Are Micro-Grids for Rural Electrification the Answer?

A Partnership in Odisha, India Seeks to Find Out

Maligaon is a small village of 50 houses nestled into the eastern ghats (mountain ranges) in Odisha, India. A solar micro-grid was installed there in 2009, through a partnership between Australia’s CAT Projects (CAT)—now Ekistica—and Gram Vikas (GV), an Indian NGO. A solar micro-grid is an energy system with centralized solar panels and batteries capable of supplying energy to one or up to several villages.

Homes and lives in Maligaon were illuminated, children could study after dark, it became safe to walk at night under streetlights, and harmful kerosene lamps became relics. However, just four years later, in 2013, the micro-grid failed and Maligaon again fell into darkness with the meager consolation of a highly unreliable connection to the main grid.

Homes and lives in Maligaon were illuminated, children could study after dark, it became safe to walk at night under streetlights, and harmful kerosene lamps became relics. However, just four years later, in 2013, the micro-grid failed and Maligaon again fell into darkness.


 

Even in 2009, when solar panels were highly cost prohibitive, the financial case was clear. An analysis at the time revealed that the cost to extend the nearest main grid infrastructure, over 50 km away, up to Maligaon would be INR 1,46,09,125 (USD $208,700) whereas the cost to build the stand-alone micro-grid would be INR 59,97,978 (USD $85,685).

While this cost was donated by CAT, the operating costs had to be met by the Maligaon residents via a tariff on the energy they consumed. This is partly because funding for multi-year operating costs are rare, but primarily because payments for electricity usage also helps create a sense of ownership and encourages maintenance of the micro-grid by the users.

With the micro-grid’s monthly operating costs totaling roughly 10,000 rupees (USD$140), the people of Maligaon created a Village Energy Committee (VEC) to oversee its operation. The VEC appointed one village resident as the operator tasked with running the system, with responsibilities including monitoring the batteries, cleaning the solar panels and going door-to-door to collect payments to cover its maintenance costs and his monthly salary of 1,000 rupees (USD$14).

In 2019, the residents of Maligaon huddled around a small, battery-powered projector outside at night to watch a video of their newly formed VEC in 2009 enthusiastically explaining the above system. The operator is asked, “What is your work?” To which he replies, “Everything! Check the cable. Clean the panels. Check for electrical faults. Distill water. Add it to the batteries. Clean the powerhouse.”

The VEC conducts an outdoor meeting at night. Photo credit: Ajaya Behera.

The president then explains the payment system, “How much each family has to pay has been fixed! Each month, it is 121 rupees for people who agree to use 300-Watt hours per day and 85 rupees for those who agree to use 200-Watt hours per day. They just have to keep the money ready each month.”

While most of those huddled around the projector were excited to see what they looked like 10 years ago, others exchange sheepish looks. Many recollect this system gone awry—refusing to pay on time, the operator selling the distilled water intended for battery maintenance, or illegally tapping energy to get free electricity.

The system quickly fell into what Schnitzer et al. call a “vicious cycle” in their report Micro-grids for Rural Electrification: A critical review of best practices based on seven case studies. What happened in Maligaon is better illustrated by a vicious ‘pin-wheel’ where forces at each curl accelerated the vicious cycle.

The final blow was the arrival of the main grid in Maligaon in 2013. Miraculously, the installation occurred almost one decade ahead of schedule. Expecting that the solar micro-grid would soon be redundant and obsolete, the VEC relaxed their oversight and the operator and users expanded illicit activities that had previously been kept at bay. The system came to a grinding halt in the same year.

Now, in 2019, the people of Maligaon, frustrated with the unreliability of the main grid and aspiring to use energy in new ways, approached GV with a request for support to pick up the pieces of their failed system and start anew. Over months of meetings and discussions, the community identified the forces that spun their old vicious cycle and determined what to change to start a more virtuous one.

  • Lack of flexibility—The old fixed daily budgets meant people paid for unused energy and could not pay extra for additional energy if they wanted it. Thus, the new system includes pre-paid smart meters to allow people to pay upfront for the electricity they need—no more or no less.
  • Greater energy needs—People wanted electricity not just for their houses but also for their livelihoods such as for pumps, motors, and fridges. The technical equipment was upgraded to meet these needs.
  • Maintenance—The newly active VEC wanted batteries that require less technical maintenance. If regular maintenance could be limited to cleaning and civil works, then they could audit without depending on external experts. Thus, GV launched a crowdfunding campaign to install state-of-the-art lithium ferro-phosphate (LFP) batteries—the same technology for which the Nobel Prize in Chemistry was given this year. This is the first ever instance of a village level micro-grid in India with lithium-ion based energy storage.
  • Affordability—The community wanted tariffs to be based on affordability and not just operating costs. This way, people could initially build confidence in the solar micro-grid at lower tariffs and later welcome tariff increases for livelihood loads.

The people of Maligaon, together with GV, re-commissioned their renewed micro-grid in September 2019 with their energy needs and future aspirations resting on these changes. So far, some key lessons to understand from Maligaon are that rural communities have dynamic and diverse energy needs, require easy-to-maintain technical equipment, and are extremely price conscious.

A drone shot of the solar powerhouse under construction. Newly painted roofing sheets dry among the solar panels. Photo credit: Ajaya Behera.

The true lesson from Maligaon is yet to be learned. Are these improvements sufficient to enable true ownership and strong governance to address unanticipated challenges? The VEC is already testing a new model: four groups of women rotate on a monthly basis to carry out simplified maintenance enabled by the zero-maintenance LFP batteries.

The need for active, democratic, and participatory governance is inherent in the energy source itself. Renewable energy is fundamentally democratic. There is no monopoly on the sun shining, the wind blowing, and the rivers flowing. If the inherent democracy and abundance of renewable energy is to be leveraged to eradicate energy poverty, then renewable energy systems need to meet the needs and capacities of rural communities. More importantly, such systems need strong local ownership and governance to monitor the figurative pin-wheel and keep it spinning in the right direction.

 

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