However, Smart Power India has released a report on this mini grid model which it has been supporting. Mini-grids are another alternative, generally ranging from 10kw to 100kw and serving a larger commercial area. Towns and perhaps villages are more likely candidates for grid electrification. The Government of India has plenty of demands on its money, and the high upfront cost of electrifying hamlets coupled with the annual financial obligations to fund operations make hamlet electrification an unlikely priority. Factoring in operating costs, transformer replacements, transmission costs, generation infrastructure costs, and fuel costs, each hamlet would likely never payback the upfront costs of connecting it to the national grid and may not even generate enough revenue to cover the operating costs. To connect a community of 50 households 2 kilometers from the grid would cost a minimum of $10,000, yet evidence suggests that only 10 of the 50 households could afford the $4 a month grid connection, amounting to annual revenue of $450 (less than 1/20 th of the distribution capital costs). Each household costs $300 to connect even without a meter. A transformer costs between $900 and $3,000 depending on quality and capacity. In 2014-2015, the estimated cost of extending an 11KV distribution line 1 kilometer in India was approximately $4,000 and 33KV lines $6,000 per kilometer.
The cost of extending the grid is the first hurdle. With that in mind, let us take a closer look at the different types of grids and where they fit into an inclusive electrification strategy.
Hamlets can be as small as 20 households but in rare cases are as large as a few hundred, and a large portion of them remain off-grid. The typical household income, as reported by customers to Mera Gao Power, is between $0.25 and $0.50 per person per day depending on the season. Most labor is engaged in agriculture and livestock, and families typically have smaller livestock and land holdings than in villages. Rural hamlets are much smaller, more remote, poorer, and generally deprived of public services.To be considered electrified, only 10% of village residents need to be connected to the grid. However, electricity service to villages is worse than to towns with power often delivered only after 11pm and before 5am and often not at all for weeks. The government’s recent focus for grid expansion has been on villages with the goal of 100% village electrification. Villages are typically 250 households or larger. The balance of the labor force is typically engaged in agriculture and livestock. Because of the more limited traffic, commerce is usually lower and village shops serve the residents of the village or residents of nearby hamlets. The proximity to the road usually allows residents to travel to towns for work or to start roadside commercial shops. Rural villages are usually alongside or very close to a paved road.Nearly all towns are connected to the national grid though service is poor. A town would typically have more than 1,000 households. Because of the greater commercial activity, incomes and payment capacity are higher. Behind the shops are normally a few rows of houses. The increased traffic leads to more opportunities for commerce resulting in clusters of shops alongside the road in all four directions from the intersection. Rural towns are commonly located at the intersection of paved roads.To better understand where the market for various levels of service lie, it is important to break rural North India down a bit further. But even here, rural off-grid communities are not homogenous. And 200 million people are off-grid in the states of Uttar Pradesh and Bihar. No single solution will work best in both the North and the South.Īs there are over a quarter of a billion people off-grid in North India, let us narrow this discussion on the North. In North India which hosts the majority of the off-grid households, the households are quite poor and the communities, though small and far apart, are quite dense. In South India, there are fewer off-grid communities, households have higher incomes, and communities are more sparsely populated. Demand for power, either through the grid or from private operators, varies by customer income which itself is linked to how remote the customer’s community is that demand for power and remoteness then impact the viability of the different approaches. The reason being, there is not one rural India. “National grid, mini grid, or micro grid: which is best suited for serving off-grid communities in rural India?”Īs much as I want to answer the question, the truth is the question cannot be answered not in that form at least.
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