Minigrids can power rural economic activity

11/1/2017 490 Economic Affairs | Rural Development | View Recent Current Affairs

  • According to Smart Power India, Mini grids can spur economic activity in rural areas and accelerate the process of expanding mobile phone network across the country due to their large capacities and the ability to connect to the national grid.

What is mini grid?

  • A mini grid, also sometimes referred to as a "micro grid or isolated grid", can be defined as a set of electricity generators and possibly energy storage systems interconnected to a distribution network that supplies electricity to a localized group of customers."They involve small-scale electricity generation (10 kW to 500MW) which serves a limited number of consumers via a distribution grid that can operate in isolation from national electricity transmission networks.


  • There are a number of solutions of smaller capacities that rural areas can use such as a solar lantern, a solar home solution, or even a community solution like a micro grid. But a mini grid is the only alternative that provides the kind of electricity that can be used for business activities.
  • One of the deficiencies of the other off-grid power solution models is that while these solutions are good in moving households away from kerosene and providing them with reliable and clean energy, they do not provide the energy required to fuel enterprise or commercial activity.
  • A mini grid is a larger system that converts direct current (DC) to alternating current (AC) and it provides safety as per REC and CEA standards. Usually, the power coming from the smaller off-grid solutions is DC energy. While it is good for lighting, it does not satisfy the community’s requirement to run any sort of business.
  • The power generated from a mini grid can be seamlessly transferred to the national grid since it is already going through a a charge controller which manages the flow of energy and an inverter which converts the electricity from DC to AC. It also has a storage facility to meet night demand as well.
  • A large part of the demand for mini grids came from telecom service providers for powering mobile towers. Mobile towers have a presence across rural India and all of them suffer from inadequate power and so have to use diesel. There is a national mandate to green 50–60 per cent of the telecom towers and also the cost of using diesel is very high and it (the risk) includes diesel theft and all the other nefarious activities that go along with it not to mention the pollution. The power demand of a telecom tower is 24/7.
  • Government regulations also provide complete flexibility to the investor in mini grid, allowing them to compete with the grid, if they choose, sell their excess power to the grid or even exit by selling their assets to the distribution companies.
  • Tariff flexibility is also given such that the tariff for the power coming from a mini grid is decided between the provider and the community served. At the moment, the government has not set the upper limit on the tariffs and has left it to the market. It’s not as if people will buy power at any price. At the lowest tariff level, they would pay 5–6 rupees a day to light up their home or shop using a mini grid. That is a big saving over diesel or kerosene and the power comes with the benefit of being regular and standard.


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