Decentralized off-grid electricity generation in

developing countries: Business models for off-grid

electricity supply

Off-grid Access System for South AsiaA Multi-partners Multi-disciplinary Mega Project

Project Brief

� Sponsors

– Engineering & Physical Sciences Research Councils, UK

– DFID, UK

� Project Duration

– Start Date: 01 September 2009 ; End Date: April 2015

� Research Partners

Genesis

� 1.5 billion without electricity access in 2008

� 84% located in two major deprived regions

� 70% located in 12 countries

� Knowledge gap – Most research considered technical aspects and general cost-effectiveness

SS Africa

41%

North Africa

0%

China E.Asia

13%

South Asia

43%

L. Am

2%

Rest

0%

M. East

1%

� Two main gaps

– Business models and

institutional arrangements for

delivery rarely considered

– Limited project scale-up and

project sustainability experience

Research Questions

� Are there cost-effective, secure and

reliable local off-grid electricity supply

solutions that can meet the present

and future needs and are socially

acceptable, institutionally viable and

environmentally desirable?

� Do these local solutions have the

scaling-up and replication potentials

and can these solutions be brought to

the mainstream for wider electricity

access in developing world?

Techno-economic analysis

Governance mechanisms

Environmental concerns

Socio-political

dimensions

Multi-dimensional analysis framework

• Four angles of focus

– Techno-economic analysis

– Governance mechanisms

– Socio-political dimension

– Environmental aspects

• Four cross-cutting themes

– Capacity building

– Cross-referencing

– Cross-learning

– Dissemination for policy translation

• Focus on South Asia

1. Academic Research: Review and Analysis

2. Action Research: Demonstration Project

3. Knowledge Sharing:Capacity Building

4. Policy Research: Policy Advocacy

Academic outputs

Publication type Total

(all research partners)

Working Papers 20

Peer reviewed papers

(Journals)

17

(few more in pipeline)

Conference papers 32

Books + Journal (Special issue) 4

Book Chapters 26 +

In addition, a database of off-grid projects in South Asia

has also been created

Capacity building

� Post doc RA and RA on the job training

� 1 PhD student completed & another in advanced stage

� 8 MSc thesis supervised

� 4 internships

Action Research - Focus on Mini grids

• Electrification with

productive energy use

• Technology choice

– Local resource

– Local grid

– Demand management

• Business models

– Lighting only

– Lighting plus

– Anchor load

• Delivery organisation

• Financial viability

• Institutional arrangements

Partners: IRADA – Odisha; Kandhamal District Administration, Odisha;

Mlinda Foundation, West Bengal; Mera Gao Power, Uttar Pradesh

Knowledge Sharing & Policy discourse

• Knowledge sharing

– 12 workshops organised

– 2 final dissemination events

– Training sessions at

demonstration sites

– Outreach through social media (http://dmu.academia.edu/OASYS

SouthAsiaResearchProject)

– Energy for Sustainable

Development Special issue

• Policy influence

– Policy briefs

– Policy dialogues

– Networking and new

collaborations with

stakeholders

Impacts

• Academic– more than 120 citations so far

– High volume of online downloads

– Cited in policy influencing reports (REN21, DFID Mini-grid study, World Bank Book, Mini-grid tool kit)

• Mobilisation of additional funding– Rural Electrification

Corporation India

– Kandhamal District Administration

– Private partners in demonstration projects

• Non-Academic– Demonstration project impacts

– More than 20,000 lives of people impacted through cleaner energy interventions

– Third party assessment at demo project sites

» Reduced fuel expenditure

» Ease and flexibility of carrying out domestic chores

» Longer hours of study for children

» Improvement in safety and security;

» increase in productive time for households

Demonstration Project(s)

• Key research and implementation related questions:– How can subsidies be used in smarter ways?

– How do the site conditions impact the technical and institutional models?

– How do we enhance participation of private operators of rural energy systems?

– What role can local governments play enhance viability of rural electrification projects?

– How can we build the potential for scaling-up into project design?

– What technological advancements can contribute to long term system sustainability?

Demonstration Project(s)

Mini, micro, pico grids, AC & DC

– Community managed model with NGO (AC & DC micro grids of different

capacities; 5 villages) in Dhenkanal district, Odisha – serving around 140 HH –

Project Commissioned

– Community managed model with district administration (~ 18 kWp AC mini-

grid in a village) in Kandhamal district, Odisha – to serve around 300 HH –

Implementation recently completed

– Privately operated (micro utility) model – selected through a competitive

bidding from eligible project developers

• Solar DC micro/pico grid in Uttar Pradesh – covering around 3200 HH

• Solar AC pico grid in West Bengal – serving around 700 HH & shops

• Installation of micro & pico grids are completed

� 3 different management & technical models tried out at

different locations – one size do not fit all

Community managed AC/DC micro grids in

Dhenkanal district, Odisha

� Implemented in a cluster of 5 villages inside a Reserve Forest

� Solar AC and DC systems designed based on no. of households and demand

scenario

� AC: Rajanga (6 kWp), Kanaka (5 kWp), Baguli (2.4 kWp) ~ 30-40 households/micro grid

� DC: Rajanga Hamlet and Chadoi (400 Wp) ~ 15 household per micro-grid

� While technical solutions are decentralised, a single institution (village energy

committee) manages all the micro grids

� All households , either connected to AC or DC systems, have been provided with

similar LED bulbs to ensure equitable service

� In addition to lighting, livelihood applications such as grinding & packaging

machine, saal leaf plate making machine and water pump supports in

augmenting income.

� Smart, grid-interactive inverters used for future grid interconnection, Battery

management system, auto load cut off, Timer-based operation for energy

management

Community managed AC/DC micro grids in

Dhenkanal district, Odisha

Project Co-benefits

• Six sewing machines has been put up in the community centres by the

Partner NGO

• Civil construction employment opportunities for the community

• New focus for development by local Panchayat

• Improvement in the condition of roads, better accessibility

• People have started coming from nearby towns/ city to buy the organic

vegetables grown in these areas, enhancing farmers’ income

Challenges

Technical

• Inverter and other equipment got damaged in one village due to lightning strike.

• Spoilage of LED bulbs over the first two months of operations due to short circuits caused by rains

Operational

• Tampering of household connections and installation of additional electrical sockets to operate a higher number of appliances by some households.

• Some households resisted in paying the connection fee due to non-functioning of inverter and bulbs which made a difficult task for VEC to make progress on collections without offering full services.

Private developer managed solar DC micro

grids in Uttar Pradesh

� Solar DC modular micro grids with auto switch on/off, providing basic lighting (2-

4 points) and mobile phone charging services for 7 hours

� Implemented by Mera Gao Power, with Viability Gap Funding support from

OASYS South Asia Project, connecting around 2200 households

� A Joint Liability Group model is used for collection of weekly tariff; Collection

efficiencies of over 90% observed during field visits

� Revenue earned from these micro-grids are being ring fenced and re-invested to

cover additional 1,000 HHs over the next 2 years

Strengths & Drawbacks

Strengths • Flexible configuration to

accommodate new connections like

a power utility company

• Immediate actions against users in

case of misusage (remove the

connection)

• 24*7 availability of technicians at

various installed sites.

• No manual intervention required

because of in-built timer operations

in the charge controller

Drawbacks• 24*7 availability of technicians

seems drain to project costs

• Holding inventory based on

forecasting about new installations

brings high risk cost investment as it

is dependent on social dynamics of

the user groups

• Some system misuse are reported

despite such tight measures

Solar AC pico grids in remote islands of

Sunderbans, West Bengal

� OASYS South Asia supported VGF to Mlinda Foundation to implement

solar AC pico grids to cover around 500 households and 200 shops in 4

villages

� Mlinda Foundation organised Joint Liability Groups (JLGs), each

comprising 6-10 households, for the pico grids

� Shops in the marketplace are catered through a separate micro-grid of

larger capacity.

� Both JLGs and the market association availed small loans from NABARD

facilitated by Mlinda Foundation

� The balance amount, comprising around one-fourth of the project cost

financed through VGF from OASYS South Asia

� After sales service provided by Mlinda Foundation own team who also

collects the repayment for the Bank

Strengths & Weakness

Strengths

• Field officers from Mlinda are present physically in the project

implemented sites

• Inspection and maintenance is carried out by Mlinda technicians on a

regular basis.

• Monthly instalment is collected by field officers from homes.

• Collection dates are flexible, delay of a few days is allowed.

• Strict scheduling of operation ensures longer life of the system

Challenges

• Mandatory for shops in market to take up DG set connection

• Drop in connections in some pico-grids

• Students going to tuition centres still use kerosene lamps

• Some households dissatisfied with the brightness of LED bulbs

Going Ahead

� Monitoring of the demonstration projects

– for better understanding of the different models and working

out the business models

� Finalizing a study on scaling up and replication to understand what

works and what not and recommend viable models

� Recommendations for wider delivery of off-grid solution

Thank You

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