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Report | September 2015

The micro intervention

Mrida Renergy is creating a rural eco-system of solar micro grids and environment friendly, energy efficient LED bulbs to provide energy access and last mile connectivity to the off-grid population. Interestingly, the company is also on the verge of partnering with the Reliance Foundation for interventions in tribal areas of Panna district in MP.

Globally, 1.2 billion people-including 550 million in Africa, lack energy access (International Energy Agency, 2012), and depend on kerosene for their lighting requirements. However, kerosene not only provides poor illumination, but is also highly toxic, hazardous, and environmentally unfriendly. It is neither an economical option, being too expensive at market rates or requiring Government subsidies for the rural poor.

Cut to India, where about 300 million people-one in four-lack access to electricity. However, DC Solar Microgrids represent an economic and sustainable alternative, which can be set up within two to three days, in the remotest areas, and has the potential to virtually transform lives.

Ergo, while state governments find it difficult to reach out and provide last mile energy connectivity to far flung and remote hamlets, there are a few silent players, who are willfully doing what they find right-brighting the lives of those in need. Mrida Renergy, is one such player in the DSE space, who has set up ´working models´ which people can feel and experience themselves, besides serving as a learning experience for the company prior to scaling up.

Currently, Mrida´s target audience are primarily located in remote rural areas of Bihar, Orissa, Uttar Pradesh and Jharkhand, where according to company officials, more than 50 per cent of households lack energy access. This represents a huge opportunity for solar micro grids.

Mrida´s focus areas At present, Mrida is focusing on 240 Watt DC Solar Micro Grids, which can provide energy access to upto 25 un-electrified rural households through two LED bulbs each. Even where a large number of households require energy access, the company prefers to set up multiple units of 240 Watts.

They then involve small local communities for maintenance, optimum utilisation of the grids, and use of the energy access to facilitate holistic development. The company has also set up three e-hubs (solar powered education, entertainment and e-commerce facilities) in remote locations.

Says Arun Nagpal, Co-founder, Mrida Group, ´We are currently working on more than 20 micro grids and related initiatives in different Indian states.´ Overall, Mrida is working on an incremental concept of ´50-500-5,000´, whereby they aim to set up 50 working models on the ground in the first two years of operation, then scaling up to 500 in the next two years, and 5,000 in the two years, thereafter.

According to Nagpal, Mrida´s solar power grids are not targeted at locales where these are ´stand-by´ options for power outages or shortages, but rather play the role of ´energy access enablers´, where it can benefit those with no electricity access. Creating a rural eco-system Meanwhile, such initiatives require thinking beyond just ´social obligation´. Mrida Renergy is creating a rural eco-system of solar micro grids and environment friendly, energy efficient LED bulbs to provide energy access to the off-grid, base-of-pyramid population.

If effectively used, renewable energy for rural electrification has the potential to transform lives. Using energy access and better illumination for extended periods as a tool, Mrida fosters education, health and livelihood programs leading to social upliftment, economic growth, and sustainable rural development. ´Women, for instance, can now work during the evenings and nights, set up Self Help Groups (SHGs), and engage in activities such as candle making, pulse grinding and basket weaving among others,´ explains Nagpal.

Mrida also seeks to address the issues of health, hygiene and sanitation as part of its efforts towards social upliftment and holistic development. Sanitation drives, including those for individual and community/school toilets have also been introduced in some villages in collaboration with experts. Hygiene and sanitation related trainings are organised in villages, supported by screenings of documentary films at the Mrida e-hubs to create awareness.

In addition, Mrida´s model of fostering community involvement in the operation and maintenance of micro grids, and using energy access as a tool for holistic development, is aimed at ensuring financial viability coupled with social impact. A grid in itself can have 36-40 months of payback period, given efficient collection of energy access charges. Considering that the logistics and servicing costs of setting up micro grids in remote rural locations are disproportionately high, selling cost in typically not determined on a per unit basis, but in comparison with the cost of kerosene consumption and mobile charging-which the micro grid reduces significantly, if not eliminates altogether.

As a social business venture, Mrida looks at returns not only in the form of an internal rate of return (IRR), but from the point of view of financial self sufficiency and sustainability, and also from a social impact perspective.

Payback time
Meanwhile, these interventions have been initiated in varied, often hard to reach terrains and locations. In this case, Mrida is an exception. The average cost for setting up a solar micro-grid is around Rs 1.5-2 lakh, inclusive of the cost of the grid, energy access to 25-odd households for two light points, a mobile charger point each, and part of the cost of initiating related activities to optimally utilise the energy access for holistic development. ´This cost is minuscule compared to the change that we can potentially effect in the lives of people and our initial projects have been set-up as real life showcases of what we promise,´ Nagpal feels.

Moreover, the company does not have guarantees about the practicality of recovering 100 per cent of their investment amount from the projects set up till date (financially, a higher than 80 per cent recovery can allow a micro grid project to work towards a payback period of about 36 months). But, principally, Mrida believes that energy access will help the upliftment of these households, leading them to develop their own destiny.

Children will now be able to study better, which will eventually widen the job opportunities available to them. Women from the households will also be able to earn livelihood from stitching, weaving, handicrafts, etc., that can increase their income. Just six hours of light can potentially transform the lives of those at the base of the pyramid at a nominal price of Rs 150 per month.

Hence, to strengthen their presence, the company is also working with corporate entities who set up these grids as part of their CSR initiatives; where the basic payment system remains the same, except that the money received goes towards a Village Development Fund (VDF), which can be used for maintenance, and for funding other development initiatives in the village, thereby facilitating sustainability as well as holistic development.

Funding the DSE
Mrida is currently self-funded, but have plans to target private equity and venture capitalists to scale up their operations. The ticket size of individual investments for the 240 Watt DC Micro Grids is relatively low, and the company has three different revenue models-the Village Level Entrepreneurs (VLEs) or SHGs, CSR funding from corporate entities, and crowd funding using social media (the last is in the process of being set up).

While commercial funding to VLEs and SHGs for setting up micro grids and providing last mile connectivity is largely non-existent at the moment, Mrida expects to be able to convince banks, financial institutions and agencies like NABARD to participate once they have been able to provide proof of concept through their working models on the ground.

In the overall desire to set up MW and GW scale initiatives and projects, the government somehow seems to have ignored the needs of remote rural locations, which are unlikely to be serviced by the large projects currently being focused on. As such, the government would do well to consider specific emphasis on basic, consistent and reliable energy access, using very small micro grids (in fact, the 240 Watt grids would probably be better termed as Nano Grids or Pico Grids!). A focused and sustained initiative of this nature at the government level could potentially see every Indian having basic energy access in the very near future.

When the sun sets...
Setting up what would probably be the first DC Solar Microgrid in the area, Mrida took up a challenge in the tough terrains of the Himalayas. Tucked away in a remote corner of the Zanskar Valley in Ladakh, housing an ancient and culturally rich 1,000 year old Buddhist village with a population of just 80, Sumda Chenmo seemed far from seeing the light of development in the normal course, having waited for electricity for the last 67 years since Independence. Rising to the challenge, and after initial discussions with local authorities and the village head, Mrida started its journey towards illuminating the ancient heritage and lives of Sumda Chenmo.

The team trekked in the parching sun towards the mountains and away from civilisation, braving the rain in -4 degrees Celsius, carrying solar panels, batteries and wire bundles on horse backs and ponies.

The trek criss-crossed narrow winding trails to climb over the famous Konzke La pass at 16,000 ft to finally reach its destination, three days and many cracked, tanned skins later.

Sumda Chenmo was an outpost during the ancient silk route and had never seen electricity in its 1,000 years of existence. It took three days to install and set up the solar panels and batteries, mount the electrical wiring, and fit the LED bulb connections. Three DC Solar Microgrids were installed-a first of its kind in the area, with the capacity to power-up the entire village. The grid also supports a custom built DC LED television-also a first in the region.

It was around 07:00 pm on August 20, 2014, when the sun began to set, that 121 energy efficient LED bulbs permeated Sumda Chenmo with warm white light.

The time when the grids went live was arguably one of the recent most momentous occasions in the history of Sumda Chenmo, as the villagers spontaneously broke out into song and dance. It was heartening to see the happiness on these faces who had never known life with electricity. The irony is that it involved simply leveraging a resource that the village was always blessed with-sunlight-which they didn´t have the means to tap into. Access to energy has extended the work hours and productivity of Sumda Chenmo´s inhabitants, providing them with options for livelihood generation and income enhancement.

It has provided increased opportunities for children to study, and for the village to be better connected to the outside world through installed TV sets. Finally, it has fostered better community engagement, with villagers getting together and contributing money and efforts to maintain and sustain the DC Microgrids. - Sumda Chenmo, Ladakh

Uttarakhand
Binsar: Mrida installed a 240 W DC Microgrid at Mayoli farms in Binsar, Uttarakhand. Haridwar: Mrida has partnered with Rockman Industries Ltd (a Hero Motors Group Company) to launch ´Mission Parivartan´-a CSR initiative to facilitate sustainable development and transform lives across three villages in Panchayat Khala Teera near Haridwar; and with AG Industries (also a Hero Motors Group Company) to transform Tantwala village. These villages are electrified, and the focus is on solar e-hub grids to facilitate education, entertainment, e-commerce and other related development interventions.

Uttar Pradesh
Bareilly: The Infrastructure Leasing & Financial Services Ltd. (IL&FS) MPowered Village at Tahtajpur is the first initiative undertaken by Mrida in partnership with IL&FS.Tahtajpur: The hamlet today boasts of three 240 Watt DC Micro grids powering many of its households, with energy efficient LED bulbs and mobile charging facilities-lighting rural lives, facilitating education, allowing extended working hours for livelihood and income generation, and so on. The first Mrida e-hub-an innovative solar powered package of education, entertainment and e-commerce facilities under one roof, was also set up Tahtajpur.Kushinagar: Under the ´Mahindra MPowered Village´ initiative, two Solar Micro grids were set up in an un-electrified hamlet of Belwa village near Kushinagar. This small hamlet of 35 households which had never seen electricity, now has two LED bulbs and a mobile charging point per household. Likewise, Jhajawa village nearby, saw electricity for the first time, with the setting up of two more microgrids and solar streetlights.

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