Building a Digital Infrastructure Platform for the Electric Grid

I. The need for structural reform in the power sector

We have two compelling narratives that define India’s energy transition story.

On one side, India has a vision of achieving 500 GW of renewable energy capacity by the year 2030. This ambitious goal, growing at 15 percent per year, signifies an important shift towards sustainable power generation. To meet these objectives, various subsidies are being provided to attract capacity additions for utility-led tenders and Commercial & Industrial Open Access (C&I) projects. Every corporate is accelerating their energy transition plans through C&I Open Access markets including CTU (Central Transmission Utility) grids. New sectors are also emerging along with the focus on building a low-carbon economy and achieving net-zero emissions by 2070. For example, there are many startups and corporates building innovative climate technologies to address the decarbonisation of hard-to-abate sectors, green chemistry to eliminate the use of hydrocarbons in the Fast Moving Consumer Goods (FMCG) product value chain, and green hydrogen to replace the use of chemical burners in manufacturing industries.

New sectors are also emerging along with the focus on building a low-carbon economy and achieving net-zero emissions by 2070.

On the other side, Discoms are already facing challenges today by way of accumulated losses amounting to US$6.11 billion. Over the last 10 years, public discoms have remained stressed due to higher levels of Aggregate Technical, Commercial, and Collections (ATC&C) losses compared to regulatory norms—the nationwide average of this loss being 24 percent; low tariffs in relation to their cost of supply (resulting from low cash collection from consumers due to poor quality of supply). Corporates looking for Open Access solution will further worsen the financial position of the Discoms and significantly affect the asset utilisation levels (thermal generation and transmission) which are already on the lower side.

As we delve into this compelling narrative, we must look at solutions that can support and balance both sides. The energy transition story of India cannot afford to overlook the realities of Discom financials that confront us today. At EdgeGrid, we have chosen to make the Discoms and the Grids sustainable while leading this data-driven energy transition.

Broadly speaking, the energy transition focus has disproportionately favoured large and global companies, leaving the crucial ‘last mile’ market unattended, ignoring over 65 percent of the sector’s market share. In the pursuit of a climate-friendly economy, this last-mile market must not be ignored, and the transition must be both impactful and profitable. As electrified two-wheelers (2W) and three-wheelers (3W) are set to play their role in the energy transition, with fleet operators and commercial vehicles following suit, the sheer number of users (and therefore demand for electric power) at the last mile will grow exponentially. Furthermore, simply adopting electric vehicles (EVs) is not enough to effectively combat climate change; it is crucial that EV mobility should be powered by clean and sustainable energy sources (renewables rather than the coal-fired grid).

The energy transition focus has disproportionately favoured large and global companies, leaving the crucial ‘last mile’ market unattended, ignoring over 65 percent of the sector’s market share.

The way that consumers interact with the grid is fundamentally changing, from bilateral power purchase agreements and state-driven power transmission to democratised and delicensed market access to energy, where commercial, industrial and residential players can buy, sell and produce their own energy. This creates an opportunity for a new solution to emerge: One that lowers the costs for end customers, slows down the pace of climate change by integrating renewables into the grid, and, most importantly, creates new financial opportunities for consumers with respect to sustainability and energy profits.

II. Edgegrid’s Solution: Data-driven integration of Distributed Energy Resources (DER)

At EdgeGrid, we are building the digital infrastructure for the distributed grid to accelerate the path towards a zero-carbon future and cater to the last-mile customer, through a data-driven energy transition. Historically, grids were designed around centralised power generation and uni-directional power flows, primarily fuelled by fossil fuels. However, with renewable energy costs plummeting, the emergence of electric vehicles, and with the rise of Distributed Energy Resources (DERs), a paradigm shift is taking place.

EdgeGrid’s vision centres around the belief that “software can eat carbon,” implying that building a data-layer and a smart software solution to manage the energy will make the grid and costs to the consumers more sustainable and efficient.

DERs such as onsite solar, wind and battery storage, as well as EV chargers, and microgrids, are increasingly prevalent for industrial businesses to achieve their energy management goals. The costs of DER have fallen sharply in recent years, so that these resources outcompete conventional energy sources, even without policy incentives. For discoms, as more industrial customers link their energy usage to increasingly sophisticated energy management systems, discoms can tap into these resources to meet peak demand or unusual spikes in electricity usage, and use this new flexibility to help balance electricity supply and demand as the share of large scale solar and wind power (which can be intermittent) grows.

The costs of DER have fallen sharply in recent years, so that these resources outcompete conventional energy sources, even without policy incentives

EdgeGrid aims to capitalise on this industry shift to create a data and market platform that can aggregate, manage, and optimise DERs effectively, so that these assets can collectively contribute to the electric grid and power last-mile customers more efficiently. There are four key thematic areas which EdgeGrid focuses on:

1. Distributed and decarbonised energy: EdgeGrid’s breakthrough lies in empowering local communities to collaborate with the grid and their utility to generate and manage renewable energy. By enabling access to rooftop and distributed solar plants at the locations where it is profitable to the grid and consumers, the platform allows users to produce and consume energy independently of the grid and allows them to transact with each other in the form of energy credits. This democratisation of energy is data-driven.

2. Demand flexibility or virtual battery: Demand flexibility allows consumers to adjust their energy consumption based on real-time pricing and grid conditions. EdgeGrid’s digital infrastructure enables a virtual battery concept, where energy consumption can be optimised to match supply, reducing the need for physical energy storage and improving grid stability.

3. Energy storage or real battery: Energy storage solutions are vital for storing excess energy generated from renewable sources and ensuring a reliable power supply during periods of low generation. EdgeGrid aims to integrate real battery solutions into the energy ecosystem to enhance grid resilience and reduce dependence on conventional power sources during peak demand.

4. Grid modernisation: Grid modernisation is crucial to accommodate the changing dynamics of India’s energy landscape. EdgeGrid’s digital infrastructure will help upgrade and optimise the existing grid infrastructure, allowing for seamless integration of DERs and improved energy distribution.

III. Challenges to scale and recommendations for key stakeholders

1. Regulatory framework for seamless renewable integration: To accelerate the energy transition, it is imperative to untangle the complex web of regulations that currently constrain the seamless integration of renewables. EdgeGrid advocates for a progressive regulatory framework that not only encourages but also incentivises the adoption of renewable energy sources. Such a framework should not rely on subsidies or incentives; instead, it should be rooted in market principles that harmonise sustainability and profitability within the energy sector.
2. Discom engagement as anchors of the energy transition: The active engagement of discoms with other key stakeholders in the energy transition ecosystem is severely lacking. EdgeGrid is committed to fostering collaboration with discoms, enlightening them about the numerous mutual benefits this transformation offers and, at the same tim,e co-develop solutions that can help Discom financials as well as accelerate energy transition for the entire grid.
3. Financing distributed energy resources (DERs): The last-mile market often lacks the high creditworthiness required to attract investments from financial institutions and banks. However, with the appropriate interventions from various stakeholders, these projects can become financially viable. EdgeGrid is actively working to establish a market framework that addresses the bankability of distributed energy resource projects.

These challenges, once overcome through concerted efforts and strategic initiatives, will pave the way for a smoother and more rapid transition to a sustainable and inclusive energy ecosystem.

IV. Conclusion

EdgeGrid’s digital infrastructure for the distributed grid aims to democratise access to clean energy and empower consumers in making sustainable choices. As renewable energy becomes increasingly dominant and consumers seek sustainable choices, the distributed grid represents the future of energy. By enabling cost reduction, promoting renewable integration, and empowering commercial, industrial and residential consumers, EdgeGrid is paving the way for a human-centric energy transition at the last mile, fostering a sustainable energy future for all.

Sunil Talla is the Founder and Chief Executive of EdgeGrid.

Mushtaq Ahmed is the Co- Founder of  Edgegrid.

Vamsi TP is the Co- Founder of Edgegrid.

Neeraj Sansanwal is the Co -Founder of Edgegrid.