Originally published in World Economic Forum’s Agenda here
Co-written by Sourajit Aiyer and Sandeep Bhattacharya, India Projects Manager, Climate Bonds Initiative
During India’s lockdown, many workers moved back to their rural villages from the cities – and many have stayed there.
But employment opportunities are limited in India’s rural areas.
Local renewable energy solutions could generate new livelihoods for these internal migrants.
The COVID-19 lockdown halted economic activity in India’s cities, and the loss of their daily livelihoods left millions of internal migrants economically vulnerable.
Furthermore, the process of returning to their native rural provinces was particularly distressing – and those bitter memories are causing many migrants to remain in their villages, even since a partial easing of the lockdown. But Indian villages hold limited employment opportunities – and so the question is whether India can unlock new jobs in its rural areas to absorb this workforce productively.
One way is to leverage decentralised renewable energy (DRE) solutions as an enabler for rural commerce. For instance, CEEW-Villgro’s Powering Livelihoods project assisted rural units to leverage solar energy-powered sewing machines to decentralise the manufacturing of cotton masks.
However, the larger opportunity to leverage DRE solutions might be in agriculture and the agri value chain. These are not only a key provider of rural livelihoods. Many internal migrants operated micro-businesses, like roadside food establishments, in the cities. Albeit informal, they were entrepreneurs in their own right – and this entrepreneurial experience in the food and agriculture space should be harnessed. Apart from supporting jobs and entrepreneurship with better power supply, this can also address broader policy issues like energy poverty, agri-productivity, food security, emissions, gender, health and resilience to climate variability.
DRE solutions could be used across agriculture-related applications like pumping water, storing, drying and cooling of produce, cooking and lighting, agro-processing and pre-made food packaging. To give an example, a 2018 CEEW report narrowed down on machines like reaper binders, knapsack sprayers and rice transplanters as those holding the maximum potential for DRE in the farm sector.
We concentrate on the economic benefits for the sake of brevity
An IRENA study in 2016 that collected evidence from DRE solutions across Asian countries found that the savings on fuel across the value-chain is a key benefit. This includes the tangible savings plus the time and risks incurred in sourcing traditional fuels like firewood. One project in Rajasthan that supplied 4,000 solar water pumps saved 2.4 million litres of diesel, thus saving INR24 million ($322,000) in diesel subsidies. Thus DRE solutions also help unlock resources by diverting subsidy allocations – a significant factor in developing nations – into alternative avenues.
Jobs and income generation are another benefit, because DRE solutions in the agri value-chain solve the existent constraint of energy supply to run an efficient agro-processing rural enterprise. This was reiterated in Shakti Sustainable Energy Foundation’s 2019 report on the DRE sector. An improvement in yield can also be expected, as evidenced by Fraunhofer ISE’s 2019 study for MahaGenco in Maharashtra, which found that a horticulture solar PV system provides sufficient irradiation to improve yields when the modules are mounted, per certain specifications. Productivity gains along with operating efficiencies in storage, drying and agro-processing can help to scale up a business profitably, which translates into dividends of jobs and incomes.
The improvement to information access as an economic benefit must be stated as well. DRE solutions help charge mobile phones and enable internet access, thus ensuring farmers and entrepreneurs get real-time market information which enables better decision-making on logistics and pricing.
Jobs and entrepreneurship are also created in support services like installation, maintenance, operations and distribution.
The Shakti report also found that the biggest beneficiaries of DRE solutions seem to be from poor and marginalized communities, who incidentally comprise the main chunk of the internal migrants who faced distress during the lockdown. The Indian government’s policies are supportive in this context; the Kusum scheme, which supports the installation of off-grid solar pumps in rural geographies, or the Saubhagya scheme, which supports energy access for all citizens, are two projects that demonstrate the government’s commitment in this direction.
Improved health is an indirect economic benefit, because traditional fuels like firewood or charcoal are heavy pollutants. Secondly, improved storage and shelf-life of food could enable access to a more varied diet, which can reduce incidences of malnutrition. This would have implications for people’s long-term health and cognitive development.
There are already many examples from rural India where renewable energy has been used to create a positive social impact – but most of these were in solar lighting. We are proposing to take this up a notch by scaling up DRE solutions focused on the agriculture sector and the agri value-chain. Of course, this will require skilling, funding and incubation support. But it can unlock rural entrepreneurship opportunities for the returned migrants, many of whom now fear reverse migration back to the cities, whilst utilizing their micro-entrepreneurial experiences and talent at running food-related businesses. Eventually, it can help reverse rural India from being largely an economic wasteland to an economic engine in its own right.