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Secure and reliable electricity access with renewable energy mini-grids in rural India

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Ener­gy access is essen­tial for eco­nom­ic and human devel­op­ment and is an impor­tant dri­ver for the progress of India. Access to mod­ern forms of ener­gy becomes even more impor­tant for the socio-eco­nom­ic devel­op­ment of rur­al areas. To achieve “full elec­tri­fi­ca­tion” suc­ces­sive Indi­an gov­ern­ments have focussed on pro­vid­ing access by extend­ing the cen­tralised grid. Although a con­sid­er­able num­ber of vil­lages and house­holds have gained access to the grid, the reli­a­bil­i­ty and qual­i­ty of pow­er sup­ply still remain a grow­ing chal­lenge for rur­al con­sumers. Mini-grids have thus emerged as piv­otal in pro­vid­ing ancil­lary ser­vices to the grid and improv­ing the lev­el of ser­vices to last-mile con­sumers. This study assess­es the via­bil­i­ty of renew­able-ener­gy pow­ered mini-grids to both dri­ve and sup­port eco­nom­ic growth in India from the per­spec­tive of aug­ment­ing the cur­rent elec­tri­fi­ca­tion of rur­al areas. The study aims to assess the range of addi­tion­al ben­e­fits result­ing from a low-car­bon ener­gy tran­si­tion in India.

 

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Key policy opportunities:

Pol­i­cy oppor­tu­ni­ty 1: Solar-pow­ered mini-grids of high installed pow­er capac­i­ty can remain eco­nom­i­cal­ly viable and cost-com­pet­i­tive with the cen­tralised grid in rur­al areas of India. Solar mini-grid sys­tems greater than 100 kW with inter­est rates as low as 8 % and a 15 % return on equi­ty can achieve grid par­i­ty and a low cost of elec­tric­i­ty sup­ply to the rur­al consumer.

Pol­i­cy oppor­tu­ni­ty 2: Solar mini-grids are effec­tive for improv­ing rur­al edu­ca­tion in India, as most schools in remote areas of India expe­ri­ence con­tin­u­ous pow­er cuts which impede the qual­i­ty of edu­ca­tion that the stu­dents receive. Mini-grids can pro­vide elec­tric­i­ty at schools or edu­ca­tion cen­tres con­sis­tent­ly dur­ing the teach­ing hours to help stim­u­late bet­ter edu­ca­tion­al out­comes for the stu­dents in rur­al India.

Pol­i­cy oppor­tu­ni­ty 3: To dri­ve the growth of high­er pow­er capac­i­ty mini-grids that are essen­tial for reli­able 24/7 rur­al elec­tri­fi­ca­tion, mech­a­nisms are need­ed to be devel­oped to make it suit­able for the mini-grid devel­op­er to trans­fer the sys­tem’s assets to the state-owned util­i­ty when the cen­tral grid arrives at the area served by the mini-grid. This mech­a­nism must be devel­oped in col­lab­o­ra­tion with the pri­vate sector.

 

 

Year of pub­li­ca­tion: 2019

Edi­tors: Ayo­de­ji Okun­lo­la, David Jacobs, Lau­ra Nagel, Sebas­t­ian Hel­gen­berg­er, Aruni­ma Hakhu
and Sarah Kovac – IASS, IET, TERI and UfU

Tech­ni­cal imple­men­ta­tion: Bigsna Gill and Rash­mi Murali – The Ener­gy and Resources Institute
(TERI), India

Sug­gest­ed cita­tion: IASS/TERI. Secure and reli­able elec­tric­i­ty access with renew­able ener­gy mini-grids in rur­al India. Assess­ing the co-ben­e­fits of decar­bon­is­ing the pow­er sec­tor. Potsdam/New Del­hi: IASS/TERI, 2019.

DOI: 10.2312/iass.2019/020

 

This study is part of a 2019 series of three stud­ies assess­ing the co-ben­e­fits of decar­bon­is­ing the pow­er sec­tor in India, edit­ed by IASS, IET, TERI and UfU: