| 
Energy efficiency in agriculture sector
- Agricultural power use stands at about 20 per cent of India's national consumption and is the third highest, after industry and household
- The proportion of the farm sector's energy consumption has doubled since the 1970s while revenue realisation to the electricity utilities has declined, as the tariff for agriculture is well below the economic cost while industrial and household tariffs have increased at an average 11 per cent per annum.
- The average agriculture tariff is around Rs 0.50 per unit and the average cost of power to the utilities is around Rs 3.50 per unit.
- Moreover, the farm sector also lags in terms of efficient use of groundwater internationally with the average extraction of water in India less than half that of China and about 1.8 per cent that of the US.
- Two major causes for the continued use of inefficient pumps is the absence of incentives for efficiency due to heavily subsidised or free power
- The second reason is the reluctance of state utilities, saddled with mounting financial losses and power shortages, to intervene, given the high transaction cost of service and low revenue realisation.
- Applying innovative business models could stimulate large-scale investments in efficient pumps. It could attract private investments in pump replacement too.
- The average efficiency levels of agricultural pumps is 20-30 per cent whereas the BEE STAR labelled agricultural pumps at the higher end provide efficiency levels of over 55 per cent
- In order that a robust business model is developed and sustained, it is necessary that the benefits of energy savings are monitored and evaluated. In physical terms it requires dedicated electrical feeders that have adequate metering capabilities.
- An innovative project based on the above principles is under implementation in Solapur district of Maharashtra. The project, conceived by BEE, is replacing almost 3,000 agricultural pumps free of cost, on a PPP model.
- Similar pilots projects are underway in Gujarat, Punjab, Madhya Pradesh and Haryana.
