The future of planet Earth with respect to energy is turning bleak with fast depleting conventional sources of energy and increasing environmental problems. It is appalling to see that over 77 million households do not have access to electricity in India, out of which 20 million people are living in the rural areas of Uttar Pradesh. There is a heavy reliance on kerosene as a source of energy which is a diminishing resource and also a polluting form of energy. Many of the government schemes for electrification have failed to cater to the bottom of the pyramid (BoP) population.
About the social enterprise
Naturetech Infra is a for-profit social enterprise in the business of supply of most innovative and cost effective clean energy services and products to people living in un-electrified villages with earnings level at the Base of the Economic Pyramid. Naturetech has built an in-house technology through which it sets up a solar micro-grid in the villages which provides low cost and sustainable clean electricity to the rural population. The solar micro-grid comes with electricity meters so that people pay only for the amount of electricity that has been used. The social enterprise also provides a wide range of other products like solar home systems, potable biogas plants, clean energy products and gift items. Its vision is to build a business by adopting environment friendly approaches and thus generating wealth for all the stakeholders while also being socially responsible.
Naturetech Infra has developed an in-house technology to set-up innovative smart AC Solar Microgrids in the rural communities which don’t have access to electricity. The setting-up of these solar grids require an initial capital investment which needs to be funded either by the beneficiary community or a local government or a private donor. Once, the capital costs are borne, the operational costs are low enough that the community users can pay for it themselves.
The microgrid is set-up at a central location in the community and then the electricity connections are given to different households through underground cable connections. While the electricity is generated at the grid, it is distributed throughout the village through this underground distribution mechanism. In order to cut down on payment defaults or problems like electricity theft, the whole model works on pre-paid electricity packages where the beneficiary pays an advance payment for the whole month and in return gets access to 24 hour electricity throughout the period. These electricity packages cost as less as INR 150 to 300 per month per household.
This is a smart grid model where households get access to affordable electricity for 24 hours a day.
CII had been aware of the rural electrification projects which were being undertaken by Naturetech Infra and in order to further enhance these projects, it provided them with the reference of ACC Limited which is a leading cement manufacturer of India. ACC Limited was looking to support access to electricity for its own local communities, as part of its own Corporate Social Responsibility (CSR) initiatives. Thus, with the help of CII, Naturetech got introduced to the CSR Head of ACC Ltd.
After getting initial approvals from the ACC’s Delhi CSR department, Naturetech proposed the plan of setting up smart solar grids in rural villages of Uttar Pradesh, to the ACC’s Uttar Pradesh CSR head. The proposed project got appreciation from the ACC’s UP CSR team and the final nod was given to the social enterprise to go ahead and set-up these grids in the local communities who suffered from unavailability or poor availability of conventional forms of electricity. The construction of the proposed solar grids has been started and would be completed within the next three months. This CSR initiative of ACC in collaboration with the social enterprise Naturetech Infra, will electrify around 30 households in the village in the first phase of its implementation.
As discussed in the model, the capital costs of constructing the smart micro solar grid will be funded by the corporate partner. In this particular partnership, ACC is providing funds to the tune of INR 4 lakhs to cover one time installation charges for building the grid. Once installed, the grid would be operational for the next 25 years. The beneficiary households will be paying INR 150 to 300 per month per household for 24 hour access to electricity from this solar grid.
Part of the annual revenue collections would be used by the village energy committee to contribute towards providing Comprehensive Maintenance Contract charges to maintain & provide replacements for batteries etc. for the 25 years of plant life. The village energy committee would also engage an operator from the village who would be trained by Naturetech to provide customer service in the village including collection of the monthly prepaid recharges.
To the corporate
The activities of Naturetech perfectly fit under the ACC’s CSR plans and activities. Electricity is a subject of need and prerequisite for any development in the village. Adopting a cause as common and widespread as this attracts partnerships from the corporate side.
Long term sustainability of project
The model is quite unique and comes at an ultra low cost. Nature tech commits to keep the plant operational in the village for the next 25 years without any cost to the corporate. As a partner, the company is responsible only for the one-time installation charges and is free of any responsibilities or commitment in the long run. This is a big relief and a matter of great satisfaction to the corporate client.
To the social enterprise
Access to customer Base
The partnership provided the social enterprise with a wide customer base. By the virtue of the location of the ACC’s cement plant, Naturetech got access to a remote village in Gauriganj, Amethi in U.P. CSR activities in the vicinity of the manufacturing plant or factory site helps social enterprises tap into unexplored areas for their market.
ACC found the working of the social enterprise’s model very unique. There was hardly any competition for Naturetech in the market neither in scope of work nor in price. With this, ACC is looking to replicate this model throughout its other cement manufacturing locations, thereby helping the social enterprise to scale-up its efforts across the country.
Any social enterprise needs to be unique in their approach of getting in touch with the corporate. The entire partnership needs to be weighed from the corporate point of view and altered, if necessary, to fit in their requirements.
With the Companies Act and the release of the draft rules, even companies are realizing that one time donations is not substantial CSR. Companies are looking to adopt sustainable models. At the same time, companies are more comfortable when the commitment and responsibility in the long run is held by the social enterprise and does not fall upon themselves.
Sunita Narain, Director General, Centre for Science and Environment has stated that decentralised renewable energy systems could offer the key to solving the current state of energy poverty. Naturetech is a huge initiative to solve this issue by tapping into the abundant source of solar energy.
The partnership with ACC is only one step towards low cost rural electrification. There is potential of more partnerships in the future. This is a perfect example of how big companies like ACC are looking to build an adaptive and cost effective model and thus build smart AC Solar Microgrids.