Empowering Rural India Thru Renewable Energy Cooperatives

India has declared an ambitious renewable energy program of 175,000 MW of power generation capacity addition by 2022 and 40% cumulative electric capacity from non-fossil fuel based energy resources by 2030 as declared in the recent Intended Nationally  Determined Contributions ( INDC ).

Back of the envelope calculation shows that the country needs  to commission, each year,  25,000 MW thru solar, wind, hydro and biomass.  Bulk of this capacity addition is envisaged thru solar parks and ultra mega solar parks on the traditional power generation model  of Super Thermal Power Project  (STPP ) and Ultra Mega Power Project ( UMPP ) that had been adopted for the coal based plants.  GOI needs to take a serious look at this approach and reexamine whether  a) this concept of  large centralized power generation,  makes sense for renewable energy power generation  b) assuming that the centralized power plants materialize; will the power reach the ultimate consumers in rural areas c) the renewable energy plants should be set up only by big corporates or should it be set up thru thousands of  energy cooperatives similar to Europe.

Centralised Power Generation concept  suitable for Pit Head Coal Plants

The traditional approach  of large centralized power plants have evolved because of a)  it is more economical to transmit and distribute power rather than transporting the high ash Indian coal over long distances  b) the economy of scale factor of coal based power plants wherein  one large 2000 MW thermal plant is more economical than setting up  20 no of 100 MW power plants c) time involved in getting the permits, clearances & financing for a large power plant is same as that of a small power plant.

While the above rationale is valid for coal based power plants, however, one needs to question the wisdom of  adopting the  traditional 20th century concept  for the 21st-century  renewable power generation.  All the three factors which favored the centralized power generation concept for coal is not valid for the renewable energy power plants which need to adopt an entirely different approach.

Renewable Energy Sources  : Suitable for Distributed Power Generation

Unlike Coal ;  wind, solar and biomass  are not  concentrated energy sources  but are  widely distributed across the country .   For an energy source which has already been distributed by the mother nature, there is no rationale for concentrating it and redistributing.

Economy of Scale factor :

Economy of scale factor is also not valid for both solar and wind since both are modular.  The solar module capacity generally used is a 250 Watt panel.  A 1 MW solar plant uses 4000 panels and 100 MW will use 400,000 panels.

Failure of centralized power generation concept to provide 24X7 power to villages

India’s population is widely distributed across the country.  70% of the population live in 600,000 villages.   Rural electrification had been given a priority and through various programmes like  Rajiv Gandhi Grameen Vidyutikaran Yojana  (RGGVY ) etc large number of villages have been electrified and today the wires have reached large no of villages. While the wires have reached the villages, however, electricity does not reach the people. Since the rural communities are provided with subsidized power, and are not considered to be remunerative, the discoms  resort to providing only 6-8 hrs of power supply just enough to keep the people from  protesting.

Sub-optimal utilization of transmission corridors

For evacuating power from the large solar parks, it is envisaged to construct green corridors. The transmission lines from solar parks would be grossly underutilized since solar power itself is not available for more than 10 hrs and if we also consider the fact that the peak solar power is available only for about 4 hrs, the utilization rate of the transmission line would be a mere 30%.  There is no rationale for investing lot of money in transmission lines which are going to be utilized only for 30%.

On the contrary if the plants are located in each village, the same lines that are supplying the power to the village will be used for export of the power and therefore there will be no additional cost for the transmission lines.

Grid Stability

Solar and wind are characterized by their intermittent nature.  The grid disturbance on account of this intermittency is more in case of large solar parks than if they are distributed over a wide area, since the clouds have a tendency to keep moving and due to what is called as portfolio effect the disturbance gets evened out since when one plant drops load another would have picked up load.

Need for promoting Renewable Energy Sources Cooperatives ( REScoops) in India

It is a tragedy that villages which give up their land and the associated solar / wind resource for the  large wind and solar power plants do not derive any benefit from the power plants.  It is not uncommon to see a large power plant brilliantly illuminated in an island of darkness surrounding it.

Mega Solar Park vs Renewable Energy Cooperatives

GOI should consider setting up of the solar plants thru large no of Renewable Energy Cooperatives rather than thru setting up Mega Solar parks. It is better to set up 500 numbers of 1 MW plant in each village rather than setting up a single 500 MW in one location.  10% of the power from the 1 MW plant can be supplied free to the village where the project is being set up and balance 90% may be  exported to the grid and sold to the Discoms / NTPC / SECI at CERC determined tariff. The power to the village shall be on a Net Metering concept so that during the non solar time the village draws power from the grid which can be netted off against the power exported from the village during daytime. This would enable the solar projects to be set up without any battery support.  If the villagers consume more than 10% free power, they shall pay for the same at the same tariff at which the power procurer is purchasing.

Rationale for free power is since the village would be providing the land to the solar power developer, the land constitutes their equity and they would be entitled to free power against the land given up by the village.

Since the villages are already electrified, the same wires can be used for export of the power from the 1 MW plant.

The villages so far are viewed as an unremunerative customer and one of the cause of discom’s ill health will turn into a productive consumer and discom will not be able to apportion all their losses on the villages.

RENEWABLE ENERGY COOPERATIVE AS PART OF SAANSAD ADARSH GRAM YOJANA:

Saansad Adarsh Gram Yojana was initiated to bring the M.P.s of all the political parties under the same umbrella while taking the responsibility of developing physical and institutional infrastructure in villages and turn them into model villages. Under this scheme, each M.P. needs to choose one village each from the constituency that they represent, except their own village or their in-laws village and fix parameters and make it a model village by 2016.

As part of this initiative, each M.P. can set up the 1 MW Renewable Energy Cooperative in each village on the lines mentioned above.

This will ensure 24X7 power to all the villages and each village will become net exporter of power.

So far about 700 villages have been adopted. If RE coops are set up in each village, this will translate to 700 MW.

This will also trigger huge employment potential in the villages.

Feed-In Tariff instead of reverse auction

While the process of reverse auction for shortlisting of developers was manageable when the quantum of projects to be awarded was limited, however, when a huge volume of 25000 MW per year is to be set up, the reverse auction process would be unmanageable and GOI does not have resources to process such huge capacities.

The current trend of the ever decreasing tariffs due to competitive pressure is not a sustainable model.  Since the power capacity is huge, there is no need for resorting to selection of developers thru bidding and each 1 MW project can be taken up by a renewable energy cooperative on a first come first served basis on a fixed feed-in tariff for that year. The Central Electricity Regulatory commission is anyway fixing the tariff for each year. There is no need to rediscover the price.

Investment Tax credits for salaried persons instead of accelerated depreciation for companies

While the accelerated depreciation concept was enabling profit making companies in setting up RE plants, however,  it does not provide any tax benefits to the millions of salaried class who are interested to invest into renewable energy. This is in a way discriminatory and  if GOI were to bring in an enabling  Investment Tax Credit policy  similar to that in US / Europe,  there will be no need to seek any foreign  funding.  Today the salaried class is compelled  into investing in non productive assets like housing and gold, whereas this change in tax policy would unlock huge investments into RE sector.

20th Century technology, processes and mindset cannot address the 21st century technology, needs and aspirations of  1.25 billion Indians.