Session 5: Energy and Environment

Chair: Nitin Desai (The Energy and Resources Institute)

Presentations:

  • Rural electrification with off-grid community micro-grids: An impact evaluation in Uttar Pradesh – Johannes Urpelainen (Columbia University) 

  • Should resource saving technologies be subsidised? Evidence from the diffusion of drip irrigation in Gujarat – Ram Fishman (George Washington University)

Discussant: Anandajit Goswami (The Energy and Resources Institute)

The Energy and Environment session was chaired by Nitin Desai of the Energy and Resources Institute. The first presentation was by Johannes Urpelainen of Columbia University who presented on an impact evaluation study of the Rural Electrification with Off-Grid Community using solar power in Uttar Pradesh. Using a Randomised Control Trial approach evaluating Intention To Treat (ITT), the study, implemented in rural Uttar Pradesh with Mera Gao Power shows that adoption of solar power as a mode of rural electrification has substantial benefits over the widespread use of Kerosene. In particular that it is easy to scale up and does not require any subsidies to encourage adoption. The monthly payments for solar power service, though relatively higher than urban electricity access, are affordable and enable small business to flourish through the provision of reliable power supply. Kerosene spending is significantly reduced following the adoption of solar power. Increased lighting use at relatively lower cost of adoption is significantly evident, and this is without the presence of subsidies on either the consumption or service provision side. The study however notes the limitations that off-grip solar rural electrification is not suitable for irrigation and that productive loads of electricity are unavailable, and that, on average, compared to grid electricity, poor villagers in rural areas pay more than wealthy urban electricity users.

The second presentation was on the effects of subsidies on resource saving technologies presented by Ram Fishman of George Washington University. The study, implemented in Gujarati, studies the effects of subsidising the adoption of drip irrigation on water and electricity use. Compared to flood irrigation, the study shows that subsidies significantly increase the adoption of drip irrigation, but this in turn increases the use of electricity significantly initially, then gradually declines, particularly years 2 to 4 after adoption. Adoption of drip irrigation subsidies is related to costs; subsidies reduce costs of adoption, and as such, enhanced subsidies enhance adoption of drip technology. However, increased adoption leads to increase in use of electricity and electricity bills, which in effect increases the use of energy. However, this also leads to increased land use and efficiently increases productivity.

Summary written by Herryman Moono, Country Economist, IGC Zambia