dissesmination posters

© OASYS –South Asia 2015 – De Montfort University, Leicester, UK

Contact: Prof. Subhes Bhattacharyya, E-Mail: [email protected]

Visit: http://dmu.academia.edu/OASYSSouthAsiaResearchProject

Off-grid Access System for South Asia (OASYS South Asia)

Project Overview Prof. Subhes Bhattacharyya, De Montfort University (PI)

Electricity Access Challenge More than 1.3 billion still lacking access, mostly in

South Asia and Sub-Saharan Africa More acute problem in rural areas (Fig. 1) Problem to aggravate unless intervened (Fig. 2)

Knowledge Gaps (identified in the proposal) Research so far considered technical aspects and

general cost-effectiveness Two main gaps

Business Models and institutional arrangements for delivery rarely considered

Limited project scale-up and project sustainability experience

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Fig. 1: Rural –urban disparity Fig. 2: Future prospects

Project investigated two research questions Are there cost-effective, secure and reliable local off-grid electricity supply solutions that can meet the

present and future needs and are socially acceptable, institutionally viable and environmentally desirable? Do these local solutions have the scaling-up and replication potentials and can these solutions be brought to

the mainstream for wider electricity access in the developing world?

Four angles of focus

Techno-economic analysis Governance mechanisms Socio-political dimension Environmental aspects

Four cross-cutting themes Capacity building Cross-referencing Cross-learning Dissemination for policy translation

Focus on South Asia

Techno-economic analysis

Governance mechanisms

Environmental concerns

Socio-political dimensions

Capacity building

Cross learning

Cross-referencing

Policy translation

Five work packages WP1 – Development of Analysis

framework WP2 – Assessment and selection of

appropriate business models WP3 – Demonstration project WP4 – Study of scale-up and

mainstreaming WP5 – Recommendations for wider

delivery

Five project partners UK partners

IESD, De Montfort University School of Built Environment, Edinburgh

Napier University School of Environment and Development,

Manchester University Indian partners

The Energy and Resources Institute TERI University

Project timeline Started – 20th October 2009, Moved to DMU 31st August 2012, Ends 30th April, 2015

mailto:[email protected]

http://dmu.academia.edu/OASYSSouthAsiaResearchProject






Summary of Outcomes

Outputs

Academic research

2 Books + one work-in-progress

16 Peer-reviewed papers + 5 other

articles

20 Working papers

32 Conference papers

4 book chapters

Action Research

Demonstration projects

Village community model in Orissa

Partnership with the District

Administration (Orissa)

Private sector model in Uttar Pradesh

Not-for-profit organisation model (Sunderbans India)

Policy Research

Policy dialogues

Policy briefs

Capacity building

1 doctoral thesis + 1 work-in-progress

8 Masters dissertations;

4 internships

1 BSc final year project

1 PDRA + other RAs

Training events

Knowledge sharing

12 workshops

2 dissemination events

New collaboration with NGOs, private

sector and researchers

Outreach via Social Media

Special issue of Energy for SD








An integrated approach for mini-grid based electrification

Purpose: to develop an integrated approach to analyse and implement mini-grid-based decentralised electrification.

Project name

Technology Plant size (kW)

Ownership Funding

Rampura Solar 8.7 Community Non-governmental

Radhapura Biomass 10 Community Government

Tamkuha Biomass 33 Private Private

Amthagouda Micro-hydro 20 Community Non-governmental

Karlapeta Micro-hydro 25 Community Non-governmental

BERI Biomass 1000 (total)

Government Mixed

Field visits

Project data

analysis

Literature review

Method

Approach Variants

Indicator-based Levelised costs

Weighted scores

Sustainability indicators

Optimisation techniques Specific tools (e.g. HOMER)

Customised tools

Systems analysis

Multi-criteria decision analysis

Analytical Hierarchy Process

Out-ranking models

Practice-based literature Worksheet-based tools

Critical elements in a step-by-step process

Performance of off-grid projects

Source: Analytical frameworks and an integrated approach for mini-grid based electrification, SC Bhattacharyya, A Mishra and GK Sarangi, in SC Bhattacharyya and D Palit (eds.) Mini-grids fro rural electrification of developing countries, Springer, 2014.

Outcome








To regulate or not to regulate off-grid electrification

Aims and objectives: The paper aims to analyse the following questions: (a) To regulate or not to regulate off-grid electrification is the primary question. Does decentralized electrification require regulatory supervision and if yes, what should be the purpose of such supervision? (b) What should be regulated and how would the regulatory arrangement differ depending on the delivery system? (c) What are the possible concerns or issues related to the effectiveness of the regulatory systems?

Electricity supply options Rationale behind regulation - Classical natural monopoly argument used in the traditional

electricity supply business. - Due to specific cost characteristics, a natural monopoly

can provide the service more economically than multiple entities

- But if a monopoly status is granted to the service provider, it can exploit the power and charge an excessive price for the service to maximise its profit.

- Forcing the natural monopolist to competition, on the other hand, is likely to lead to a situation of perpetual loss, which would not encourage any private provider to enter the market.

- The economic regulation tries to balance this dilemma by granting a monopoly status to the service provider but subjecting it to conditions that would protect the consumers as well.

No regulation required

Regulation required

Regulatory Options

Generic waiver or exemption

Blanket exemption (e.g. Indian Electricity

Act 2003)

Exemption up to a threshold (e.g. Mali, Senegal, Tanzania)

Exemption for specific organisations (Co-

operatives in Ethiopia)

Simplified light-touch arrangement

Model regulation for off-grid areas

Full-fledged arrangement

Licencing

Concession

Service area

• Overlaps in service areas

• Threat of grid extension

Quality

• Reliability of supply

• Health and safety

• Standards of service

Tariff

• Setting appropriate charges

• Subsidy and cross-subsidy

• Grid parity

Regulatory capacity

• Limited capacity

• Additional burden

Information gaps

• Limited reporting and data collection

Source: SC Bhattacharyya, To regulate or not to regulate off-grid electricity access in developing countries, Energy Policy, 63, 2013: 494-503.

Issues and challenges








Financing challenges facing off-grid electrification

Funding need: • Sustainable Energy for All initiative aims at universal energy access by 2030. • The International Energy Agency estimates an annual investment of $48 billion over two decades • Almost 90% of this will go to electricity access • Ensuring universal electricity access by 2030 will require an annual investment of $40-45 billion per year until

2030.

Source: SC Bhattacharyya, Financing Energy Access and off-grid electrification, Renewable and Sustainable Energy Reviews, 2013, 20: 462-472.

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Middle East and North Africa South Asia Sub-Saharan Africa

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LDC Other Non-OECD

RE-grid, 1311.6, 33%

Off-grid, 313, 8%

Other -elec, 241.6, 6% Cooking, 164, 4%

Productive uses, 994,

25%

Policy, 924, 24%

Gross Fixed Capital Formation in electricity and gas distribution

Foreign Direct Investment Overseas Development Assistance

World Bank portfolio

Problem gravity - LDCs will need an annual investment of $11.6 billion as against $2.5 billion

invested in 2008 for the basic level of supply. - Support of the multilateral finance organisations is biased towards large-

scale energy projects and often disproportionately benefits large developing countries.

- Economic recession in the developed world and donor apathy towards sustaining aid support.

Off

-gri

d s

up

po

rt

Rural electrification Assistance

Subsidy

Donations

Discounts

Funds

National/ international

Grants

Partnerships

Micro-financing

Credit

Leasing

Fee for service

Fiscal instruments

Tax exemption/ reduction

Bulk tendering

Other mechanisms

Quotas

Feed-in tariffs

Green certificates

Regulatory and political risks

(regulatory barriers, political instability, currency risk, law enforcement issues)

Absence of a level playing field

(undue competition from subsidies; low grid electricity prices)

Finance-related barriers

(low investment volume, short loan maturity, high interest rates)

First generation barriers

(e.g. low return, high transaction costs, poor affordability, limited access to credits)








Solar Mini-grids in Chhattisgarh State (India)

Aims: • A review and comprehensive assessment of solar

mini-grids deployed in the state of Chhattisgarh (India).

Method: • Secondary information from the State Renewable

Agency; • Primary data from eight mini-grid project sites in

Raipur and Korba districts; • Data collection through focus groups and semi-

structured interviews.

Source:D Palit, GK Sarangi and PR Krithika, 2014, Energising rural India using distributed generation: The case of solar mini-grids in Chhattisgarh State, India, Chapter 12 in SC Bhattacharyya and D Palit (ed.) Mini-grids for rural electrification of developing countries, Springer, UK.

Funding Agency (MNRE & tate Govt.)

CREDA

Grant from Central & State Govt. Operational Subsidy by State Govt.

AMC Service Provider

Power Plant

System Engineering System Owner, Monitoring,

Revenue: Tariff, Billing, collection

VEC

System Supplier

Consumers

O&M, LT line Maintenance Installation & Commissioning

Electricity

Organise VEC

Addresses social conflicts, Local monitoring

Provide contract; monitoring

Chhattisgarh profile - 75% households grid-connected, - 563 villages were off-grid at the time of

the study. - Off-grid villages are mainly poor and

heavily forested.

Field visit details

Observations and findings

Management process

Monthly income-expense in a clusterof mini-grids

Key Success factors - Robust institutional arrangement; - Clear demarcation of duties and

responsibilities; - Standardised system; - Early engagement with villagers; - Enabling policy environment - Availability of skilled manpower - Strong leadership








Evolution of renewable energy-powered mini-grids in India

Aims: • Analysis of mini-grids for rural electricity access in India. Method: • Review of literature, stakeholder interviews, and field visits

Source:D Palit and GK Sarangi, 2014, Renewable energy-based mini-grids for enhancing electricity access: Experiences and lessons from India, ICUE 2014 on Green Energy for Sustainable Development, Thailand, 19-21 March.

Long experience with mini-grids

• Pioneered mini-grids in the Nineties in Sunderbans region – 25 kWp solar mini-grid

• Hybrid systems (solar PV/ biomass generators) set up in West Bengal, Chhattisgarh, Lakshadweep, Odisha, Uttar Pradesh, Madhya Pradesh and Bihar

• Around 5000 villages covered through mini-grids, serving more than 50,000 HHs

• Mini-grids accepted as an alternative to grid-electrification in many areas

WIND HYDRO

GRID

Stand-alone Solar

Systems

Mini Hydro

Biomass

Wind

+ Solar

Solar Mini-Grid

1980 1990 - 2000 2010 …….

Smart Mini Grid

Mini-grid evolution

FUNDING AGENCY

PIA

Power Plant VEC

System

Supplier

Consumers

Consultant (DPR, system

design, TA support)

Organize VEC

System Engineering.

System Owner

$

Installation &

Commissioning

• System custodian

• O&M

• LT line Maintenance

Electricity

Grant from Central Government

Equity by PIA/NGO or Beneficiaries

Revenue: Tariff,

billing, collection

Management model – first generation

Funding Agency (MNRE & tate Govt.)

CREDA

Grant from Central & State Govt. Operational Subsidy by State Govt.

AMC Service Provider

Power Plant

System Engineering System Owner, Monitoring,

Revenue: Tariff, Billing, collection

VEC

System Supplier

Consumers

O&M, LT line Maintenance Installation & Commissioning

Electricity

Organise VEC

Addresses social conflicts, Local

monitoring

Provide contract; monitoring

Chhattisgarh model

Private sector model

DC Micro grid Solar Multi utility

Solar mini grid

Level 1- Basic needs • Lighting

• Communication • Cooking • Heating

Level 2 - Productive uses

• Agriculture (water pumping, mechanized tilling etc.)

• Public health centres

• Education (Schools, tu ition centres etc.)

• Street lighting

• Sewing, cottage industries • Grain grinding

Level 3- Modern society needs

• Modern domestic gadgets

and appliances for space cooling, heating etc.

• All productive applications for

24/7 usage • Transport

Small scale RETs

Ideal for isolated and vulnerable communities

Facilitate

Village-scale mini-grids Ideal for larger or more

developed villages

Facilitate

Mini-grids coupled the main grid

Ideal for cluster of

villages

Facilitate Creates the

market for mini-

grids

Could develop

into

Lifeline Productive Consumptive

Mini-grid evolution path








Poverty amidst plenty: Case of renewable energy-based off-grid electrification in Nepal

Electricity Access Challenge in Nepal 25 % of population are deprived of access to modern

energy Energy access challenges get exacerbated due to difficult

geographical terrain, poor transportability, scattered settlements, illusive energy development strategies, and lack of adequate financial capital

Off-grid mode of electrification plays a paramount role due constraints in extending the grid based electricity to all areas of the country

Case-study analysis

Aim of the study Evaluate the policy, regulatory and institutional

landscape Examine the key dimensions of off-grid energy sector Conduct techno-economic analysis of a micro-hydro

project

Policy recommendations Focus should be on policy and regulatory certainty Emphasis shall be given on creating additional local

productive loads Better co-ordination and harmonisation among different

entities and actors should be prioritised Emphasis should be laid on better targeting of subsidies

and smart subsidies

Barriers to scale-up Lack of strong legal framework Low load factors resulting surplus of energy Lack of adequate institutional financing Regulatory uncertainty regarding future grid extension

Policy & regulatory contours in Nepal Hydro Power Policy 1998 was the earliest policy aimed

at promoting off-grid energy sector in the country, followed by a host of other policies such as Rural Energy Policy 2006

Policies have also been declared from time to time to disburse subsidies, latest was the Subsidy Policy 2013

Organisation contour for off-grid energy sector is characterised by a complex interrelationship between multitude of actors and entities

Source: GK. Sarangi, D. Pugazenthi, A Mishra and VVN. Kishore, 2013. Poverty amidst plenty: Case of renewable energy-based off-grid electrification in Nepal. Working Paper 17, OASYS SOUTH ASIA Research Project, Working Paper Series.

Name of the project Malekhu Khola

VDC Mahadestan

District Dhading

Capacity 26 kW

Number of households 265

Year of commissioning 2007

OASYS Project team conducting a focussed group discussion with key stakeholders of the project

Key features of off-grid energy sector Service delivery model – largely community managed

schemes Projects are financed through 1) community equity, 2)

government subsidies, 3) contribution from local government and 4) funding from other sources

Strong presence of donor agencies Structured system of quality control – e.g. NEPQA

standard Strong emphasis on capacity building of key

stakeholders

Organisation contour for off-grid energy sector

Subsidy and its impact on LUCE – sensitivity analysis

Project details








Demonstration Projects 3 different management and technical models implemented at different geographic locations in India

A technology neutral and location neutral approach followed for designing the projects

Community managed solar micro grids in Dhenkanal district, Odisha

Implemented in a cluster of 5 villages inside a Reserve Forest

Solar AC and DC systems designed based on no. of households and demand scenario

AC: Rajanga (6 kWp), Kanaka (5 kWp), Baguli (2.4 kWp) ~ 30-40 households per micro grid

DC: Rajanga Hamlet and Chadoi (400 Wp) ~ 15 household per micro-grid

While technical solutions are decentralised, a single institution (village energy committee) manages all the micro grids

All households , either connected to AC or DC systems, have been provided with similar LED bulbs to ensure equitable service

In addition to lighting, livelihood applications such as grinding & packaging machine, saal leaf plate making machine and water pump supports in augmenting income.

Smart, grid-interactive inverters used for future grid interconnection, Battery management system, auto load cut off, Timer-based operation for energy management

Private developer managed solar DC micro grids in Uttar Pradesh

Solar DC modular micro grids with auto switch on/off, providing basic lighting (2-4 points) and mobile phone charging services for 7 hours

Implemented by Mera Gao Power, with Viability Gap Funding support from OASYS South Asia Project, connecting around 2500 households

A Joint Liability Group model is used for collection of weekly tariff; Collection efficiencies of over 90% observed during field visits

Revenue earned from these micro-grids are ring fenced and re-invested to cover additional 1,400 HHs over the next 2 years

Solar AC pico grids in remote islands of Sunderbans, West Bengal

OASYS South Asia supported VGF to Mlinda Foundation to implement solar AC pico grids to cover around 500 households and 200 shops in 4 villages

Mlinda Foundation organised Joint Liability Groups (JLGs), each comprising 6-10 households, for the pico grids

Shops in the marketplace are catered through a separate micro-grid of larger capacity.

Both JLGs and the market association availed small loans from NABARD faciliated by Mlinda Foundation

The balance amount, comprising around 0ne-fourth of the project cost financed through VGF from OASYS South Asia

After sales service provided by Mlinda Foundation own team who also collects the repayment for the Bank








Business models for mini-grid based electrification

Purpose: • to provide an overview of the business challenges, consider alternative business delivery options and models,

and to analyse the financial viability of such activities.

Source: SC Bhattacharyya, Business issues for mini-grid-based electrification in developing countries, Chapter 7 in SC Bhattacharyya and D Palit (eds.), Mini-grids for rural electrification of developing countries, Springer, 2014.

Porter’s five forces analysis

Threat of substitutes or

alternative supply

Bargaining power of buyers or

suppliers

Potential threat of entry

Supplier power to squeeze

profitability

Competition from other suppliers

e.g. Solar home systems, subsidised fossil fuels

e.g. anchor loads dictating a price,

e.g. grid extension

e.g. local diesel generators

PESTLE analysis

Political

Economic

Social

Technological

Legal

Environmental

Weak policies, limited political support

Tariff, subsidy, cross-subsidy issues

Weak regulation, poor electricity laws

Reliable supply, low maintenance, possibility to scale-up and replicate

Equity and distributional issues

Mini-grid business models

Lighting only micro-utilities

Private ownership (e.g.

Mera Gao Power)

State Agency driven (e.g.

Chhattisgarh)

Lighting plus

Private ownership (e.g.

Husk Power)

NGO/ Community-

based

Co-operatives (micro hydro

systems in Nepal)

Franchisee/ Licensee (e.g. in RGGVY scheme)

Anchor load

Investment

costs

Operating

costs Fuel

costs

Losses

Subsidies

and

grants

Tariffs

and

charges

Supplier/

user

credits

Other income

Business Viability




dissesmination posters

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