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India's Off-grid Renewables Initiative Changing Lives

Ladakh, a remote district of India's northernmost state, is currently benefiting from the largest off-grid renewable energy project in the world. The Ministry for New and Renewable Energy (MNRE) is spending INR473 billion (US$88.8 million) on decentralized solar and hydro technologies to bring energy security to this remote mountain region. Why Ladakh?

“Because we Ladakhis are closer to God,” smiles Jigmet Takpa, project director of the Ladakh Renewable Energy Development Agency (LREDA). “Our sunshine is high quality. We have an average of 320 sunny days every year and the mountain air is thin and cold, making the operation of photovoltaic systems highly efficient. Ladakh is a solar paradise.”

Ladakh, known as the Land of High Passes, is a high-altitude cold desert region in Jammu & Kashmir state, neighboring China to the east and Pakistan to the north. It is a focus of the 3.5 year Ladakh Renewable Energy Initiative (LREI), a 28.3 MW energy revolution, now in its final year.

Ladakh is manifesting a flagship role in national renewable energy policy. Although Ladakh is a small district with sparse population, its rugged geography means that many dispersed communities are beyond the viable reach of the regional grid system. Stand-alone renewables are the obvious solution. “The harsh environment makes it the perfect test case for the technology itself, and for future policy: to prove to the government and the public that renewables have a valid role to play,” says Dr. Parvind Saxena, director of MNRE in Delhi.

Electrifying rural areas is a prime government concern. Prime Minister Manoman Singh gave his personal commitment to electrify every Indian household by 2017. The 2005 Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) program has pursued grid electrification of villages, and the 2009 Remote Village Electrification Program makes off-grid provision, but 400 million Indians still lack access to modern forms of energy, and 20,000 villages are too remote to ever realistically be grid-connected.

Displacing High-cost Diesel

Beyond the social expectations, there is also a financial incentive to this initiative. “We noted that, bar a couple of small hydro projects, almost the entire region, including the Border Defense Force, was using diesel generation (DG) for electricity and kerosene for space heating, and due to Ladakh's remote location, fuel is imported by road at a very high cost. Harsh winters close those roads for at least five months of the year, exacerbating energy vulnerability and deprivation,” says Saxena.

Prior to the LREI, Ladakh generated a total of 25 MW electricity. Of some 240 villages, 187 received electrification by micro-grid for a few hours each day, 75 percent by diesel and the remainder by small hydro. A few remote communities entirely lacked electricity.

“The high cost of DG in Ladakh, currently INR25-28/kWh (US$0.47-0.52), makes renewable energy very competitive,” says Takpa. “Off-grid solar PV-generated electricity worked out over 20 years' system-life in Ladakh currently comes to INR16-18/kWh ($0.30-0.34). And the cost of solar keeps falling due to technological development and scalability.

The International Renewable Energy Agency's (IRENA) November 2012 report confirmed renewable energy as the default option for off-grid electricity provision, with solar PV now a cheaper option than diesel in many locations.

The LREI's use of dispersed hydro and solar PV have rapidly replaced diesel to a large extent and avoided unnecessary extension of long, expensive grid lines. According to LREDA figures, the total expected saving of diesel in Ladakh from hydro and PV generation is 35 million litres per year or approximately INR1.6 billion ($32 million) annually, a substantial saving for the government.

Ankur Agarwal, CEO of Advanced Renewable Energy Technologies, says: “The increasing cost of diesel will be a key demand driver for solar PV installations in India,” a country which has an estimated 60 GW of diesel power capacity. Recent cuts in government subsidy for diesel will encourage this trend.

Background

At LREDA's offices in Leh, Jigmet Takpa is consulting with senior project engineer, Reuben Gergan, a Cornell-educated Ladakhi. The dynamic team has strong links with India's main tech providers, collaborating on R&D and international scientific exchanges. LREDA is a state nodal agency of MNRE, born in 2000 from the Ladakh Autonomous Hill Development Council. Takpa joined in 2001 and oversaw the Remote Villages Electrification Project, the first of its kind in India. It supplied solar home lighting systems to 200 hamlets in the region. Its success led to a nationwide program.

LREDA's 2005 Ladakh Vision 2025 document highlighted the massive untapped solar, geothermal, hydro and wind energy potential of the region, from which Takpa successfully proposed the LREI as a catalyst for development.

Takpa's engineering and conservation background, and his role as conservator of forests, make Ladakh's fragile ecosystem his concern. Growing tourism and a cash economy have affected local ecology and living practice. He promotes rural livelihoods, eco-tourism, and ecosystem management and the LREI complements these needs through renewable energy and conservation techniques for housing and agriculture.

Funding/Investment

Central government funding came from MNRE's financing arm, the Indian Renewable Energy Development Agency (IREDA), a non-banking finance agency which funds mainly rural projects. Over half of IREDA's sanctions are for the wind energy sector, with the rest for small hydro, biomass and solar projects.

As an Autonomous Border Region, Ladakh receives Special Area Status (strategic, remote, underdeveloped) and the highest funding: hydro and solar PV hardware are 100 percent funded. Electricity is then charged from users. “Up-front costs of renewable energy access systems is the key barrier and therefore complementing subsidies with funds is a practical way to solve the first-cost capital financing problem. Subsidies for energy access projects are generally justified as a response to inequality and social expectations in energy provision,” says Gireesh Pradhan, secretary for MNRE.

Ladakh nonetheless suffers barriers to large investment. The lack of initial grid connectivity, the region's remoteness, and the small population's limited growth potential discourage large-scale solar projects. The small capacity of projects has so far restricted developers from benefiting from Renewable Energy Certificates, although a revision for hydro is proposed. LREDA has encouraged incentivization, including removal of entry tax on solar products and provision of district-level simple clearances.

#rewpage#

Tendering and Challenges

The initiative was tendered to a number of India-based firms, largely Tata BP Solar, but also Conergy, Moser Baer and CEL. K Subramanya, then CEO of Tata BP Solar, said: “The projects were executed under challenging circumstances given the rough terrain, transportation hurdles, extreme climate and limited local resources.”

An emphasis on reliability stemmed from minus temperatures, altitudes over 9000 meters, and wind speeds of 90 km/h. The initiative has advanced at a remarkable pace, despite mid-winter constraining construction with temperatures down to -35 degrees C. However, in those months pack animals transport PV systems along frozen rivers to shorten otherwise arduous mountain routes to remote villages inaccessible by road.

Tendered rates were amongst the lowest in India for the implementation of renewables. “The companies rightly saw it as a proving ground for their technology and expertise,” says Takpa. Contractors must provide five years' maintenance and train two villagers per installation for future maintenance, with LREDA engineers in supporting roles. Villagers' PV electricity tariffs contribute to a renewable energy fund, from which future maintenance costs and the salaries of village technicians will be paid. All technology is 100 percent Indian-manufactured, a legal requirement for PV under the National Solar Mission (NSM) Phase 1 guidelines. This facilitates maintenance and repair, and PV contractors must set up a branch office in Leh.

A principal challenge of the project has been transmission and distribution. The local grids are being constructed under the RGGVY scheme, but aligning the two projects has been difficult. Some finished PV plants have had long waits for distribution to villagers. In some cases constituency development funds have had to replace any RGGVY allocation.

Small Hydropower Development in Ladakh

Small hydropower projects, economic at less than $0.04/kWh, are the first off-grid choice. The LREI provision of INR2.66 billion ($48.8 million) for 23.7 MW being installed across 30 locations, in capacities of 150 to 3000 kW, is in various stages of development, due to complete in late 2013, with expected savings of 20 million liters of diesel annually. Small hydro in Ladakh costs on average $2.2 million per MW installed, according to LREDA.

Despite the arid climate, hydro generation works from mountain melt-water village streams for 8-10 months of the year, although in deep winter frozen streams necessitate the use of diesel generator sets. Even so, a 500 kW hydroelectric plant at Tsati, Siachen, cost $1.6 million to develop and serves around 125 households across three villages. There are also 50 non-LREI pico-hydro projects, with a total capacity of 250 kW, which are 50 percent complete in various sites, 75 percent subsidized by MNRE. For example, in Khungru, Nubra, a 5 kW installation provides for 10 households.

Solar Photovoltaic Developments

The solar photovoltaic element of the LREI investment program comprises INR1.94 billion ($36.4 million) towards a total of 215 stand-alone solar PV power plants across Leh and Kargil districts, with a total capacity of 4.6 MWp and 90 percent already installed.

Remote villages without realistic hydro options were the first choice, with plants sized at 5-100 kW, and a total capacity of 2.6 MW across some 70 locations. For example, Lukung's 12.5 kWp plant serves 15 households. The plant cost INR3.96 million ($74,000) inclusive of battery bank room, security fencing, and local distribution.

Electricity access 24 hours a day allows use of several low-energy lamps and small domestic appliances, and some communities also have invested in processing machines for wood, flour, juice and oil.

Civic institutions (medical, religious and educational) account for 1 MW shared by 120 stand-alone PV power plants with capacities of 5-10 kW, massively benefiting service provision. Furthermore, 50 Indian Defense Force establishments have reaped rapid benefits from PV plants with a total capacity of 1 MW installed by LREDA, which takes a commission. As a result, at the Indian Army's 14 Corps HQ, 384 liters of diesel per day are being saved.

Solar Thermal Progress

For solar thermal INR642 million ($12 million) is being spent on approximately half-subsidized technologies. A successful public awareness campaign brings up to 80 daily enquiries.

Solar thermal water heating systems from 100-3000 litres per day (LPD), 40 percent-50 percent (commercial-domestic) subsidized, are a priority, and now account for half a million LPD, with twice that projected by late 2013. A residential system using 100 LPD costs INR7000 ($130).

Their use instead of electric geysers and kerosene-based boilers is, by LREDA estimates, saving 500,000 liters of kerosene per year, or approximately INR23 million ($432,000). MNRE estimates more than six million square meters of solar water heating have been installed in the country.

In addition, 25 concentrated solar power (CSP) steam cooking plants are proposed. The JNV school's six-dish sun-tracking steam system built by Thermax is feeding 600 people every day, LPG-free. An additional 10,000 solar dish cookers, 1000 solar food dryers, and 2000 further solar home lighting systems have been sanctioned. To extend Ladakh's short growing season, 2500 domestic and 250 commercial passive solar greenhouses are planned to improve nutrition and livelihood. Solar irrigation pumps, ground source heat pumps, LED lanterns, solar spinning machines and watermill upgrades are all in R&D. LREDA promotes subsidized solar passive architecture parallel with local NGOs. “The initiative takes a holistic approach to energy and sustainability,” says Takpa.

Further Projects Underway in Ladakh

Further projects not included in the LREI include six 10 kWp hybrid solar-wind systems installed in residential schools, each costing $47,000, and Tangtse's 100 kWp system supplying 350 households. Large turbine wind technology has not been utilized purely because of transport logistics.

Meanwhile, two geothermal plants with a total capacity of 8 MW are under development at Puga and Chumathang, in association with LREDA, MNRE, the Jammu & Kashmir Power Development Department, and the Defence Research and Development Organization (DRDO). The 5 MW Puga project is the first of its kind in India. The development contract was awarded to Thermax, whose INR1.8 billion ($33.6 million) budget will include construction of the power transmission network. The 3 MW Chumathang plant will be fully financed by DRDO. Ground research work has been completed, and construction of the installation is due to start in June 2013.

#rewpage#

These non-LREI projects bring the aggregate capacity of off-grid renewable energy projects in the region to 36.61 MW. Further, two 45 MW large hydro plants opened in December 2012 on the Indus River, a central government scheme bringing grid electricity to Indus Valley communities, including 8 MW for Leh.

Energy Security/Capacity

Beyond the need to cut carbon emissions, power shortages and energy security are both critical issues for India's rapidly growing economy. During the world's largest blackout in July 2012, substantial grid failure left 700 million Indians without electricity. The rising cost of coal and crude oil, of which India is the world's fourth largest net importer, is significantly narrowing the gap between conventional and renewable energy costs.

“With an energy demand supply gap of 8 percent, peak shortages to the order of 11-12 percent, and grid access not available to over 55 percent of the rural population, maximizing the use of renewable energy sources for providing energy access is imperative,” Abdullah said.

Overall, India's installed grid-connected power capacity comprises 65 percent thermal power, 21 percent large hydro, and 2.6 percent nuclear. Renewable power accounts for around 12 percent (26.3 GW) comprising 18 GW (68.5 percent) from wind, 3.4 GW (13.1 percent) from small hydro, 3.4 GW (12.9 percent) from biomass, and 1 GW (4 percent) from solar, according to recent MNRE figures. MNRE expects renewable capacity to double to 55 GW by 2017.

Small hydro projects are overseen by MNRE, which estimates the potential nationally at 15 GW, mostly in the northeastern Himalayan states, best paired with local community participation in remote and hilly areas, mixed public/private sector and grid-connected/decentralised modes. Currently around 4.5 GW have been set up, but MNRE forsees this reaching 7 GW by 2017.

India's Jawaharlal Nehru National Solar Mission (NSM) has set the ambitious target of generating 2 GW from off-grid solar installations by the end of the 13th Five Year Plan in 2022, 12 times the current capacity, along with 20 million square meters of solar thermal collector area and solar lighting for 20 million households.

Recently the Indian government removed diesel subsidies in order to control a budget deficit swollen by fuel subsidies at a time of high world oil prices. This will strengthen the case for solar power in areas where power supply is irregular. The modular nature and flexibility of renewables projects is a further attraction.

While the off-grid solar market is small, with only 160.8 MW of off-grid PV commissioned (13.4 percent of India's total solar capacity), it has received more attention following July's blackout, when local micro-grid renewable plants were broadly unaffected.

“To date, the government has given little attention to distributed generation from renewable sources; however, this may be a potential avenue as it re-examines its power infrastructure, although the scale of off-grid projects is inevitably more limited,” says Ernst & Young's Country Attractiveness Index Country Focus - India report.

“The focus is on self-sustaining off-grid systems,” said MNRE's Gireesh Pradhan of NSM's Phase 2, which encourages households to purchase off-grid and grid-connected rooftop PV and solar water heating, with direct loans to individuals from the Reserve Bank of India for this purpose. It is expected this will lead to increased lending for electricity access projects.

Looking Forward

The LREI sets new standards for rural electrification, development and energy conservation. Its broad initiative takes a holistic approach and amounts to a flagship for distributed renewables at a timely moment in India's energy story. Further remote regions seem likely to follow, with MNRE currently funding a second off-grid Special Area Project in Arunachal Pradesh, a remote north-eastern state well suited to small hydropower.

Ladakh's initiative has brought modernity to the region. Until last year, Leh was a town at the mercy of the daily failings of its smoking diesel-generated local grid. During night hours, the streets appeared and disappeared, with available electrical current often insufficient to charge a laptop, internet connection severely intermittent, bulbs flickered or dimmed to a firefly's glow, and blackness always followed by a chorus of yard generators and barking dogs.

But now medical facilities can now store vaccines and use modern equipment, schools can teach computer literacy and families benefit from greater connectedness, less drudgery, more livelihood options, and flexible hours for homework and family life.

In remote Shayok village, where 34 solar panels have brought the village a constant 350 W of power per household, the Khangbu Soma family are watching their first week of satellite television. Three children cower in the corner, fixated on a sword-swinging terrorist. Their mother, Yangzes, stuffs dumplings for supper, while her mother spins the prayer wheel she has spun every night for the last 40 years.

Husband Namgyal finally arrives home from his medical practice. “The best thing is not carrying a lantern. No more dark winter mornings. No more hand-churning of milk for an hour to make butter or cheese, when the electric whisk does it in fifteen minutes unsupervised. However, Granny complains that there's too much TV and not enough work around the house,” he grins.

Duncan McKenzie is a freelance journalist. 

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