Session 7 - Palit - Emerging Business Models KTH _7 Feb

7/29/2019 Session 7 - Palit - Emerging Business Models KTH _7 Feb

1/22

Innovative Business Models

Debajit Palit

Associate Director, TERI

February 7, Kathmandu

Sharing Business Models and Scaling up Mini

Grids in Asia and Pacific


2/22

Mini-Grids in India

Pioneer of Mini-Grid system First mini grid commissioned in 1996 in Sunderban Islands

State-of-the-art system designs & use of components

(converters & inverters), continuing till date

Cooperative model of service delivery Involvement of local community from planning stage

Policy enablers from time to time

Around 5000 villages covered through mini-grids, serving

more than 50,000 HHs

Multiple technology adopted


3/22

Managing Mini Grids: Earlier Model

FUNDING AGENCY

PIA

Power PlantVEC

SystemSupplier

Consumers

Consultant (DPR, systemdesign, TA support)

Organize VEC

System Engineering.

System Owner

$

Installation &

Commissioning

System custodian

O&M

LT line Maintenance

Electricity

Grant from Central GovernmentEquity by PIA/NGO or Beneficiaries

Revenue: Tariff,

billing, collection

Village Energy Committee(VEC) Model

Source: TERI, 2011


4/22

Case Examples of Emerging Models

Community Based

Entrepreneur Driven

Pro-Poor Public Private Partnership

How we can Introduce Smartness


5/22

Multiple Energy Sources

Solar PV

Wind Aero Generators

Biomass Gasifier

Hybrid Systems

Multiple Applications

Charging lanterns

Powering computers,

Charging cell phones

Water purification

Micro enterprises

Located near the energy utilization points in a village to provide

electricity services as per the communitys need

Solar Multi UtilityCommunity based model

Source: TERI , 2012


6/22

Solar Multi Utility

Self Help Groups, Farmers Associations & Individuals from the

surrounding villages access the SMU & utilize services for a fee.

Source: TERI , 2012


7/22

TERI

Overall Project Management Raise Grant support for the projects (~ 75%)

SMU

Technology Provider

Installation of power

plant AMC

Local Partner (~ 15%)

Scoping, community

mobilization, monitoring& training

Users (~ 10%)

Farmers Associations,SHGs, Individuals

Payment for services &

new investments

VEC

Operation & collection

of revenue

Maintenance & saving

for replacement

Institutional Model

Source: TERI , 2012


8/22

Sustainability going beyond technology

Institutional

Creating linkages with other developmental

programs/ marketing agencies

Local capacities developed to operate and manage

the system

Technical/

Social

Energy efficient system & intelligent loadmanagement for reduced peak demand

Need based design with standard procedures for

operation

Financial

Variable grant : equity ratio.

Customized pricing strategies to suit particular

livelihood activities


9/22

Some glimpses


10/22

Manure

Mixer

Sattu

Grinder

INR/kgAnnualized Equity for

setting up of unit

0.75 0.43

Buying cost of

Electricity

0.21 0.21

O&M cost 0.5 0.5

Logistics Cost 1 1

Value of service 5% 5%

Risk 10% 10%

Inflation 8% 8%

% of profit 25% 25%

Service charge 7% 7%

Actual process cost 4.04 3.48

Ability to Pay 5 2.5

Profit/Loss 0.96 -0.98

Final Processing Cost 5 2.5

LUCE

INR/kWh Elect PriceINR/kg Prod CostINR/kg7 0.21 4.04

10 0.3 4.19

15

0.45

4.44

20 0.6 4.68]

Sale price of solar electricity

can be kept high and it does

not significantly affect the

price of service

Regulation vs. No regulation

SMU Business Unit

Source: TERI , 2012


11/22

DC distribution lines (voltage varies depending on distance) run alongrooftops from the battery bank to households over a short distance to

power lights, mobiles etc.

Solar DC micro gridEntrepreneur Driven

Running time : 5-6 hours

Installation Cost: Rs 3200 3800 per HH

Tariff: Rs 120 150 per month, charged

by the operators

Source: TERI , 2012


12/22

Institutional Framework


13/22


14/22

Providing access to population earning less than 1$/day

Remote, tribal communities w/o cash disposable income

Subsidy vs. financing affordability ?

Subsidy for capital infrastructure ? ensuing operational sustainability improved

quality of life

Solar Mini Grids in ChhattisgarhPro-Poor PPP

CREDA has reportedly electrified around 35,000

households through solar PV based mini-grids


15/22

Financing Capital cost ~ 25000 INR (500$) per household

Capital subsidy- 18,400 INR (368$) per HH by MNRE under RVE program

- Balance by state government

Tariff per connection = 30 INR/0.6$ (2x11 W CFL)

Tariff subsidy (by Chhattisgarh government)- 25 INR (0.5 $) per HH connection

- In Sunderban region, tariff for mini-grids ranges between 2-3$depending on light points (3-5) for 4-5 hours supply

Source: CREDA and WBREDA


16/22

Solarmini-grid model of CREDA

Source: TERI , 2012


17/22

Some Lessons Decentralized, usually low

capacity, covering remote areas Usually small loads served

Limited by capacity and duration

of supply

Community as stakeholder

Tariff based on flat rate

Clustering of projects more

successful

Inability to meet increased demand

Single energy resource catering tofixed load for fixed time

Battery vulnerable, overdrawl by

most consumers

Difficulty in O&M because of

remoteness

Social issues tampering, non

payment etc.

Technology developmentSmartness of mini-grid addressing

some of the above challenges

Hybrid systems addressing single resource and load issues

Opposed to popular approach let the community handle -

Each entity sticks to what it does best


18/22

Foster demand side management and demand side response;

Reduce power outages, increasing reliability, efficiency and safety ofthe grid;

Efficient management of systems ,

reducing tampering

better collection efficiency (pre paid)

Better battery management Provide better autonomy to customers to manage their electricity

needs.

*A Smart Mini Grid System is a subset of Smart Electric Grid and it is

generally defined as an intelligent electricity distribution network operatingat or below 11kV, providing electricity to a community;

uses advanced sensing, communication and control technologies to

optimize electrical power generation and delivery

Works with grid interconnection or off the grid

Dynamic communication


19/22

10.5kWp Solar Photovoltaic (C- Si) system installed on the

roof of the North Block of the TERI Retreat;

2kWp Solar Photovoltaic (C Si) system installed on the

roof of the Biomass Gasifier building;

1kWp Thin-film based Solar Photovoltaic system on theroof of the South Block of the TERI Retreat;

3.3kW Wind Turbine Generator (WTG);

100kW Biomass Gasifier (woody) system in the Biomass

Gasifier building;

Battery Bank of 48V, 600Ah for energy storage and,

Diesel Gensets/Utility Grid.

How does the TERI Smart Mini Grid System work: s3.EXE
http://localhost/var/www/apps/conversion/tmp/scratch_2/s3.EXEhttp://localhost/var/www/apps/conversion/tmp/scratch_2/TERI-Smart%20Mini-Grid.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_2/TERI-Smart%20Mini-Grid.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_2/s3.EXE


20/22

Data collected from the various data nodes are transmitted via Ethernet using Modbus

Protocol and GSM modem using TCP/IP.


21/22

Develop a Smart Mini Grid Maturity Model (SMGMM) and Matrix according

to the Indian context on strategy, management and regulatory, system

operation and technology, asset management etc.

Integration of Smart Mini Grid system with conventional Smart Electric Grid

network and addressing the issues related to Smart Metering system

Establishment of Smart Controller Laboratory where various researchactivities on different smart techniques can be taken place


22/22

In conclusion

Ecosystem(AAQS)

Appropriatetechnical

design

InnovativeFinancing

Local

Skills

EnablingPolicy

Sustainability

condition

Documents

Session 7 - Palit - Emerging Business Models KTH _7 Feb