Assessing the Role of Solar-Powered Microgrids Within the Context of Grid Expansion in Rural India

Abstract

Increasing electricity access continues to be a significant challenge in many developing countries and despite large efforts from the central government, a number of rural communities across India still lack access to the centralized power grid. Solar microgrids have recently been recognized as an alternative to conventional power grid by providing immediate electricity access through low-carbon technology. In the last couple of decades, a new industry consisting primarily of non-profit organizations and private enterprises has emerged in order to implement microgrids across India. However, there is significant uncertainty regarding what to do when the central grid inevitably arrives, particularly because solar microgrids are not yet cost-competitive with the central grid. This project aims to identify the potential role of microgrid technology in a grid-connected world– first by identifying conditions under which microgrids start to become cost-competitive with the central grid and then by investigating how a pre-existing microgrid system could be incorporated into the central grid in order to provide cost savings or to improve the quality of power available to system users. Based on data collected during a research trip to India in January 2020, I conducted a rigorous technical and economic analysis of these systems under a variety of possible future scenarios. My findings suggest that while under current policies, stand-alone microgrids are not cost-competitive with the central grid, there is significant potential to use a pre-existing microgrid and the central grid in tandem to deliver higher-quality electricity services to these communities. However, to obtain these benefits, public policies must first be put in place in order to establish a framework for this type of grid-microgrid interconnection.