Asolar microgrid is a solar power generating unit with or without any power backup (such as energy storage systems and diesel generator), which can work in grid-connected or islanded mode. These microgrids are typically not spread out geographically, and do not have power transmission capabilities. Hence, they are generally implemented in areas where grid availability is scarce or unfeasible like islands, hilly areas and remote villages.
With more than 400 microgrid projects in operation or under development, the global microgrid capacity is expected to grow from 1.4 GW in 2015 to 7.6 GW in 2024. In fact, the microgrid market is expected to grow at a compounded annual growth rate (CAGR) of 12.45 per cent, so as to reach $38.99 billion by 2022. Along with microgrids, the global market for energy storage in microgrids is also expected to grow at an impressive CAGR of more than 27 per cent by 2019.
With the power ministry’s flagship 24×7 Power for All programme approaching its deadline in March 2019, 16 states are 100 per cent electrified as of December 12, 2018. The remaining states are expected to be 100 per cent electrified by December 31, 2018. However, even with these impressive statistics, the power quality in most areas of the country remains poor. Frequent power cuts and voltage imbalances have led to not only industrial and commercial segment, but also independent residences to adopt power back up options.
Solar microgrids can help address this issue of inadequate power supply, and even provide an almost continuous energy source when integrated with energy storage. Hence, the importance of solar microgrids is also being realised in commercial, industrial and institutional set-ups apart from remote regions. These establishments, largely dependent on diesel generators, are increasingly switching over to solar microgrids and getting significant savings on their operating costs. They are also ideal for use in rural areas where agriculture is the main occupation and biomass can be used as an additional source for consistent power supply in the solar microgrid.
Challenges in implementation
The Ministry of New and Renewable Energy had issued a draft National Policy for Renewable Energy-based Micro and Mini Grids in June 2016, to promote microgrid deployment in the country. The aim of this policy was to develop up to 500 MW capacity in the private sector by 2021 through regulation of prices and flexibility in tariff determination for operators. However, even after more than two years, the policy has still not been finalised. The implementation of solar microgrids remains constrained even with the high scalability and economic benefits offered. Lack of awareness, policy fluctuations and execution challenges are some of the major challenges hampering the microgrid deployment in the country.
The way forward
Efforts of certain organisations have resulted in various business models for microgrids emerging across the country. These include the customer-owned business model (CAPEX), microgrid as a service model (OPEX) and the Pay–as–you–go model. The uptake of each of these models is dependent on the consumer category, their buying power, the region where the microgrid is located and the application of the microgrid.
Various organisations are working at the grassroots level with village communities to generate awareness about the benefits of solar microgrids. For instance, Gram Oorja, a Pune-based organisation recently implemented solar microgrids in six unelectrified hamlets of the village Dahigaon in Maharashtra. The company uses corporate social responsibility funds for such projects in remote areas. The solar microgrids are operated and maintained by an appointed manager, who is selected by the village committee to also collect tariffs from households. About 90 per cent of the total 225 households in the village have opted to be connected to these microgrids. This sheds the myth of unwillingness to pay by consumers in rural areas.
In another instance, ABB inaugurated a microgrid comprising a solar rooftop plant and an energy storage system at its manufacturing facility in Vadodara. This is India’s first industrial solar microgrid. Going forward, with the cost of solar modules and energy storage decreasing year on year, solar microgrids can indeed become the dominant source of energy in offgrid areas or regions with poor grid availability. The only assistance required in this endeavour is an enabling policy and regulatory environment to provide the much needed confidence to developers, investors as well as consumers.
Based on inputs from Sandip Sinha, Vice-President, Microgrids, ABB India at Renewable Watch’s conference on “Distributed Solar in India”