News

Feb 22, 2018

Beyond Household Lighting: Promoting Anchor Load Agri-Business to Build Mini-Grids in India

By: Sudeshna Mukherjee & Rebecca Symington, Mlinda Foundation

Rural electrification through renewable energy is the flagship project of Mlinda, a non-profit focusing on market-based mini-grid solutions in India. The initiative provides access to electricity to rural and tribal communities of Jharkhand through renewable energy-based mini-grids funded by the communities. Mlinda has commissioned 13 solar based mini-grids powering over 1,400 rural and tribal household and agri-based productive loads. Currently, the total installed capacity is 325 kWp. Mlinda focuses on providing clean energy access to grow sustainable livelihoods and increase local incomes by incubating agri-businesses and training local youth to repair and maintain the energy service network.  Mlinda engineers stay and operate in rural and tribal villages, working with individual entrepreneurs, women’s groups, farm clubs, user groups and local governance structures to grow the local economy.

 

Farm-Based Productive Loads as “Anchor”

Establishing commercial viability of mini-grids in remote rural tribal villages is a challenge. Household loads are volatile, productive loads are seasonal and fossil-fuel-based anchor loads, such as telecom towers, fuel stations, institutions and markets, are not universal. To ensure mini-grids’ commercial viability, it is imperative to grow demand in a responsible manner by supplying reliable and consistent power quality.

Agriculture is the primary livelihood in rural India, and the presence of agri-based machinery is universal in any rural economy. We identified electric equivalents of the diesel-driven farm machinery such as water pumps, rice hullers and wheat millers that would make farming more efficient and increase profit margins for farmers. Mlinda has fielded over 158 small 0.75 HP electric irrigation pumps, six 7.5 HP electric pumps, five 5 HP pumps, eleven 2 HP pumps, 15 electric rice hullers and 11 wheat milling machines. We have financed energy-efficient machines to accelerate uptake and worked with local communities to incubate some agri-businesses like oil expelling, mini cold storage and electrifying poultry coops in villages. To date, we have completed five oil expellers and two mini cold storage systems in 13 villages. Additionally, Mlinda engages with households to introduce low-watt household appliances in local communities.

 

Results             

Achieving positive social, environmental and financial outcomes are at the heart of Mlinda’s objectives. They shape programming and reporting structures as well as guide operations. The environmental objective of reducing CO₂ through our projects ensures that if we succeed in providing additional access to electricity, thereby increasing energy consumption, we also ensure that villagers have access to energy-efficient devices despite villagers relatively low consumption level. If we are to support an individual enterprise to encourage business, we look to ensure equity and that women and the most disadvantaged will benefit from focused support. Mlinda’s uniqueness lies not in promoting clean energy access through mini-grids but building an ecosystem of low carbon sustainable rural growth powered by clean energy.

The mini-grids are financially viable at the village level: The revenues collected are sufficient to cover the operations expenditures incurred at the village level, where there is one full-time operator and one part-time engineer. Financing is procured through a mix of grant, debt, and equity.

Mlinda will begin scaling our operations to ensure the programme is feasible at the regional and national level. We plan to commission 50 mini-grids by June 2020 with an installed base of over 1.1 MW with 4 grids installed every quarter between 2018 and 2020.

The project is monitored regularly for grid management, utilisation, connections, revenues, repair maintenance functions, and other matters. An independent monitoring and learning organisation is evaluating the impact of the project. A new report is due out at the end of February that will evaluate the progress to date.

The most recent report, published in July 2017, found the following:

• 90% of the households and businesses in Mlinda villages are connected to the Mlinda mini-grids.
• 90% of primary lighting sources in all Mlinda villages are powered by the mini-grids.
• End users now aspire for 17 hours of electricity compared to 7 hours during the baseline period (prior to the mini-grid installation).
• Some results from household surveys included: reports of feeling safer using bulbs over kerosene, increased hours of study for children, and ease of carrying out domestic chores for village women.
• A decrease in GHG emissions in the Mlinda villages by 38% as compared to non-Mlinda Villages. Over the same time period, comparison villages experienced increased GHG emissions by 8%.
• There was a decrease in kerosene and diesel usage by over 57%.
• Per capita increase in GDP with corresponding increase in energy efficiency of GDP (i.e., an increase in GDP without an increase in the carbon footprint)
• Per capita CO₂ emissions reductions from economic activities have decreased to 647kg CO₂ across 4 operational villages.

In terms of GHG reduction and local GDP growth, the findings are the following: 

(Data Source: Sambodhi Midline Study Report of Mlinda Mini Grids in Gumla, Jharkhand, July 17)

Key Lessons Learned

• Village Selection Criteria: Focus on the productive density of the village, access to water for farming and village size.
• Grid Sizing Methodology: Grid design is modular to cater for incremental growth in instalments of 5 KWp for single and three phase inverters.
• Load Analysis: Detailed load analysis template for identifying productive loads and domestic loads in relation to distance within village has been developed. This tool informs grid design and sizing.
• Deep Community Engagement: Mlinda has benefitted by generating greater demand for the productive loads, from areas such as agri-businesses. This has resulted in enhanced local incomes and greater utilisation of grid. Growing utilisation requires intensive community engagement in addition to the grid operations on the ground.
• Upfront Commitments: Committing to providing a reliable electricity supply and a robust repair and maintenance service has won the trust of the villagers.