India is getting digitised rapidly, but can its electricity infrastructure fuel this enormous growth? For years, telecom networks have been expanding, and many initiatives have been taken by the service providers and the government to increase the teledensity and broadband penetration in urban and rural parts of the country. However, telecom initiatives in rural India still succumb to problems due to the challenges in the state of rural electrification.
The rural areas have been facing specific problems of good quality power for quite some time now. Because, in most of the rural areas, the conventional grid power is not easily available with the right quality, and the grid, sometimes, is far away. Even if the grid supply is available, the power quality remains challenging and erratic. That is mainly due to supply interruption, sudden change in voltage, under-voltage, over-voltage, fluctuation and local faults. As a result, this causes data loss and data errors in communication network equipment.
Since the availability of quality power in the rural areas is not certain — the next best alternatives — diesel generators and inverter-battery systems are being used for economically better households and kerosene lamps or candles for lower-income strata people. But, this, too, keeps an uninterrupted power supply for the desired period. Plus, supply, storage, cost of diesel and the resulting pollution — both noise and environmental — pose massive hurdles in operating diesel generators and inverter batteries. With kerosene in shortage, the poorer people have no option but to live in a challenging environment.
In India, there are about 5.8 lakh mobile base transceiver stations (BTS) towers, and each of these towers has 15-20 KVA diesel generators as power backup. To run these stations, more than two billion litres of diesel is consumed every year, generating about 10 million tons of carbon (one litre of diesel emits 2.68 kg of CO2).
Not just telecom networks, small and medium enterprises (SMBs) and micro-enterprises in the rural areas also face a similar fate. As the electricity is on-demand with the right quality is not available in parts of rural India, most households rely on alternative sources of light like kerosene lamps, diesel or oil lamps, which pose great health hazards. Moreover, they are ineffective, expensive, or unreliable. So, what is the solution here?
Enters OMC Power
Based in Gurgaon, OMC Power is a first-of-its-kind renewable energy services company (RESCO) that builds, owns, and operates power plants with smart mini-grids to serve telecom companies, small businesses, and rural poor-grid areas. The company supplies reliable and affordable power to lakhs of people, thousands of businesses and hundreds of telecom towers across India, leveraging micropower — small-scale energy with local generation and distribution.
OMC Power, which began its operation in 2011, started by a group of telecom industry veterans, has come a long way from where it all started. The company has installed about 270 plants to date, with a generating capacity of 16 MW, 20 MWh of storage, and a 350 km long grid, whereby it serves more than 20,000 off-takers, including 8000 SMEs and 12,000 rural households.
Today, OMC Power works with all sorts of technologies in the renewable energy space. While the company primarily uses solar, it is also one of the early adopters of micro wind turbines. “During the solar hours, you have solar. And, beyond the solar hours, you have the wind turbine supplementing power generation. This will eventually eliminate diesel,” said Rohit Chandra, CEO, OMC Power. Further, he said that the company is also looking to deploy CNG/ LNG to eliminate diesel.
On the storage side, the company used to work with lead-acid batteries because they were proven in the past. Recently, it has moved to maintenance-free VRLA batteries that fast charge, along with deploying lithium-ion batteries. “We are continuously innovating with new storage technologies and with the latest generation of rectifiers and inverterors,” added Chandra.
Also, the company is working to various predictive benefits of equipment, which can be deployed outdoors in extreme weather conditions, with very high efficiencies, and equipment that can serve a high amount of load, and also scalable from the point of view of having the ability to charge a very large battery bank on the storage side. Besides this, OMC also uses smart grids and smart energy meters, which work as per the customers’ needs.
Further explaining, he said when a customer shifts from kerosene to LED, the size of the wallet does not increase. Therefore the odds are extremely low, and we need to find a solution to fit the size of their wallet. However, he believes that this will eventually lead to economic development in the villages, and the size of the wallet and consumption will continue to increase.
“While they might start with an LED bulb and a charging socket, but eventually as prosperity happens in the village, they will start using more and more appliances and devices,” said Chandra. In addition to this, OMC Power also offers several other services to increase the productivity of the people and businesses that it serves.
OMC Power -ABC Model
A - Anchor Loads
In this vertical, the company provides electricity to telecom towers in poor-grid areas traditionally powered by diesel generators. Here, it takes all responsibility for generating and supplying power to the tower with long-term power purchase agreements in place.
B - Businesses via Smart Grids
The company offers power to businesses of all sizes and petrol and irrigation pumps, mills, hospitals, banks, schools, and other buildings.
C - Community Households via Smart Grids
OMC Power supplies electricity directly to homes from their power plants. Its affordable price point enables near full penetration of all homes near their power plants. Most importantly, it offers customised packages to suit its customers’ pockets. “We charge consumers based on their existing household budget for kerosene and mobile charging and enable people to climb the energy ladder,” said Chandra.
Pioneering ABC Model
We believe that we were the pioneers of this model, whereby you have three different segments of customers on one platform — telecom service providers, SMEs and micro-enterprises, and rural communities,” said Chandra. Its ABC model has established OMC Power as one of the world’s largest and most successful mini-grid companies. A Scalable, Social & Environmental Venture.
While OMC Power looks to revolutionise the way power is generated and distributed in the rural parts of the country, the question is, how scalable is this model? Chandra said anything with a huge social, environmental and economic impact can only sustain.
“What we are running is a very large infrastructure project, and it requires a large amount of capital expenditure for growth, and promoters or angel investors of the company cannot fund the capital expenditures. So beyond a certain point, we have to work with large equity investors, and we have to work with large lenders who provide us with the capital required for growth,” said Chandra, stating that their business model is robust and financially viable.
In the coming years, OMC Power looks to grow from 270 plants to 1000 plants in India, predominantly in the region of Uttar Pradesh — which is one of the largest states in India with a population of more than 220 million people — and then slowly expand to other states like Bihar and Jharkhand, where it believes that its business model is of relevance, alongside expanding to Africa and Asian countries.
Backed by Mitsui & Co and Rockefeller Foundation, the company plans to expand its presence beyond 1000 plants in India, scaling up to 5000 plants, and become one of the largest distributed energy companies practising the ABC business.