I think microgrids will also be deployed in places that have the conventional, robust grid in ways similar to the emergence of Competitive Local Exchange Carriers in telecom. Thus, microgrids have broader applicability than emerging markets, and I will not be surprised to see them take off in the US, and not merely as backup or for emergencies.
In fact, while telecom is truly a wide area networking business with positive "network externalities," it is not strictly necessary to have the "grid" as a wide area network. There are no comparable network externalities with electricity.
Electricity can be an entirely local business. As Gerry Wootton said in his comment, "there are many ways to go." The grid as we know it need not be.
Scott, I agree with what you say. Indeed, program management plus solar panels will get basic lighting into everyone's hands - the Solar Home Systems. This is an immediate need, is being done. You are right: "distributed generation ... is essential, particularly for low-power and critical infrastructure. Dedicated distributed generation (DG), not linked and thus not susceptible to cybersecurity problems, is also an essential tool." But what I'm saying here is: This is not enough.
We need to create microgrids, which is DG, and largely operating in "island" mode, or cooperating with neighboring microgrids, more than with the macro-grid. Only such microgrids will ensure 24*7 supply for cooking and refrigeration in addition to lighting and phone charging, with local control and accountability, economically.
Such optimized, automated microgrids also have urban uses, even in electrified areas, in all markets, and similar to Competitive Local Exchange in telecom. They are the basis for competitive electricity supply. On that topic, I will write separately.
Folks, the following three recent references might interest you. a) Clean Power, Off the Grid in New York Times, July 17, 2014, b) Solar Hybrid with Fuel Cells - South Africa, thanks to PJ Van Staden, and c) Greenpeace India's microgrid.
This is brilliant, people-centric public policy. The nation will be rid of "domestic content" oriented ideological nonsense.
On the same subject, this article describes a landmark struggle - Berliners still fighting to pull the plug on coal fired utility.
Hi Brian, appreciate your observations. At least three issues prompted this article
a) price drop do not automatically lead to more demand; demand also depends on market segments and their distinctive behaviors, especially for technological products new to the market.
b) While comparisons with telecom industry structural changes are worthwhile, and much here for the electric utilities to learn from, nevertheless going off-grid may not be compared to cutting off the landline connection.
c) Even when solar panels with batteries make for (electric) grid independence, the monitoring of power generated from the panels is very much networking, and thus we maintain the "telecom grid."
I am a big believer in distributed generation. The utilities will get into that in a big way. No doom and gloom - cannot think of a more thrilling industry to watch and participate in.
Excellent article. I think the fundamental driver why business models have to change is because the electric utility is no longer a "natural monopoly." Scale is not essential for economical generation. With distributed generation, we have co-located generation and use, thus no expense of transmission. More broadly, the electric utility business is not a networking business at all (at least for residential consumers). Thus, new technology and topology will fray and fragment the utility at the edges. What is a electric utility to do? Go "out of market" for service provision, be as NRG, and embrace DG, with microgrids rather than any one generation type. The barriers are organizational culture and mindsets, not assets.
Congratulations on this remarkable project.
When I worked at Hughes Network Systems around 2003-4, we created a similar solution using satellite connectivity where you have the 19 km hop via Wi-Fi. We installed the solution for RV parks in 3 or 4 locations in California that did not have Internet connectivity except for dial-up connections. We used directional antennas to propagate Wi-Fi signals at each location - Direcway Wi-Fi Hot Spots. The satellite connectivity was via Ku band, which allowed for acceptable speed, but not enough; the project was in anticipation of Hughes' launch of Spaceway (Ka band), a new satellite systems with much higher speed connectivity.
Our business model was based on subscriptions and pay-per-day or hour use. It was slightly more expensive than typical home subscriptions but less than what hotels charged for daily connectivity.
Your use of solar is great. What this points to is:
a) Synergy (I wish to avoid the word convergence) between telecommunications and stand-alone, distributed electricity systems,
b) Emerging new networking topologies (alternatives to today's grid) that can make distributed solar systems extensions of the Ethernet - the Internet-of-things - from a network management perspective.
The longer term business implications are significant as I have written about in REW.
Does this mean about 600 MW+ would be auctioned this year? I assume all these would be grid-tied with PPAs, and the off-grid projects would be in addition to the 20 GW proposed by 2017? It would be great if Mr. Kapoor elaborated on this in a comment.
This appears to be foresightful public policy. Natalie and Bloomberg covers India solar news very well, thank you.
This is an impressive, valuable project, and a well-written article. Thank you. Michael's and Larry's comments are also on the mark. One grid does not fit all, all power should be local. Just as we segment customers routinely in marketing, why should we not segment customers for electricity? Microgrids of this kind will allow for that. With a technology like this, entry barriers in the electricity business drop - they already have with solar - the natural monopoly arguments weaken, and entrepreneurial start-ups will enter the business. Regulations have to respond to this reality. Could there be a more exciting time than now to be participating in this bigger than the Internet (perhaps) transformation?
A fine, timely article. In addition to grid-tied solar, I hope PV sprouts up on rural households and on urban building roofs much as TV antennas once did - distributed generation, micro-grids, community power. Given the scale of India's needs, I hope the overall economics of PV solar, panels and balance of systems, improves by a few orders of magnitude. While I am hopeful, I must say the solar PV market is still in the latent phase in India - the "chasm" has to be crossed (in Geoffrey Moore's words) to reach the mass market.