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

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 employs a dual approach com­pris­ing a qual­i­ta­tive “on the ground” assess­ment of the social ben­e­fits in three rur­al com­mu­ni­ties in India, com­bined with a tech­no-eco­nom­ic analy­sis to deter­mine the fac­tors that affect the economies of scale of mini-grids (specif­i­cal­ly solar-pow­ered mini-grids) and their suit­abil­i­ty for sup­port­ing socio-eco­nom­ic devel­op­ment in rur­al areas of India. This approach is cho­sen to ensure trans­fer­abil­i­ty of the case study find­ings obtained for rur­al India. Data and test vari­ables used in this study are India-spe­cif­ic and are drawn from detailed stake­hold­er engage­ments, and are in align­ment with local con­di­tions (at the time of com­pil­ing this report). This study focus­es strict­ly on solar-pow­ered-mini-grids in India to rep­re­sent the term “mini-grids” with­in the Indi­an context.

 

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Policy messages

Key pol­i­cy mes­sage 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.

Key pol­i­cy mes­sage 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. The mini-grid 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.

Key pol­i­cy mes­sage 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 (in col­lab­o­ra­tion with the pri­vate sec­tor) 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: