The Power of Small

Published Dec. 5, 2017

By V Rishi Kumar for The Hindu Business Line

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Powering Agriculture: An Energy Grand Challenge for Development supports the development and deployment of clean energy innovations that increase agriculture productivity and stimulate low carbon economic growth in the agriculture sector of developing countries to help end extreme poverty and extreme hunger.

With nearly 300 million rural Indians, about a fourth of the country’s population, still lacking access to quality power, Decentralised Distributed Generation (DDG) could be the answer. This would entail setting up of small and independent power units without any grid links instead of the mega power projects that became the trend in the early 2000s.

And due to the remote locations in which many of this un-electrified population lives, the situation can only be enhanced through generating energy from various means including harnessing solar power, biogas plants, wind pumps and micro-hydel plants.

This has also been articulated by the Ministry of New and Renewable Energy, which feels remotely located renewable energy projects are ideally suited for distributed applications. These kind of projects have substantial potential to provide reliable energy supply as an alternative to grid extension or as a supplement to grid power and in locations without the grid.

The Central Electricity Authority anticipates the country’s energy demand to increase by four fold to about 690 GW by 2035. The current energy scenario gives rise to two key challenges for the power sector — the need to increase the generation capacity and expansion of the current transmission and distribution infrastructure. The Centre has also announced a ₹16,320 crore Saubhagyya Yojana with a mandate to electrify 30 million homes by March 2019.

Thus far, the challenge has been to focus on strengthening last mile issues. However, DDG has the potential to solve both these issues, especially in rural and semi-urban areas. Hence several power companies, some big and some small, have started to pursue this route. One of them is Tata Power. It believes that DDG systems can be considered the new future of power generation solutions. “The growth of decentralised distributed generation has been subtle as more and more industrial, commercial and residential consumers install their own generation, be it roof-mounted solar panels, gas-fired combined heat and power plants, biogas plants, or even conventional diesel back up generators,” observes Anil Sardana, MD & CEO of Tata Power.

And so his company is actively pursuing smaller scale options and has worked on 50 DC distributed networks with battery storage for three days and prime generation through solar photo-voltaic. Similarly, biomass and small hydro with option to generate energy from flowing streams and canals with focus on small scale have potential.

The areas such as DC micro grid with solar cum storage, micro hydro, kinetic turbines, floating solar, biomass and biogas based generation hold promise for such decentralised distributed generation.

Small and modular

Sardana feels that in the long run relying solely on centralised generation and grid extension will not suffice. Small, modular decentralised off-grid systems located in or near the place where energy is consumed would be a better solution. The model not only reduces infrastructure investments but also addresses its constraints, even as it significantly reduces the carbon footprint and encourages creative solutions.

Today, apart from solar, a number of innovative projects are being run in different parts of the country, including a biomass plant based on rice husk. “Decentralised generation becomes ideal for remote locations, tribal tracts, in inaccessible hilly areas, forest tracts where setting up of grid is not feasible,” explains Sabhyasachi Majumdar, Group Head, ICRA.

Citing the example of the Chhattisgarh Government, which encouraged DDG projects, Majumdar says it has attracted a number of individuals and small companies to set up units. And later when the State grid actually reaches such a remote location, the power generated from such a project would also be purchased if it is in excess.

Devendra Surana, Managing Director, Bhagyanagar India and Director Surana Group, says, “When the solar policy was drafted, the distributed development of projects was encouraged. This ensures local consumption and there is no loss in transmission and distribution. We had then suggested that local generation capacity could be set up for consumption in that areas itself based on the local transformer capacity.”

Pay-for-use model

“The distributed power plants such as solar could now be backed by storage facility,” says Surana. “This has become gradually attractive as the cost of storage is steadily coming down from 2012, and is nearly half of the price it was then. This makes it attractive to have storage and makes it reliable.”

Husk Power Systems that provides electricity using both the biomass gassifier and solar PV panels in Bihar and Uttar Pradesh uses its own distribution network within a radius of three to four km connecting households on pay-for-use basis. “Decentralised power generation and distribution has all the benefits compared to national or large grids, which need huge capital investment and also lead to huge transmission losses,” says Ratnesh Yadav, Co-Founder of the company.

“I see the future belonging to such generation. For remote areas and sparsely populated areas grid connectivity means a huge cost and they are not economically viable. In mountainous areas, houses are located far away from each other and spreading grid network in such a terrain is very costly and then in every monsoon or season climatic disasters destroys them.”

But he feels there is a downside to DDG. “There is lack of discipline amongst customers and lack of support and coordination from the Government for private players,” adds Yadav. Unlike the large solar park concept, the Telangana Government too has adopted a distributed power generation approach, but at a larger scale. The developers have been encouraged to set up solar plants at locations where power demand-supply mismatch was mapped. Gujarat, Rajasthan, Karnataka, Maharsahtra have also adopted similar models for harnessing renewable power.

Recently, Azure Power announced its plan to expand into rural electrification by setting up of mini and micro grid in Jharkhand. The company had won a project to electrify 320 households across 11 villages.

“Solar PV costs are low and there is plenty of biomass available that goes waste all the time,” says Yadav. “There are also small micro turbines that can be used to generate power. I think policy-makers need to think out of box and encourage setting up of such projects.”

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