Demand Assessment: A Critical Factor in Ensuring Economic Viability of Mini grids in India

Introduction

Demand assessment plays an important role when it comes to private players promoting mini grids in order to provide reliable electricity in rural areas. With the help of demand assessment, a private player understands not only the load demand of a village but also its demographic, socio-economic condition and prevailing energy usage. A private player makes investment which is mobilised from different sources (banks, MFIs, bilateral, multilateral organisations etc) and in different forms (equity, debt, grant, award, etc) and will put serious effort to understand the overall ground situation of a village in order to recover and repay the investment. Therefore, a reduction in the pre-investments costs towards demand assessment, system sizing, site selection etc provide a level of comfort to private players.

Demand Assessment Survey in India

Under this context, UPNEDA with support from GIZ has conducted a demand assessment survey in the districts of Kanpur Nagar and Banda in India. The exercise was carried out under the context of developing a private sector model for attracting large scale involvement and investment of private players for promotion of mini grids in the state of Uttar Pradesh, India. Five key elements were proposed under the private sector model. These elements are:

• Selection of villages on a cluster based approach in order to provide economies of scale.
• A reduction in the pre-investments costs towards demand assessment, system sizing, site selection, etc.
• A reduction in the costs of financial closure through pre-established financial structures/ linkages.
• A reduction in the risk of demand uptake through efforts to encourage productive end uses of electricity
• A reduction in the policy and regulatory risk through appropriate mitigation structures.

Data Collection

Fifty un-electrified or de-electrified villages were identified for demand assessment survey. A primary survey was carried out to estimate the load demand for three target segments, namely-households, irrigation loads and commercial/productive loads. This primary survey adopted a mix-design approach with both qualitative and quantitative aspects. The quantitative data was captured through household surveys (covering 10% of the households in each selected village) and surveys of commercial and irrigation loads. The survey covered detailed information related to demographic, socio-economic and prevailing energy usage.

Findings

Inter alia, the household surveys captured key information like electricity requirement in various intervals of time, preference for electrification options and income and expenditure patterns. Using these data, load duration curves and load profile curves have been generated for all the villages in the two districts. 

• All the load curves generated are found to have peaks in the morning and evening, which is typical of village load curves.
  
• Similar Load curves have also been generated for the productive loads using the time of operation provided by their owners in the survey response. 
•  As regards irrigation load curves, the average load on a per-day basis is estimated using the time and duration of operation of irrigation pumps for various cropping seasons. In most of the villages of Kanpur Nagar and Banda, Kharif and Rabi crops are cultivated and in some instances Zaid crops are also cultivated, which result in uniform loads throughout the year.

On comparing the preferred options for electrification with the economic status it has been observed that irrespective of the card-holding category (like Below Poverty Line, Above Poverty Line etc) or income level, Options B and C were the preferred choice of a majority of households in both Kanpur Nagar and Banda. The below mentioned table illustrate different options which was used during the survey.

Options	Description
A	1 light bulb (1.5W) for 4 hrs per day + 1 mobile phone charger for 2hrs
B	2 light bulbs (1x1.5W and 1x3W) for 4 hrs per day + and 1 mobile phone charger for 2hrs
C	2 light bulbs (1x1.5W and 1x3W) for 4 hrs per day + 1 mobile phone charger for 2 hrs per day + 1 radio for 6 hrs
D	2 light bulbs (1x1.5W and 1x3W) for 4 hrs per day + 1 mobile phone charger for 2 hrs per day + 1 TV (80W) for 2hrs
E	2 light bulbs (1x1.5W and 1x3W) for 4 hrs per day + 1 mobile phone charger for 2 hrs per day + 1 fan (50W for 4Hrs)
F	2 light bulbs (1x1.5W and 1x3W) for 4 hrs per day + 1 mobile phone charger for 2 hrs per day and Other loads

 

Conclusion

The data gathered through this detailed survey can play an important role for optimum design of the solar based mini-grid systems. 

The government of Uttar Pradesh has recently adopted a Mini Grid policy for electrification of unelectrified area through the participation of private players in the state of Uttar Pradesh. It is expected that the policy will encourage large scale participation of private players in order to promote mini grids for electrification in the state.

Access to finance has been a challenge in current scenario especially for start-ups or newly formed companies.

 

Further Information

• Energy Situation of India
  
• Mini-grid portal on energypedia
  

Reference

• For further information about the survey methodology, data collection and assessment, please contact the author.