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Grid Governance: Are Solar Microgrids a Step on the Ladder Towards Grid Access?

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Electrification projects in Dharnai, a village in eastern India, exemplify what can happen when public institutions and private actors fail to coordinate. Greenpeace installed a 100-kilowatt solar/battery microgrid to provide electricity to the villagers, which was promptly undercut when the government extended grid access. While grid access remains highly desirable and provides cheaper electricity than off-grid options, both remain unreliable in India. The concern is whether they can work together to pull Indians up the energy ladder.

In July of this year, Greenpeace installed a solar/battery microgrid in the village of Dharnai in eastern India. The 100-kilowatt system was designed to provide power for the village’s 2,400 residents, 50 businesses, 2 schools, and other infrastructure. Greenpeace called the project “inspiring,” writing that case studies like Dharnai prove “villages can develop their own clean power and contribute to saving their environment by showing we don’t need to use nuclear, coal or other fossil fuels for energy.” 

A few months later, the government utility extended the national grid and made the solar microgrid obsolete.

It’s apparently a familiar scenario in India, where extension of the central grid is “scuppering efforts to supply clean, modern energy” according to Bloomberg. “We wanted to set this up as a business model,” Bloomberg quoted Greenpeace campaigner Abhishek Pratap as saying. “Now we’re in a course correction.”

No one should be surprised that the grid has the ability to “crowd out” microgrids and distributed generation. As the Bloomberg piece noted, the government’s grid extension is now “flooding the community with cheap power that undercut the fledgling solar network.” That’s a bit like saying that a new hospital came in and undercut Doctors Without Borders.

Bloomberg criticized the government’s imposition of its “erratic but unbeatably cheap subsidized power,” accusing India’s utilities of “crushing the [microgrid] model before it gets off the ground as they continue a policy of supplying farmers and the poor with cheap power.” The grid may be subsidized, but it’s worth noting that grid power continues to be much cheaper where available than microgrids and distributed generation. From a 2014 IEA report on energy in sub-Saharan Africa:

Subsidizing grid extension and provision of electricity access falls squarely into the purview of the state government. And of course, the Greenpeace microgrid was never going to be the last step on Dharnai’s “energy ladder” – the system would be supplying each villager with at most 100 kilowatt-hours annually, split across residential, commercial, and industrial uses. This is far from the global average of 3,000 kWh/yr or the United States’ 13,000 kWh/yr. 

On the other hand, many villages in poor regions like rural India or sub-Saharan Africa are unlikely to be connected to the grid anytime soon. As the Sierra Club’s Justin Guay wrote this summer, the job of DG/microgrids is “to help people get onto the energy ladder today rather than forcing them to wait decades for a grid extension that may never come.”

The question, then, is why did Greenpeace choose to erect “the first village in India where all aspect of life are powered by solar” in a place that clearly was not decades away from grid access?

I spoke with Tufts energy expert and Breakthrough Fellow Kartikeya Singh, who was somewhat dismayed by the government’s actions. “I smell politics,” he told me, noting that the government has been known to extend grid access ahead of elections only to let the reliability of the power system suffer in the long term. “We’re talking 8 to 16 hours of power cuts daily,” according to Singh. “So you may have ‘grid access’ and sure it may be ‘reliable’ (especially around elections), but it will fall back to shortages in the months that follow.”

Singh’s assessment that the grid in India is notoriously unreliable is shared by many experts. Does that mean that off-grid is the alternative?

Joyashree Roy, a professor at Javadpur University in India and a Breakthrough Senior Fellow, told me that solar and microgrids are “not seen as a long-term solution; rather a stopgap solution until enough generation capacity is created” and grids are extended. This is what an energy ladder from DG to full grid access might actually look like, in contrast to Greenpeace’s vision of their solar microgrid being the end of the story. “As of now it can be expected this renewable generation will be connected to the grid and some price negotiation will happen in the foreseeable future,” according to Roy.

The upshot is that while grid access remains highly desirable and provides cheaper electricity than off-grid options, both remain unreliable in India. The concern is whether they can work together to pull Indians up the energy ladder.

“The government has yet to come up with or firm up a policy that will give the market and any private entrepreneurs any indication of what will happen to their investment,” said Singh. A recent paper in the journal Energy concluded that as more people consume more energy, grid connection becomes the lowest-cost option for delivering electricity. And a 2014 World Bank report on electrification insisted that a “two-track” approach, in which centralized and decentralized strategies are harmonized, is essential. The Dharnai case reveals what can happen when institutions – both public and private – fail to coordinate.

Photo Credit: YouthKiawaaz

Alex Trembath's picture

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Bas Gresnigt's picture
Bas Gresnigt on Dec 18, 2014 2:28 pm GMT

The real problem is that high developed economies did (and still do) not invest enough in solar + battery research in order to make it cheaper than coal.

So alas the price decrease of solar + batteries is now only ~8%/a. A shame, as a much faster price decrease towards <25% of the present price was and is possible.

Then the 1billion people without grid can simply buy themselve three 345Watt solar panels + battery.
And use that also for a washing machine, cooking, etc.

So Greenpeace should ask governments to invest more in solar + battery research in order to speed the price decrease towards 20%/a.

Joris van Dorp's picture
Joris van Dorp on Dec 18, 2014 5:09 pm GMT

Thanks for this update on an intriguing story.

While the Indian grid is as unreliable as it is, microgrids could be a good option I suppose. They may be expensive, but expensive electricity is better than nothing, even for poor communities.

What I wonder about is whether these investments in micro-grids and (intermittent) renewables for India mean that arguably more urgent investments in grid-extensions and firm capacity additions are proportionally less. If that is the case, then I suppose that it is better to focus investment on grid-extensions and capacity additions rather than microgrids.

Moreover, if the cause of the unreliability of the grid in India is lack of capacity during daytime demand, then adding (utility) solar to the grid might actually be worthwhile. Not because it is a viable long-term least-cost strategy to eliminate co2 emissions and resource depletion (which it isn’t) but simply because it may be a cost-effective way to increase the number of hours that total generation capacity is sufficient to keep the grid online – at least during the day. Putting up utility solar for dealing with daytime load (much of the time) is presumably quicker and less costly than putting up coal or gas fired peakers. Nevertheless, as increasing firm capacity requirements in India are eventually filled with dispatcheable generation in the course of time, the same uneconomical competition between dispatcheable generation and intermittent solar (or wind) will emerge, as it has been emerging in countries like Germany, with the same risk of fossil fuel lock-in.

I agree that cooperation is important when micro-grids are employed as in India to hasten the extension of access to electricity ahead of the expanding Indian grid. In that respect, might it not be possible to install the microgrids in such a way that they can eventually be seemlessly connected to the grid when it arrives, after which the specific microgrid equipment (solar panels, invertors, transformers, switches, generators, etc.) is efficiently dismantled and then reinstalled in another location that has yet to be connected to the grid?

Bob Meinetz's picture
Bob Meinetz on Dec 19, 2014 8:50 am GMT

Alex, if residents of small communities find microgrids useful they could be effective as a temporary stopgap. There are a couple of significant problems:

1) The systems are being grossly oversold. 70 kW of capacity in Dharnai is directed to residential power generation, 30 kW is reserved for pumping water. Assuming a generous 20% capacity factor for power, the system will yield 14 kW distributed among 2,400 people, or enough for each resident to charge their cellphone. The basic plan allows for 18 watts per household, which is capable of illuminating the smallest refrigerator bulb available and nothing more. With this system, microgrid-powered A/C, television, computing, and cooking are out of the question.

2) The plan could backfire, resulting in more emissions. Once Greenpeace installs their solar microgrids it will require a minimal amount of engineering to augment them with diesel, which could result in more emissions than coal-fired generation coming from a grid.

Bas Gresnigt's picture
Bas Gresnigt on Dec 19, 2014 10:03 am GMT

Bob,
Biking five weeks through the mountains of Kashmir this summer, I stayed in a number of those not grid connected villages. Some are so far off the nearest grid that they won’t get a grid connection soon.

Most houses each had a small PV-panel (<0.5m² or so) with a battery and a few LED lights.
Only few had a standard PV-panel. Often such panel + battery was shared between a few houses. A real small micro-grid.

So PV+battery ousted most small diesel generators that I saw in the nineties.
But they don’t have the money to pay for a decent installation that facilitates a washing machine, fridge, etc.

So we help them greatly if we reduce the price of PV-solar + batteries a factor 4.
Such price decrease is technical quite feasable soon, if we put up more research.
We help ~1billion poor people with such price decrease!

Bob Meinetz's picture
Bob Meinetz on Dec 19, 2014 5:53 pm GMT

Bas, it’s a pleasure to be able to agree with you on the topic of solar for remote areas. If it improves the quality of life for people with no practical access to a grid, and does it cleanly, I’m all for it.

In those kinds of situations people have little access to diesel fuel as well, so retrofitting them would be equally impractical.

Bas Gresnigt's picture
Bas Gresnigt on Jan 16, 2015 10:08 am GMT

Jarmo,
Solar panel prices even had periods of increasing prices; more demand than production capacity generates price increases.
That doesn’t change the clear potential for further price decreases towards ~25% of present price, through increased efficiency (>30%; double junction PV-cells), automated production, cheaper materials, etc.

Btw.
In US and EU the high import tariffs (~40%) play a role too.

 

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