Energy Transitions in Agriculture: A Case Study of Transitioning to Solar Pump-sets in Two Villages in India

Abstract:

The Indian Government has been aggressively promoting renewable energy (RE) technologies by creating a conducive policy framework for private investment in the grid-connected solar and wind energy generation and introducing regulatory incentives for the provisioning of decentralized renewable energy solutions, especially in rural areas. Consequently, the agricultural sector too is witnessing a transition towards using RE sources, especially for irrigation with the objective of introducing technology that improves agricultural productivity while minimising further ecological harm. Solar irrigation is being pushed as an important forerunner for allowing leapfrogging towards a low-carbon trajectory and reducing emissions while increasing accessibility of energy especially in areas which lack access to the grid or receive electricity of poor quality. This paper presents an analysis of the differential impacts of an energy transition to solar pump-set usage in two contiguous villages, Uchauli and Gobindpur in Hardoi district of the state of Uttar Pradesh in India. This study assesses the dynamics involved in undergoing an energy transition at the village level and the consequent impacts from such a transition on the beneficiaries differentiated across the socio-economic categories. The short-term impacts of the intervention are evaluated using a quasi-experimental design wherein the beneficiaries of the solar mini-grid intervention act as treatment units while the non-beneficiaries act as control units. The counterfactual situation was approximated by conducting a pre-test post-test evaluation which includes an ex-ante and an ex-post study of the beneficiaries and selected non-beneficiaries of the project based on panel data collected before and after the intervention. The paper provides an estimate of the district-level potential such an energy transition can have in terms of reducing emissions given a range of assumptions for ensuring increased diffusion of decentralised solar irrigation. The paper also evaluates the potential costs that will have to be undertaken for creating a favorable regulatory environment which subsidises the costs of transitioning to solar technologies especially for small and marginal farmers.