1. BACKGROUND: THE ENERGY AND WATER SECTORS

The performance of the Indian power sector is increasingly
dependent on how efficiently irrigation water is used and paid for. Water withdra wal is an energy intensive operation
performed throughout the agricultural sector that results in a third of the power consumption in the country being used
for the roughly 50% of the national irrigation water consumption extracted from groundwater resources. Highly
subsidized power supply policies for agriculture have major
implications for the overall condition of the power sector and associated water resource. Economic logic – the low marginal cost of pumping and high marginal returns of abundant use of water – has dictated that ground water tables are sinking deeper and deeper. In 286 districts across 18 states, water levels have fallen by five meters

1 . Half of rural western India’s wells are dry.

2 The level of attention paid to water use efficiency is directly proportional to the prices charged for water servicing. Rising prices lead to increasing attention to water use and, in the long run, more efficient use of water. Addressing water and energy use efficiencies in the Indian agricultural sector requires a strategic combination of several interdependent components. There has to be central and state policy dialogue on power and water sector reform to develop an energy and water framework. Commercial practices have to be introduced in rural power distribution in order to expand the domain of power planning beyond the customer side of the electrical meter to encompass the water well, the exploitation and recharge of aquifers and the management of the watershed as a whole. It is also essential to involve the rural consumer in partnership to advance energy and water use efficiency, there by improving re form prospects. Above all, the issue of good governance involving all affected stakeholders will be needed to realize the many potential benefits of a closer union between the power and water sectors. The country is beginning to recognize the importance of addressing these challenges: the need for cost recovery and cross-sectoral integration and coordination of water and energy demand planning and use. There are other socioeconomic and related governance challenges as well. Substantive research undertaken over the past two decade by analysts such as Amartya Sen, Robert Chambers and Tushaar Shah among others, has demonstrated a strong linkage between poverty alleviation and reliable access to basic amenities such as power and ground water. Groundwater, Power and Poverty; Governance: Access to groundwater is the single most important factor determining the reliability of water supplies. Reliable irrigation water supplies are the lead input required to ma ke the full “green revolution” p a ckage of seeds, fertilizers and other inputs viable. Without reliable water supplies, the risk associated with other investments in agricultural production is high since everything can be lost due to variations in precipitation. Furthermore, when drought hits, farmers without access to reliable irrigation are often forced to migrate or sell the limited assets they have been able to accumulate. The result is a continuing cycle of p overty. Access to assured irri gation such as groundwater creates a positive cycle out of poverty. Since groundwater availability is relatively independent of recent fluctuations in rainfall and there is often very substantial inter-annual stora g e , farmer’s access to water is rarely threatened by climatic changes – at least on a short-term basis. This gives groundwater irrigation a substantial advantage over surface irrigation with regard to poverty alleviation.

3 Groundwater is reliable, but that reliability is directly and singularly affected by the reliability of power supplies. If powersupplies are unreliable, the unique advantages of groundwater with respect to poverty alleviation will be totally lost

4 . The political will to usher reforms that ensure reliability of power supply and attendant ground water reliability will ultimately depend on good governance by enabling empowered stakeholders making their voices heard . A motivated, wellinformed and org anized civil society, media and business community can pressure government decision-makers to support sustainable and integrated management of energy and water resources.

2. THE NEXUS – THE DEVELOPMENT HYPOTHESIS FOR GOVERNANCE:

It is clear that unsustainable practices in the use and management of one sector are intimately related to the fate of the other, due to two fundamental realities:

ENERGY IS REQUIRED TO MAKE USE OF WATER
RESOURCES. Energy is consumed whenever water or wastewater is withdrawn from surface or ground water sources, transported, treated, or disposed of

WATER IS ALSO REQUIRED TO MAKE USE OF ENERGY RESOURCES. Water is necessary at several stages of energy production, conversion or end use, and is the sink for much energy-related contamination.

An integrated approach across use sectors, geographic areas and social groups is fundamental to ensure adequate service provision to all stakeholders. This is particularly relevant as competition for energy and water increases. A holistic approach of governance allows for inclusion of health and environmental issues in the resource management equation and provides for responses based on analysis of tradeoffs and costs with use of energy and water. It is to consumers that the benefits good governance will be felt. This can happen only through awareness, understanding, and appreciation of the linkages among the various users of the resources, as well as development of the proper enabling environments and institutional frameworks to support collaboration, cooperation and participatory governance.

3. ENERGY-WATER NEXUS IN RURAL AREAS : AGRICULTURE (See FIGURE 1):

The precise points of ov erl ap a n d p o t e n t i a l mismanagement or improved efficiency in either the water or energy sectors vary depending on the specific h uman activity sector, geogra phic area and source of water and energy supply. Figure .

1 illustrates some of the key driving forces, feedback relationships and impacts associated with existing ‘vicious cycles’ for one illustrative areas of intensive energy and water use: agriculture in rural areas. In this sector of economic activity, consumption of energy and water are closely tied to productivity of the land and the livelihoods of farmers. Highly subsidized power supply policies for agriculture and non-commercial operating practices of utilities have major implications for the overall condition of the power sector and associated water resources issues. First, they have undermined state finances and the performance of the state run electric utilities (the State Electricity Boards - SEBs) because every unit of energy sold to agriculture represents a significant financial loss to the utility. 6 The we a k fi n a n c i a l condition of the SEBs makes it difficult for these utilities to provide re l i able service on a sustainab l e basis to a situation that worsens with every additional energy unit consumed by a fa rmer. The rural/agricultural sector in India uses 85% of the country ’s ava i l able fresh water. However, irri gation efficiency is only 20-50%. In other words, Indian a g riculture wastes up to half of the country ’s fresh water supply. Although from a basin perspective , much of the wasted water is reused, significant amount of water is wasted primarily due to irrigation inefficiencies. There a re inefficiencies on the energ y front as well. Agriculture accounts for about 27% of
the total electricity consumption in India. The consumption is somewhat higher in the states like

AP, Gujarat, MP,UP, Karnataka and Harya n a , where gricultura l electricity use is between 35-45%. However, sale of this electricity amounts to no more than 0-10% of the electricity utilities revenues. The resultant unreliability of electricity provision to farmers directly leads to one of the most important vicious c ycles in the agricultural sector, especially for the roughly 50% of irrigation water sumption across the country extracted from groundwater sourc e s. The cycle unfolds as follows: Unreliable grid electricity, with its ntermittent service, irregular hours of provision (often at off-peak nighttime hours), and fluctuating voltage make it difficult for the armer to efficiently manage his irrigation schedule and the amount of water he releases to his fields. The farmer copes with irregular energy supply by buying oversized pump motors to ensure maximum water withdra wal during limited periods of power ava i l ability,and protect his motor from burnout caused by irregular voltages . He also may supplement grid supply with dieselpowered
pumps. In addition, because of the inconvenient timing of electricity availability, the farmer leaves his pumps running 24 hours a day, there by indiscriminately pumping water whenever the electricity comes on, often far in excess of what is needed. Since farmers face little or no marginal electricity cost when pumping, they have little financial incentive for efficient water use, encouraging overexploitation. Making the entire situation worse is the typical farmer dissatisfaction with the energy services he receives and an unwillingness to allow pumpsets to be metered or to pay even the applicable flat rate tariff for p ower. Water itself is also virtually fre e , re m oving any remaining disincentive to inefficient agricultural practices that sap shrinking water supplies. As wasteful behavior proceeds, some of it attributable to poor governance,9 aquifers are being depleted so that farmers must purchase even larger capacity motors to pump water from deeper and deeper wells, thus exacerbating the energy-water waste cycle.
Energy inefficiencies such as these obviously contribute to increased greenhouse gases (GHGs).10 In addition, depleted water supplies contribute to lowered agricultural productivity as well as ground and surface water contamination, all with potential health and economic impacts.

The enormous proportion of all water and energy consumed in India’s agricultural sector ma ke this negative cycle a priority area of concern.11 Unfortunately it is also among the most difficult sets of issues to address, since the costs of energy and water are so subsidized in the agricultural sector.

4. GROUNDWATER DELETION - IMPACTS ON HEALTH

Groundwater usually tastes cool and delicious. The ke y a d vantage of aquifers is high microbiological quality, arising from its protected situation locked in a natural vault. But just as pollution depletes the quantity of surface water, depletion pollutes the groundwater quality. Plunging water tables create a vacuum, concentrate total dissolved solids (TDS), draw saltwater intrusion and expose natural elements at deeper elevations.
Water quality decline – especially involving fluoride, nitra t e concentrations and arsenic – harm the life, health, productivity and development of infants, children, pregnant women and the elderly. Methaemoglobinemia, caused by nitrate-nitrite conversion in the intestines, lead to listlessness and bluish tinge of the skin. Nitrate poisoned cattle lose milk and abort c a l ves. Families can’t filter or boil away nitrate, only distil it, which is too costly. Health specialists propose pumping less groundwater, a d vocating better sanitation, re d u c i n g indiscriminate use of fertilizers, or recharging aquifers to dilute. These issues of governance are hard to mandate.

5. FLAT WASTAGE

The adoption of flat rate pricing for agricultural power is cause for this perverse state of affairs. Under this system, a fa rmer pays a fixed price per horsepower per month for electricity. There fore the marginal cost of pumping water is zero. This leads to energ y wa s t a g e , over-pumping and inefficient selection of crops. Flat rate pumping also masks the true cost of power to farmers. The tariff structure a n d the poor combination of technology and management are responsible for water loss, unsustainable exploitation of groundwater and the high energy losses associated with the distribution and end-use of electricity in irrigation water pumping. Significant energy losses are associated with the distribution of electricity and in the poor selection, installation, maintenance and operation of the electrical motor pump system. A vicious cycle operates two sub-systems in tandem: the electrical distribution system and the water pumping system. This vicious cycle comprises three sub-cycles: The technology sub-cycle, the financial sub-cycle and the socioeconomic sub-cycle.

6. TECHNOLOGY SUB-CYCLE
It starts with the electricity distribution system characterized by poor design and installation of the main distribution LT feeder lines (11 kV). Overloading the 11-kV/415 V distribution transformers (DTRs) and long lengths of undersized secondary lines resulting in high line losses and large voltage drops compounds this. Farmers have no control over the quality of supply and on it timing and duration. There are several consequences of poor p ower quality. Frequent motor burnout cause leads to additional costs of reinstallation. As a result, farmers tend to select robust motors that have thicker armature coil windings to withstand large current and consequent localized heat generation without coil burnout. These motors are less efficient. Also, to ensure that the flow rate of water pumped out is not reduced due to voltage conditions, farmers tend to replace existing motors with higher capacity rating. It has been seen in Haryana and Andhra Pradesh that farmers use oversized pumps to obtain the required discharge. The poor management of load demand by the local distribution sub-station authorities compounds the problem of poor power quality. The sub-station personnel follow a prescribed system of power regulation (power curtailment policy) whereby power is rotated among the farmers in two blocks of 4-8 hours per day.This power rostering results in certain undesirable practices that eventually leads to system failure . A common practice amongst farmers is to keep their motors switches turned on so that water is pumped whenever the rostering schedule is in effect for a particular block. This in effect means that a large number of pumps become active at the same time, resulting in a load demand diversity of nearly unity. This causes the 11 kV/415 V DTR to trip and, in cases where the transformer fuses have been tampered with, the transformer burns-out.

7. FINANCIAL SUB-CYCLE
Poor quality of power and the resultant impact on performance and efficiency of pump results in low crop yields and incomes. Under these conditions, electricity tariff revisions for farmers are politically resisted and payments on electricity bills are postponed, resulting in low cost re c overy. Low cost re c overy, in turn, is linked to under funding of operations and maintenance of the power delivery systems. This coupled with poor engineering standards and state of the LT distribution systems and inappropriate structure, policies and staff skills of many SEBs closes the circle by providing poor quality of supply service. This sets off a chain reaction of events of motor burnout and transformer overloading. These further depress cost-re c overy levels and the vicious cycle sets in. Sub-optimal allocation of resources towards the distribution system places further burden on the already vulnerable system causing deterioration in the quality and reliability of supply.

8. SOCIOECONOMIC SUB-CYCLE
Exacerbating the low cost recovery issue are the twin issues of illegal connections and thefts. The former is a direct result of the long waiting periods for new connections. The latter is due to the ease with which unscrupulous elements can tap into the long winding secondary distribution lines. These are combined with the near universal practice of “motor nameplate switching”, whereby higher capacity motors have their labels altered to indicate lower ratings. In a flat rate tariff system this further robs the utility of its legitimate revenue.

9. CAUSES OF WATER LOSS
There are five causes of water loss. First is the choice of crop. Farmers select crops that bring in maximum benefit to them and not crops that use less water. The natural environment also plays an important role in determining how much water is lost. Soil types, climate and hydrology all affect water losses. India has a very diverse natural environment. A recent classification by the National Bureau of Soil Survey and Land Use Planning distinguishes 20 broad agro-ecological zones, separated by natural features and crop growing periods. Each of these agro-ecological zones comprises many myriad micro h abitats. There fore , there are always some regions in India that will have lower water use efficiency than others a n d a ny water-efficiency project must be site-specific. Technology is next on the list of causes. The type of irri gation and delivery systems determines how efficiently water is used. Drip and sprinkler irrigation systems are more complex in design but can be more easily operated with low losses than surface irrigation methods, which require a high degree of flexibility in water supply. Pipe delivery systems generally lose less water than the more commonly used canal systems although canal systems are often more easily maintained. The type of control structure used in irrigation is also important. Fixed control structures are less flexible but require a lower degree of expertise to operate and maintain. All this lends to the fact that technology that requires less skill to manage may often incur less water loss than systems that are theoretically more efficient. A gain, site specific analysis is essential in determining the proper technology to be used. The fourth cause of water loss is farmers. Farmer characteristics such as skills, knowledge, organization and motivation determine their ability to manage water. The fifth cause of water loss is the central water agency and its policy. This cause should be recognized as the most important cause because it underlies the others. The efficiency of any water management technology is dependent on the reliability of the water supply. Farmers cannot function effectively without a reliable supply of water and have no incentive to use water efficiently if it is supplied with little or no charg e . To provide the farmers with the means and incentive to conserve water, municipalities must provide water at a realistic cost and simultaneously improve the quality of the service they provide to the point where farmers will be willing to pay for it. Attitudes about the public ownership of water make this
transition difficult. Throughout history water has belonged to a class of materials called common property resources, to which access is nonexclusive, ownership is held in common by the public and prices are very low, or zero. When the price of input such as water is very low relative to other productive inputs, it is used without regard for quantity or conservation.
In India water is supplied to the agricultural sector virtually
free of charge and therefore farmers use as much of it as possible. Unfortunately, municipalities raising the price of water cannot solve this problem. Farmers also must be willing to pay for the water. It has been shown that farmers in India are willing to pay for the water they receive provided that the supply is reliable. Currently water supply to farmers is very unreliable. Farmers never know how much water they will get and when it will come. As a result of this and the low or non-existent cost, va l ves are most always open so that farmers can get the most out of the syncopated water flow. It should also be noted that improving reliability and timeliness in water supply entails higher costs in terms of additional storage capacity and pumping. For example, in Haryana, where the irrigation charges for surface water supply are less than Rs. 500 per
hectare per year, farmers are known to spend as much as
Rs. 4500/ha every year in irri gation pumping costs. These irrigation costs accounts for as much as 20 percent of the net value of output from these crops. Farmers are willing to
pay for timely and reliable water supplies for irri gation. Hence, those institutional and financing arrangements that ensure reliable water supplies are likely to be more sustainable for improving water use efficiency than those that concentrate only on cost-re c overy.

10. ENERGY-WATER NEXUS: GOVERNANCE APPROACHES
The principal components in any water sector reform strategy are: Conservation, Regeneration and Sanitation of the water resourc e s. These elements are not mutually exclusive but complement one other. Conversely, in a segre gated approach, resource sustainability, which is surely the most critical aspect of the re form process, is often defeated. The integrated model is even more appropriate in the Indian context as water scarcity issues are becoming increasingly complex with the alarming growth in population. By way of contrast power sector reforms are driven by the need to improve the technical and financial performance of the utility through the adoption of commercial practices, restructuring of the sector by way of unbundling the vertically integrated SEBs into independent generation, transmission and distribution companies and establishing independent regulatory bodies. While one approaches the power sector reform through the utility’s perspective , it is perhaps customary to approach the water sector reforms from the users’ perspective. By definition, the root of the water-energy nexus lies in the inability of the power utility to provide reliable power to farmers to meet their water demand leading to a host of inefficient coping strategies by users/consumers in both electricity and water use. Governance structures that prevent the degradation of electricity and water resources through the adoption of mutually sustainable practices directed at both resources needs to be adopted. Herein lies the need to expand the scope of state electricity regulatory agencies to include oversight and regulation of ground water as part of its responsibilities.
Together with establishing a role for the state electricity regulatory agencies to also regulate ground water use, it is
implicit that we promote voluntary public policies at the user level to salvage policy restraints at the Government level. These can be established through effective governance structures created in shape of community institutions addressing both energy and water issues. This intervention would be particularly re l evant to the rural users. The institutional structure is expected to be the strongest amongst them considering the high degree of social cohesion observed in them. Given the large user population it is almost impossible to reach out to them. It is worthwhile that the users represent themselves through user energ y / water institutions. These energy/water institutions should be adequately empowered through extensive Information, Education and Communication (IEC) activities. They should be gradually groomed to plan and manage various targeted activities. Finally the learning will transform them into independent management units capable to own up the entire reform process which would eventually ensure sustainability in the use of energy and water resources.
11. CHALLENGES AND BARRIERS TO ENERGY-WATER GOVERNANCE
Although needs are great and many opportunities for action
present themselves, there are also significant challenges facing a ny joint energy/water project. These should be seen not only as obstacles to overcome, but also as long-term needs to be addressed by any new project activity. Principal challenges that should be kept in mind in developing governance structures include:

Water is primarily considered as a social good in India, creating significant barriers to cost recovery and full service provision.

There is little or no political will to deal with water management as an economic good and force cost recovery.

In comparison with the energy sector, re form in water resources management is lagging. The fact that the two sectors are ‘out of phase’ in their paths to re form present obstacles for their coordinated management.

National and State water policy has not moved beyond rhetoric. Although there are several good policies and legal frameworks in place for water resources and waste management, these have not been successfully implemented to date.

Institutional and policy barriers to effective water and energy resource management are significant, especially in support of cross-sectoral integration and coordination.

Management and operational capabilities among the providers of energy and water services are inadequate, especially at the local level.

An enabling environment for technological innovation and advancement does not exist at the national, state or municipal level.

12. CONCLUSION:
The pace of groundwater withdrawals and use in India is intimately tied to energy prices. A critical factor in achieving efficiency and sustainability of groundwater use is the quality and price of power supplies to the agricultural sector. The use of flat rates for electricity, combined with unreliable power supply, encoura g e farmers who own wells to maximize pumping of groundwater. The political will to implement reforms that ensure reliability of power supply and attendant efficient use of water in rural areas will ultimately depend on the creation and effectiveness of the governance structures in place. The expansion in the role of state electricity regulatory commissions to regulate ground water use should be widely debated. In any event there is a strong case to be made for establishing local energy/water user groups. A motivated, wellinformed and organized civil society can pressure government decision-makers to support sustainable and integrated management of energy and water resources and realize the many potential benefits of a closer union between the power and water sectors.