The document discusses issues with India's energy sector and argues that micro-grids are a promising solution. It notes problems like power outages over large areas caused by small transmission failures. Micro-grids could help by reducing transmission losses, integrating renewable energy sources in a reliable way, and providing last-mile connectivity to rural communities. However, the variability of renewable energy sources and unclear policies around areas like payment mechanisms have hindered the development of micro-grids in India. The document advocates studying both the individual characteristics of and collective approaches to renewable energy and micro-grids to help unlock their potential.

1. Micro-grids: The way forward for Indian energy sector!
A black-out lasting for 2 days in the heart of the Indian capital due to a transmission
causality in a place about 150km away from it. Few state governments & UTs getting
paid for only 65% of the energy they buy from generators, resulting in guaranteed
losses of SEBs. The last mile connectivity hurdles of the power distribution networks
rendering the valuable hours of our farfetched villages less productive. The industrial
belt in Tamil Nadu reaping Rs.150 crore revenue loss every day, on account of just
85MW out of the 1100MW agreement reaching the borders of the state. A 20 year old
project for building a nuclear plant being with-held from operating on accounts of the
scare of potential environmental hazards. This is precisely the background against
which the idea of giving importance to renewable & micro-grid is based on.
Now without much ado, if we have to articulate the advantages that a micro-grid could bestow, it would
be to:
• Reduce of the 27% loss in AT&C for India which is 8% globally
• Reduce energy conversion loss of 5%: Light to light instead of light-electron-light
• Reduce peak power consumption by 11%
• Responsible usage of power for small groups & ensure productive usage of electricity
• Integrate citizen services, governance
• Last-mile connectivity & dependable source of energy for local community
• Least time taken to setup a power source for a community
Despite offering so many advantages, the idea of micro-grid & solar still lurks in the dark owing to the
combined effect of ignorance, funding hurdles and of course lack of will. The foulest vice of renewable is
that of its variability in output & undependability. It’s the same variability that would reduce the
utilization factor of transmission system to the choice of seasons and unavailability of benchmarks for
financial institutes to evaluate projects. Eg. The same solar potential within the same district at 2 places
with 35km of spatial separation & 2 different technologies might give glaring differences in yield of up to
30%! The transmission network which would carry the solar or wind power as and when it is bestowed
by nature would otherwise be dead as a door-nail. Add to the inherent uncertainty of renewable, the
direction & clarity of policies revolving around RECs, payment mechanisms, nose-diving solar energy
prices and lack of benchmarking standards for financial institutions make the understanding of
renewable & micro-grid market all the more murky.
To unwind the juggernaut, each characteristic of the renewable & micro-grid will have to be understood
separately at first, and collectively next.

2. • Variability in production: The grid code of handling 30% fluctuation for wind, and probably a
similar code for solar in the future, simply shifts the brunt of nature from empty transmission
lines onto project developers who are in to reap profits. India has about 37GW or roughly 20%
of its power from hydro-power, and only the Tehri dam is planned for large scale storage. The
untapped potential for more hydel projects could also be the best avenues for storing electricity
at the grid level. Alongside hydro, the other centralized storage systems would account for
absorbing the shocks of variable production from micro-grids and ensuring greater utilization of
transmission lines.
• Variability in prediction: Renewable energy installations in UMPP scale could be given a
mandate to follow a particular load cycle. This would stabilize the flow of electricity into the
grid, give time for grid managers to ensure power quality at the macro-level & stable revenue
stream evaluation for the banks.
PV Fluctuation: GETCO
• Incentives/policy to migrate to renewable: The key barriers to adopt wind or solar at the micro-
level are likely the high initial capital investment, storage requirement to reign in variability, lack
of knowledge on wind & solar, optimism of cheaper grid electricity being available at sometime
in the future, lower cost of heavily subsidized main grid power and lack of will-power despite
incentives from utilities. Most of the policies that serve as incentives for distributed generation
are transitory in nature, i.e. the quantum of incentives is fixed only over a certain period of
years. Eg. REC guidelines, FiTs for domestic rooftop PV installers, etc. Though the transitory
incentives in actual reflect the spiraling price trend of solar & wind, they actually implicate some
undesirable signals to the industry: