ANNOUNCEMENTS
Approximately 60% of India's population relies on agriculture for their livelihood. The sector provides employment to more than half of the nation’s workforce, contributes nearly 20% to the national GDP, and accounts for over 18% of total electricity usage—primarily for irrigation through groundwater pumping systems. Electricity to Agriculture in India is heavily subsidised due to social and political compulsions. Electricity consumption for agriculture pumps has multiplied over eighteen times from 13.4 BU in 1979-80 to 244 BU in 2022-23. Broad analysis of tariff orders issued by SERCs for the year 2022-23 reveals that the subsidy requirement for electricity consumption in agriculture from State Governments was around INR 1509 billion. Despite this, the farmers are not satisfied and demand daytime quality power. The heavy subsidy is increasing financing stress on state Governments as well as on DISCOMs. The farmers using diesel pumps are also waiting for the electricity connection; however, DISCOMs are reluctant, as they have to invest not only in augmenting distribution infrastructure but also in supplying highly subsidised electricity.
The first objective of the study is to project the demand for energy, including electricity and diesel, for irrigation pumps under different scenarios by 2030, and the corresponding requirements of state subsidies on electricity supply to the agriculture sector. In this regard, a novel attempt has been made to estimate the demand for energy for irrigation pumps under different scenarios. A bottom-up model of energy indicators is developed and then combined with historical top-down data on water, energy, agriculture, and other socio-economic indicators. It is estimated that the requirement of electricity subsidy for irrigation pumps will increase by 40% in Fiscal Year (FY) 2029-30 compared to FY 2022-23. This increase is mainly on account of increase in the electricity consumption for irrigation pumps, increase in the ACoS, and state Governments’ decision to continue providing electricity free or at a highly subsidised tariff to irrigation pumps. As solar PV technology becomes increasingly affordable, it offers a viable solution to meet electricity demands for irrigation, significantly cutting the need for state subsidies and enabling governments to redirect those resources toward other social development initiatives.
The second objective is to explore options for replacing electricity supplied for grid-connected agriculture pumps with solar power and undertake a techno-economic analysis of these options. There are various options to use solar energy for agriculture pumps, including large-scale solar power plants, decentralised solar power plants, small solar plants feeding an individual or group of agriculture consumers, and standalone solar pumps. Techno-economic analysis of different business models deployed based on policies and programmes of the Central and State Governments has been carried out to compare them on various performance parameters. The feeder level solarisation is an easy and cost-effective option for agriculture feeders. Virtual feeder segregation is an innovative model of segregating the irrigation load, not only saving cost but also time, by avoiding the need for a separate physical feeder with the complexities of right-of-way.
The third objective of the study is to analyse the impact of adopting different options of solarising agriculture pumps on subsidies being provided for electricity and other direct/indirect benefits to different stakeholders in the agriculture sector. Under individual pump solarisation, with solar capacity higher than irrigation pump capacity, it has been observed that the net-export of surplus solar power to the grid by the farmers was not as expected; rather, in some cases, they have net-import of power from the grid. Solarisation of agriculture pumps provides daytime reliable electricity for around 12 hours a day, as against 6-8 hours being supplied in different shifts, mostly in night hours prior to solarisation. In order to encourage farmers to use electricity and water efficiently, an amount that could be a certain percentage of the APPC for each electricity unit (kWh) saved by consuming electricity below benchmark consumption. Feeder level solarisation has been successful in reducing the electricity subsidy burden, and its impact is evident in the state of Maharashtra, as reflected in the overall electricity tariff reduction by the state regulator.
This thesis provides recommendations to policymakers on reducing the subsidy on electricity consumption for agriculture pumps through the use of solar energy.
Key Words of the Research: Groundwater, Irrigation pumps, Electricity demand, Electricity subsidy, Solarisation, Feeder segregation.
