Setting up sustainable models of Pico hydro for enhanced rural energy services and village based micro enterprise development

Pico hydro feasibility in North-east India

Providing access to clean sustainable energy services in rural areas is a daunting challenge. A comprehensive societal development cannot be achieved when rural and peri-urban communities have limited access to modern and clean energy options. As energy is an engine to economic development and poverty elevation, access to energy services supports localized economic development, enabling local income generation through non-farm employment, catalyze the creation of micro enterprises, livelihood activities beyond daylight hours and locally owned businesses, in addition to better health and education. Thus rural development should have an overall priority in meeting the access challenge through decentralized energy systems in isolated situation using conventional and renewable sources promoting local energy entrepreneurs, establishing financial mechanisms and strengthen policies and regulatory systems to expand the level of energy services.

Hence with the above understanding the feasibility study, which resulted in a detail project report (DPR) proposes a strategic Village Hydro and a micro-entrepreneurship model, which is appropriate in north east India contest and therefore it is anticipated that the project will generate extreme interest amongst stakeholders and draw the attention of policy makers and thereby assimilate into government policies supporting Pico hydro models.

Pico-hydro technology is a relatively cheap and environment friendly mechanism of generating renewable energy (Alternate Current) in smaller capacities to electrify a few households, small hamlet, a village, or a wayside business establishment and also have the opportunity to power mechanical drives for milling and turning operations. It is becoming a mature technology which can now be considered an alternative in technically feasible areas as compared to grid extension, diesel generators, and solar photovoltaic (PV) systems with reference to the cost saving that can be made. This has been demonstrated positively in Vietnam, Philillines, Nepal, Sub-Saharan Africa and Kenya, where best practices include: good governance, appropriate tariff setting, community participation at all implementation stages, capacity building, sustainability and their positive contribution to local development has been document for a wider audience. However this information though easily being available cannot be translated into reality by potential end users (community or micro-entrepreneur) without the support from various players; donors, technocrats, manufacturers, training and capacity building agencies (SNAs or the NGOs) in the Indian Himalayan and specifically to the Eastern Himalayas. Trace instance of community and individual effort from Nagaland, Manipur and Arunachal Pradesh has been reported, where efforts have failed due to inadequate technical know-how. Therefore there is a need to support the popularization of Pico hydro opportunities at various end use levels, be it sole for business development activities or for social development as a unit that offers viable earnings form the energy generated.

In regards to the Government of India’s objective to electrify the remote census un-electrified villages and remote hamlets based on non-conventional energy sources by the end of the Eleventh Plan, 2012 and in regards to achieving energy security, climate change, energy & poverty issues and commitments for achieving the MDGs. Planners and policy makers are being urged to review all available energy options, especially those decentralized sources such as Pico hydro that could play a critical role in supplying poor and isolated communities with energy for poverty elevation and rural development.

We aimed a village hydro model which would be financially sustainable from the revenue that would be generated form the end-users and with a lower capital cost at Rs 20258.00 per package in comparison to previous micro-hydro projects. The low capital cost of the Village Hydro is attributed to standardization, technology and low-voltage distribution and this addresses the financial constraints attributed to micro hydro projects. It is therefore presumed that the proposed model will help support the government’s ongoing efforts towards off-grid rural electrification.

A cash flow analysis indicated that the village hydro will be financially sustainable as the annual revenue generation would be about 11% of the capital cost, which could be utilized for covering the cost operation and maintenance cost of the plant over the life span and also could be used to repay the capital cost after subsidy (Rs. 75000/- KW) by MNRES, Govt. of India. Even a small service payment of a fixed amount of Rs 150.00 per month by an individual user makes the system financially sustainable and improves the viability of off-grid rural electrification attributed to the low cost design.

Thus the study proposes a strategic Village Hydro and a micro-entrepreneurship model, which is applicable in north east India and therefore it is expected that the government policies will support the models. As the technology become widely available in NE India, off-grid rural electrification projects can be accelerated to improve the living standard of remote village communities in the region.