Reliability Key to Productive Electricity Use, Economic Development of Rural Communities: SPI

The energy service companies (ESCOs) running mini-grids need to focus on meeting rural India’s existing power demand along with building additional demand for power by supporting the development of local micro-enterprises to ensure financial viability and economic growth.

November 23, 2020. By Manu Tayal

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Smart Power India (SPI), a subsidiary of the Rockefeller Foundation, has released the findings of its ‘Demand Generation Manual for Solar Mini-grid.’ The objective of this manual is to suggest ways to generate demand for solar mini-grids and increase the electricity consumption among underserved rural communities for better social and economic development.

The mini-grid sector has played a critical role in providing access to reliable electricity in rural India. Reliability of electricity not only enhances the lighting and productive uses but only spurs micro-enterprise activities in the villages. The energy service companies (ESCOs) running mini-grids need to focus on meeting rural India’s existing power demand along with building additional demand for power by supporting the development of local micro-enterprises to ensure financial viability and economic growth.      

Commenting about the launch, Jaideep Mukherji, CEO, Smart Power India said, “India has made phenomenal strides in achieving universal electrification. It is indeed a welcome development that due to the government's persistent efforts, all villages in India have been electrified and today, almost 100% households have received electricity connections. Now that the government has achieved this commendable feat, it is time to shift attention to the next electrification challenge of providing reliable electricity supply not just for lighting purposes but also for productive use.”  

Despite significant strides in the universal village and household electrification, electricity consumption has not seen much improvement. The gap is majorly a result of mismatches between characteristics of demand and supply. Mini-grids have been greatly successful in bridging this gap in rural areas with reliable electricity supply. A rural mini-grid distribution network extends 1-2 km from the plant, providing electricity to 100-140 households, 50-60 shops, and a mix of productive users. Demand Generation Manual for Mini Solar Grid aims to address the relevance of electricity for productive use by creating adequate demand among customers.

Demand generation strategy is a means to create awareness among potential customers about the mini-grids and to help Energy Service Companies (ESCOS) generate revenue to sustain their operations. This then leads to a triple-win: a win for the households, a win for the rural micro-enterprise and a win for mini-grid operators.

  a) Creating awareness among potential users

  b) Target underserved but high demand regions/ communities

  c) Demand generation for existing loads

  d) Demand enhancement through energy efficient appliances

Mukherji further added that “the Demand Generation Manual outlines the importance of electricity for productive use by creating adequate demand among customers. An increase in demand for electricity not only improves the quality of life but also helps in enhancing the incomes.” 

Mini-grid have the potential to be a significant driver of rural development, unlocking latent economic potential and livelihoods, while simultaneously enabling aspirations for improved quality of life, said the SPI report.

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