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JAN 22 2016

Govt turns to irrigation pumps to ease crippling power debt

  • Economic Times, ET Bureau / Hyderabad
  • Created: Fri 22nd JAN 2016

A plan to replace 3 crore water pumps for farmers may cut electricity used for irrigation by about a third, according to the country’s power minister.

The pumps will be replaced over a three-year period, power minister Piyush Goyal said in New Delhi on 18 January, after meeting with manufacturers, including Crompton Greaves Ltd. and Shakti Pumps India Ltd. The efficiency effort is part of Prime Minister Narendra Modi’s plan to reform the country’s electricity sector and make regional retailers, which have accumulated debt of more than Rs5 trillion, profitable.

In the first phase, 2 crore pumps that draw power from the grid will be replaced, cutting about 5,100 crore kilowatt hours of power for annual savings of Rs20,400 crore ($3 billion) based on electricity costs of Rs4 per kilowatt hour, according to Energy Efficiency Services Ltd. managing director Saurabh Kumar.

The company is a joint venture of four state-run power companies and will pay up-front costs for replacing the pumps and will be repaid out of savings from the corresponding decline in electricity use, Kumar said. Another 1 crore pumps that run on diesel will be replaced in the second phase of the programme, according to Kumar.

Farming accounted for about 22% of total electricity sales from power retailers in the year ended March 2014, according to data from state-run Power Finance Corp. Almost 70% of India’s 130 crore people live in rural areas and depend directly or indirectly on farming for a living.

Retail power providers are forced by their state governments to sell electricity at subsidized rates, leading to losses and undermining their ability to repay debt. Starved of funds, the retailers often cut purchases, leading to blackouts, even as power plants remain idle. The government has also distributed more than 5 crore LED bulbs, which it says saves more than 1.7 crore kilowatt hours of power daily.

About 45% of all farmland is irrigated by drawing water from dams and underground, while the rest of the irrigation need is met by the annual rainy season, known as the monsoon.

Tags

Delhi TOTAL Finance Grid Diesel Energy Joint Venture Rural Energy Efficiency Power Electricity India

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