The seeds of innovation – Farmer made pico-hydro systems

I heard this story in the mid 1990’s when I was still a student of Mechanical engineering. During this time I travelled the breadth of the incredibly biodiverse Ghats, encountering an amazing array of farmer - built pico-hydro systems that charged batteries for lighting. These travels were the most transformational time of my life; They taught me the meaning of “small is beautiful”.

At that time, the electricity grid had not yet reached these hills completely, and even where it had reached, it was very unreliable. The systems farmers had built were run-of-the-stream systems (no dams, no impounding), snugly retrofitting into their irrigation networks. With these systems, farmers could control allocation of water for irrigation or energy – they managed their energy demand along with the flow of streams and their irrigation needs.

The importance of these innovations instilled in me, along with many in Civil Society the desire to champion the cause of pico-hydro. But the challenges that all renewable energy practitioners face were aplenty. How would it be financed and by whom? While technology was not new, how would it be adapted to a local context? How would it be owned, operated & maintained? Mobilizing people and achieving financial sustainability – of both the systems and the efforts to build them – was the challenge of the day.

A model micro-hydro community system: Pathanpara Kerala In 1996 two engineer activists, Anil and Samuel took it upon themselves to demonstrate “people’s energy”, in the context of a movement against a proposed nuclear power plant in the region. They convinced the local church in a small village called Pathanpara (Kannur District), in the Western Ghats of Kerala. Under its leadership the village built a 5 KW micro-hydro system that would become an exceptional model of a community- based micro-hydro system.

The project met and overcame the numerous challenges renewable energy practitioners face in rural India; It secured financing from the village through cash or kind; It formed a Village Electricity Committee (VEC), elected at regular periods, which set tariffs on a no-profit no-loss basis; And it empowered the VEC to operate, maintain, manage and regulate energy use.

Watch: People's Electricity in Pathanpara Part 1, Part 2, Part 3

This system, built in 1996, provided reliable electricity to around 100 households in the village. Even though the grid arrived in the village in 2002, it has failed to provide electricity to all households. Today, the micro hydro system continues to provide electricity to 50 households. What’s more, the VEC achieved demand management (critical when the supply was limited to 5 KW and had to be shared equitably) through social regulation rather than sophisticated technical means. The VEC also realized the importance of protecting the stream, which the micro-hydro system was built on, and has worked to maintain environmental protection. Ultimately, this system and its governance, remain a model for future efforts.

The role of government agencies and policy

Since the mid-1990s, the grid has extended to some areas in the Ghats – but its inclusiveness and its reliability remain questionable with many locations still completely cut-off from the grid. What’s worse, until the Electricity Act of 2003 efforts to deliver decentralized renewable energy to the people through systems like those at Pathanpara were technically illegal. Capital subsidies that defray the upfront investment costs of such systems were put in place around the same time (2003), by the Ministry of New and Renewable Energy (MNRE), which opened possibilities for replication. However, accessing the subsidy and deploying this money still poses challenges and delays for practitioners to varying degrees in different states.

Small scale, micro and pico systems, that are people owned & managed need supportive policy environments. While the 2003 act has undoubtedly helped practitioners, much more can be done in public policy that can help replicate these pioneering efforts. Considering the energy security, access to energy and most importantly, local inclusive economic growth implications of such systems government policy in this area must be a priority.

Evolution of civil society: Acknowledging the need for a Business-like approach. Meanwhile, civil society has evolved its approach as an increasing realization swept the community that unless the delivery of these systems addressed issues of post installation maintenance services, along with the need for financial sustainability, the systems would not be sustainable in the long term. Therefore, efforts morphed into more business or business-like entities, which tried to strike the right balance between products & customization and the pricing of delivery and maintenance.

One of those to have mastered this balance is Prakruti Hydro Labs (PHL). PHL pioneered necessary technological adaptations and delivery chain issues. PHL has established a dealer network for its 1 KW micro-hydro product that identify sites & customers, install & commission the systems, provide post-installation services – and, most importantly bundle two types of financial services with all of these. First, they provide an interface with the MNRE to integrate access to subsidies for consumers. The subsidy is released after completion of the installation but can be delayed up to a year. Therefore, the dealer network has worked with local farmer cooperative banks to enable a bridge loan to cover capital needs during the subsidy release cycle.

Watch Micro Hydro Supply Chains Part 1, Part 2, Part 3

Prakruti Hydro labs and its dealer network are now partnering with Small Scale Sustainable Infrastructure Development Fund (S3IDF, www.s3idf.org) to try and mobilize more local bank money for this program. Together we are working to expand the program and create the conditions necessary for scaling up these efforts.

The Way Forward

Micro hydro systems still hold tremendous untapped potential. For instance, systems < 1KW can potentially serve basic electricity needs for even landless labourers while larger scale systems can enable value-added local economic activity such as agri-produce or agri-waste. Larger scale systems are particularly exciting because they can eventually be connected to the grid. Such linkages not only make these projects more bankable, they hold the potential to drive more local and inclusive economic development. However, this requires an innovative approach to rural electrification that involves local governance and possibilities of entrepreneurially run local ESCOs (Energy service companies) rather than a sole focus on large scale centralized power plants and grid extension.

While practitioners will continue to lay the foundations for such an approach, it is critical that good governance incorporates the importance of these possibilities. A capital subsidy to encourage these systems is a starting point, but good public policy must promote an enabling eco-system for the sector to develop and achieve maturity. This means other forms of assistance – technical financial and economic – must be mobilized. It also requires capacity building for local people who can be gainfully employed in this sector.

It is important that the nation’s decision makers see that its own people have demonstrated solutions to their problems, and in so doing an alternative vision for their development and their future; A vision that potentially holds answers to our burning problems of social equity and the environmental crisis. If we desire inclusive and benign development, I believe that this is not a choice but an imperative.