Tata Power will target 10,000 micro grids across India, for which it has formed a company, TP Renewable Microgrid.
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Tata Power announced a new business in partnership with The Rockefeller Foundation, under which it will set up micro grids based on renewable power and manage electricity supply in rural areas.
A micro grid is a localised system of power generation and distribution, as distinct from grid power that is generated and transported over large distances.
Tata Power will target 10,000 micro grids across India, for which it has formed a company, TP Renewable Microgrid.
In the first phase, around 200 villages have been identified in Uttar Pradesh, Bihar and some parts of Assam, Chief Executive Officer Praveer Sinha told Business Standard.
TP Renewable Microgrid will be operated and managed by Tata Power.
The latter has 11,000 Mw of installed grid scale generation capacity and 2.6 million customers in the Delhi, Ajmer and Mumbai distribution areas.
With this, it would be going full hog into the distributed energy generation and management business, after having adopted this model on a smaller scale through a joint venture with the Delhi government for slum communities.
On why they were venturing into the rural electricity market, Sinha said when Tata Power was formed, the purpose was to supply clean, abundant and affordable power.
“The paradigm shifted to Mumbai, where we supplied power.
"Now, this is the leadership (which) Tata Power will have to demonstrate and if 25 million people have to be impacted, it has to be Tata Power,” he declared.
The Rockefeller Foundation’s Smart Power India (SPI) division already works with local energy supply companies; it would be partnering Tata Power.
“Our experience with SPI shows when people buy power from micro grids, they value it and like the quality of power.
"When people purchase power, their income increases considerably,” said Rajiv J Shah, president, The Rockefeller Foundation.
Shah said they intended to be an equity partner.
The Foundation is in discussion with international funding agencies and plans to also bring in commercial financing.
On how difficult it would be to scale up the micro grid business because of competing grid supply, Shah said, “The entire strategy is to have the right partner and Tata Power is absolutely the right partner, which brings the level of scale and sophistication that allows to bring down the price considerably.
"We believe it will be on par with grid power - it is not just about price but also quality and reliability, which is not being met by grid power.”
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