Microgrids Key to Bringing a Billion Out of the Dark

Every night, more than a billion people live in the dark when the sun goes down. They experience a different world than that of people in developed countries. Their only source of light, where available, comes from kerosene – a fuel that is expensive, dirty and potentially dangerous. Consequently, their immediate environment is often filled with smoke and fire, thereby making it difficult to even see properly.

Ten years ago, alternatives to kerosene were hard to find. Today is a very different story. Technological advances have greatly reduced the price of LED lights and solar, not to mention precipitating global mobile coverage. Jake Kendall and Rodger Voorhies cite in a Foreign Affairs article, “according to the World Bank, mobile signals now cover some 90 percent of the world’s poor.” These changes have fed a mini-revolution where it is now possible to bring a billion people out of the dark.

Low-cost micro grid pioneer, Mera Gao Power (MGP), which provides lighting and cell phone charging services, recently closed a U.S. $500,000 debt investment deal with the Dutch-based ICCO investment fund. This is a welcome development for energy access companies, which desperately need funding to meet the increasing demand for lighting, cell phone charging and other energy services. Although encouraging, many more investments are needed.

 

A Mera Gao Power technician connects the wiring to charge a cell phone. Photo by Anastasia Cronin
A Mera Gao Power technician connects the wiring to charge a cell phone.
Photo by Anastasia Cronin

As it turned out, 2014 was a very successful year, when energy access companies secured at least $64 million in investments, mostly equity, according to Greentech Media. This may have outpaced energy access investments in all previous years combined. MGP’s investment is particularly relevant because debt financing signals achievement of past success, as opposed to equity, which is riskier. More difficult to obtain, debt investment is essential to attracting commercial banks, which are vital to truly scale the energy access sector.

MGP’s success comes on the heels of its accomplishment last year, as a winner of National Geographic’s Terra Watt Prize, a competition challenging energy access companies to provide basic electricity to communities living off the grid. To date, the $125,000 earned from the Terra Watt Prize has enabled MGP to build micro-grids in 70 hamlets in Uttar Pradesh, India, a number that is expected to double in the coming months.

MGP’s operation oversees the completion of one micro-grid facility per day, which serves approximately 25 households each with enough electricity to power two lights and charge a cell phone. This is cheaper, safer and a higher quality alternative to kerosene, which costs families 35 rupees ($0.55) per week and sometimes much more — and this does not include phone charging. As an alternative, MGP customers pay 30 rupees ($0.47) per week for lighting and phone charging services.

 

Each household connected to the micro-grid receives enough electricity to power a couple of one-watt LED light bulbs. Photo by Anastasia Cronin
Each household connected to the micro-grid receives enough electricity to power a couple of one-watt LED light bulbs.
Photo by Anastasia Cronin

With such advancements, it is no wonder MGP is generating interest. Not only among banks and off-grid communities, MGP has also attracted attention among communities with grid-access. Even though these communities are grid-connected, electricity can be low voltage and therefore less reliable. “They can’t even charge cell phones,” explains MGP co-founder, Sandeep Pandey. However “with a partially connected grid, these households are particularly enthusiastic because they experience what it’s like to get access to electricity.” The demand for MGP services continues to grow.

“Families are simply happy to see the food that they eat after sun down, safely avoid snakes entering their homes, and no longer be exposed to the fire hazards of kerosene lamps. The economic case is not a hard sell, hence MGP customers are eager to obtain reliable electricity for 30 rupees a week.”

 

After winning the Terra Watt Prize, Mera Gao Power expanded their business to Sitapur in Uttar Pradesh, India Photo by Anastasia Cronin
After winning the Terra Watt Prize, Mera Gao Power expanded their business to Sitapur in Uttar Pradesh, India
Photo by Anastasia Cronin

Changing Planet

Chad Lipton is currently starting a business delivering clean energy services in Cote d’Ivoire. Previously, Chad worked for National Geographic where he managed a grant program to fund entrepreneurs delivering innovative energy solutions to communities facing economic, climate change, environmental and other challenges. In 2013, Chad submitted the winning idea to be the subject matter for National Geographic's challenge competition, called the Terra Watt Prize. He helped develop the prize objective, which is to address the challenges of energy access by facilitating the flow of capital between entrepreneurs and investors and also to identify viable business models. Before National Geographic, Chad worked for Elysian Energy as an energy auditor, carrying out site visits and analysis in the residential energy field. Prior to Elysian Energy, Chad worked in the field of carbon management, where he performed site verification for greenhouse gas emission reduction projects. From 2004-07, Chad worked as an environmental health specialist in Africa carrying out water and sanitation projects in Côte d’Ivoire and Mozambique. Chad has master’s degrees in Environmental Health Science and International Relations from The Johns Hopkins University.