What is the issue?
- Lack of access to electricity remains a huge barrier for rural businesses.
- It is high time that the potential for clean energy innovations is tapped effectively.
What is the dire need?
- The rural economy is underserved by existing electricity sources.
- It relies on human labour or fossil fuels such as diesel.
- It thus affects livelihood through various income-generation opportunities.
- Clean energy innovations for agriculture and non-farm micro-enterprises could help.
- It can complement the government’s electrification strategy which is more household-oriented.
- This can be achieved by leveraging distributed renewables coupled with energy efficiency.
What are the concerns in agriculture?
- About 40% of the agriculture produce is wasted before reaching consumers.
- The market value of the produce does not get reflected in the farmer’s revenues.
- Moreover, their real incomes remain low because of rising cost of agri-inputs.
- These include seeds, fertilisers, pesticides, irrigation equipment and services, among others.
- These issues are amplified in the case of small and marginal farmers (86% of cultivators in India).
- The fragile economic condition makes them more vulnerable to the effects of climate change.
How can clean energy help?
- Innovative technologies could reduce input costs and deliver higher farm outputs, better market opportunity.
- These may include clean energy-based cold chain, seed sowing, fertiliser application, pesticide spraying, or irrigation.
- This will also aid innovations such as solar-powered milking machines, and charkhas (spinning wheels).
- In this context, just 3 activities have a total market potential of about $40 billion.
- These are pesticide spraying, rice transplanting, and harvesting of grain crops.
How is the non-farm sector?
- The non-farm sector also suffers from lack of reliable electricity access.
- The enterprises include that on custom tailoring, food processing, poultry and livestock rearing, and hairdressing, etc.
- Lack of electricity has limited the number of non-farm activities undertaken in rural areas.
- These are indicative of the latent demand in India’s rural non-farm economy.
- Clean energy-driven and energy-efficient machines could help meet existing demand.
- It can as well offer hope for addressing latent demand.
- The rural population could find more viable non-farm activities to supplement farm incomes.
What are the lacunae?
- Billions of dollars worth of market opportunities remain untapped.
- The path from concept to commercialisation faces technical failure and market failure.
- The deployment of these innovations at scale continues to be plagued by
- high upfront cost of distributed renewables
- low and fragmented rural demand
- paucity of long-term debt to end-consumers
- missing incentives to adopt energy efficient practices
What lies ahead?
- Council on Energy, Environment and Water (CEEW) is planning to build an ecosystem for clean energy innovations for rural economy.
- The platform would provide
- affordable market intelligence to enterprises
- facilitate strategic pilots
- enable enterprise and consumer financing
- connect with MSMEs to help manufacture and distribute at scale
- engage with policymakers to improve technology transfer
- The commercial deployment of clean energy innovations needs partnerships.
- It must include the public institutions, philanthropic foundations, private firms, and the international development community.
Source: Business Standard
