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The quest to bring “Power, Everywhere” in India | Energy Access Practitioner Network

News

The quest to bring “Power, Everywhere” in India

By: Pär Almqvist, Chief Marketing Officer, OMC Power and Sarraju Narasinga Rao, Chief Technology Officer, OMC Power

“How can we make sure everyone gets access to power, and how can we contribute to cutting carbon emissions?” These were the two guiding questions that led to the founding of Omnigrid Micropower Company (OMC) in India in 2011, guided by a clear vision to bring power everywhere.

OMCPower2

India, a country where nearly 400 million people still live and work without access to electricity, represents a significant opportunity for innovation. This is what motivated the creation of OMC Power: a new type of power-company that finances, builds, owns and operates solar micro-power plants in rural areas of India that are not part of the traditional electricity grid, with both rural communities and mobile networks as customers.

The company operates in the North Indian state of Uttar Pradesh, which is the country’s largest in area and population – comparable to Brazil, the 5th most populous country in the world. Over 150 million of Uttar Pradesh’s 200 million people live in its 100,000 villages and approximately half of them lack access to electricity, a key factor in poverty eradication and socio-economic development.

OMC, with its simple vision of “Power, Everywhere”, has three goals: ensuring sustainable energy access, cutting carbon emissions, and lowering energy costs.

OMC’s Business Model

As cellphone use has taken off in India, cellular towers have become prevalent across the country. To keep them running during regular blackouts, cellular companies depend on diesel-fueled power generators that are expensive to run and create noise and air pollution. OMC sets up small solar-power plants, which generate less than 50 kilowatts of power, near the cellular towers. This power is used to keep the cellular towers running – eliminating the need to set up and run captive power infrastructure – and leftover capacity is used to power nearby village homes and businesses.

For anchor and business customers, power is provided on a kWh consumed basis. For community customers, OMC charges the equivalent of the existing household budget for diesel and kerosene, and manages the provision of power through a variety of connection packages, including indoor wiring with power sockets and even light bulbs, adapted to power consumption requirements. Other services are provided once electricity is in place, including Internet, TV and electric vehicle rentals.

This Anchor, Business, Consumer (ABC) sequence has enabled a commercially viable roll-out and ramp up of OMC’s model. Efficient distribution of mini-grids and the ability to generate power that can supply not just the telecom tower but also the village makes the implementation of the ABC model possible. By itself, neither the telecom community nor the community would be viable customers; providing power to both has led to a faster demand growth demonstrating the viability of a hybrid business model that aggregates commercial and community demand, leading to long-term Power Purchase Agreements (PPAs) and Memoranda of Understanding (MOUs) with leading telecom tower companies in India, such as Airtel, Viom, Vodafone and Idea.

The Viability of Mini-grids in India

OMC’s decision to build mini-grids stems from high population density and abundant solar irradiation in Northern India. In addition, a mini-grid can generate between 1 kilowatt and 5 megawatts of power, and has the ability to meet the growing needs of an entire village – including homes, schools and local businesses – providing more flexibility and growth potential for the company.

Currently, OMC owns and operates 70 solar micro-power plants – providing energy access through mini-grids to 200 villages with a total population of 1 million people. By the end of 2015, OMC will have generated over 1500 MWh of clean energy. In addition, to date, OMC has saved approximately 5,500 metric tons of CO2 emissions by replacing fossil fuels with energy generated primarily from renewable sources.

Lessons Learned

  1. Energy access is not merely building generation capacity: Cost of local energy storage and distributed operations must be taken into account as these are areas where most energy access providers face challenges.
  2. Availability of energy access fuels further demand: Any long-term energy access venture must be made to scale to allow for increased supply to meet growth in demand.
  3. A diversified customer base is critical for commercial viability: OMC started out focusing on telecom power, with community power as an added benefit. While building the company and its operations, OMC realized that community power is a growth area for the company, made possible by long-term PPAs with telecom infrastructure companies. This hybrid model integrating both community and business customers has been critical to the success of the company.
  4. Recruitment and training of local staff is key to sustainable operations: Training is essential to ensure the quality of staff. At OMC, experienced employees train new recruits in an operational power plant, allowing them to learn through practical experience, with training provided on a regular basis to ensure ongoing competence development.

OMC hopes to continue to learn and grow: by the end of 2015, OMC will have established 100 micro power plants and 500 plants by the end of 2016. OMC’s longer term target is to provide energy to 3,500 telecom towers and 2 million homes – 10 million people – in over 1,600 towns and villages by 2018; a small contribution to the sector’s shared goal of access to energy for all.