micro-grid, or to maintain a micro-grid, as they don’t know how, accordong to Thacker. One solution is partnering with micro-finance organisations like Rang De to boost the economic viability of a grid, for example in building an agro-business in a future “smart village”, with opportunities for education and training for the micro-grid.

One bugbear is that some donor agencies provide money to develop micro-grids based solely on their personal interaction with applicants. “Plus, money is sometimes not spent properly; we see people building grids on the ground for less than 10,000 USD, and other companies spending almost the same amount on ‘smart’ grids which are the same size.” Lots of learning should not be proprietary, add Walawalkar. “We have to learn from each other’s mistakes. Our hope is to bring that transparency to the ground, but it has been challenging. We now know a lot more about what we don’t know!”

Harsh Thacker of CES

Harsh Thacker of CES

Walawalkar adds that his team is not reinventing the wheel; he is optimistic. “We are meeting more and more people who acknowledge the problem, so we have to keep on banging on the right doors.” With lower solar prices and ever improving technologies (including improved control systems, cost of monitoring, internet of things), he sees a natural evolution towards the positive. “People’s aspirations are increasing, and they are starting to demand performance.” Finally, he sets great store by the “underestimated” Indian tradition of emerging as a leader when least expected. “We just need one or two individuals who can transform a sector – it happened with milk production, where India became one of the top two exporters, it happened in IT and telecom. We are counting on this happening in the energy sector.” With Thacker collecting data on the ground, and Walawalkar working with senior-level minds, they might well the two individuals to pull India into the future.

–Nabeelah Shabbir, @lahnabee