Agenda

Problems of electrification in rural India

Introduction to Husk Power systems

Success so far Working Design Business model & Revenue models Financing Economic sustainability Value chain Social & economic Impact CRS activities Future plans

Problems of electrification in rural India

Shortfall in generation capacity & limited electrical infrastructure access

45% of the households in rural India has to depend on biomass fuel or kerosene lanterns

Low priority to villages during Grid Rationing.

Not much success of government plans which focus on rural electrification Rise in concerns about depleting non renewable energy sources, and elevated environmental concerns. World Bank-Distributed generation and supply franchises model

HUSK POWER SYSTEMS

Gyanesh Pandey Inspiration Pathetic situation of electricity services in rural Bihar. Started off by exploring the various methods Ratnesh Yadav
Solar
Too Expensive

Bihar did not experience high levels of wind

Wind

Hydro

There wasnt enough water for harnessing

Rice Husk

Rice husk was deemed unfit for cattle fodder because of the high content of silica in it. Rice husk could be converted into a combustible gas which could then be used to generate electricity using a generator.

Success so far..
Succeeded in installing the technology Electrifying the village of Tamkuha in August 2007

Current Operations
84 plants with an installed capacity of 25.6 MW Supplying electricity to around 40000 rural households across 300 villages.

Earned about $ 540500 of revenue in the financial year 2012-13 A low cost pay-for-use service approach for its rural customers

Earlier Samta Samriddhi Foundation

Present situation

Working Design

Electricity Production & Distribution

Electricity Production Distribution

Each phase producing around 230 volts

Transformers not Used

Extension of grid

Occurs in 3 phases

Only single phase lines

About up to 1.5 kms Ensures a supply of 190 volts Bamboo poles and low voltage wires

Business model Cost

$0.20 per kilowatt hour for both generation and distribution Likely to drop to around $0.15 as the utilization increases

Supply
Households -40W for 6-8 hours every evening - which is enough to power two 15W CFL bulbs & recharge a cell phone

Small Business-60-75 W charging them in return around $4-4.50 per month

Optional services of every additional 15W are also supplied in return for an additional $1.10 per month

Monitor
Smart meters installed in the subscribers household Helps keep loss in revenue due to non-payment under an avg of 5 %- (national avg 30%)

Revenue model
Build, own, operate, maintain
Operator, husk loader, collector and electrician Monthly subscriber fees 4 months for a single month to have operational profits Around three or four years to recover the capital expenditure

Build, own and maintain

Build and maintain

Operated by a local who is willing to invest around 10 per cent of the project cost for a share in the revenue

Franchisee model sells it to a local entrepreneur New owner is responsible for all costs incurred Gets to collect to entire revenue

Financing
Corporate Finance
Grants and investment by their owners Struggling to sustain its franchisee approach because of the unwillingness of banks to take risks Shell Foundation, LGT Philanthropy, International Finance Corporation , Acumen Fund, Draper Fisher Jurveston, CISCO and Bamboo Finance, Overseas Private Investment Corporation

Subsidies-MNRE pays a subsidy of up to $14500 for each 32 KW plant installed by HPS Carbon Payments -contribute around 5 per cent of the revenues and it is estimated to account for about 50 per cent of the total sales by the end of 2014

Economic sustainability
Total landed cost of installation = $1300 per kW Unit cost to the end user = average $0.25 per kWh Operational Costs: Average monthly biomass feedstock = $275 Average monthly cost of labour = $380 Average monthly maintenance expenses = $100 Average monthly revenue per plant: Average monthly electricity sales = $1200 Average monthly carbon credit = 215 CER Additional sales = 6 tonnes of incense sticks Sustainability: At plant level, gross margin = 20 per cent Takes around 3 months to have operational profits Takes around three or four years to recover capital expenditure on the plant Expected lifetimes are as follow: Gasifier : 12 years Engine : 20 years Bamboo poles : 1 year

Value Chain Raw materials

Rice husks @ $0.03 per kg

R&D & Innovation

Unique gasifier design which can be fabricated locally Low cost monitoring Bamboo poles based distribution system Biomass burnt in a restricted supply of air Passed through a series of filters enough to power about 500 households Word of mouth
request of village representatives and if 400 or more households agree to pay the monthly electricity fee only if there was a reliable source of rice husks

Operations Marketing
Plant Installation Process Billing and Payments Maintenance

smart meters Electricians doubled up as collectors

Maintaining about 93% availability Daily monitoring via individual plant managers who sends daily reports to their regional managers

Social Impact
Electricity has played vital role in increasing the working hour of the village life and thus has helped to improve the quality of life by providing the opportunity of extra earnings Professions like basket weaving and garment making have also profited because of these extra hours of lighting available to them. Lighting can remove the danger of poisonous reptiles and insects by removing the darkness in the village area. The light has improved the future of the students in the village area because light is necessary for education Ability to now charge their mobile phones in their own houses Decrease in pollution

Economic Impact
Kerosene use has reduced by about 6 to 7 litres around Rs. 250 per month Rice mills also benefit from HPS, by earning around $2500-3000 every year by supplying rice husks at a rate of $25 per ton of rice husk Creates local jobs, providing employment to around 300 villagers, and training them to work in the plants.

CSR activities
Education Programmes
Livelihood Programmes
HPS pays the school fees of local communities in the villages in which its plants are located. This amounts to around Rs. 50 per month per child.

HPS has provided training to a large number of rural women in incense stick production from the ash which is a by-product of the HPS plants

Future Plans
Expansion to West Bengal, Tamil Nadu, Assam & Nepal Installing 2014 plants by the end of 2014 Saving around 72,000 tons of carbon dioxide emissions and provide electricity to a million homes
If able to register its plants under the Clean Development Mechanism, HPS will be earning an extra Rs 1 lakh per annum per plant

Thanks