Call them disruptive, innovative, futuristic, any which way you like, but smart microgrids and hybrid energy projects have the potential to ensure energy security.

Be it in inaccessible places such as hilly tracts, islands, or remote locations with or without grid access, these projects help to light up the area and transform the local economy. The ability of small power units is well known in reaching out to remote locations, but microgrids or ‘power systems in boxes’ take it to the next level.

Ramnath Vaidyanathan, CEO of WiSH Energy, a subsidiary of Enzen Group, says, “A hybrid renewable energy system uses more than one clean renewable source to produce energy. This could be a combination of solar and wind, or solar and waste, solar and hydrogen, wind and hydrogen, wind and waste, wind and wave, or all of them together.”

The premise for building a hybrid energy system is to bring in sustainability and optimise costs. As opposed to conventional renewable energy projects that utilise a single source of energy, these hybrids, say, solar and wind, will make the best use of various seasons, with the former most efficient during summer and the latter during certain seasons and those located near shores more during high tide.

By combining such systems, one not only gets significantly higher generation but also consistency in generation over the course of the day, month and year.

A smart hybrid in a microgrid ensures optimal utilisation of all renewable energy sources, brings down storage requirement and, thereby, cost implications. Such systems can also be integrated with diesel generators and the additional power generated can be monetised using net metering where there is a grid.

“WiSH Energy has executed, directly or through channel partners, over 35,000 installations across 40 countries, with total capacity of 75 MW. Some of the projects include green fuel stations for BPCL and IOCL, powering up telecom towers and providing water supply,” Vaidyanathan says. “We installed a 30 kW system for a hill resort in Lonavala in Maharashtra that did not have any grid connection and was totally reliant on diesel power requirement. The costly diesel system was integrated to a hybrid system and thereby the resort has become self-sufficient,” he says.

Decentralising does it

Praveer Sinha, CEO and MD, Tata Power, says, “Providing uninterrupted and good quality power is fundamental. The government’s Pradhan Mantri Sahaj Bijli Har Ghar Yojana or Saubhagya, launched in September 2017 with an outlay of ₹16,320 crore, aims to provide power to every citizen in the country by December 2018. While conventional, grid-based supply of power is, and will continue to be, the foundation for generation and distribution of electricity, last-mile connectivity, particularly in remote parts of the country, is an important step to achieve goals under Saubhagya. A little over ₹14,000 crore of this scheme budget is allocated to rural India.”

The scheme data shows that 95 per cent of the target households have thus far been reached. This leaves another 1.05 crore households that need to stop using fuels like kerosene, wood, etc.

The quickest and most efficient way to provide reliable power is through decentralising — by moving away from large, grid-based systems to localised generation, transmission and distribution.

Tata Power has implemented mini-grid projects in two villages of Bihar, having 390 hutments with a population of about 2,000, to create a sustainable model of smart microgrids.

The first project is in Tayabpur, in an unelectrified village in Vaishali, and the second in Behlopur village situated on an island in the river Ganga, in Vaishali district. Tata Power partnered with Tata Trusts to establish these two microgrids. Another mini-grid is being implemented in Gyani More village in Siwan district.

“Our projects aim to develop a smart microgrid model suitable for Indian conditions and support access that is affordable, sustainable and helps us reach remote rural areas. These will catalyse a new wave of energy-enabled economic opportunities in rural communities currently left out of India’s economic boom and create and demonstrate the long-term viability of a new paradigm for infrastructure, energy-efficient consumption, and the overall business for rural electrification in India and beyond,” Sinha explains.

Microgrids have been experimented with and implemented in many parts of the country over the last three decades, with mixed results. Lack of coherence at the ground level between technology providers, local governing officials, other service providers and community, and unrealistic models, both financial and social, have hampered a sustainable implementation.

“We need a robust policy for microgrids integrated with policies of other related areas of solar and energy policy as there is huge potential to help rural electrification through microgrid intervention,” Sinha says.

Over the last decade, the regulatory focus in the country has been on large, utility-scale renewable energy and capacity addition. There is now growing focus on renewable systems to bring down dependence on fossil fuels and develop decentralised installations.

Hybrid systems, microgrids and decentralised distributed energy systems will get popular for their inherent advantages of being low-cost and commercially viable. While some States have initiated microgrid policies, a national policy is under preparation.

“We have had very positive interactions with the Ministry of Renewable Energy (MNRE) and believe that they understand the importance of defined policies for smaller hybrid systems and microgrids to grow. We expect concrete policies to emerge,” Vaidyanathan says.

A smart grid-backed renewable energy project insulates the system against the extremely volatile nature of the energy source. Since it is technology-enabled, it provides ease of management as well.

Among innovative installations is the greening of fuel stations with standalone hybrid system for BPCL at Kognoli in Karnataka and for IOCL at Kollam in Kerala. In India, where telecom towers are dependent on diesel engines, the effort is on to set up renewable hybrid systems.

Policy support is a must

Vivek Sridhar, CEO, Shiroi Energy says, "Microgrids have tremendous potential to change the way our current grid services the country. The rural population has issues ranging from grid connectivity, continuous supply of power, three-phase power supply to fluctuations in voltage level. A centralised grid cannot solve these problems without huge capital investments, which may not yield the desired returns.”

Sridhar explains, “The state electricity boards are actually losing money supplying power to rural areas as this electricity supplied is subsidised, but a new electrical line to reach the customers is a major capital investment. This vicious cycle is what has led the electrical boards to not being pro-active about this segment.”

Therefore, says Sridhar, “We find that even in completely electrified States, the grid still has miles to go in terms of serving the rural population with 24/7, 3-phase electrical power. Smart microgrids are a wonderful solution to these issues, but this market has barely picked up in the country.”

The inherent challenges in any business focusing on the rural segment are market accessibility and payment collection. Apart from that, smart microgrids also face issues of maintenance and theft.

Also, the electricity boards view smart microgrids as competition and hence are not being supportive of their development. This is similar to the push-back that the solar industry is facing currently.

“Also, there is no specific policy for microgrids at the national level. A policy legalising a microgrid operated privately, along with clauses to ensure maximum charges and a fee to the electricity board, can help the industry build a strong foundation.

“This will help clear the table for corporate investments in this sector, following which scale and impact can be seen,” Sridhar says.

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