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Microgrids, Macro Solutions

Rural electrification has been given new momentum with the widespread deployment of microgrids, which have become a critical solution for delivering energy access to those that need it most.

In 1980, AT&T commissioned the consulting firm McKinsey to estimate how many mobile phones would be in use globally by the year 2000. The handsets were too heavy, the battery life too short, and the price too high, they observed. Their prediction was that 900,000 would be in circulation by the end of the century. AT&T at first heeded their advice and pulled out of the market but changed their minds later. They made the right decision—by that year, 900,000 were sold every three days. Now there are nearly 8 billion mobile phone lines: more than one mobile phone for every person on the planet. Telephone lines used to be considered essential infrastructure for a nation’s development, but now that mobile phones have become ubiquitous in many of the world’s poorest countries, landlines are practically considered an obsolete technology not worth the investment.

The same change is happening within the global energy sector, particularly now that the consequences of climate change are becoming increasingly visible. While the use of a centralized electrical grid for power transmission and distribution may never become obsolete, the microgrid is leapfrogging as the best available technology to provide electricity access to the 1.3 billion people still in the dark. Off-grid solutions, such as microgrids, are typically used to provide smaller communities with electricity.

Particularly within the rural Indian context, decentralized generation offers three major advantages over the traditional, centralized electricity grid. First, microgrid deployment is often cheaper than extending the national grid, making them a cheaper way of providing power to remote, rural areas. Such systems are also much faster to install than large power plants, which typically require 6-8 years from design to deployment. Finally, microgrids increasingly employ a mixture of renewable energy resources, such as solar-biomass hybrid power systems, which reduce the amount of emitted carbon significantly.

Rural electrification has therefore been given new momentum with the widespread deployment of mini-grids, which have become a critical technology for delivering energy access to those that need it most.

From an environmental standpoint, off-grid systems offer much more sustainable methods of electricity generation than does India’s electrical grid. The majority of India’s installed capacity utilizes fossil fuels, with 70.6% of the national share coming from thermal power (of which 90% is generated by coal-powered plants), and the capacity of coal-fired plants is expected to double 2012 levels by 2022 and thus contribute 75% of national electricity generation. From extraction to waste disposal, coal is perhaps the dirtiest power source known to man.

First, the mining process is extremely harmful to the environment, particularly because of the mine wastes containing heavy metals that can leach out into local water systems. Acid mine draining (AMD) is another serious problem: when coal gets wet, it creates sulfuric acid that dissolves toxic metals, and not only does the run-off destroy aquatic habitats and render water undrinkable, but these metals can accumulate along the food chain. Transportation is also an issue, since most Indian coal comes from the eastern part of the country and must travel on diesel-powered trains. Once the coal finally arrives to the plant and is burned, it emits over 60 different hazardous air pollutants, as well as vast amounts of water that must be consumed in the process. Indian coal is mostly thermal coal that is of poor quality (i.e. low calorific value and high ash content). Despite the Indian coal industry having some of the laxest standards in the world, compliance with air safety regulations is still substandard. No power generation plants in India control mercury emissions, and few actually measure them. Lastly, no other fuel contributes as much to global warming as coal, which emits 72% more CO2 per unit of energy than natural gas. 

Microgrids, on the other hand, use renewable energy sources that are far less CO2-intensive and, when properly designed, are non-destructive to the environment. Oorja plans to utilize biomass gasification that produces biochar to sequester carbon in the soil, a process which actually removes CO2 from the atmosphere.

But microgrids (or stand-alone systems) are not simply a luxury for those who can afford to be environmentally conscious. They are poised to become a more reliable source of electricity than India’s national electrical grid. Despite frequent promises to provide energy access for all, the number of people without access to electricity has roughly stayed the same: electrification programs have only kept pace with the growth of population. This has particularly been the case in India, where universal energy access goals have been made and missed several times. The reality is that many communities in rural India are both small and extremely isolated, making grid extension unfeasible for electrification programs with limited resources. The capital-intensive investment in infrastructure required for the installation of the electrical grid is in many cases much more expensive than what’s necessary for decentralized off-grid solutions. But more importantly, many households in electrified areas choose not to pay for connection to the grid, either for financial constraints or because they have little confidence in the quality of these services.

Despite official claims that 93% of Indian and 57% of Bangladeshi villages are electrified, rural household connections only reach 53% and 28%, respectively. Many supposedly “electrified” areas see tens to hundreds of days a year of significant outages, and often electricity is only available during off-peak hours. In Uttar Pradesh, for instance, only 5% of households reported having access to power for more than 20 hours per day, while 23% get four hours of basic evening supply. Microgrids often successfully coexist alongside the centralized grid because they provide a more reliable source of electricity. Moreover, microgrids can be connected to the grid: when needed, electricity can be drawn from the grid, and when more electricity is produced by the microgrid than is being used, it can be sold back to the power utility. And in the cases where the local community members own the power plants and are able to keep the profits, the money spent on electricity is invested back in the community (particularly through the creation of micro-enterprises that invariably begin with the advent of electricity access).

Lastly, microgrids provide a local solution to a local challenge. Grid extension and traditional rural electrification programs simply render the beneficiaries subjects of initiatives in which they have no sense of ownership. Microgrids, on the other hand, leave the task of electricity generation in the hands of the end-users. Oorja, for example, plans on selling or leasing its power plants to cooperatives and women’s self-help groups. Not only will the people become responsible for producing their own power, those most in need will be given a stake in the process. Moreover, microgrids give the people a strong voice in the decision-making processes. While rural electrification programs are usually top-down programs directed by a state (or a private company) that has often not taken into account the specific needs of those at the bottom of the pyramid, the nexus of a microgrid exists entirely at the local level. Any decisions in regards to the generation, supply, and use of electricity are made by the locals that actually use it, rather than a distant bureaucratic authority. Often these decisions are made in the most democratic manner possible by self-organized cooperatives. The presence of a microgrid actually foments democracy and civil society at a local level and brings communities together in new ways. It gives the inhabitants of isolated rural areas a new found agency in shaping their communities and greater control of their own destinies. Energy democracy may be the purest form of democracy they have ever experienced.

It makes little sense for those in the developing world to adopt what was invented generations ago, for in the time it takes to implement these technologies on a wide scale, they may become obsolete. The newest innovations should be used to bridge the gaps that the previous ones could not. For decades we have heard promises to provide universal electricity access, yet the population with no access at all—1.3 billion people—has failed to decrease. If we are truly serious about providing them with the energy access that is increasingly being viewed as a human right, we must create an environment in which innovative solutions may flourish. Uncertain regulatory structures, lack of financing, and the heavily subsidized grid and fuel prices have impeded the growth of off-grid energy solutions. But despite these obstacles, many success stories have emerged because of the sheer superiority of these technologies in generating electricity in difficult geographic conditions. 

The sooner we make a commitment to helping disseminate these alternatives, the sooner universal energy access will become a reality.

Written by John McLeod , Communications Assistant at Oorja.


Bhattacharyya, Subhes C. “Energy Access Programmes and Sustainable Development: A Critical Review and Analysis.” Energy for Sustainable Development 16.3 (2012): 260-71.

 “Financing Energy Access and Off-grid Electrification: A Review of Status, Options and Challenges.” Renewable and Sustainable Energy Reviews 20, April (2013): 462-73.

Palit, Debajit, and Akanksha Chaurey. “Off-grid Rural Electrification Experiences from Southeast Asia: Status and Best Practices.” Energy for Sustainable Development 15 (2011): 266-76.

Alstone, Peter, Dimitry Gershenson, and Daniel M. Kammen. “Decentralized Energy Systems for Clean Electricity Access.” Nature Climate Change 5 (2015): 305-14.

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