There is welcome policy action in the renewable energy sector. The ministry of new and renewable energy has issued guidelines for setting up a million solar-powered water pumps, which would be connected to the electricity grid so as to boost agricultural incomes.
We do need to incentivise innovation to gainfully rev up off-take of renewable power, purposefully reduce carbon emissions and also proactively reduce the carbon intensity of output going forward, for a low-emissions growth path. What’s essential is forward-looking policy design which can actually step-up generation of renewables.
What’s required is an innovative energy policy which makes both economic and environmental sense. The move to solarise diesel and electricity-powered pump-sets is as per the PM-KUSUM scheme or the Pradhan Mantri Kisan Urja Surakhsa evam Uttham Mahabhiyam. The plan is to have 10 lakh solar-powered agricultural pump-sets, each of 7.5 Horsepower capacity, and by 2022. The initial target is to set-up 1 lakh such pumps as a pilot project, which would then be scaled up later. The idea is to incentivise farmers to install solar photovoltaic plants of up to twice the attendant pump capacity in kilowatts, so that farmers can use the pumps for irrigation and also sell surplus power to the grid, at mutually favourable rates, to be arrived at by the concerned state power distribution utilities.
Reports say that the Centre would provide Central Financial Assistance of up to 30% to meet solarisation costs, including that for PV components, modules and inverters etcetera, and with installation and commissioning costs taken into account. The way forward is to call for competitive bids to discover the most attractive cost combinations, but also to have benchmarks to decide on costs.
Solar-powered pumps would obviate the need for gratis or cheap power from the grid, as also the need to buy diesel or make do with negative externalities like fuel emissions. However, 70% financing would still need to be raised, and it would make eminent sense for state governments to explore funding from multilateral sources or seek bank finance for what amounts to capital expenditure.
Further, it would make sense to rope in external funders and other partners to set-up micro-grids and supply surplus power from PM-KUSUM or small hydroelectric plants, and provide ancillary power supply to micro enterprises to overcome infrastructural constraints. Reports say that 10,000 such micro-grids are planned by 2026 that would provide power to over five million households.
Solar power plants are land-intensive, requiring up to 5 acres of land per MW, and it makes ample sense to leverage agricultural holdings to set-up renewable energy capacity to power pump-sets.