ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Scaling Up Demand-side Management and Solar Pumping Programmes

Use of Multi-stakeholder Cost–Benefit Regulatory Frameworks

India’s energy–irrigation nexus is rooted in issues of multi-stakeholder governance and incentive structures. As such, purely technological or tariff rationalisation strategies will be ineffective at delivering solutions. Possible solutions are analysed using a multi-stakeholder benefit–cost framework that provides regulators and policymakers with a tool to balance the interests of different stakeholders, that is, farmers, utilities, ratepayers, regulators, manufacturers, energy service companies, and society. This framework provides regulators with a systematic approach to rationalise incentives and transfer payments among stakeholders. Using the framework, agricultural programme strategies for energy-efficient pumpsets and grid-connected solar pumpsets are analysed.

The authors thank Navroz Dubash of the Centre for Policy Research and Ashwin Gambhir of Prayas Energy Group for providing comments on the earlier drafts of this paper. This paper is based on a project funded by the Regulatory Assistance Project. The authors also express deep gratitude to the following individuals who provided detailed and insightful comments on the report generated through the project: N Sreekumar, Shantanu Dixit, Ashwin Gambhir, and Aditya Chunekar of Prayas Energy Group; Navroz Dubash of the Centre for Policy Research, New Delhi; and Ranjit Bharvirkar and Bob Lieberman (formerly) of RAP. The authors also thank the anonymous reviewers for their constructive comments that helped in improving this paper.

Problems at the intersection of agricultural irrigation and energy in India are longstanding, multidimensional, and multidisciplinary, involving utility economics, energy consumption, agricultural socio-economics, environmental science and engineering, and politics. The challenges associated with reforming agricultural irrigation have been studied and debated for more than two decades (Sant and Dixit 1996, Rodell et al 2009, Shah 2009, Shah and Verma 2014). Subsidised agricultural tariffs contribute to financial losses for the distribution company (discom); electricity service to farmers is unreliable and intermittent, and generally at night, which is inconvenient at best and unsafe at worse; and groundwater resources are depleting to low levels, a condition enabled by subsidised tariffs. Ultimately, farmers require affordable and sufficient irrigation, utilities are concerned with cost recovery, broader societal concerns include impacts on ratepayers, water security and its impact on food security, and greenhouse gas emissions. The problem itself is subject to mischaracterisation as agricultural subsidies may be overestimated, while subsidies to other sectors is a larger contributor to the total subsidy problem, which is only growing. Further, existing data is inadequate, unreliable and inconsistent (Prayas 2018).

Balancing Multiple Interests

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Updated On : 13th Apr, 2020
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