Micro Grids in the States of Uttar Pradesh and Bihar in India

Small Power Plants bring light in a sea of darkness. Pity there are so few of them

Every night, the rural areas of the states of Uttar Pradesh and Bihar in India plunge into complete darkness. In the last week of January, David Ferris (Cleantech journalist for New York Times and Forbes) and myself undertook a gruelling road trip across these two states. We saw only darkness in the districts we visited until we came to the capital city of Uttar Pradesh, Lucknow, brilliantly decked up in the lights of the tri-colour to celebrate the 64th Republic Day.

Bringing these peoples out of darkness must be the priority not just of the Indian government. It is also important for Indian businesses: these areas are untapped markets for products and for recruitment. It should also be the priority of successful Indians who have prospered in the last two decades and who should be acutely aware that the social fabric of the country cannot accommodate inequality of access to basic services of this magnitude.

There is a small glimmer of hope. A combination of reasons (falling solar prices and rising solar efficiencies) and grit and inventiveness of a few entrepreneurs has led to the emergence of a model of rural electrification called micro grids which can electrify villages quickly and with small doses of capital.

There are a few brave spirits working in the vast states of Uttar Pradesh and Bihar, as our briefing note will describe. These are people who have forsaken careers in global semi conductor companies and large Indian infrastructure organizations. There is even an organic farmer from California. There is a medium sized privately owned automotive company which has diversified into rural electrification to round out this motley crew. (Sun Edison, subsidiary of MEMC is a large multinational has a micro grid site running in Madhya Pradesh).

Taken together – in the course of the last two years or so they have covered about 200 villages, a very tiny fraction of India’s un-electrified landscape. However, as we will describe, in our briefing note, the models and technologies they are evolving are of incredible importance.

The small capacity non-fancy plants provide basic lighting services only: two lights and one mobile charger per household for a monthly subscription of about Rs. 100 per month (numbers vary between operators). The lighting services are for about five to six hours in the evening. The Rs. 100 (or about USD 2) per month is the amount that these households pay for kerosene and mobile charging. Cell phones are ubiquitous but cell phone owners have to travel to the local towns and pay as much as Rs. 5 per charge.

Companies get to this pricing level by being frugal innovators. Solar technology seems to be gaining ground even as the panels survived the terrible winter this year when temperatures fell to near zero degrees celsius and there were days on end with dense fog. Biomass gasification based small plants work too provided operators are able to maintain adequate supply of agricultural waste within reasonable cost limits. The trick is to restrict the system capacity down to a point where capacity utilization is reached quickly without having to draw the lines over long distances (which increase costs and leads to losses).

The challenges are incredible. Almost all operators agreed that the problem of bad debts is the one most serious issue. The operators have to collect small amounts of money weekly or monthly and this is an incredible task in an economy where liquidity is often an issue. Overloading is another problem. Hooking up an additional light or a mobile charger robs the companies of revenue and also often trips the system and brings the whole village to darkness. In these villages, where caste and communal divisions run deep, companies have to often set up separate micro grids for different castes or communities. Entrepreneurs are responding to these challenges with innovative business models: building tighter management controls and setting up franchisee or village level entrepreneur models where the plant is actually owned and operated by a local villager.

It is impossible to significantly impact livelihood in these villages just by the provision of a few lights and mobile charging. But our trip did uncover several heart warming stories of change as villages are lit up by modern electricity for the first time in human history. Life becomes a wee bit easier. Children can do their homework and women can space out their work more easily. The dangers to health and safety from the noxious fumes and naked flames of kerosene are avoided.

The most important impact, as often, comes from entrepreneurship and professional management. Members of different caste groups work side by side, women can train to be plant operators and young men continue their studies, while they work, in the hope of a promotion. Standard practices in much of the 21st century world.

There is much that India and Indians can do to make this glimmer of hope brighten into something more meaningful. The Indian government could carve out territories where micro grid players could operate and spend public money to promote awareness and encourage research and development. Successful Indians can get together and crowd fund the moneys required to power up individual villages and hamlets. India has recently passed a law that requires large corporations to spend 2% of their net profit in CSR activities. These large corporations can “adopt” larger villages.

In fact the time for a concerted national action is now. The United Nations Decade of Sustainable Energy for All provides the international momentum and support to remove this curse on millions of her people. The brave people running India’s micro grids need all the support that the world can give them and more.

Download the Micro Grid Briefing Note