Publication: Mini Grids in Uttar Pradesh: A Case Study of a Success Story
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2017-11
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2017-12-18
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Uttar Pradesh, the most populous state in India, has among the lowest levels of electricity connection in the country.1 Over 100 million people, at least half of the rural population, lack a formal connection to a distribution grid. The level of electricity services remains low despite the physical extension of the state-owned grid to all official villages. Unelectrified households are reluctant to apply for grid connection because they expect electricity supply to be unreliable, and they would have to spend money on coping strategies to replace electricity. In addition, connecting individual households in each village is costly to the state-owned distribution utilities. Highly regulated tariffs and a high cost of servicing remote areas mean that rural connections promise few returns to the utilities.Electrification has been a public policy priority for decades of successive state and central governments across the political spectrum. Public policy has maintained ambitious objectives to expand grid services from the state-owned medium-voltage (MV) distribution grid to rural areas. The state-owned grid has electrified all cities and surrounding towns. The high-voltage (HV) transmission grid extends throughout most of the state, in contrast to other energy-poor countries in Asia such as Cambodia, Indonesia, and Sri Lanka. Private mini grid operators have occupied a small but growing space in the rural electricity market in Uttar Pradesh since around 2010. Several small companies, as well as individual entrepreneurs, are now providing electricity services in almost 1,900 settlements (villages and hamlets) in the state, and have made about 37,000 connections (and growing)Independent mini grid operators in Uttar Pradesh have proven they can earn rural customers’ trust and their business. Rural consumers’ simple energy needs can absorb up to a third of households’ monthly expenditure without an electricity connection.Mini grid operators are addressing these gaps in service through renewable-based systems that deliver power to underserved villages. They have gained credibility as a more reliable service than the state-owned grid in rural areas by providing a reliable solution to residents’ and businesses’ lighting, phone charging, and appliance-powering problems. They provide basic light-emitting diode (LED) home lighting and a mobile phone charging outlet to a household for a scheduled 6 to 8 hours a day.
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“Energy Sector Management Assistance Program. 2017. Mini Grids in Uttar Pradesh: A Case Study of a Success Story. © World Bank. http://hdl.handle.net/10986/29021 License: CC BY 3.0 IGO.”
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Publication Mini Grids in Bangladesh(World Bank, Washington, DC, 2017-11)The study’s objective is to understand what regulatory settings governments may adopt to scale up electrification through private development of mini grids, drawing on the experience of these six jurisdictions; provide technical assistance to four countries that want to further develop their mini grids framework; and disseminate findings and recommendations globally to inform successful mini grids regulation. The study focuses on mini grids defined as small, privately-owned and operated systems with generation of up to 10 megawatts (MW) capacity and a network that distributes power to several customers. The study includes small mini grids of less than 1 kilowatt (kW) capacity, also known as ‘micro’ or ‘pico’ grids. The six case studies are intended to be synthesized in one report. The report is to provide a cross-country comparison of these topics: it examines side by side how each of the countries studied have responded to a specific regulatory question, and presents a decision-tree approach to developing regulatory frameworks for mini grids. This case study is based on in-depth interviews with a number of key stakeholders in Bangladesh, conducted during and after a research trip in August 2017. Several experts in the Bangladesh context and mini grids more broadly reviewed this case study for accuracy and clarity, and their have incorporated their comments while retaining a neutral fact-based position. The Government aims to provide electricity to all by 2021 through grid extension, mini grids and stand-alone systems. 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The study focuses on mini grids defined as small, privately-owned and operated systems with generation of up to 10 megawatts (MW) capacity and a network that distributes power to several customers. The study includes small mini grids of less than 1 kilowatt (kW) capacity, also known as ‘micro’ or ‘pico’ grids. The six case studies are intended to be combined in one report. The report is to provide a cross-country comparison of these topics: it examines side by side how each of the countries studied have responded to a specific regulatory question, and presents a decision-tree approach to developing regulatory frameworks for mini grids. This case study is based on in-depth interviews with a number of key stakeholders in Kenya, conducted during and after a research trip in September 2017. The supplemented the insights gained from these interviews with extensive background research. 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The study focuses on mini grids defined as small, privately-owned and operated systems with generation of up to 10 megawatts (MW) capacity and a network that distributes power to several customers. The study includes small mini grids of less than 1 kilowatt (kW) capacity, also known as ‘micro’ or ‘pico’ grids. The six case studies are intended to be combined in one report. The report is to provide a cross-country comparison of these topics: it examines side by side how each of the countries studied have responded to a specific regulatory question, and presents a decision-tree approach to developing regulatory frameworks for mini grids. This case study is based on in-depth interviews with a number of key stakeholders in Cambodia, conducted during and after a research trip in August 2017. We supplemented the insights gained from these interviews with extensive background research. 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This document is structured as follows: (i) Section 1 starts with brief introduction; (ii) Section 2 has brief description of the context of the country; (iii) Section 3 sets out an overview of the power sector; (iv) Section 4 examines the main aspects of the policy setting for mini grids; (v) Section 5 surveys technologies and business models used in the mini grids sector; (vi) Section 6 explains the process to authorize mini grid operators; (vii) Section 7 assesses technical and service standards for mini grids; (viii) Section 8 explains tariff setting, financing, and subsidies; (ix) Section 9 describes handling the relationship with the main grid; and (x) Section 10 concludes with a summary of lessons learnt from the experience of the country.Publication A Retrospective Analysis of the Role of Isolated and Mini Grids in Power System Development(World Bank, Washington, DC, 2017-11)This report provides the first historic overview of power system development focused on its evolution from distributed systems to centralized grid systems. It tracks the early development of power systems in several (now) middle- and high-income economies to inform the current drive to deploy new systems and achieve universal access to electricity services. We find that history can provide certain insights to a set of questions faced by today’s energy policy makers. Our review is non-comprehensive, but will hopefully provide fodder for future, more detailed historical research, and shed some light on the complex and fascinating role of mini- or isolated grids in power system development globally. The development of power systems began in several regions of the world in the second half of the 19th century, marking the start of a new era, characterized by disruptive innovation, rapid development and opportunity. Today, electric power systems constitute a fundamental pillar of modern societies and electricity is increasingly recognized as a crucial prerequisite for the achievement of socio-economic prosperity. The development of power systems was affected by multiple factors, some systemically endogenous, such as technical advancements, innovation, entrepreneurial drive and decisions, and some exogenous, such as economic principles, legislative constraints and support, institutional structures, historical contingencies and geographical aspects (Hughes 1983). While numerous paths have been followed over the years there was a common igniting point; small isolated power systems and mini-grids. As technologies improved, demand increased and the policy and regulatory regimes stabilized, larger generators could be built (taking advantage of economies of scale) and electricity could be transmitted over longer distances. These factors resulted in the emergence of centralized utilities (either privately or publicly owned). Typically, mini-grids either became integrated with one another forming the nucleus of a larger centralized system or were absorbed by a larger grid system as it expanded.
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