What India can Learn from African Microgrids
With Prime Minister Modi’s recent call to speed up the rural electrification process and plans for 100% electrification within ‘well defined timeframe’, the rhetoric from the top implies that these are realistic targets and rural India should rejoice in their soon-to-be-connected status. However, as ever, the reality is a little more complicated. Whilst the promise of increased capacity, both from renewable and fossil sources is commendable, there is rather a large elephant in the room which unless dealt with soon is likely to stymie this well-meaning bluster. The less glamorous and oft-forgotten sister of power generation is power distribution. All this power being generated is useless if it cannot be delivered effectively to the industries and households that need it.
Power Generation in India: an Old Problem
India currently has around 313,437 circuit kilometres (ckm) of transmission lines, an impressive feat. But whilst investment in power generation has been consistent and forthcoming, investment into power distribution has been lagging. This is compounded by the fact that many of the recent major power lines that have been built have proven to be massively underused as major generation projects such as the proposed hydro power projects in eastern and north-eastern regions failed to materialise.
As Modi rightfully pointed out recently, the problems continue at the local level too, with power theft remaining a major issue. The question then arises: is there another way?
Since the 1990’s and a successful project in the Sunderbans region, India has been a world leader in off-grid micro-grids. A micro-grid is a small standalone power system incorporating a central (usually renewable) power generation source and a distribution network that connects up to a few hundred local households and businesses.
A number of companies including OMC Power and Husk Power Systems are already successfully operating these projects commercially in India, however widespread adoption seems to be hampered by a number of factors including the difficulties of revenue collection and because often the services offered are limited to powering a few lightbulbs and mobile phones. These are valuable services, but in order to catalyse faster rural development, these technologies need to scale and people need enough electricity to run businesses to power light industries.
For examples of how this can be addressed, we need to turn to the perhaps unlikely rural areas of East Africa. Here, a number of companies including SteamaCo and PowerHive are exploiting M-Pesa, the ubiquitous mobile money platform to allow end-users to buy grid-like power services from their village scale solar power stations using mobile phones.
A simple, cashless, PAYG (pay as you go) system means that users can top up as much or as little as they like. When their account is in credit their power is on and when their credit runs out, their line is automatically switched off. In the case of SteamaCo, this ‘last meter’ service delivery and cashless revenue collection is coupled with an online dashboard through which the microgrid operators monitor and control the grid remotely, communicating directly with users, keeping a watchful eye on the technology and being able to forecast commercial factors such as return on investment.
Another Good Example from Africa
In comparison to these systems, many of India’s microgrids remain relatively unsophisticated.
One of the many reasons for this is the revenue collection problem and this has been linked to the slow adoption of mobile money services in India. This has been blamed on a variety of factors, but chief amongst them has been unsupportive regulation and inappropriate technology. Whereas in Kenya, where people simply need a form of ID in order to set up an M-Pesa account, in India all mobile money accounts have to be tied to an existing bank account. This obviously creates huge challenges for those in rural areas where access to any banking services is poor.
Secondly, whereas M-Pesa is designed to work on even the most basic of mobile phones, many of India’s mobile money services require an internet connection. This has meant adoption has been higher in urban areas (where it is more likely that people own a suitable phone) despite the arguably greater benefit these services would confer to someone in a rural area.
There are a number of ways around these problems. In Kenya, the SteamaCo system https://twitter.com/steamaco allows users to pay for their power themselves, however the system could very easily be adapted to run through a local agent. This ‘power-wallah’ could be registered with a mobile money account, accept cash from village customers and top up their accounts accordingly. An automatically generated text message direct to the customer’s phone would serve as a receipt and reduce the opportunity for unscrupulous behaviour by the agent. All subsequent communications such as credit queries and low-balance warnings would then be carried out directly between the power provider and the end user.
There is much scope for this South-South technology exchange and this is one example whereby the substantial experience, technology and knowledge of microgrid technology in India could be leveraged to make a significant impact on rural electrification irrespective of high level rhetoric and the vagaries and unpredictability that plague large infrastructure investment.