Energy Efficiency Services (EESL) 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 (SPV) will 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.
The model the company is 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.
It will use additional money from carbon finance, raise, debt and innovative structures to reduce the cost of capital wherever possible.
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 will entail 100 MW of solar power generation.
EESL has initiated this program based on its experience in Maharashtra – 100 MW of decentralised solar which it has 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 the land to set up projects.
The company has proposed to several states that it will provide solar run pumps for free to farmers and then include this cost of pump in a tariff. It will maintain those pumps as well.
For instance, in rural Goa, the power tariff is Rs 5.75 per unit. If the cost of pump is added to it, the tariff increased by barely Rs 3.50 per unit. There is a benefit of close to Rs 2,200 crore to the state.
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, Power Finance Corporation, REC and Power Grid Corporation of India (PGCIL).