IEEE Electrification Magazine - March 2014 - 22

response impacts the activities of consumers and entails
economic losses.
for example, india, an emerging economy with 17% of
the world's population, ranking second after china, only
ranks fifth in the world in total energy consumption. india
has been investing heavily in centralized power systems to
meet its growing demand for energy, but it faces the critical challenge of meeting a rapidly
increasing demand for energy. the
estimated peak shortage is about 10%
across the country, and this figure is
rising despite attempts to increase
generation capacity. also, the operational efficiency of the power system
is low given the high aggregate technical and commercial (at&c) losses (in
the range of 30-40%). therefore, utilities in india resort to load shedding in
the short term to deal with energy
shortages. the consumers connected
to the grid have to invest in expensive
backup systems to ensure acceptable
power quality and reliability (pQr).
apart from the shortage in power,
according to international energy
agency estimates, more than 400 million indians are without access to electricity or modern forms of energy.
the issues with centralized grid-based power systems
for demand-supply matching are:
xx
centralized power systems are capital intensive and
have long gestation periods. Difficulties in attracting
such capital for energy investments impede economic
development, especially in less developed countries.
there is a fair amount of inertia with regard to the
rate of change that can be introduced in the energy
system. Decisions on centralized power plants are
delinked from social and environmental aspects.
there is an excessive focus on technology and
economic aspects in the decision making rather than
on resources and their availability.
xx
centralized power systems are considered to be highly
efficient. However, it can be shown that, for certain
end uses, it may be more efficient to use local energy
resources than grid-based electricity when the overall
efficiency of the energy chain is considered.
xx
the dependence on external sources and imports
increases the vulnerability of the dependent regions
and nations to geopolitics and reduction in energy
security. rising energy prices for energy imports can
lead to skyrocketing import bills, with adverse consequences for business, employment, and social welfare.
xx
the relationship between the cost of the system and
pQr is exponential in nature. to improve pQr, redundancy needs to be introduced into the power system.
there is an increasing order of magnitude of costs for
every percentage point improvement in reliability.

furthermore, utilities are often economically delinked
from the demand side. policy makers being supply and
grid focused implies a lacuna in their understanding of
consumer needs. the social and environmental impact of
individual choices remains unknown. engineering solutions are preferred to social solutions. centralized power
plants do not ensure access, affordability, and energy
security at the individual consumer
and community level. on the microeconomic level, per-unit energy prices
influence consumer choices and
behavior, and this can affect macroeconomic development and growth.
all of the above factors suggest the
need to invest in additional systems
that can adequately plug the existing
demand-supply gaps and also provide
access to modern energy to the millions who are dependent on outmoded
forms of energy.

Microgrids are not
just a stopgap
solution for
matching demand
and supply in
emerging economies
and enabling access
to modern energy.

I E E E E l e c t r i f i c ati o n M agaz ine / MARCH 2014

Stakeholder Needs

Demand-supply matching of energy
and power is not just a technical problem as often perceived. it requires an
understanding of the intricate nature of the energy system
at the economic, social, and environmental levels. the decision is one of choosing between an optimal solution or a satisfying solution, an organic or an inorganic growth model,
and an inclusive or an exclusive decision. it is about
acknowledging individual consumers and communities as a
significant part of the system with entitlements, rights, and
duties and that the power system exists to serve their needs.
all of this calls for a paradigm shift. strengthening communities to be self-sufficient or at least less dependent on grid
power for their reliability would reduce vulnerability and
adverse impacts on the economy, society, and the environment. from this perspective, if one were to define the needs
of energy consumers, it is for sustainable energy systems.
sustainable energy systems imply:
xx
reliable and secure availability of quality power to all
consumers
xx
meeting the legitimate energy demands of all sections
of the present and future generations at affordable
prices with the least effect on the environment
xx
energy conservation using effective supply- and
demand-side management
xx
generation by using clean and renewable energy
sources
xx
efficient handling and balancing of the conflicting
equity, environment, and economy objectives under
different spectral, spatial, and temporal conditions.
While making decisions, stakeholders have to consider the additional costs of the different sources of energy:
logistics, safety, storage, and environmental costs. it is
important to return to the basics of power generation and

Table of Contents for the Digital Edition of IEEE Electrification Magazine - March 2014