India Turns to Irrigation Pumps to Ease Crippling Power Debt

  • More-efficient pumps calculated to save $3 billion annually
  • Farming accounts for 22% of electricity sales by retailers

A plan to replace 30 million water pumps for Indian 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 Jan. 18, 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 5 trillion rupees, profitable.

In the first phase, 20 million pumps that draw power from the grid will be replaced, cutting about 51 billion kilowatt hours of power for annual savings of 204 billion rupees ($3 billion) based on electricity costs of 4 rupees 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 10 million pumps that run on diesel will be replaced in the second phase of the program, according to Kumar.

Farming accounted for about 22 percent of total electricity sales from power retailers in the year ended March 2014, according to data from state-run Power Finance Corp. Almost 70 percent of India’s 1.3 billion 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 50 million LED bulbs, which it says saves more than 17 million kilowatt hours of power daily.

About 45 percent 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.

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