By Laila Kasuri, GGGI Water Sector Analyst
As someone trained as a water resources engineer, working primarily in water-centric organizations for the last seven years, I am presented with a new, but exciting, challenge at GGGI: to truly be “integrated” by working with the other sectors, but also ensuring that water is never overlooked! At GGGI, our small, but growing water team, is making sure water considerations are streamlined in green growth solutions to avoid any unforeseen externalities.
And what do I mean by externalities?
Let’s use the example of South Asia, which is my home turf. It happens to be a hotspot for water problems, but also home to some amazing “green growth” and environmental thinkers from South Asia, such as Ramchandra Guha. South Asia is an excellent example of how certain solutions, without proper planning, can wreak havoc on natural systems and lead to negative externalities.
While South Asia’s agricultural economy is one of the largest in the world, ensuring food security for about two billion people, it nevertheless needs significant greening efforts. Despite being home to the largest canal irrigation networks in the world, the region depends heavily on its groundwater aquifers to supply water. Millions of pumps running on either diesel or electricity, are used every day for multiple purposes.
However, in recent years, electricity fluctuation, shortages and load shedding in most villages of South Asia has added to the challenges farmers face by affecting energy – and water – availability. To address this issue a new, “green energy” innovation has emerged: “Solar powered pumps”.
These pumps, instead of running on electricity, run on solar energy, and were even seen as the “harbinger of a new era for water provision”. While the capital costs for installing these pumps can be quite high, these costs are being heavily subsidized by governments in South Asia. In India, schemes are providing 86% subsidy on the capital cost of the pump while the farmer only pays the 14%. Not only that, the operational cost of such pumps is almost negligible as sunlight is free, and the environmental impacts are significantly reduced. Subsidies further allow for this innovation to be accessible to the rural farmer as well as the farmer not connected to the grid. A technological innovation that is green and inclusive! Great, right?
Not entirely. The challenge with any new solution is that we design it to solve a single problem without looking at the other pieces of the picture. Solar pumps are designed to solve the problem of energy, but without the appropriate checks and measures in place, they could lead to additional problems. The almost free cost of solar pumps for farmers means there is no incentive for them to pump less. In fact, this can lead to indiscriminate groundwater pumping, which could threaten the long-term sustainability of aquifers, non-agricultural water uses, and stream–aquifer interactions that sustain riparian ecosystems. What you are left with is ultimately another case of the tragedy of the commons.
Furthermore, current capital subsidies are so large that farmers can choose to overinvest in the capacity of the pumps, choosing an expensive one with higher discharge, even when a surface pump would suffice. These large capital subsidies therefore impose a huge financial burden on both the state and national governments. Such unfortunate and unsustainable financing schemes will lead to inadequate system management and ultimately, failure of the technology itself.
But there are solutions looming as well. IWMI’s leading researchers, including Mr. Tushar Shah have written a great deal about “smart solar pumps”, where a solar power buy-back policy is introduced to encourage farmers to sell excess energy to the grid, incentivizing them to use less for pumping. Farmers will be paid to ‘grow’ solar power and sell it back to the grid rather than use it to pump water, thus making solar power a cash crop. To reap the most benefits, farmers can form “solar farm cooperatives” with a single connection to the grid and sell back and meter the excess power.
This has happened in Dhundi village where the members have formed a cooperative and sold it to the Madhya Gujarat Vidyut Company (MGVCL). Not only has this benefited Dhundi village, but also the MGVCL and the state government, who would otherwise have to provide the village heavily subsidized electricity. These heavy electricity subsidies are common in many parts of India, where they are placing huge economic burdens on the state and federal government. There is difficult to eliminate them due to fear of farmer backlash. The Dhundi model can offer an alternative of foregoing grid power for solar power with lower capital subsidies but attractive feed-in-tariffs, and at the same time solving the problem of electricity subsidies. Currently, this pilot program is a year old, with data being collected to monitor groundwater and energy use.
For GGGI – and its Water Sector team – this is an exciting opportunity to learn from the IWMI experience, and look at viable solutions that can solve not just one problem, but multiple problems, from increasing energy access and solving the problem of perverse electricity subsidies, to improving the management of water resources and creating incentives for water conservation. In the case
of solar powered pumps, there is a huge untapped opportunity for integrated green solutions that can solve not only farmers’ challenges, but the problem of water provision in rural and developing communities not connected to the grid. It requires foresight and strategic planning, from choosing the correct subsidy and the right power supply tariff, to putting in place the institutions that can monitor groundwater extraction and power use. As these solutions are scaled up, the capital costs are likely to go down with mass-produced pumps, thus not requiring huge capital subsidies. This makes such solutions even more viable.
This is certainly an exciting challenge for GGGI – to truly be “integrated” by working across sectors and seeking cross-cutting solutions. Moving forward, it may be necessary to retrain ourselves; instead of solving singular problems of water, of energy, of cities, etc. as many specialists are trained to do, we must work to design solutions that address multiple problems, with the fewest negative externalities. Maybe smart solar pumps are one of them?
Laila Kasuri is a Water Sector Analyst with GGGI’s Investment Policy Solutions Division.