Mini grids can spur economic activity in rural areas and accelerate the process of expanding mobile phone network across the country due to their large capacities and the ability to connect to the national grid, according to Smart Power India.
A mini grid, as defined by the Ministry of New and Renewable Energy, is an off-grid power system with a generation capacity of between 10 KW and 500 KW. There are a number of other solutions of smaller capacities that rural areas can use such as a solar lantern, a solar home solution, or even a community solution like a micro grid. But a mini grid is the only alternativethat provides the kind of electricity that can be used for business activities, Jaideep Mukherji , Chief Executive Officer (CEO), Smart Power India told The Hindu .
“One of the deficiencies of the other off-grid power solution models is that while these solutions are good in moving households away from kerosene and providing them with reliable and clean energy, they do not provide the energy required to fuel enterprise or commercial activity. You will not be able to power equipment, motors, etc,” Mr. Mukherji said.
“A mini grid is a larger system that converts direct current (DC) to alternating current (AC) and it provides safety as per REC and CEA standards,” he explained. “Usually, the power coming from the smaller off-grid solutions is DC energy. While it is good for lighting, it does not satisfy the community’s requirement to run any sort of business,” he said.
The power generated from a mini grid can be seamlessly transferred to the national grid since it is already going through a a charge controller which manages the flow of energy and an inverter which converts the electricity from DC to AC. It also has a storage facility to meet night demand as well.
“The power that comes out is regular and standard with no fluctuations,” Mr Mukherji said.
Apart from commercial enterprises, rural banks or schools, Mr. Mukherji said that a large part of the demand for mini grids came from telecom service providers for powering mobile towers.
“They (mobile towers) have a presence across rural India and all of them suffer from inadequate power and so have to use diesel,” Mr. Mukherji said. “There is a national mandate to green 50–60 per cent of the telecom towers and also the cost of using diesel is very high and it (the risk) includes diesel theft and all the other nefarious activities that go along with it not to mention the pollution. The power demand of a telecom tower is 24/7.”
Even from his company’s point of view, one of the important criteria in selecting a village to install a mini grid is to see whether there is at least one customer in the area – like a telecom tower, petrol pump, school or bank – that could make up a significant portion of the energy demand from the mini grid.
“The selection of the village is very important. We look at the number of households and the potential of existing commercial activity and the future potential demand. There should be a threshold amount of economic activity. And the other important criterion is the presence of an anchor-load customer, a single customer who can guarantee at least 25-30 per cent of the demand” he said.
A combination of flexible regulation by the government and erratic power supply from the national grid has meant that mini grids can complement the national grid and, according to Mr. Mukherji, often the mini grids are installed in places already covered by the national grid.
“Where the grid has reached, the power is inadequate, erratic and not able to meet the energy requirements of the village,” he said.
Government regulations also provide complete flexibility to the investor, allowing them to compete with the grid, if they choose, sell their excess power to the grid or even exit by selling their assets to the distribution companies.
“Tariff flexibility is also given such that the tariff for the power coming from a mini grid is decided between the provider and the community served,” Mr. Mukherji said.
“At the moment, the government has not set the upper limit on the tariffs and has left it to the market. It’s not as if people will buy power at any price. At the lowest tariff level, they would pay 5–6 rupees a day to light up their home or shop using a mini grid. That is a big saving over diesel or kerosene and the power comes with the benefit of being regular and standard,” he said.