Microgrids – The Potential to Power India’s Future

India is in the midst of unprecedented urbanization. While overall annual population growth has slowed to 1.2 percent, the country is set to add another 300 million residents to her urban population by the year 2050 according to the first ‘World Cities Report 2016- Urbanisation and Development: Emerging Futures’ report by UN Habitat. The government’s 100 Smart Cities initiative is a step in the right direction, addressing infrastructure needs through a combination of urban expansion and redevelopment – with the application of smart technology to improve the delivery of services such as power and water – while enhancing sustainability by promoting low-carbon technologies.

India: A Power Paradox

Modernising the energy supply, however, encompasses more than just replacing old equipment with new. The investments will need to address the integration of larger amounts of energy from renewable sources while delivering higher levels of reliability and resilience. This assumes all the more relevance given the government’s ambition of achieving ‘24×7 power for all’ by 2019.

On the power generation front, there are good tidings with data from the Central Electricity Authority showing India to be in a power surplus for the first time, with a surplus of 3.1 percent during peak hours and 1.1 percent during off-peak hours. This can be attributed to 46,453 MW of additional power capacity and about 11,000 MW of gas-fired power plants revived in the past two years by addressing issues related to fuel supply linkages. Also contributing to the power surplus is the growth of the renewables component of India’s energy mix, with 175 GW of renewable energy to be added by 2022.

Despite this, load shedding and power outages are still common with some parts of India having access to power for less than eight hours a day. Distribution – the link between power generation plants and the end users – is a complex challenge that India’s power sector is tackling with only qualified success. Close to one fourth of India’s population still lacks access to the grid, those who do have an intermittent supply of power.

Microgrids: Building energy security for urban and rural communities as well as businesses

Microgrids are shifting our conception of how power is produced and distributed. A microgrid is a small-scale localized power generation and distribution network, capable of operating independently or in conjunction with the main grid. Microgrids are way to provide a reliable supply of power, with the additional benefit of reducing demands upon the conventional distribution network. Users connected to a microgrid can be insulated from the power outages on the conventional network; while microgrids connected to the main distribution network have the potential to support the main grid by exporting surplus power. Typically microgrids use power from a combination of sources. They can help reduce greenhouse gas (GHG) by facilitating the use of with low-carbon energy sources such as solar and wind.

The cost of energy storage equipment is falling. This means that, for communities where the cost of connection to conventional power distribution networks is prohibitive, mircorgrids which incorporate energy storage offer a cost competitive way of providing power.

Developing Standards for Microgrids

At this early stage of evolution, the microgrid market is fragmented. As Navigant Research highlights in a recent report, projects and business models tend toward being “one-off” custom-designed installations. However, those one-off projects are already showcasing the technologies that are likely to become the standard for the industry. Interestingly, they have also revealed the special challenges in designing microgrids for urban centers. Resilient and low-carbon systems require multiple technologies. For example, a system based only on solar and wind generation would be low carbon, but would not deliver resilient or reliable service because these are both intermittent resources dependent upon the sun and wind. To be resilient resources like energy storage and fossil-fueled generation sources are required as part of the system. Seamless integration of multiple generation sources and loads is at the heart of what makes a system a microgrid.

A platform for remotely operating and maintaining multiple distributed generation resources and microgrids is also critical because many of these resources are designed to be “operator-free.” Modern data analytics platforms can take holistic and granular views of energy flows, operating data in real-time through advanced predictive algorithms and equipment condition monitoring. These platforms can identify wasted energy, enhance efficiency, and enhance resiliency through coordination of generation and demand of smart devices deployed on the system —all while constantly monitoring and evaluating market costs and environmental performance.

Modern analytics and control allow microgrid owners to focus on achieving the benefits that are most important to them, be it cost, greenhouse gas reduction, resilience, or other attributes, without sacrificing on other important qualities.

Will Microgrids power India?

The global microgrid market is estimated to top $35 billion by 2020. The concept of locally generated and consumed energy is evolving how global cities are planning utility systems, with resilience and reliability gaining precedence. The Ministry of New and Renewable Energy of the Government of India has taken cognizance of the importance of micro and mini grids in achieving the objective of ‘24X7 power to all’ with the proposed development of 10,000 renewable microgrids and mini-grids with a generative capacity of 500 MW announced in June this year.

Though challenges exist in terms of funding and viability of such projects – due to the existing price differentials with state discom supplied power – municipalities, city residents and businesses stand to benefit by incorporating distributed low-carbon microgrid projects in smart city initiatives, and even more significantly, embedding them at the core of holistic strategic infrastructure and urban revitalization plans. Finding a solution to these challenges will not just help bring a major chunk of India out of the dark ages, but also power India’s future through her smart cities. Let there be light!