Omnigrid Micropower Company Ptd Ltd (OMC) builds, owns and operates solar plants. Its unique ABC business model uses mobile towers as anchor load (A) and builds minigrids to serve rural businesses (B) and rural communities (C).
Can you tell us a little about Omnigrid Micropower Company (OMC)?
Omnigrid Micropower Company Pvt Ltd (OMC) is an integrated rural utility. We aim to advance economic and social development for millions of people by providing clean, reliable and affordable power to rural households, businesses and telecom towers.
OMC builds, owns and operates solar power plants and smart minigrids in rural Uttar Pradesh. It was started by pioneers of the Indian telecom industry who saw a business opportunity in providing reliable and clean power to India’s half a million mobile towers. Using telecom towers as guaranteed “anchor loads” offered a unique opportunity to serve the commercial and residential market.
Rural communities have been waiting for power for decades. They are willing to pay for reliable service. OMC provides that reliability.
What is the business model you follow? Who are your target consumers?
OMC’s unique “A-B-C” business model serves:
‘A’ – Anchor loads from telecom towers that provide for stable, long-term, contracted revenues through PPAs;
‘B’ - Businesses and commercial customers, such as small and medium enterprises, shops and small shopping malls, banks, petrol stations, mills, hospitals and colleges;
‘C’ - Community households, who choose between pre-paid power packages for lighting, mobile charging and appliances, or larger metered connections.
What have been the challenges and success in this?
We’ve come a long way since our first plant was commissioned in 2012. In four years we have refined our business model, and now have 70 operational power plants in Uttar Pradesh. We have reliably served telecom towers with 24-hour availability for four years so the tower companies are eager for us to serve more towers but equally exciting is our growth to become a major community power player. We now have about 100km of distribution networks in operations, and expanding rapidly. We’ve been able to beat kerosene on price and get high penetration of customers along our grids in a very short time. And we’re seeing people climb the energy ladder and demanding power beyond lighting and mobile charging. The impact we see on village life is truly remarkable.
Success, in our view, comes down to three things: execution, regulations and finance. Operating a distributed energy company in rural areas is not easy, and we face new challenges every day. Execution is about having the right team with the right standardized processes to tackle anything that comes up while still being able to replicate and scale up.
Second, regulations: When we started out, minigrids were seen as risky. Now, with the new signals from the central government about minigrids being key to the future energy infrastructure, and with the dedicated Minigrid Policy and regulations from the UP government, our regulatory risks are significantly lower and our investment more secure. We expect more states to follow UP’s leadership in the coming months.
Finally, finance. Setting up minigrids is capital intensive, and as an infrastructure player we cannot promise the returns of e-commerce start-ups. As we’re de-risking our business and the sector is becoming more mature, we’re seeing increased appetite from lenders and investors, domestically and abroad, and are confident we’ll continue finding partners to help us deliver on our vision.
How has the work of OMC evolved over the years? What are the highlights?
Our community power model has evolved significantly. We started out with lanterns and later introduced chargeable “power boxes”. Last year we made a major strategic shift to smart minigrids at all locations. Our smart minigrids allow us to serve all customers, from the single light bulb six hours a day to micro-entrepreneurs and businesses. This is the model we now aim to scale up.
What are your plans for the future?
Our immediate priority is to roll out more plants and expand our minigrids. With the new regulations in UP we will expand rapidly across the state, and also gradually move into other Indian states. We are also exploring markets outside India.
Finally, what role do you expect CLEAN to play in the work you are undertaking?
CLEAN has already played an important role in promoting the decentralized energy sector, from which we have all benefitted. We expect CLEAN to continue providing valuable inputs from all the companies in this sector, to inform and improve future policies for the sector, both at the national level and increasingly also at the state level. Most decentralized energy companies are small and cannot dedicate staff to this type of engagement. CLEAN also improves the awareness and recognition of the sector among the business community, among potential investors and lenders, and the broader public. Lastly, CLEAN provides a meeting place where we as practitioners can interact with and learn from each other.