I recently spent three weeks in India, and like most Americans traveling the subcontinent, I was struck by the deep differences between our two societies.  Waste disposal is a highly visible one – in the United States, we like to bury our trash and forget about it.  In India, trash is thrown on the ground and forgotten, or rather, ignored.

One of the sharpest differences between the United States and India, though, is the power system.  Citizens of developed countries are used to 24/7 access to power.  Sure, sometimes that power may be more expensive (thanks to utility attempts to balance demand throughout the day and night).  But when we flip a light switch, we take it for granted that the light will indeed turn on.  What if it didn’t?  What if we had regular power cuts, either scheduled or for emergency purposes?

In India, power cuts are a part of life.  The infrastructure was not built to handle such a huge population and, while construction is rampant throughout India, progress is slow and expensive.  Thus, utilities simply shut off the power when it becomes too difficult or expensive to run.  In Chennai, the capital of Tamil Nadu, power cuts are scheduled for 2 hours a day, staggered across different parts of the city.  In the house where I was staying, the power went off from 4 p.m. to 6 p.m. daily.  In remote villages, access to electricity is the exception: power cuts can last as long as 16 hours, every day.

Geographic Inequality

This may seem backward to those of us used to constantly running air conditioners.  But if American utilities practiced routine load shedding, even for 5 minutes a day, huge amounts of energy could be saved.  This is the principle behind smart appliances, which don’t consume electricity when it’s not needed.  In India, where smart appliances are still essentially unknown, load shedding is an effort to prevent emergency power cuts and blackouts, such as the massive blackout that gripped 20 states in north India last July.  Demand often outstrips supply, especially with inefficiencies and theft common across the Indian power grid, which accounts for between 20% and 50% of all power generated in the country.

Officials tend to blame coal shortages, although it is really a matter of geographic inequality.  India’s grid is fragmented.  Even when there’s a surplus of electricity in one part of the country, it’s impossible to transport it without losing most of the energy along the way.  Clearly, the Indian grid needs revamped massive upgrades.  On the website Powercuts.in, citizens can report electricity outages via mobile web, SMS, Twitter, and other smartphone applications.  This website takes the information and makes it publicly available.  This is only effective in major cities, though, where cell phone reception is reliable and consistent.  The full extent of load shedding is hard to quantify.

In India, one of the most rapidly developing economies in the world, major inefficiencies in the grid cause many people to be without electricity on a daily basis, slowing development and costing billions of rupees in lost productivity, especially in villages.  The situation could be improved by integrating localized renewables, which is already happening, as well as better mapping of electricity use nationwide, which could reduce theft and inefficiencies.

It’s difficult to imagine, as an American, the effects of such widespread blackouts.  But with the growing frequency of major natural disasters and our own grid aging, they may soon become more familiar.

The ability of electric vehicle batteries to interact with the grid has been one of the more exciting promises of the EV industry.  The spread of EVs, along with the growth of smart communications software, has brought along with it new ways to take advantage of the energy storage capabilities of vehicle batteries.  Though this technology is exciting, questions remain concerning its actual utility and economics.

In Hot, Flat, and Crowded, Thomas Friedman described how this technology would allow everyday motorists to participate in wholesale energy markets while hooked into the grid at places as simple parking garages.  EV owners can charge the vehicle at night when prices are low per kilowatt-hour (kWh), and then discharge the power onto the grid during the day when prices are high.  That’s known as energy arbitrage.

The above dynamic may come eventually, but it will require a great deal of electricity market deregulation and increased adoption of dynamic pricing plans by utilities before the infrastructure investments begin to take place.  Further, managing a system in which the participating vehicle will at some point need to drive away presents other interesting challenges.  Until the wider public market has been enabled, energy arbitrage will be an opportunity best harnessed by commercial fleet operators who can leverage far greater kWh capacities and better manage vehicle schedules.  Near term uses for the technology will likely focus on providing an alternative to diesel generation sets for emergency back-up power, for which the biggest market is India.

Northern India’s historic blackouts at the end of July left a population around twice that of the United States without power.  Unfortunately power outages are common in India, which makes diesel generators almost obligatory for any small business.  As can be expected, during the blackout, demand for diesel surged as thousands of generators jumped in where the grid left off.  For small businesses, neither the fuel nor the generator is cheap;  diesel prices in India are around $3.10/gallon (U.S.) and new 15 kW generators can cost around $5,000.  On the other hand, bidirectional charging upgrades to existing Level 2 electric vehicle charging equipment (EVCE) are estimated to be around $500 to $1,000, and can supply max power of 7.2 kW.

To be clear, besides having significant issues with grid reliability, India at this point has no existing EVCE infrastructure and barely has an EV industry.  The country, however, appears to be motivated to confront these challenges: Prime Minister Manmohan Singh has outlined a  $400 billion plan to improve grid reliability, and the government just recently passed a $4 billion (U.S.) plan to boost electric and hybrid vehicle production, with the goal of putting between 4 and 5 million of the vehicles on Indian roads by 2020.

The momentum for a rebirth of the Indian electric infrastructure comes at a time when vehicle to building (V2B) technologies are just being introduced by Nuvve, and major Automakers Nissan, Toyota, and Honda.  Though India is still a nascent EV and EVCE market, both the government and small business could profit greatly from V2B investments.  Further, creating an additional way for Indian small business owners to maximize the value of their costly EV purchase could be fundamental to EV sales growth, and therefore critical to helping the country reach that 4 to 5 million vehicle goal by 2020.

As noted earlier by my Pike Research colleagues, the massive power outage in India that left over 370 million people in the dark in late July could open up opportunities for cleantech in booming South Asia.  It could also help make India one of the world’s top hotspots for remote microgrids.

Remote microgrids can serve as the anchors of new, appropriate scale infrastructure, a shift to smarter ways to deliver humanitarian services to the poor.  That’s why financial support for remote microgrids has come from the United Nations, the U.S. Agency for International Development (USAID), and non-government entities such as the Clinton Climate Initiative and the Bill Gates Foundation.  Even Greenpeace has endorsed the concept, with a report extolling a bottoms-up distributed renewables strategy to export surplus solar power out of the Indian state of Bihar via microgrid networks.

Clearly, relying upon centralized coal plants to fuel India’s expanding economy is not a viable solution.  As climate change expert Joe Romm points out in a blog on The Energy Collective, mobile phone towers powered by off-grid renewable energy sources may be pointing the way toward viable energy supply solutions for India.

Just as the developing world leapfrogged landlines – the equivalent of today’s centralized transmission grid – to move directly to mobile and wireless telecommunications, it may skip to distributed microgrid networks (the analogue of cell phones), rather than building out massive long-distance transmission networks.  More importantly, from an environmental point of view, these remote systems will not rely on diesel power generation, the default source of power throughout much of the developing world.

At present, entrepreneurs view India as an attractive market since all microgrids under 1 megawatt (MW) in size are deregulated, which means that these systems can be developed by the private sector with a minimum of government red tape.  Among the leading innovators is Simpa Networks, which has developed a “pay-as-you-go” business model that allows villages looking for simple systems to power lighting and mobile device-charging services.  Billing its service as a “progressive purchase,” the firm relies upon smart meters to measure consumption.  Customers purchase power in much the same way millions of cell phone users buy prepaid cards.  The difference is that customers are slowly investing in their own solar PV systems, which are typically paid off within 3 to 5 years.

One of the first microgrids to be deployed in India to service more affluent customers was installed by smart meter vendor Echelon for the Palm Meadows Community in Hyderabad, India.  This 86-acre gated community with 335 homes and residential services offers another peek into the future for India.  The community ties into the grid at a dedicated substation and sources energy in bulk from the utility.  While the community still runs primarily on diesel generators, a pricing plan can reduce consumption to help respond to peak demands.  The microgrid will also incorporate solar PV into rooftops that will feed energy back into the grid, creating a solar infrastructure with payback options.

Early on the morning of July 30^th, India experienced its worst power outage in nearly a decade as electricity supply was down for more than 8 hours to more than 370 million people, a number greater than the population of the United States.  The consequences of rising electricity demand and weak electricity infrastructure are now fully on display, as India attempts to identify the cause of the outage and develop a solution to prevent future widespread outages.  There are myriad technical solutions in development across the globe – smart energy, smart grid, and smart industry technologies and strategies – that India may now feel a more pressing need to adopt.

The power industry’s role in supporting economic development is unparalleled.  In India, the power outage in the north affected agricultural operations in Punjab, telecommunications and commuter services in New Delhi, military operations in Kashmir, and water treatment services in Uttar Pradesh, one of the most densely populated regions in the world.  What’s at stake are the food and water supplies to millions of people, the security of those people, and millions of dollars in gross domestic product.

As the real consequences of this power outage continue to emerge, this debacle is likely to become an impetus for Indian politicians to more aggressively pursue energy infrastructure development.  India faces the problems characteristic of other emerging economies – particularly power theft, heavy dependence on coal and other thermal resources, and a fragile power grid.  In the case of this power outage, rising electricity demand and coal shortages proved to be too stressful for the existing infrastructure.  With India’s electricity demand expected to rise five-fold to six-fold in the coming decades, according to the International Energy Agency (IEA), and GDP growth rate forecast to stay above 6% in the coming years, this is increasingly a liability for a country that has never been known for building and maintaining state-of-the-art infrastructure.  India needs a flexible grid infrastructure that can accommodate growth and encourage resource diversity.  Solutions such as advanced battery storage, distributed solar, and microgrids (India is already home to 17 microgrid installations) can provide such flexibility and diversity.  In the coming years, India will be a hotbed for such technologies.  Pike Research forecasts strong growth in many emerging sectors (solar, energy storage, and electrified transportation) in emerging markets, including India.

The power outage in India is a reminder that cleantech market development is not just about the growth and advancement of new technologies and markets; it’s also about new energy development strategies for emerging economies.  The distinct conditions and challenges faced by emerging markets such as India, China, and Brazil provide lessons for the broader market and may ultimately drive cleantech market expansion.