21---Dr Gaurav Bhatiani, USAID and Mr Rakesh Gumar Goel,PA Consulting

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2nd Energy Efficiency Technology

Cooperation Conference

Energy Efficiency Bidding in Agriculture IrrigationPumpingIndian Experience

Gaurav Bhatiani Principal Energy Specialist, USAID

Rakesh K Goyal Chief of Party, PA Consulting

Concurrent Session -3

November 17, 2009

Page 200781-9

Presentation Flow

• Water Energy Crisis and Nexus

• Innovation Developed and Solution Demonstrated

• The Process Followed

• Challenges Faced

• Scalability and sustainability

Page 300781-9

An Emerging Crisis in Water & Power

• 90% of ground water is used in agriculture

• India a topper in ground water use

• Power supply to lift water consumes 23%-40% of electricity

• Delivery of subsidy through power tarif fs for irr igation stimulates

higher levels of consumption and is a threat to ground water

levels and DISCOMs

0

50

100

150

200

250

300

1940 1950 1960 1970 1980 1990 2000 2010

US

W. Europe

Spain

Mexico

China

India

Pakistan

Bangladesh

Sri Lanka

Vietnam

Ghana

S Africa

Tunisia

Water is a Global Crisis, but the Scale ofGround Water Use in India is Unique

Page 400781-9

Importance of Eff iciency in Agriculture Sector

Agriculture consumes 23% of power at national level and in manystates it accounts for 40% of power.

At national level, agriculture uses 38% of water (90% groundwater)

55 – 60% population dependent on groundwater

Financialhealth of

power sector

Availability of

water both forirrigation and

drinking

Livelihoodof farmers

Demand

supply gap inpower sector

Govt subsidy

of Rs. 30,000Crore per

annum

Page 500781-9

An Emerging Consensus Favors water-energy Co-management

ISSUES

• Groundwater irrigation has adverselyimpacted both water & energyresources

• Electricity consumption in agriculturesector stands at approx 25%

• Agriculture tariff structure is subs idizedleading to excessive consumption andrevenue losses

• Groundwater levels are falling by 3 to10 feet per year

• Rapid decline in groundwater table dueto overexploitation due to low operating

costs to the farmers

OPPORTUNITIES

• Comprehensive water-energy co-management model may beessential to remedy the situation

• Reduce electricity consumptionthrough efficiency improvement of

irrigation pump-sets

• Reduce water consumption throughirrigation efficiency improvement(micro-irrigation techniques – drip,

sprinkler, etc.)

• Integrate both energy & waterefficiency for better results

• Improve the service quality ofelectricity as prerequisite

Page 600781-9

Potential for Power Savings by Different Measures

15-25%Efficient Irrigation Methods3

5-15%Suction Pipe & Foot Valve2

45-80%Total Saving Potential4

25-40%Efficient Pumpset1

Potential forSavings

MeasuresSr.No.



Page 700781-9

Free Power Helped the Green

Revolution, but is now Dysfunctional

Revenue Contribution of Agricultural Sales

0

10

20

30

40

50

H a r y

U P

R a j

K a r n a

G u j

M a h

a A P

M P

P u n

T N

% Supplyto total

% Revenue to total

WATER

•Water rights arepassed with therights of land

•There is no waterusage policy

There is no Economic incentive to Farmer to save Water or Electricity

Page 800781-9

Innovation Developed

M a r k e t

b a s e d a p p

r o a c h

Risk Mitigation

W i n

- w i n s

i t u a t i o

n

Innovation

• Farmers -get NHEP,after-sales services, good

quality power & requiredamount of water

• Utility –energy savingswith greater opportunity

cost 46%• ESCO – profit from

saving energy, paybackin three years

• Project based oncommercial principles

• Long term horizon – no ‘snap back’effec t

• Project risks sharedamong stakeholders

and ESCO

• Rules of publicprocurement followed

• Active engagementof all stakeholders

• Extensive groundwork – studies, information –

reduce perceivedproject risks

Page 900781-9

Solution Demonstrated

Projec t Nam e Wat er Energy Ne xus (WEN EXA)

Supported By USAID

Implemented by PA Consulting

DISCOM Bangalore Electricity Supply Company (BESCOM)

ESCO Selected Enzen Global Solut ions Bangalore

First Ever ESCO deal in Agricultural Demand Side

Management on a performance contract basis

Public-Private Partnership with a 10 year agreement

Page 1000781-9

Solution Demonstrated: Project Site Details

Location: Doddabalapur (BESCOM)

Geographical area 11,000 Acres

No. of villages/population 29/17,000

% net sown area 75%

% irrigated area 16%

Major crops Mulberry & grapes

Depth to ground water 200-400 ft

No. of feeders/pumpsets 4/700

Typical pumpset capacity 5-10 HP

Datarelated issues

Bid processSelectionof ESCO

Capacitybuilding

Projectexecution

Page 1100781-9 11

• BESCOM provided all the preconditions for the project

– HVDS installed.

– One Distribution Transformer for each pump.

– Meters on all Distribution transformer – NGO working and educating farmers for four years

– Detailed data available on pumps and pump efficiency

– BESCOM obtained in principle agreement from KERC & the Governmentof Karnataka to proceed on a pilot program

• Farmers get a new branded energy efficient pumpset free with a 18 monthwarranty.

• ESCO to implement the pumpset replacement as a part of the Ag DSMprogram

– ESCO finances the investment required

– Provides ongoing O&M support to farmers and establishes a site office

• ESCO recoups investments through sharing of the energy served

Solution Demonstrated: Key Features

Page 1200781-9

The Process Followed

>>>

Electricalnetwork upgradation

RiskMitigation

Bid processSelectionof ESCO

Capacitybuilding

Projectexecution

Agreements

M&V Protocol

Keepingstakeholdersinformed

Farmers

DISCOMemployees

ESCO

Bid evaluation

Presentation bybidders

FinancialevaluationAward

Draft RFP andmarketing

Pre NIT

Pre-bidmeeting

Site visit

Data collection

Mining

Presentation

Preparingbusinessmodel

HVDS

Capacitorbanks andelectronicmeters

2005-2008 2008- 2009 2009 ONGOING 2009

E l e c t r i ci t y

s avi n g s



Page 1300781-9

Network Upgradation: HVDS Network and Metering

Page 1400781-9 14

Contents of the RFP

• Volume –I

– RFP Document

– Draft Agreement between BESCOM and ESCO

– Draft Agreement between ESCO and Farmer• Volume-II (on CD)

– Annex. A to H- regarding site study about feeders, land, irrigation, pumpetc carried out by various agencies.

Risk Mitigation: Data Collection

Annexure A: Concept Note on Agricultural DSM (June, 2007)Annexure A: Concept Note on Agricultural DSM (June, 2007)

Annexure B: Financing Agricultural DSM Projects. (Aug, 2008)Annexure B: Financing Agricultural DSM Projects. (Aug, 2008)

Annexure C: Map of Feeders 12 & 13 inAnnexure C: Map of Feeders 12 & 13 in DoddaballapuraDoddaballapura subsub--division complied under the India DRUM Projectdivision complied under the India DRUM Project(2006)(2006)

Annexure D: Land use maps for Feeders 12 & 13 inAnnexure D: Land use maps for Feeders 12 & 13 in DoddaballapuraDoddaballapura subsub--division (July 2008)division (July 2008)

Annexure E:Annexure E: PumpsetPumpset Survey details for Feeders 12 & 13 inSurvey details for Feeders 12 & 13 in DoddaballapuraDoddaballapura subsub--division (Updated 2008)division (Updated 2008)

Annexure F: Water Balance Study in parts ofAnnexure F: Water Balance Study in parts of DoddaballapuraDoddaballapura TalukTaluk, Bangalore Rural, Karnataka. (October 2008), Bangalore Rural, Karnataka. (October 2008)

Annexure G: Detailed Project Report: Irrigation Efficiency ImproAnnexure G: Detailed Project Report: Irrigation Efficiency Improvements in the BESCOMvements in the BESCOM DoddaballapurDoddaballapurSubdivision Feeder Lines DF 12 and 13 Service Area. (2006)Subdivision Feeder Lines DF 12 and 13 Service Area. (2006)

Annexure H: FarmersAnnexure H: Farmers’’ Education inEducation in DoddabballapuraDoddabballapura (2004(2004--2008)2008)

Page 1500781-9

The Bid Process: Pre-Bid Meeting

Page 1600781-9

The Bid Process: Site Visit

Page 1700781-9 17

Criteria for the ESCOCriteria for the ESCO PointsPoints ObjectiveObjective

Understanding of the Problem &Understanding of the Problem &Technical ApproachTechnical Approach

3030To assess the understanding of theTo assess the understanding of theproblem, the effectiveness of the plannedproblem, the effectiveness of the plannedapproach and relevance of prior work.approach and relevance of prior work.

Proposed Organization, Staffing andProposed Organization, Staffing andprior experience related to the projectprior experience related to the project

5050

To evaluate the strengths of the proposedTo evaluate the strengths of the proposedteam, including key project managementteam, including key project managementmembers and technical specialists and themembers and technical specialists and thetime and other resources that will betime and other resources that will bedevoted to the project.devoted to the project.

Innovation & other factorsInnovation & other factors 1515

To judge the value of proposed innovationsTo judge the value of proposed innovationsin improving the probability of achievingin improving the probability of achievingdesired results from the Ag DSM projectdesired results from the Ag DSM projectand to make allowance for other factors notand to make allowance for other factors notpreviously contemplated that will have apreviously contemplated that will have abearing on project resultsbearing on project results

Usage of (BEE) StarUsage of (BEE) Star--ratedrated

pumpsetspumpsets0505

Award of 5(five) points for proposed usageAward of 5(five) points for proposed usageof fiveof five--star rated pump sets; 3 (three) forstar rated pump sets; 3 (three) forfourfour--star ratedstar rated pumpsetspumpsets; and 1( one) for; and 1( one) forthreethree--star rated pump sets. Pump setsstar rated pump sets. Pump setsbelow threebelow three--star rated no points shall bestar rated no points shall beawarded.awarded.

Applicant with a score of 70 or more shall be declared as technApplicant with a score of 70 or more shall be declared as technically qualified.ically qualified.

Bid Evaluation: Technical Criteria

Page 1800781-9 18

Bid Evaluation: Financial Criteria

NAME OF ESCONAME OF ESCO

Energy Saving in the project with reference to the base lineEnergy Saving in the project with reference to the base line

(in %)(in %)

X (say)X (say)

Proportion of Energy saving proposed to be s hared withProportion of Energy saving proposed to be s hared withBESCOM (in %)BESCOM (in %)

Y (say)Y (say)

Bidding Parameter (in %)Bidding Parameter (in %) X*YX*Y

Applicant proposing the highest value of bidding parameter shallApplicant proposing the highest value of bidding parameter shall be thebe thefinalist ESCOfinalist ESCO

Conditional Financial bids may be liable for rejectionConditional Financial bids may be liable for rejection



Page 1900781-9

Capacity Building

Page 2000781-9 20

Obligations of BESCOMObligations of BESCOM

BESCOM shall be responsible for efficient and reliable operationBESCOM shall be responsible for efficient and reliable operation, maintenance and repair/replacement, maintenance and repair/replacementof power supply systemof power supply system

BESCOM had implemented HVDS with one transformer for one pump.BESCOM had implemented HVDS with one transformer for one pump.

Each pump to have a separate meter physically located on the DisEach pump to have a separate meter physically located on the Distribution Transformer (DT).tribution Transformer (DT).

BESCOM has installed switched capacitors on 11 KV systems.BESCOM has installed switched capacitors on 11 KV systems.

BESCOM will make payments on a monthly basis to the ESCO based oBESCOM will make payments on a monthly basis to the ESCO based on the share of energy savingsn the share of energy savingsderived from the competitive bidding process.derived from the competitive bidding process.

Seek GOK support for implementation of proposed project; keep KESeek GOK support for implementation of proposed project; keep KERC informed and seek necessaryRC informed and seek necessaryKERC approvals, if any.KERC approvals, if any.

BESCOM will be obliged to provide the necessary hours of supplyBESCOM will be obliged to provide the necessary hours of supply to the Feeders as per policy ofto the Feeders as per policy ofGOK.GOK.

Project Execution: Contracts

Page 2100781-9 21

Obligations of ESCOObligations of ESCO

ESCO shall also be responsible for financing and implementing thESCO shall also be responsible for financing and implementing the new energy efficiente new energy efficient pumpsetspumpsets

ESCO will be responsible for planning the New High Efficiency PuESCO will be responsible for planning the New High Efficiency Pump (NHEP) procurement, installation,mp (NHEP) procurement, installation,maintenance and repair/replacement during the contract.maintenance and repair/replacement during the contract.

The ESCO will be responsible for dismantling the old pumps and eThe ESCO will be responsible for dismantling the old pumps and ensuring its disposal in a manner thatnsuring its disposal in a manner thatit can not be used as irrigationit can not be used as irrigation pumpsetpumpset anywhere in India.anywhere in India.

The ESCO will be required to maintain a log of easily visible seThe ESCO will be required to maintain a log of easily visible serial numbers and markings in the castingrial numbers and markings in the castingon the products. (For purposes of record and scrutiny against taon the products. (For purposes of record and scrutiny against ta mpering of the IP set.)mpering of the IP set.)

Agreements to be signed between ESCO & BESCOM.Agreements to be signed between ESCO & BESCOM.

BESCOM to facilitate signing of agreement between ESCO & farmersBESCOM to facilitate signing of agreement between ESCO & farmers..

ESCO, jointly with BESCOM, to implement a monitoring and verificESCO, jointly with BESCOM, to implement a monitoring and verification (M&V) protocolation (M&V) protocol

for meter reading.for meter reading.

Project Execution: Contracts

Joint Obligations of BESCOM and ESCOJoint Obligations of BESCOM and ESCO

Page 2200781-9 22

Milestone EventsMilestone Events DateDate

Commencement of sale (/posting on website) of bidCommencement of sale (/posting on website) of bid

documentdocument

January 13, 2009January 13, 2009

Written Submission of questions to BESCOM on RFPWritten Submission of questions to BESCOM on RFP January 20, 2009January 20, 2009

PrePre--bid conferencebid conference January 22,2009 (15:00 hrs)January 22,2009 (15:00 hrs)

Site VisitSite Visit January 23, 2009January 23, 2009

Last date for sale (/availability on website) of the bidLast date for sale (/availability on website) of the biddocumentdocument

February 20, 2009February 20, 2009

Last date of submission of bidsLast date of submission of bids February 20, 2009 (13:00 hrs)February 20, 2009 (13:00 hrs)

Opening of Technical BidsOpening of Technical Bids February 20, 2009 (15:00 hrs)February 20, 2009 (15:00 hrs)

Call (select) Bidders for PresentationsCall (select) Bidders for Presentations February 22February 22 – – 28, 200928, 2009

Completion of Technical Bid EvaluationCompletion of Technical Bid Evaluation March 5, 2009March 5, 2009Opening of Financial BidOpening of Financial Bid March 12, 2009 (13:00 hrs)March 12, 2009 (13:00 hrs)

Award of ContractAward of Contract March 16,2009March 16,2009

Milestone EventsMilestone Events DateDate

PrePre--NIT meetingNIT meeting December 17, 2008December 17, 2008

FarmersFarmers’’ Meeting with BESCOMMeeting with BESCOM January 05, 2009January 05, 2009

Project Execution: Schedule Followed

Page 2300781-9

Challenges Faced

Electricalnetwork upgradation

RiskMitigation

Pre-bidprocess

Selectionof pump

manufacturer/ ESCO

Capacitybuilding

Projectexecution

• Vast network

• Tough terrain

• Farmerscooperation

• Upfrontinvestment

• Old records

• Illegalconnections

• Unplannednetworkextensions

• Tough terrain

• Marketacceptable RFP

• Submission ofsufficient bid

• Adherence toutilityprocurementlaws/guidelines

• Maintainingtimeline withinternalprocedureof utility

• Weeding outnon-seriousbidders withutilityprocurementguidelines

• Farmers arenot interested

• Employeesavoid workingin rural areasand learnings

• Pumpmanufacturer/ESCO sees toomuch as an risk

• Co-operationof farmers

• Reading themeter

• Maintenance ofelectricalnetwork

Page 2400781-9

Responsiveness and Impact

• Interest of various stakeholders:

– State governments – Government of Karnataka

– Regulatory commissions – Karnataka, Haryana and others

– Utilities – BESCOM, UHBVNL and others• Long term contract signed between ESCO and BESCOM

• Impact – energy savings: 46% of the baseline consumption

6359

112

5,359

7,065

Karnataka level

73800

2,400

62,857

82,000

National level

2.6

7.68

2.2

2.9

Pilot project

Potential to mitigate CO2 (in‘000 tonnes)

Cost savings (in Rs. million)

Capacity savings (in MVA)

Energy savings (in MU)

Savings/year as on 2008



Page 2500781-9

Sustainability –Way Forward

– Continuous Awareness generation and capacity building of farmers:

• Realise the nexus between electricity and water

• Adoption of micro irrigation technologies

• Changing/adapting cropping patterns by farmers

– Capacity building of ESCO

– Sensitisation of DISCOM, regulator, Government and p ump manufacturer

– Involvement of large institutions like NABARD, Agricultural University, etc

– Better quality of electricity supply

– Water balance study and ground water data of the site

Page 2600781-9

Project Partners

Page 2700781-9

Thank you

Public Recognition

Documents

21---Dr Gaurav Bhatiani, USAID and Mr Rakesh Gumar Goel,PA Consulting