Bringing Electricity to Rural Homes and Businesses in India
When The Rockefeller Foundation asked me to lead Smart Power India—an organization that aims to deliver a comprehensive solution to the energy needs of unserved and underserved villages—for me it was a continuation of my experience at the nexus of energy access and social impact.
In recent years, energy access has been the focus my work and I have seen the opportunities that come with electricity. At my previous company, d.light, we introduced portable solar lights to millions of off-grid homes, a better lighting solution than kerosene and with none of the ill effects. Our customers clearly felt the benefit; however these same households wanted more power for fans, TVs, and their businesses. There were limitations to portable solar devices and we needed another solution.
Mini-grids have been done before, but they were often implemented unsustainably—only providing lighting alone. Under the Smart Power model, solar power plants built and run by the energy service companies (ESCOs) have higher capacities, not just for lighting homes and shops, but also for serving productive loads like micro-enterprises. Small businesses such as Atta Chakki, computer shops, welding operators, and irrigation pumps can be served at the same time as the telecom towers that are now present in thousands of off-grid villages. The cell phone tower serves as the “anchor load” (bringing assured base demand) for mini grid plants and this is a key element of the Smart Power model. The ability to serve a load mix underpins the viability of the plant and also helps spur economic development in communities.
Backed by The Rockefeller Foundation’s investment, Smart Power India will serve four distinct functions:
- We will provide project development support to ESCOs, helping them structure their financing and business models, selecting villages and clusters, and helping with procurement.
- We will work to facilitate agreements with anchor tenants—such as the telecom tower companies that provide the base loads—and facilitate agreements with investors and equipment providers.
- We will assist in load development, working with communities to ensure strong local buy-in and sustained demand for the power plants that ESCOs will build.
- We will work to align policies with the regulatory environment to support the market development for mini-grids, and eventually their interactivity with the national grid as it expands.
Bihar and Uttar Pradesh have been targeted first, since they have the highest number of villages with limited or no power.
We know that the work ahead will not be easy and there are many challenges. However, we have already done extensive groundwork. Twenty-five plants are operating in Bihar and Uttar Pradesh, and many more are in various stages of commissioning.
I recently visited an off-grid village called Bheldi, and saw one of the mini grids in operation. I met the customers who had connected about two weeks previously and the feedback was very positive. One of the computer shop and photo studio operators mentioned that he is now able to focus on improving his business, instead of wasting time and money on a diesel generator and a separate connection with a common generator supply back-up. He is very happy with the reliable, steady quality of electricity, and many others in the community may connect soon.
We have key data and insights that tell us this model is not only viable, but scalable. We have exciting early partnerships with ESCOs such as Tara, Oorja, OMC, DESI Power and Freespanz, and discussions are ongoing with many others. With The Rockefeller Foundation providing the risk investment capital—including loans to ESCOs and impact investments—we are certain that other investors will crowd in and bring this work to scale.
One day, everyone in India will draw their electricity from the national grid and we believe that decentralized renewable energy plants could strengthen grid resilience, and provide a last-mile effect. But that is still further down the road, and the people who live in these off-grid villages do not need to wait.
I am encouraged by Prime Minister Modi and his government’s commitment to expanding electrification and bring electricity to every household by 2019. We believe Smart Power India will play an important role in complimenting these efforts to unlock opportunities for India’s rural communities.[ssba]