The renewable energy sector has made significant strides over the past few years and this growth momentum is expected to continue in the future.

1. Renewables for
Microgrids - A
sustainable approach to
connecting remote
communities

3. The renewable energy sector has made significant strides over the past few years and
this growth momentum is expected to continue in the future. The total renewable
energy capacity has grown significantly from 34.98 GW in 2014 to 65.54 GW in 2018.
It has been complemented by a decline in wind and solar power tariffs. In this
context, renewable energy-based microgrids (as compared to diesel generator sets)
could emerge as a potential solution to provide energy security to the masses in a
sustainable manner.
Through the use of locally abundant fuel sources such as solar, wind and biomass,
along with energy storage solutions, microgrids can provide reliable and consistent
power supply, particularly in rural areas. Further, such microgrids enable the infusion
of investment at the community level and provide an avenue for revenue generation
to the communities through the feed-in tariff mechanism. In addition, by installing
distributed generation assets throughout the network, utilities can fall back on them
for ancillary services during times of emergency. Microgrids not only enable the
maximum integration of renewable energy, but also provide greater load flexibility
and better demand management.
In an attempt to promote microgrids in India, the government issued a draft national
policy on renewable energy based mini- and microgrids. The policy proposes to set
up at least 10,000 renewable micro-and minigrid projects across the country, with
500 MW of generation capacity to be developed by private players by 2022 in order to
cater to around 237 million people experiencing energy shortage.

4. Overview
Microgrids utilise various generation resources including diesel, solar photovoltaic
(PV), micro-hydro and biomass gasification, and also employ hybrid technologies
such as wind-diesel and PV-diesel. While diesel-based microgrids are the most
commonly used globally, solar PV systems are also gaining popularity due to the
reduced cost of PV modules and solar PV equipment.
In India, solar microgrids with an aggregate capacity of 1,899 kWp have been
installed so far in 63 villages with financial support (30 per cent of the project cost)
from the Ministry of New and Renewable Energy (MNRE). Thus, for a 10 kW direct
current microgrid, the MNRE offers Rs 105 per watt, and for systems with a module
capacity of 10-250 kW, it offers Rs 90 per watt. The systems come with a minimum
warranty of five years in the rural and remote areas of the country.
Meanwhile, hydro-based microgrids are typically run-of-the-river projects, wherein
the water from a river or stream is diverted into a turbine to generate electricity.
Hydropower systems are the most flexible source of renewable energy, since the
water flow can be controlled to balance the supply during times of low water
consumption. Microgrids can also be operated using biomass, which is not available
in a single location and is mostly spread across rural areas.
In India, key players in the microgrid market include Gram Power, Mera Gao Power,
DESI Power, Omnigrid Micropower Company and Gram Oorja Solutions. Most of
these players deploy solar-based microgrids in combination with smart grid
technologies in states such as Karnataka, Maharashtra, Uttar Pradesh and Bihar.

5. Economics
While microgrids are considered more economical, the capital investment
required for their installation is generally higher than that for diesel-based
microgrids. This is because renewable-based systems are more capital intensive
on a unit cost basis. Further, since microgrids aim to achieve last-mile
connectivity, there are inherently high fixed costs of wiring and connectivity for
low levels of consumption. Given the cost economics of microgrids, government
funding and external support play a crucial role in their scalability.
Issues and concerns
A major challenge with respect to renewable-based microgrids is the intermittent
and unpredictable nature of power generation. The availability of wind and solar
radiation may not match the load distribution during the day. Further, the
localised nature of microgrids can restrict the scalability of these systems. Unlike
solar energy, which is widely available throughout the country, wind and biomass
are location-specific resources. Also, the process of conversion of biomass into
heat or electricity is more complex, costly and time-consuming as compared to
solar PV or wind. Hydropower, on the other hand, is more capital intensive and
highly dependent on the availability of water. Therefore, a judicious choice needs
to be made regarding the renewable energy sources to be used.

6. Economics
While microgrids are considered more economical, the capital investment
required for their installation is generally higher than that for diesel-based
microgrids. This is because renewable-based systems are more capital intensive
on a unit cost basis. Further, since microgrids aim to achieve last-mile
connectivity, there are inherently high fixed costs of wiring and connectivity for
low levels of consumption. Given the cost economics of microgrids, government
funding and external support play a crucial role in their scalability.
Issues and concerns
A major challenge with respect to renewable-based microgrids is the intermittent
and unpredictable nature of power generation. The availability of wind and solar
radiation may not match the load distribution during the day. Further, the
localised nature of microgrids can restrict the scalability of these systems. Unlike
solar energy, which is widely available throughout the country, wind and biomass
are location-specific resources. Also, the process of conversion of biomass into
heat or electricity is more complex, costly and time-consuming as compared to
solar PV or wind. Hydropower, on the other hand, is more capital intensive and
highly dependent on the availability of water. Therefore, a judicious choice needs
to be made regarding the renewable energy sources to be used.

8. Energy storage solutions
Energy storage systems and controls can play a significant role in addressing grid
stability issues during renewable energy generation, and are a suitable option for
both grid-connected and off-grid renewable energy systems. These solutions can
further enhance the value proposition of high-renewable microgrids. Moreover, such
solutions present a better and cleaner alternative to diesel generators which result in
significant carbon emissions. They allow storage of excess intermittent power during
low-peak hours to despatch the same during periods of high demand, and thus
enable better load management.
Currently, different types of energy storage technologies are available. These include
batteries (lithium-ion, sodium-ion, etc.), pumped hydro storage, compressed air
energy storage and high speed flywheels. The decision regarding the deployment of
storage technologies depends on their cost, energy density and discharge life cycle,
among other things. For optimal operations, the type, configuration and impact of
the energy storage system on the microgrid needs to be considered.

9. Conclusion
Given the increasing global focus on renewable energy generation and
commitments to counter climate change, microgrids offer a range of benefits. They
help reduce emission reductions, provide economic advantages and increase
efficiency. Such systems have the potential to power remote and isolated
communities. However, their scalability is restricted due to a host of financial,
operational and technical challenges. To improve investment returns and lower
tariff rates for potential customers, reductions in equipment costs, finance and soft
costs will be critical as the market develops. Further, the successful integration of
renewable energy with microgrids will require enabling technologies such as
storage systems, grid stabilisers and automation systems.