EESL sets up new company offering solar solutions to India's farmers

'Convergence' to focus on solar irrigation pumps, reduce cost of clean power for farmers

EESL Limited has formed a new subsidiary ‘Convergence’ to focus on clean energy solutions in the rural areas and for the agriculture sector. This special purpose vehicle would bring in innovative solutions for solarising irrigation pumps, facilitate clean and affordable electricity to farmers and bring much needed capital to such projects in rural areas.

EESL on Monday appointed Mahua Acharya, former assistant director-general of Global Green Growth Institute as the head of Convergence. Speaking with Business Standard, Acharya said the idea behind this initiative is that farmers do not get either reliable or cleaner energy.

“The model we are using is to reduce the cost of electricity to farmers. The company will take up different business models to deliver clean, reliable and affordable power to farmers. We will use additional money from carbon finance, raise, debt and innovative structures to reduce the cost of capital wherever possible,” said Acharya.

One of the first projects that Convergence has taken up is the disbursement of 6,300 solar-run irrigation pumps and 1.6 million LED bulbs in rural Goa. This would entail 100 Mw of solar power generation. Saurabh Kumar, Executive Vice Chairman, EESL told the paper that the model for the new company is based on their prior successful initiatives.

“We have initiated this program based on our experience in Maharashtra – 100 Mw of decentralised solar which we have delivered and 700 Mw which is under execution for solarising irrigation. It is very much like KUSUM scheme but the difference is the state government has given us land to set up projects,” said Kumar.

KUSUM is a Central government scheme which entails solarising all irrigation pumps across the country.

Kumar said as states would provide them land for agri-solar projects, the company would aim to put both agriculture and clean energy solutions at one place. 

“We have proposed to several states we would give solar rum pumps for free to farmers and then include this cost of pump in a tariff. We would maintain those pumps as well. For instance, in rural Goa, the power tariff is Rs 5.75 per unit. If we add the cost of pump in it, the tariff increased by barely Rs 3.50 per unit. According to our calculations, there is a benefit of close to Rs 2,200 crore to the state,” Kumar said.

He added that the procurement of pumps would be based on EESL’s existing model of “aggregating demand”. We will do large-scale procurement of solar-run irrigation pumps. The reduction in cost and value that comes in, goes in the power purchase agreement, Kumar said.

EESL in the past did bulk procurement of LED bulbs for the UJALA program and brought down the cost of LED bulbs in the range of Rs 40-70 from Rs 300 earlier. It also tied up with power distribution companies for sale of these bulbs. It carried out a similar model of procurement and sale for other energy efficient products as well.

“Market potential for solar agriculture feeders and changing rural lives is massive.  There are 25 billion pumps in the country and if one has to solarise all the pumps, you need 350 GW of decentralised solar power. There are 150 million households and if we are to provide 4 LED bulbs then 600 billion LED bulbs,” Mahua said.

Kumar said apart from Goa, the company is in talks with several large states including Uttar Pradesh and Maharashtra for similar agri-solar projects.

EESL is a joint venture of four public sector utilities under ministry of power – NTPC Limited, Power Finance Corporation Limited, REC Limited and Power Grid Corporation of India. It is India’s first Energy Service Company (ESCO), which enables consumers, industries and governments to effectively manage their energy needs through energy efficient technologies.