Indian power companies have their hands full generating and transporting power to cities and large factories—the current peak power deficit is 13 percent and growing. The problem isn’t just that the energy need is much larger than the production capacity; the existing electricity distribution and transmission infrastructure is also hugely inefficient, with up to 50 percent of the electricity generated lost in transport.
The solution has been to reframe India’s power shortage. Rural citizens do have money to spend on power, but neither they nor the power company have the money or time to lay cables to every home. And so, electricity has to become portable, to be sold in a sachet, “pay as you go” model. Such has been the thinking behind OMC’s community power initiative with one of India’s largest mobile network infrastructure companies, Bharti Infratel. The logic is straightforward: telecom companies have a vested interest in getting energy to their customers so they can better use their mobile phones.
By building micropower plants in rural communities, OMC provides mobile networks with reliable and renewable power for their telecom towers. These small plants come without the high capital expenditure and long construction times (5–7 years for a new coal plant, if you’re lucky) of traditional power plants, or the wastage associated with long transmission lines. As an added bonus, OMC’s power plants run on solar, wind, and biogas, cutting down on carbon emissions. The mobile phone networks, in turn, provide a long-term commitment to purchase power from OMC, based on their income from new cell phone users. The plants also power local communities so they can charge their phones.
To make this work commercially, OMC rethought the business model for charging. For a fee paid per day, week, or month OMC’s customers get a fully charged LED lantern or PowerBox that runs several lights, fans, and, of course, charges their mobile phones. OMC delivers to their doorsteps in the afternoon and picks up the equipment for charging in the morning, every day.
There are a number of positive knock-on effects of spurring social and economic development, such as the world of financial services available via the mobile phone. But sometimes electricity can simply mean a clean and efficient source of light. The most common light source in rural India is the often dangerous and highly polluting kerosene lamp, at a typical monthly fuel cost of Rs. 180 (US$3.3). OMC’s LED lanterns cost only Rs. 100 (US$1.8) per month—a very large cost savings with a product that also offers superior illumination.
What’s striking about this business model is that it does not require government subsidies to work, just the power of the market and a certain faith in the ability of communities to thrive when given opportunities. It’s worth remembering that there is no correlation between the price of electricity and development, only correlation between the existence of electricity and development. India’s rural poor understand that and they are willing and able to pay for power.
Can such experiments in electrifying rural India provide a lesson for the developed world as well?
It is completely feasible that we, sooner than we would have imagined, will have a power plant close to home—if not in our backyard, perhaps in the neighborhood. The era of centralization is ending; our resources are limited, our energy needs are increasing, and the electricity grid is not going to get efficient anytime soon. So we need to go local.
The time for micropower is now.
