OASYS South Asia International Workshop on Financial and Institutional Challenges of Off-grid Electrification October 16, 2012 De Montfort University, Leicester
Renewable energy mini grids Indian experiences Debajit Palit Associate Director and Fellow The Energy and Resources Institute, New Delhi Email: debajitp@teri.res.in
What is TERI A not-for-profit technology research and policy think tank; Established in 1974 in New Delhi; More than 1000 professionals, with centers spread across 5 cities in India; Overseas presence in London, Washington DC, Tokyo, Dubai and Addis Ababa Working Areas Energy & Power Regulatory practices Habitats and transport Environment Addis Ababa * Water and NRM Climate policy Bio technology Social Transformation
People lacking access Source: World Energy Outlook 2011 Number of people lacking access to electricity Number of people relying on traditional use of biomass for cooking Africa 587 657 Sub-Saharan Africa 585 653 Developing Asia 675 1937 China 8 423 India 289 855 Other Asia 378 659 Latin America 31 85 Developing Countries* 1314 2679 World 1317 2679
Indian National RE Progress (2005-11) 89.86% of targeted un-electrified villages (120000) have been electrified (around 95% of total villages electrified); 60.95% of electrified villages (350 000) intensified; 74% of the targeted 23.3 million BPL households electrified; 103 079 rural electricity distribution franchisees in place Around US$ 5312 million spend for rural electrification Miles to go. Huge gap between access to electricity (as per RGGVY definition) and actual connection of households 74 million hh without connections ~ 45 % of total hh Poor availability of supply in the connected areas (~ 8.3% av deficit)
Rural Electrification Framework in India
Mini-Grids in India Pioneer of Mini-Grid system First solar mini grid commissioned in 1996 in Sunderbans Islands State-of-the-art system designs & use of components (converters & inverters), continuing till date Cooperative model of service delivery Involvement of local community from planning stage Policy enablers from time to time Around 5000 villages covered through mini-grids, serving more than 50,000 HHs Multiple technology adopted
Technology Transition GRID Solar Mini-Grid Wind + Solar WIND HYDRO Biomass Mini Hydro Stand-alone Solar Systems Mini Grid Smart Mini Grid 1980 1996. 2010.
Why mini grids in India Technically, mini-grids are preferred for remote areas over other options such as solar home systems, as mini-grids provide electricity services for lighting & for powering various appliances, whereas SHSs typically provide only lighting services Can support small productive applications Organisationally, managing mini-grids are easier compared to individual systems due to their centralised operation through a proper institutional arrangement
Source: CREDA and TERI Solar PV Minigrid
Source: TERI Control Room, Battery Bank, Grid
Biomass Gasifier Power System Fuel Preparation Biomass Gasifier Cooling cleaning train Engine Alternator Biomass drying Power evacuation Source: TERI
Managing Mini Grids: Earlier Model FUNDING AGENCY Grant from Central Government Equity by PIA/NGO or Beneficiaries Consultant (DPR, system design, TA support) System Supplier $ PIA Organize VEC System Engineering. System Owner Installation & Commissioning Power Plant VEC Village Energy Committee (VEC) Model Source: TERI Electricity System custodian O&M LT line Maintenance Revenue: Tariff, billing, collection Consumers
Lessons from early Mini grids Decentralized, usually low capacity, covering remote areas Usually domestic loads served Community as stakeholder Tariff based on flat rate, locally decided, depending on fuel cost, O&M cost and WTP (~ US$ 1 per point/month) Non commercial in nature Inability to meet increased demand Low plant load factor Single energy resource catering to fixed load for fixed time Battery Vulnerable, over drawl by most consumers Difficulty in O&M because of remoteness Limited technical knowledge of VEC frequent system shutdown Not linked to any productive enterprise / irrigation pumpsets
Hybrid System Wind Diesel Hybrid system 55 kw Solar and 3.5 kw Wind Electric Generator based hybrid system Source: TERI
Managing Mini Grids: Addressing low load Source: TERI
Mini Grid Private Sector Equity Investors MNRE Equity investments Subsidy (optional) Technology partner Design, I&C Sells electricity on light point basis Husk power Systems Sign contract with HPS Generates, transmits and distributes electricity Trains local people to operate gasifiers Negotiated tariffs Billing and revenue collection Grievance redressal Consumers Coverage ~ 80 villages, 33 kwe systems, 300-400 households in a village Tariff: ~ US$ 3/month/HH for 2 lights, 4hrs Synergies created for co-benefits & viability Husk Power System A for-profit entity - identifies suitable villages, builds the electricity supply, and arranges for operations and maintenance, with the help of local partners.
Solar DC micro grid New Development Solar Power : 50 households connected from 400 Wp of solar panels. Panels are installed on the rooftop of a village house at a central place in the village. Battery Bank: 24 V 100 Ah of storage capacity. Batteries are stored in a cabinet inside the same house or distributed battery storage at HHs Power Distribution: DC distribution lines run along the rooftops from the battery bank to households within the village. Power is distributed for 5-6 hours each night at 24 volts. LED: Each household having 2 or 4 LED lamps
Community vs. private sector led model High sense of ownership and accountability Better equipped to deal with local social problems Tariffs are set based on ability to pay; tariff subsidy critical for success Collection efficiency is usually low Fragmentation of responsibilities between operator and revenue collector have shown better results Capacity building is the very precondition for success of the project Poor revenue management Cluster approach more successful both in terms of O&M Poor in dealing with technical matters High probability of replicability and scalability Competition and cost cutting goals encourage innovation Tariffs are set keeping in mind the financial viability of the project Collection efficiency is relatively better; smart/pre-paid metering to check theft and pilferage Need for socially motivated entrepreneurs to get into such a business Revenue management is better Poor in handling social issues or poor grievance redressal mechanisms Often produces inequitable outcomes
Providing access to population earning much less than 1$/day! Remote, tribal communities without cash disposable income! Subsidy vs financing affordability? Mini Grids in Chhattisgarh Subsidy for capital infrastructure ensuing operational sustainability improved quality of life
Demographic & physiographic attributes Population : ~ 25 million SC & ST population : about 43.4% of total population (national average ~ 24 %) Rural-Urban ratio : 80: 20 Forest area : 44% of the total area (national average ~ 21 %) All these have bearings on rural electrification
History of Rural Electrification Creation of Chhattisgarh in 2000 Division of responsibility : CSEB & CREDA - CSEB - grid based rural electrification - CREDA - off-grid renewable based electrification CREDA made responsible for electrification of 2200 remote villages Unique situation - there exist energy poverty in the midst of plenty State has surplus power (e.g. 1.7 % energy surplus), however remote villages are un-electrified 22
Solar PV in Chhattisgarh Street lighting system (Nos.) 18000 Home lighting system (Nos.) 7233 Solar lanterns (Nos.) 3192 Solar power plants (KWp) >1400 Solar cooker (Nos.) 37464 CREDA has reportedly electrified around 35,000 households through renewable energy based mini-grid Source: CREDA & Central Statistical Organization (CSO), GoI, 2012
Profile of surveyed projects Village Kouhabehra Rawan Mohda Latadadar Murumdeeh Surka Sapalwa Year of commissioning Capacity of the plant (kwp) Total number of HHs Supply duration (hours) 2003 2004 2004 2004 2003 2007 2005-06 3 7 4 3 5 4 5 50 72 72 45 46 50 83 6 6 6 5 6 6 6 24
Some glimpses 25
Solar mini-grid model of CREDA
Financing Capital cost ~ 25000 INR (500$) per household Capital subsidy - 18,400 INR (368$) per HH by MNRE - Balance by state government Tariff per connection = 30 INR/0.6$ (2x11 W CFL) Tariff subsidy (by state government) - 25 INR (0.5 $) per HH connection 27
3 tier Maintenance System Comprehensive Annual Maintenance Contracts (CAMC) Three tier system of maintenance - Project level operator - Cluster level cluster technician - For multiple clusters Cluster supervisor Parallel supervision by CREDA staffs Partners (Group) Skills (Organize) Allocate (Load) Service (Delivery) > Install > Operate > Maintain 28
..The GOLD Model Cluster Based Service Delivery V V V V V V V H V V V V V Village Cluster -15 Villages - 50 Customers / Village H : Service Hub ( Base station ) -Technician / Helper - Spares / Consumables 29 V : Villages in the Cluster
Financials CLUSTER based Service delivery Total Number of villages covere 150 Revenue / month Expenses / Month / cluster No. of Villages / cluster 15 Nos Rate Rate No. of Customers / Village 50 Technician 1 8000 8000 Total No. of Customers / cluster 750 Helper 1 3500 3500 Collection per Customer 35 Conveyance 1 3000 3000 - Through CREDA 25 Others 1 1000 1000 - Direct 10 operators 15 700 10500 Total collection / cluster / month 26250 Expenses / month / cluster 26000 Total AMC collection / cluster 315000 Expenses / year 312000 No of clusters 10 Total collection under CBSD 3150000 Expenses / year 3120000 Source: CREDA
Key factors for success Top-down approach /Organized delivery model Driven and implemented by CREDA with support from state government & MNRE Commitment and enthusiasm across all levels of CREDA Opposed to popular approaches let the community handle - Each entity sticks to what it does best Effective maintenance (post implementation) Fruitful partnership between CREDA and System Integrators Structured communication channel between CREDA and contractors Strong govt. support and political will Maintenance subsidy of Rs 25/household (benchmarked to household s expenditure on kerosene & Ekal batti Yojana) Strong political leadership 31
Key factors for success contd Creating an eco-system for solar electrification Solar shops Support to local manufacturing and development Modular training and capacity building Different for different stakeholders depending on need and requirements Learning from doing Transition from ACMC to long-term CMC Introduction of fully commercial model in select locations
Key Lessons Service delivery models are to be structured considering the uniqueness of the region within which the plant is to be installed -Today off-grid, gridconnected tomorrow Decision on technology should be based on availability of the technical know-how and skill-sets of local people; Contrary to prescribed models of off-grid electrification, top-down approach/organized structure seems to be working better than community model
Key Lessons contd. Designing variable tariff structures considering both ability to pay as well as operational expenses Access to electricity is merit good Need to build local capacity and adopt clustering for effective maintenance & viability of operation Strong regulatory & policy regime supports development of projects Viability gap funding/ Results based aid
Framework for Mini Grid Could develop into Mini-grids coupled the main grid Ideal for cluster of villages Creates the market for minigrids Village-scale mini-grids Ideal for larger or more developed villages Facilitate Small scale RETs Ideal for isolated and vulnerable communities Facilitate Level 1- Basic needs Lighting Communication Cooking Heating Facilitate Level 2 - Productive uses Agriculture (water pumping, mechanized tilling etc.) Public health centres Education (Schools, tuition centres etc.) Street lighting Sewing, cottage industries Grain grinding Level 3- Modern society needs Modern domestic gadgets and appliances for space cooling, heating etc. All productive applications for 24/7 usage Transport
Access + Availability + Quality + Sustainability Appropriate Technology Enabling Policy Ecosystem (AAQS) Innovative Financing Local Skills
In conclusion Not how can we make community use the mini-grid technology, but how can more & more people get access to and sustainably benefit from this technology
2012: International Year of Sustainable Energy for All Let us together make a change