Enabling Micro Small & Medium Enterprises (MSME)’s access to demand aggregation solutions and cost-effective electric systems designed for low operating range

Problem Overview: Lack of MSME-specific systems for clean energy penetration

India’s 70+ million MSMEs contribute ~30% of nation’s GDP, 45% of exports, consume ~8% of total electricity and collectively generate ~110 Mn Mt of CO2e per year. With increasing implementation of Time of Day (ToD) pricing and more than 70% of the country electricity generation coming from coal, these customers lack access to cost-effective, low-carbon electricity. Current modular battery energy storage systems (BESS) for 5-20 kWh range costs $630-790/kWh which is significantly higher than larger systems ($420-600/kWh) that benefit from economies of scale.

While MSMEs have a wide range of load profiles (micro (<20kW), small (20-100kW), and medium (>100kW)), almost 68 million of them fall under the micro category, with a majority of them geographically concentrated and existing in clusters. Aggregating demands at cluster level can present operational benefits and yield economies of scale.

Core Bottlenecks: Disadvantages of disaggregated demand

Majority of MSMEs rely on the main grid for electricity supply. While Green Energy Open Access Rules, 2022 enables MSMEs to enter Power Purchase Agreements (PPAs) for 10-25 years, the current procurement structures are not aligned with MSME’s operating realities, with three bottlenecks:

Existing Approaches and Technology Readiness

Where is the white-space for innovation?

The market demand is driven by export requirements for decarbonization (e.g. CBAM compliance), and the need to hedge against the rising ToD electricity costs. Battery technology exists but cost/modularity challenges remain. There is an opportunity to develop solutions targeting MSME clusters. And to engineer some of the components for smaller base loads.