PM Kusum

28th September, 2021 Economy

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Context:

Recently, government reviewed the progress of the PM-KUSUM scheme and reaffirmed the government’s commitment to accelerating solar pump adoption.

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.
limited awareness about solar pumps
Many farmers struggle to pay 30-40% of upfront costs in compliance with scheme requirements. Further, they cannot access bank loans without collateral.
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.
discoms often find utility-scale solar cheaper than distributed solar (under the scheme) due to the latter’s higher costs and the loss of locational advantage due to waived inter-State transmission system (ISTS) charges.
delays in leasing or converting agricultural lands for non-agricultural purposes such as solar power generation.
Current obstacles to their adoption include concerns about their economic viability in the presence of high farm subsidies and farmers’ potential unwillingness to feed in surplus power when selling water or irrigating extra land are more attractive prospects.

KUSUM aims to help farmers access reliable day-time solar power for irrigation, reduce power subsidies, and decarbonise agriculture.
it allows farmers to earn additional income by selling solar power to discoms, and discoms to procure cheap power close to centres of consumption.
need to address counter-party risks and grid-unavailability risks at distribution substations, standardise tariff determination to reflect the higher costs of distributed power plants, and do away with the waiver of ISTS charges for solar plants.
The solar pumps will save the expenditure incurred on diesel for running diesel pump and provide the farmers a reliable source of irrigation through solar pump apart from preventing harmful pollution from running diesel pump.

extend the scheme’s timelines. Most Indian discoms have a surplus of contracted generation capacity and are wary of procuring more power in the short term.
delays in leasing or converting agricultural lands for non-agricultural purposes such as solar power generation allowing faster conversion of the land.
Bring 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.
Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust.

Ministry of New and Renewable Energy (MNRE) has launched the Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM KUSUM) Scheme for farmers for installation of solar pumps and grid connected solar and other renewable power plants in the country.
The scheme aims to add solar and other renewable capacity of 25,750 MW by 2022 with total central financial support of Rs. 34,422 Crore including service charges to the implementing agencies.

Component A: 10,000 MW of Decentralized Ground Mounted Grid Connected Renewable Power Plants of individual plant size up to 2 MW.
Component B: Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps of individual pump capacity up to 7.5 HP.
Component C: Solarisation of 10 Lakh Grid-connected Agriculture Pumps of individual pump capacity up to 7.5 HP.