KUSUM guidelines aren’t watertight

Martin Scherfler | Updated on December 16, 2019

There are chinks in the scheme intended to encourage farmers to use solar power and, thereby, improve water & energy security

The agricultural sector accounts for about 80 per cent of the country’s groundwater extraction and for about 20 per cent of the country’s electricity consumption. As electricity for this sector is either free or highly subsidised, there is no incentive for the farmer to use water and energy resources efficiently.

The power discoms (distribution companies), in turn, are reeling under the subsidy burden and provide low-quality electricity to agriculture, characterised by unreliable supply, long outages, and high voltage fluctuations. This has an effect on agricultural productivity and groundwater extraction.

The recently announced KUSUM (Kisan Urja Suraksha evam Utthaan Mahabhiyan) scheme by the Ministry of New and Renewable Energy (MNRE) attempts to address some of these issues related to power supply for agriculture. KUSUM is presented as a solarisation scheme aimed at benefiting farmers. The scheme has three components.

Component A aims at setting up 10,000 MW of decentralised ground solar or other renewable power plants. Component B involves introduction of 17.50 lakh standalone solar agriculture pumps of individual capacity up to 7.5 HP. Component C aims at solarisation of 10 lakh grid-connected agriculture pumps at individual farms.

Component A promotes distributed solar energy generation with a solar plant capacity of 500 kW to 2 MW. As per MNRE guidelines, the solar plant requires a dedicated evacuation infrastructure (feeder). A competitive bidding process for tariff determination, with a ceiling tariff as per latest solar energy tariff order of the respective States, is being proposed.

Wasteland and degraded land shall be identified and leased from farmers. If agriculturally productive land is utilised, the co-location of solar energy production and crop cultivation is recommended. This will require elevated structures and a more dispersed solar array arrangement to permit sufficient sunlight for crop cultivation. For the first time, a compensation mechanisms for the backing off of the grid is recommended.

The promotion of distributed renewable energy generation (DREG), solar and other renewables, is a welcome move. The requirement for a dedicated feeder for evacuation of electricity generated by the DREG results in unnecessary infrastructure costs and occupies valuable discom substation bays.

One key advantage of distributed solar energy generation is the fact that production and consumption of electricity occur at the same location, or in close vicinity to each other, thereby reducing T&D losses and optimising the utilisation of existing electrical distribution infrastructure.

The proposed competitive bidding process for tariff determination proposed is unlikely to attract any bidders, as the capital cost of smaller renewable generators is typically higher than the capital cost of larger systems. It is financially not feasible for the generators.

One alternative approach is that the locational value of distributed solar energy generation, particularly the avoidance of T&D losses, may be priced and used to provide an incentive to the generator in addition to the solar tariff. The discom and the generator may share the savings on transmission (and distribution losses).

Grid-connected power

Component C of KUSUM promotes grid-connected solar for agricultural service connections (behind-the-meter).

The guidelines recommend that size of the solar system in kW is at twice the pump’s capacity in kW; the solar energy generated to meet the electricity required for irrigation needs and the solar energy surplus must be injected into the grid; discoms will purchase excess power from the farmer at the rate decided by the respective State; and the central financial assistance is limited to pumps of up to 7.5 HP.

A domestic content requirement for the solar system components is mandatory. The priority is set on small and marginal farmers. The guidelines also give priority to farmers already using, or about to adopt, micro-irrigation systems.

As electricity is free of cost for the agricultural consumers, the suggested financing model (with a 40 per cent contribution by the farmer) are unlikely to work.

Alternatively, a third party may invest in the solar system and sell the gross-generated solar energy to the discom. To make this approach acceptable to the farmer, a ‘solar farmer incentive’ to to reduce water and electricity consumption can be introduced.

The attempt to converge KUSUM with ongoing micro-irrigation and efficient pumps schemes presents a great opportunity to improve water and energy efficiency. However, the guidelines are silent on how this will be achieved, and there may be the risk of the proposed convergence being ignored altogether.

This presents a severe risk factor in further increasing groundwater extraction on account of agriculture.

The writer is Co-Funder, Auroville Consulting

Published on December 16, 2019

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