The solar-powered microgrid initiative aims to provide reliable electricity access to 25 million people in India by 2026, especially in poorly served rural areas

Microgrids can end energy poverty in India’s villages (Photo by OMC Power)

Microgrids can end energy poverty in India’s villages (Photo by OMC Power)

In a significant development last week, a newly formed company announced that it will establish 10,000 microgrids across India by 2026 that will provide electricity to as many as 25 million people. This will make TP Renewable Microgrid Ltd, a collaboration between Tata Power and the Rockefeller Foundation, the world’s largest microgrid developer and operator.

Speaking at the launch of the partnership, Amitabh Kant, CEO of NITI Aayog, the Indian government’s think tank, praised the initiative as a much-needed move that will tackle the issues of poor reliability and coverage of the conventional distribution network. It will result in improved healthcare, livelihoods and vibrant rural economies, he said.

The Government of India has targets to of renewable energy into the country’s power grid by 2030. An integrated model that includes grid-based power supply and decentralised or off-grid power could an efficient and cost-effective way to help achieve this target in an accelerated manner and end energy poverty faster. The Ministry of New and Renewable Energy (MNRE) has published that aims to provide a facilitative framework for the development of decentralised solar power plants in India.

India has in recent years succeeded in connecting all habitations to the power grids, although not all households have access to electricity in their homes. Despite the grid connectivity, power supply in many parts of the country, particularly in rural areas, remain unreliable. Long power cuts are the norm rather than the exception in poorly served locations.

Discom hurdle

One of the main reasons for this is the poor state of the state-run power distribution companies, which was pointed out by Kant at the launch. “The discoms (power distribution companies) are not just inefficient, they create the biggest hurdles for the creation of microgrids,” he said. “We need to ensure that there is a provision made by discoms for grid connection to enable the sale of microgrid power so that they become catalysts and facilitators for the growth of microgrids in India.” Kant also stressed that the government needed to ensure appropriate clearances and regulatory approvals to move this project forward.

According to a Reserve Bank of India report, discoms are the single-biggest burden on state finances, despite central government schemes to alleviate these liabilities. This debt is estimated to further increase to INR 2600 billion (USD 36.49 billion) by the end of March 2020, calling for serious reforms in the power sector.

Integrated energy systems that combine private sector solutions like microgrids and minigrids with the public grid-connected power distribution network can address these inefficiencies, help utilities reduce the debt burden, and ultimately better serve rural entrepreneurs, farmers and households.

The Rockefeller Foundation, through its Smart Power India initiative, has supported the state power utility in Odisha by helping setting up model distributions zones to demonstrate improvements in electricity service through micro-franchisees, which will help improve reliability and customer services.

Together, the private sector and public utilities can accelerate access to reliable, affordable energy and improve service delivery by creating a robust, integrated system that can benefit tens of millions of rural Indians.

 

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