Will in­vest­ment re­turns in so­lar PV ru­ral mi­cro­grids ever get bet­ter, asks Harsh Thacker, Se­nior An­a­lyst, CES and IESA.

Data mon­i­tor­ing and per­for­mance im­prove­ment of these as­sets are key for suc­cess of the en­ergy ac­cess pro­gramme across the world

Power Watch India - - CONTENTS - By Harsh Thacker

Mi­cro­grids - dis­trib­uted sys­tems of lo­calised gen­er­a­tion, dis­tri­bu­tion net­work and load - are be­ing in­creas­ingly de­ployed par­tic­u­larly in ru­ral ar­eas of emerg­ing and un­der­de­vel­oped coun­tries to achieve en­ergy ac­cess. In­dia has been a pi­o­neer in ru­ral mi­cro­grids since the 1990s, how­ever there is sig­nif­i­cant progress to be made de­spite rapid ad­vance­ments in tech­nolo­gies like so­lar PV, en­ergy stor­age and af­ford­able LED light­ing so­lu­tions. In­dia En­ergy Stor­age Al­liance (IESA) es­ti­mates that In­dia has in­stalled over 2,000 AC mi­cro­grids of over 5 kW by 2016 and over 10,000 DC mi­cro­grids with the ma­jor­ity sized at less than 1 kW.

Ini­tial fund­ing in the sec­tor were made by the na­tional and state gov­ern­ments in the form of sub­si­dies and also in the form of grants by in­ter­na­tional or­gan­i­sa­tions such Asian De­vel­op­ment Bank (ADB), World Bank, USAID and others. This fund­ing en­cour­aged many en­trepreneurs to im­ple­ment their unique ideas for elec­tri­fi­ca­tion through var­i­ous off-grid tech­nolo­gies. Fol­low­ing the grants, sev­eral in­sti­tu­tions and foun­da­tions such as Rock­e­feller Foun­da­tion in­tro­duced soft loans in this sec­tor at af­ford­able lend­ing rates. It is not re­ported though, but not ev­ery as­set is pro­vid­ing ex­pected re­turns and these as­sets are not break­ing even in a pe­riod of 10 years.

The en­thu­si­asm of en­trepreneurs and lo­cal govern­ment agen­cies work­ing as project de­vel­op­ers has yet not con­quered chal­lenges in the fields and hence fund­ing in the form of grants and soft loans has rarely scaled in the form of pri­vate in­vest­ments. Ever more fund­ing in the form of soft loans, pri­vate cap­i­tal and eq­uity is re­quired to plug the fund­ing gap. Over US$49 bil­lion a year till 2030 would be needed to achieve en­ergy ac­cess across the world. Out of this, ADB has quoted that only US$9 bil­lion of funds are available glob­ally. Well, the busi­ness risks here can be eas­ily clas­si­fied as fi­nan­cial col­lec­tion risks and as­set per­for­mance risks. How­ever, the chal­lenges around the per­for­mance of as­sets will be more dif­fi­cult to ad­dress at this point of time.

Growth re­straints in­clude poor vis­i­bil­ity of per­for­mance

There are many chal­lenges which have re­strained growth in this sec­tor in­clud­ing nu­mer­ous fi­nan­cial, tech­ni­cal and so­cial lim­i­ta­tions. Dif­fer­ent fund­ing agen­cies have men­tioned that most of the tech­ni­cal chal­lenges are yet not known to them. Project op­er­a­tors on sev­eral oc­ca­sions do not have clear an­swers them­selves to recog­nise why mi­cro­grids are pre­ma­turely fail­ing or op­er­at­ing at lower ef­fi­cien­cies. In­ter­est­ingly, fund­ing agen­cies, in­vestors and equip­ment sup­pli­ers are of­ten sur­prised by news of sud­den fail­ure of as­sets or tech­ni­cal au­dits re­port­ing the poor func­tion­al­ity of mi­cro­grids. As could be pre­dicted, these mi­cro­grids are man­u­ally mon­i­tored or not mon­i­tored at all. So in­ac­ces­si­bil­ity of data in this case has led to lack of anal­y­sis and knowl­edge gen­er­a­tion.

In many cases, project own­ers and op­er­a­tors are not to be blamed as poor tele­com con­nec­tiv­ity and the high cost of re­mote mon­i­tor­ing at re­mote lo­ca­tions has plagued data ac­qui­si­tion and anal­y­sis. The in­ter­na­tional Mi­cro­grid Ini­tia­tive for Cam­pus and Ru­ral Op­por­tu­ni­ties (MI­CRO) is work­ing with dif­fer­ent re­mote mon­i­tor­ing hard­ware sup­pli­ers to bring down the costs by sim­ply bring­ing economies of scale and de­vel­op­ing cheaper prod­ucts for ru­ral mi­cro­grids and for ar­eas with lim­ited tele­com sig­nal ac­ces­si­bil­ity.

In this re­gard IESA has col­lab­o­rated with the Euro­pean Space Agency (ESA) to bring satel­lite com­mu­ni­ca­tion tech­nol­ogy as an al­ter­na­tive so­lu­tion. ESA is now launch­ing a new in­vi­ta­tion to sup­port fea­si­bil­ity stud­ies which iden­tify and ex­plore busi­ness op­por­tu­ni­ties for de­ploy­ing ser­vices based on satel­lite com­mu­ni­ca­tions, earth ob­ser­va­tion data, and/or other space as­sets to sup­port the de­cen­tralised man­age­ment of mi­cro­grids in In­dia and other de­vel­op­ing coun­tries. The study is ex­pected to cul­mi­nate into a funded mi­cro­grid pilot project demon­strat­ing the po­ten­tial of the above ser­vices.

An IoT for a frag­mented and un­or­gan­ised sec­tor

The other chal­lenge is that the sec­tor is frag­mented and un­or­gan­ised, which is lead­ing to its in­ef­fi­cacy. This in turn is caus­ing road­blocks for so­cial and tech­no­log­i­cal in­no­va­tion at the very bot­tom of the so­cial pyra­mid, lead­ing to mi­cro­grids and re­lated off-grid so­lu­tions be­com­ing an ex­pen­sive af­fair.

In this con­text, a need for a platform to bring trans­parency and in­no­va­tion to the sys­tem has been recog­nised. Cus­tom­ized En­ergy So­lu­tions has de­vel­oped an ini­tia­tive un­der the In­dia En­ergy Stor­age Al­liance that looks to pro­vide the ru­ral con­sumer with af­ford­able and re­li­able power. The Mi­cro­grid Ini­tia­tive for Cam­pus and Ru­ral Op­por­tu­ni­ties (MI­CRO) has set a goal of re­duc­ing cost of elec­tric­ity in ru­ral mi­cro­grids by 30.0% within the next 3 years through in­no­va­tion and col­lab­o­ra­tion across stake­hold­ers.

At the heart of MI­CRO lies an In­ter­net of Things (IOT) based por­tal which in­cor­po­rates a re­mote mon­i­tor­ing platform with sup­ply, de­mand and fund­ing ag­gre­ga­tion ca­pa­bil­i­ties. The por­tal is a unique multi-stake­holder platform which al­lows the in­dus­try to work as a bazaar where dif­fer­ent stake­hold­ers like project de­vel­op­ers

(or ESCOs), fund­ing agen­cies and equip­ment sup­pli­ers can com­mu­ni­cate with each other, re­alise fu­ture busi­ness op­por­tu­ni­ties and val­i­date the per­for­mance of cur­rent as­sets. MI­CRO is look­ing to in­volve a va­ri­ety of stake­hold­ers, namely tech­nol­ogy providers, reg­u­la­tors, mi­cro­grid de­vel­op­ers, end-users through lo­cal not-for-profit or­gan­i­sa­tions and fund­ing agen­cies in its ef­fort to make mi­cro­grids techno-com­mer­cially sus­tain­able and link elec­tric­ity to eco­nomic de­vel­op­ment.

Mi­cro­grid is much more than a so­lar gen­er­a­tion plant

The op­er­a­tion of a mi­cro­grid has evolved as mul­ti­fac­eted task that in­volves the ded­i­cated up­keep of var­i­ous com­po­nents. The ac­tiv­i­ties here re­volve around main­te­nance of the gen­er­a­tion plant, net­work plan­ning and ex­pan­sion, cus­tomer ac­qui­si­tion, billing and re­cov­ery. Early stage ex­pan­sion has red-flagged many is­sues in these grids such as volt­age drop, in­abil­ity of serv­ing high in­duc­tive loads and re­li­able power out­put. Stake­hold­ers in this in­dus­try would need to think be­yond the mi­cro­grid as just a so­lar gen­er­a­tion plant and pro­vide a com­plete set of di­ag­nos­tic and an­a­lyt­i­cal tools to mi­cro­grid de­vel­op­ers and op­er­a­tors in or­der to achieve the tar­get of achiev­ing en­ergy ac­cess in In­dia by em­ploy­ing over a hun­dred thou­sand mi­cro­grids in In­dia.

The au­thor is Se­nior An­a­lyst, Cus­tom­ized En­ergy So­lu­tions and In­dia En­ergy Stor­age Al­liance.

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