Solar electricity in stiff competition with cheaper grid power in Bihar

According to Jaideep Mukherji, CEO, Smart Power India, there has been a lot of progress in Bihar both in terms of connection and hours of electricity supply to households

At Lokhariya, an interior village in Araria district, at Sajida Begum’s house is heard the wailing of her 16-day-old grandson, who is being given a bath and an oil massage.

A very pleased Sajida says her house, like many others in the village, got electricity from the government-powered grid in 2017. 

When Business Standard visited the village in September 2015, it was not connected to the grid. A mini solar power plant of Decentralised Energy Systems India Pvt Ltd (DESI Power) was supplying electricity for four hours in the evening to about 204 houses and a masjid, besides lighting seven street lights for free, in the village. 

Things have changed drastically since then, with DESI shutting down its operations at the village in 2017 after water flooded its plant, followed by the availability of grid power. 

DESI is now mulling shifting the plant to neighbouring Chakai village.  Mohammad Jahid Alam laments the exit of DESI though he blames internal issues with the energy supply company (ESCO) for moving away from Lokhariya. Recently, he had to pay arrears of Rs 2,200 for seven months because a collection agent of the North Bihar Power Distribution Company had run away with the payment made to him without giving Alam a proper receipt. “What benefit has grid power given us? It has its own mood. Sometimes, it goes off just as you sit down to have food,” says Alam. 

Grid power is cheaper but not reliable. Sometimes, there is no power because of local faults for days on end. When DESI was running its plant, the villagers could immediately contact the company in the case of a fault.

ESCOs, like DESI and TARAurja, had to reinvent their businesses after rural and household electrification programmes brought grid power to villages. Both these ESCOs were spawned by Smart Power India, an initiative of Rockefeller Foundation and Development Alternatives, but DESI parted ways after it decided to scale down and remodel its business. “Electricity has become politics. We cannot compete with the government since we are not big companies. Our new strategy is need-based where we are focusing on giving other services besides power,” says S N Sharan, managing director, DESI Power.

DESI has moved towards tiny grids that have a capacity of 1.5-3.5 kw, unlike rooftop solar usually used in urban areas with a capacity of 3.5-10 kw. Rupesh Gupta is one such tiny grid operator who was running a small diesel genset-based power supply business.

DESI has put up four solar panels totalling 2 Kw at his house in Khumar Pati in Araria town at about Rs 2.5 lakh. He supplies power to about 50 shops in the nearby market for four hours in the evening at the rate of Rs 10 for one bulb. Collection is done daily and he pays DESI Rs 2,000 every month. The data from the system allows Gupta to deduct payment for days when the solar power is not generated and he has to run his system on a diesel genset. “Shops take my service as a back-up to grid power since they lose business if electricity goes off,” he says.

According to Jaideep Mukherji, chief executive officer, Smart Power India, there has been a lot of progress in Bihar both in terms of connection and hours of electricity supply to households. “Village electrification, however, should mean progress in all aspects — connection; reliability of electricity supply, including quality (voltage); and customer service. Reliability and customer service still elude most of rural India,” he says.

At Bheldi village in Saran district, an employee of TARAurja is trying to convince Rupesh Kumar, who runs a photo studio, to take up their power connection again. Kumar pays Rs 600-650 a month for a government grid connection, which he took in 2016. Prior to that his shop was connected to TARAurja’s mini grid that came up in February 2015. “Kumar was upset with us for charging more. We have 80 commercial connections in the village but households disconnected after power supply from the grid improved,” says Narinder Abrol, head, demand generation, TARAurja. There were around 30 household connections when it started in 2015. 

To deal with competition from grid power, the ESCO has devised around 10 flexible packages for its customers. At the lowest level is a six-hour power supply in the evening from 5 pm onwards for Rs 200 a month for lighting one LED bulb. Then there are mixed-mode packages that start with 10 units (kw/hour) free for Rs 300 a month, after which every extra unit is charged Rs 27. Prior to November 2017, each of TARAurja mini grids had its own tariff structure but uniform packages were brought in for better targeting. Collection agents collect payments on a 10 per cent commission basis. “Tariffs charged by the mini-grid ESCOs can vary but they ensure that they are the preferred option for the customers because of reliability and quality of service,” says Mukherji.

The 37.5-Kw Bheldi power system works on a hybrid model unlike the mini grids set up by the government. At noon on a cloudy day, a power load of 2.5 kw is being fed through the battery since solar power is not enough. Smart system, put up by Pune-based start-up Ampere Hour Energy, prioritises power supply first from solar, then biogas and, if need be, diesel generation.

Besides solar panels, the site houses a cow dung-based bio gas power plant run by Grassroots Energy. Kanaih Kumar, a diploma holder in veterinary science, manages the plant. His van collects cow dung drums from 63 households in 13 nearby villages. “One cow can fill up one drum in about three days. And for every 50 drums supplied to us, we give Rs 1,000 worth of cattle feed to the cow owner, besides rendering quarterly veterinary services,” he explains.

Cow dung is mixed with water and put in gas chambers, where methane is generated and sulphur is absorbed by an iron wool. Methane is used for running gas turbines and generating electricity. A liquid by-product is sold as bio-fertiliser under the brand name of Jiva Amrit. 

Part I: Bihar electrification drive involves crossing rivers and fixing bills

Privately-run mini grids form a small portion of the rural electrification landscape in Bihar, with the state power department oblivious of their existence. Most of them have bundled their businesses with drinking and irrigation water supply services, battery charging and other allied activities to remain viable. Mukherji says these grids will continue to play a complementary role in providing reliable electricity access in villages, particularly for rural micro-enterprises that are otherwise dependent on diesel.