Renewable energy is now seen as the key electricity supply option, given its rapidly falling costs and its contribution to enhancing energy security at a time of ever-rising fossil fuel imports.
Climate mitigation is an additional spin-off. Recognising this, the Centre has recently announced an ambitious target of 175 GW of renewable energy capacity addition by 2022.
Solar power (100 GW) forms the mainstay of this target. This is further divided into large-scale centralised power plants (50 GW) and distributed smaller scale projects (40 GW of rooftop mainly used by industrial, commercial and residential consumers and 10 GW grid-connected tail-end plants).
Not the best option
This plan, however, leaves out the crucial agriculture sector. The only option proposed in this sector is individual off-grid solar pumps, with very high upfront capital subsidies to the tune of 90 per cent.
The solar pump approach is suitable for areas not served by the grid and with high water tables. But, several studies have pointed out the limitations of this approach. These are limitation on use by small and marginal farmers due to high upfront costs, slow cost reduction due to the capital subsidy structure, possibility of continued use of diesel/electric pumps, additional maintenance burden for farmer, fear of theft of panels and, most importantly, significant under-utilisation of the high cost solar system when not in use.
A significantly more cost-effective, socially equitable and easier to manage alternative is possible, where agricultural feeder separation has taken place.
The ministry of renewable energy (MNRE) has recently announced a new proposal for unemployed youth and farmers wherein 10 GW of grid connected tail-end solar PV plants (0.5-5 MW) will be connected to the distribution substation. Power from these projects would be bought by the distribution company at the rate decided by the State electricity regulator. MNRE is willing to contribute ₹0.5 crore/MW (8 per cent of the capital cost), provided the State sets up a committee and institutes a policy for transparent selection and allocation of projects.
Such tail-end, MW-scale PV projects could be used effectively to meet agricultural power demand. In areas with feeder separation, 1-2 MW tail-end solar PV plants (representative of a typical feeder load) would be interconnected to the 33 kV substation. Such feeders would be kept loadshedding-free during the day time from 8 am to 5 pm to primarily meet agriculture load.
Any excess generation from solar plants would flow back to the local grid. If the agriculture load is high the differential would be provided by the grid.
A preliminary economic analysis suggests that this method is roughly 50-60 per cent more cost-effective than solar pumps. Apart from the cost-effectiveness, this approach is investment driven and does not involve upfront subsidy.
The solar powered feeder approach could also be compared with the existing conventional grid supply. Cost of power up to agriculture feeder is about ₹4/kWh after considering cost of generation and losses while solar power costs ₹6/kWh.
Efficient pumps, if integrated into this solar feeder scheme, can bring down the effective cost of solar power for agriculture by about 25 per cent (after accounting for cost of new pumps, which can reduce power requirement by 30-50 per cent). Considering the fixed cost of solar generation (over 20-25 years) and the increasing cost of grid supply, an integrated solar powered feeder with efficient pumps would be cheaper than grid supply in just 5-6 years.
This will have added benefits of reliable and better quality (rated voltage) power, leading to lower pump burn-outs.
States would be well advised to take up the proposed MNRE scheme, but should modify it to make the crucial link with agriculture. This will also create rural industry jobs.
The Achilles heel of the Indian power sector — agricultural power supply — would be suitably addressed. It also allows for the distribution entities to meet their mandated solar purchase obligation (set at 8 per cent by 2019). Through reliable and better quality power, it would truly support agriculture in these times of agrarian distress.
The writers are with Prayas (Energy Group)
First published by The Hindu BusinessLine