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Rural DRE Mini-grids Innovation blitz : Fringe or Future?

One of the key factors determining whether Decentralized Renewable Energy (DRE) based mini-grid systems will become the mainstream energy access solution in rural areas or continue to remain on the fringe will be scalability (linked to regulatory resolution on long term operational latitude in the Indian context) and cost effectiveness.  

 

Despite focused efforts by the government, and a bouquet of policies and schemes, a significant numbers of rural hamlets remain un-electrified. While off-grid systems (primarily solar lanterns and Home Systems) have been introduced in many of these areas, those systems only solve the basic needs and are availed by only a fraction of the population residing in the areas. In recent years, in addition to the Government supported schemes, a growing number of private enterprises are implementing RE based solutions to provide electricity through a micro/mini-grid model. Decentralized renewable energy based mini-grid is a very nascent solution albeit with an ability to address the large opportunity of rural electrification in a viable manner. 

 

In order to ride the wave and capture a slice of this growing DRE mini-grid market, innovation is required to make the systems robust as well as cost optimal to meet the diverse needs of a rural setting.  There are quite a few private players who are working towards addressing the basic access to energy to starved rural communities across the globe while also making a business case for it. 

 

In the near future, the innovations across the rural DRE mini-grid value chain won’t necessarily pertain to just technical solutions, but will be increasingly linked to alternative approaches to the existing issues. The innovations in this sector are likely to be driven by:

 

  • Cost optimization: The holy grail of the DRE based rural energy access solutions will continue to remain cost effectiveness. Parity in the cost of service to rural-energy starved consumers and the urban consumers will be the key driver for innovations across the different components of the value chain.
  • Cycle-time reduction: Easy replicability and rapid scalability will be the key to the growth of this sector. Scalability aided by improved logistics and efficient transportation solutions including containerization would be needed to achieve the desired scale in a relatively short time frame.
    Also, pre-assembled solutions help reduce cycle time of implementation and increase ability of system components to be re-deployed in case of discontinued operations of the mini-grid system due to factors such as advent of the central grid.
  • Increased robustness of the systems: Robust solutions to serve the different types of rural needs while ensuring ensure high level of environmental compliance and safety for the community will be required to help the DRE mini-grids become a steady solution rather than a stop gap arrangement

 

To get engaged and learn more about the on-going work related to decentralized renewable energy (DRE), please email us at mait@sustainabilityoutlook.in (Market Access & Insights Team at Sustainability Outlook)

Author: Sustainability Outlook
Document Tag: Energy Resource Efficiency