Why Microgrids Are Essential in India’s Electricity Generation Mix

The announcement on June 23 of a partnership among Softbank, Airtel, and Foxconn for investing $20 billion in India for solar and renewable energy projects is welcome news. Many tens of gigawatts of solar generation will be deployed, augmenting today’s electricity supply. The investment will be used to deploy large, grid-tied solar and wind projects, plus the manufacture of solar panels. 

As renewables percentage in the generation mix rises, thanks to large-scale solar projects and distributed generation, the grid experiences a sudden drop in supply as the sun sets. As a result, the loads during evenings have to be met using quick-ramping power plants, which is typically gas-fired. This phenomenon, called the “duck curve,” was first noticed in California. It is so called because of the peculiar shape of the load profile resembling the neck of a duck, resulting from a sharp drop in supply at sunset. 

While solar deployments increase the average electricity supply, there arise periods of shortages at certain hours that have to be met by conventional, fossil-fuel based power plants, and for which new investments are necessary. Such generation is also typically expensive since the generation plant is used only for a short time. Moreover, such plants defeat the very value proposition of clean, solar projects.

One way to overcome this need to build conventional power plants is to deploy storage in the grid, typically batteries, and occasionally fly-wheels. Such storage systems enable quick ramp-up of supply at sunset, but today are costly.

Yet a third way, not typically discussed, would be to deploy solar panels as a part of microgrids. With microgrids, the resilience in supply can be achieved through a clustering of microgrids, each with complementary assets — some with more wind, some in proximity to rivers, some with plenty of surface for solar panels, and some with battery banks shared with other microgrids. Microgrids are inherently green and clean. Complementary clusters of microgrids also bring down costs.

India’s public policy relating to electricity must incorporate microgrids and storage to offset the “duck curve” phenomenon, and thereby avoid related fossil fuel investments. Unfortunately, no microgrids — not to be confused with Solar Home Systems (SHS) — are deployed in India as yet.

Microgrid technologies are maturing rapidly. IIM Kozhikode has conducted economic analysis by modelling ~2-MW microgrids in several scenarios — campuses, cluster of homes, and more. The costs are surprising affordable when compared to the alternatives.

Microgrids deserve public policy support right away. A few dozen microgrids of ~1 to 5 MW each may be deployed for testing and eventual commercialization. They make sense to a) extend the reach of electricity to the 300 million Indians without access to grid power, b) complement Solar Home Systems, c) offset load in congested areas, on campuses and hospitals, and d) help with grid stability as renewables proportion increases in the generation mix. 

Lead image: India map. Credit: Shutterstock

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Mahesh P. Bhave is Professor, NTPC School of Business (NSB), New Delhi area, He is also Founder, BHAVE Power Systems, San Diego, CA.  He teaches "Corporate Strategy - Energy-centric" and "Business Strategies for Microgrids" for MBA and executive MBA students. He works on projects to replace LPG (liquified petroleum gas) for cooking with solar and battery based solutions. Until December 2016, he was visiting professor, strategy, IIM Kozhikode, India.  Mahesh is an engineer from IIT Delhi with a Ph.D. from Syracuse University’s Maxwell School. He may be reached at  mahesh.bhave@nsb.ac.in . He is the author of  The Microgrid Revolution: Business Strategies for Next Generation Electricity , 2016, Praeger.  

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