Solar pump scheme to slash farm power subsidy burden on discoms

Reliance Infrastructure owned power distribution companies (discoms) in Odisha have welcomed the Centre's proposal to implement subsidy scheme for solar power-run pumps in the state, saying it would reduce subsidy burden on them.

The three discoms operated by Reliance in Odisha pay an average Rs 3 per unit to buy electricity from hydro and thermal power stations and charge the farmers only Rs 1.10 a unit, the rate fixed by the state government, though they do not get any subsidy for it.

"If solar pump scheme is implemented in Odisha, then it will reduce subsidy burden on us as farm power constitutes about 9 per cent of our total supply," said A K Bohra, chief executive officer of Central Service Office, the umbrella organization for three private discoms.

Power subsidy for farm sector is directly paid by some state governments to discoms, but many states, including Odisha, do not reimburse the money to them.

The three Reliance Infrastructure controlled discoms are North Eastern Electricity Supply Company of Odisha Ltd (Nesco), Western Electricity Supply Company of Odisha Ltd (Wesco) and Southern Electricity Supply Company of Odisha Ltd (Southco).

The fourth discom operating in the state, Central Electricity Supply Utility (CESU), is managed by the state government under the supervision of Odisha Electricity Regulatory Commission (OERC).

Out of total 27,145.84 million unit (mu) electricity demand projected by bulk power supplier Gridco Ltd for all four discoms in 2014-15, the Reliance Infra controlled discoms have estimated 18,045 mu power consumption in their respective areas. Out of it, around 1620 mu units will be consumed by water pumps for irrigating farm land.

The Centre's solar pump plan include an initial grant of Rs 7 crore for the current fiscal with a target of installing at least 1750 such pumps. Each installed unit is eligible for getting 30 per cent subsidy on total installation cost, the proposal said.

The Ministry of New and Renewable Energy (MNRE) has insisted that the state government should match the subsidy amount provided by it to help the farmers bear the burden of huge initial capital cost.

It has also asked the state government to constitute a committee comprising key officials, which will monitor the implementation process and will provide additional input such as fertilizer linkage and crop sowing tips to the farmers to maximise the benefits of the irrigation project.

The Union ministry has earmarked Rs 400 crore to implement the scheme across the country.