DSM Agricultural Pumping
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Project Overview

  • Demand-Side Management (DSM) through Agricultural Pumping Program – This project involved replacement of old irrigation pumps with energy-efficient irrigation pumps in collaboration with Kirloskar Brothers Ltd. in Indore, Ujjain and Dewas districts of Madhya Pradesh.

Public-Private Participants

  • Public Sector:
    • Madhya Pradesh State Electricity Board (MPSEB, India)
  • Private Sector:
    • Econoler International, BASIX, Verve International, and Kirloskar Brothers

Lessons Learned

Energy Policies

  • India is the second-largest generator of greenhouse gas (GHG) emissions in Asia with the energy sector producing 50% of the country’s GHG emissions. This sector is also suffering from a high energy demand and a nearly nonexistent margin of electricity generation. Electricity shortages are common for the agriculture sector and several urban feeders during high season.
  • As a solution to this specific problem, BASIX played a key role as an energy management firm to increase the capacity of the Indian power utilities through the development and implementation of a DSM program.
  • At a macro level, this includes restructuring, unbundling, privatization and liberalization of traditional electric utility activities. The program also included policy decisions and choices affecting the availability and relative prices of alternative energy sources (e.g., diesel, biomass fuel).
  • At a micro level, it includes the economic impact of tariffs on the consumption practices of the consumer.


  • Econoler provided financial support to cover a part of the cost required for energy audits at customers’ facilities.
  • The development of a carbon financing mechanism that could be replicated to provide incremental financing for the future projects was also a fundamental goal of the project.
  • From 2002 – 2005, Econoler implemented a large DSM initiative financed by the Canadian Climate Change Development Fund (CCCDF).
  • Econoler continued DSM planning activities via the Energy Infrastructure Services Project (EISP) II funded by CIDA under its bilateral agreement.


  • The strategy was to develop and implement DSM modules with viable, replicable financing and implementation mechanisms with one utility (MPSEB).
  • During the project, Econoler, with BASIX, developed a very successful approach to solve the current problems related to inefficiency and subsidized energy use that India faces.
  • The project demonstrated that a market-based approach using agricultural stakeholders, electric utilities and carbon financing mechanisms can be developed to solve the challenges.
  • The Principal Energy Secretary indicated that the government of Madhya Pradesh wanted to replicate the agriculture module in many regions of MP.
  • In July 2005, the World Bank organized a large workshop gathering several Energy, Agriculture and Rural Secretaries of a few states, including Madhya Pradesh, Andhra Pradesh, Mahajan, Temul Nadu, and Kerala.
  • Based on the project results and with CIDA support, the World Bank is showing a great interest in scaling up the project developed in MP.

Long-Term Policy Framework

  • IREDA received a comprehensive capacity-building program to support the development of DSM programs and carbon financing mechanisms, including monitoring and validation of carbon emission reductions.
  • Three new DSM cells were created within MPSEB, enabling the replication and the development of new DSM modules in all MP states.
  • We enhanced our capacity to work in the energy efficiency field with the utilities and leveraged potential financing through transfer of the carbon emission reduction modeling technology.
  • The agriculture module consisted of the replacement of existing electric pump sets and accessories, resulting in efficiency improvements of 25% to 49%.

Research and Development

  • The outsourcing of program delivery to Energy Management Firms (BASIX, Verve, Kirloskar) was attractive to the utility (MPSEB) because it minimized the need for utility staff and capital resources for program delivery. It also allowed the utility to achieve a more cost-effective and sophisticated approach to energy management by relying on the Energy Management Firm (EMF) staff.
  • By vertically integrating product sales, service and financing functions, EMFs can internalize costs of DSM program marketing and operation for potential revenue from equipment sales and leasing.
  • BASIX demonstrated that EMF/utility partnerships can implement large-scale programs with modest cost, standardized products.


One of the attractive features of this kind of program, from the perspective of the utility, is that EMFs assume the financial risks associated with their agreement to absorb costs of customer outreach, equipment installation and maintenance during the lease period. Of course, the EMFs expect to more than offset those costs through revenues generated by equipment sales and leasing.

For More Information Contact:

Ajay Kumar Giri
Phone: +91-9347272686
[email protected]

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