Govt to invest in scheme to check power wastage in farm sector

New Delhi: Power minister Piyush Goyal on Monday said the government would invest in an ambitious energy-efficient irrigation scheme, which entails procuring 30 million sophisticated pump sets for farmers, the cost of which would be recovered through savings in the electricity consumed.

Officials privy to the plan said the scheme would cost about Rs.75,000 crore over the next three to four years.

“This cost could be recovered by the end of the scheme period as the 37% annual reduction in power consumption to be achieved by farmers using the new equipment will lead to a cost saving of Rs.15,000 crore a year for power distribution companies and about Rs.5,000 crore for states that subsidize electricity to farmers,” said an official at Energy Efficiency Services Ltd, (EESL). EESL is a joint venture of NTPC Ltd, India’s largest power producer, Power Finance Corp. Ltd, Rural Electrification Corp. Ltd and Powergrid Corp. of India Ltd.

Goyal described the scheme as a “self financing” one. The central government will initially fund the scheme so that farmers do not have to pay, except for a very small amount.

At an interaction with industry in New Delhi, the minister asked officials to work with pumpset makers to finalize the financing model and asked producers to scale up operations so that competitive bids for procurement could be issued shortly.

“We intend to replace two crore pumps connected to the grid and another one crore running on diesel. The scheme could save about 46 billion kWh of power a year and help in creating 20 lakh jobs,” said Goyal. Every unit of power saved is equal to 1.3 unit of power generated, the minister added.

State government officials present at a meeting between EESL and pump makers sounded optimistic.

“We welcome the project. It would cost Rs.7,500 crore for implementation in Andhra Pradesh,” said K. Ranganatham, advisor to the energy department of the Andhra Pradesh government.

He said the state will go ahead with power sector reforms and that it had already given in-principle approval for taking over the debt of power distribution companies (discoms) under the Ujwal Discom Assurance Yojana (Uday) proposed by the power ministry. The state will take over about Rs.40,000 crore of debt owed by power distribution companies.

Goyal said that many farmers use pumpsets as old as about 40 years, which reduce agriculture productivity and increase the power subsidy burden of state governments.

If domestic companies are unable to come up with energy-efficient pumpsets at attractive prices, the government will not hesitate to consider imports, he added. One industry executive said it would take about a year for domestic producers to scale up operations to meet the demand.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.