Revitalising PM-KUSUM

Context:

The Union Minister of Power, New and Renewable Energy recently reviewed the progress of the PM-KUSUM scheme and reaffirmed the government’s commitment to accelerating solar pump adoption.

Relevance:

GS-I: Indian Society (Population and its associated issues, Salient features of Indian Society, Diversity of India), GS-II: Governance (Government Initiatives and Policies)

Dimensions of the Article:

1. About Pradhan Mantri – Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
2. Issues with implementation of PM-KUSUM
3. Challenges in implementation of PM-KUSUM
4. Way Forward for revitalizing PM-KUSUM

About Pradhan Mantri – Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)

• The PM-KUSUM scheme was launched by the Ministry of New and Renewable Energy (MNRE) to support installation of off-grid solar pumps in rural areas and reduce dependence on grid, in grid-connected areas.
• The Cabinet Committee on Economic Affairs (CCEA) had in February 2019 approved the launch of the scheme with the objective of providing financial and water security.
• The government’s Budget for 2020-21 expanded the scope for the scheme with 20 lakh farmers to be provided assistance to install standalone solar pumps; another 15 lakh farmers to be given help to solarise their grid-connected pump sets.
• This will enable farmers to set up solar power generation capacity on their barren lands and to sell it to the grid.
• Farmers can use one of three deployment models: off-grid solar pumps, solarised agricultural feeders, or grid-connected pumps.
• PM-KUSUM consists of three components and aims to add a solar capacity of 30.8 GW by 2022:
  • Component-A: 10,000 MW of decentralised ground-mounted grid-connected renewable power plants.
  • Component-B: Installation of two million standalone solar-powered agriculture pumps.
  • Component-C: Solarisation of 1.5 million grid-connected solar-powered agriculture pumps.

Issues with implementation of PM-KUSUM

• Off-grid pumps have been the most popular, but the nearly 2,80,000 systems deployed fall far short of the scheme’s target of two million by 2022.
• Barriers to adoption include limited awareness about solar pumps and farmers’ inability to pay their upfront contribution.
• Progress on the other two models has been rather poor due to regulatory, financial, operational and technical challenges.
• Only a handful of States have initiated tenders or commissioned projects for solar feeders or grid-connected pumps, according to our study.
• Yet, both models are worth scaling up for they allow farmers to earn additional income by selling solar power to discoms, and discoms to procure cheap power close to centres of consumption.

Challenges in implementation of PM-KUSUM

• Due to the strict DCR (Domestic Content Requirements), the suppliers of solar equipment have to raise the domestic cell sourcing. However, there isn’t enough domestic cell manufacturing capacity.
• There has been the relative omission of small and marginal farmers, as the scheme focuses on pumps of 3 HP and higher capacities. It is due to this, solar pumps are not reaching the majority of farmers, as nearly 85% of them are small & marginal.
• Due to power subsidies, the recurring cost of electricity is so low that farmers keep on pumping water and the water table is going down.
• In a solar installation, it becomes a more difficult job to upgrade to higher capacity pumps in case the water table falls because one will have to add new solar panels which are expensive.

Way Forward for revitalizing PM-KUSUM

• The scheme’s timeline must be extended as most Indian discoms have a surplus of contracted generation capacity and are cautious of procuring more power in the short term. Hence, extending PM-KUSUM’s timelines beyond 2022 would allow discoms to align the scheme with their power purchase planning.
• A level playing field must be created for distributed solar plants. Discoms often find utility-scale solar cheaper than distributed solar due to the latter’s higher costs and the loss of locational advantage due to waived inter-State transmission system (ISTS) charges, even though, selling surplus power to discoms is one of the main attractions of grid-connected models.
• To tackle the bias against distributed solar, there is a need to address counter-party risks and grid-unavailability risks at distribution sub-stations.
• There is also a need to standardise tariff determination to reflect the higher costs of distributed power plants and do away with the waiver of ISTS charges for solar plants.
• Land regulations must be streamlined through inter-departmental coordination as it will help reduce delays in leasing or converting agricultural lands for non-agricultural purposes such as solar power generation.
• There is a need to support innovative solutions for financing farmers’ contributions. Out-of-the-box solutions like Karnataka’s pilot of a farmer-developer special-purpose vehicle to help farmers install solar power plants on their farms are needed.
• There is a need to extensively experiment grid-connected solar pumps as the current obstacles to the adoption of grid-connected solar pumps include concerns about their economic viability in the presence of high farm subsidies and farmers’ unwillingness to feed in surplus power when selling water or irrigating extra land are much attractive prospects.
• Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust.

-Source: The Hindu