Sustainability in Action - Accenture Business School Challenge

Husk Power Systems Providing electricity to energy deprived rural Bihar

Submitted by: Ankur Gupta IIM Indore 9584466336 Kumar Aditya IIM Indore 8878650009

Introduction Why rural electrification

We live in the age of iPad, but this is the same age where nearly quarter of the world s population is still deprived of electricity. About .5 million people die each year due to pneumonic diseases caused by indoor burning of lighting fuels and cooking in India. Story of Students studying without electricity in the minimal available light of a kerosene lantern is still a reality in India. So no, it s not about inconvenience, rather it is about the impact on economic life, health and education. More than 400 million people in India do not have access to electricity. Bihar, one of the poorest states in India, leads this list with 80 million people deprived of electricity. The only way to cook and light is through kerosene and diesel which are much more costly than grid electricity. For a growing country such as India, with a budget deficit of 6.2 % of GDP, it is not possible to infuse the capital required to electrify all the villages. This calls for an off-grid solution which can be economically viable for villagers and at the same time can improve the environment for sustained development of the society. We came across an enterprise while talking to our peers who did a 1 week stint in various NGOs across India as a part of our curriculum. We did a survey with 112 participants to understand various initiatives taken up by NGOs. Based on various inputs which were well augmented by the secondary research mentioned above, we selected a company Husk Power Systems .

The Company
HPS is a rural electrification company which has developed a cost effective operational model to supply off grid electric power to villages using rice husk as a gas. Rice husk has traditionally been discarded in India, but if it is heated at an optimum temperature, it releases a gas that can that be used to run modified diesel engines to produce electricity. Currently, HPS is supplying off grid power to around 75 villages and plans to expand it to 6500 villages by 2014. Each kg of rice procured from farmer can be used to produce around 0.7kwh of electricity. The price offered by the company is around Rs 90 for 30W of power for 30 days which means around 4 Rs for a unit of power. This is less than 50% of what it cost to produce power through diesel or kerosene. This initiative saves 42,000 liters of kerosene and 18,000 liters of diesel each year. Villagers are able to save Rs. 150/month on kerosene cost while paying only Rs. 90 for electricity. Local villagers are trained by HPS to cover the operation and maintenance of the power plant creating a job platform for uneducated unemployed villagers.

Sustainable Development
Social sustainability
The electrification has helped the villagers by improving health conditions, encouraging new business developments like photo studios, increasing the business hours, reducing thefts etc. Moreover, lighting has increased the possible number of study hours for children as now they are able to study after dark. HPS has also played an instrumental role in empowering local women by providing them training and raw material to manufacture incense sticks. Till now more than 1200 women have been trained enabling them to earn up to Rs. 1000/month. By 2014, it plans to serve around 6,500 villages, save

750,000 tons of CO2, create 7,000 local jobs and save $50M in cash for the community it serves. HPS has assists in the education of more than 250 children of local communities by paying school-fee of Rs 50 per month.

Environmental sustainability
Environmental Sustainability requires that human activity only uses nature's resources at a rate at which they can be replenished naturally. Since waste rice husk is the only major raw material required for power generation, it uses only the amount of husk that s produced making it sustainable. The substances from straw of rice are 90% less hazardous than bituminous coal. Moreover, Biomass is a CO2 neutral fuel as the carbon released is absorbed by the trees as they grow. Due to low combustion temperature, NOx emissions are also lower. Each megawatt of electricity generated can reduce around 5800 tonnes of CO2 emission each year.

Economic Sustainability
The three most important parameters required for economic sustainability in this business model are availability of raw material, trained personnel and the size of target population. Raw material, which is waste rice husk available in plenty in India, is purchased for Rs. 1 per kg from rice mills and local people from community are trained to operate the power plant. Considering power need of about 4 hrs per day per household, and about 1200 households in a village community the demand per village will be around 30 KW. Small power generation units can be successful only if they select an ideal area of operation. HPS focuses solely on household lighting giving it the desired sustainability.

Path to future scaling up

The model as well the technology has a bright future to grow because of considerably low penetration of grid electricity and growing electricity need of India as it leaps towards path to sustained growth. Till now only 50% of potential of generating electricity through rice husk has been exploited. Neighboring states of Bihar such as UP, Jharkhand and Orissa are major producer of rice and their per capita consumption of electricity is also very low. Expanding the model to these states can bring a huge socio economic change to people of these states. To quote an estimation of the capability of this technology:Total Husk Production in India = 120 million tonnes/year Electricity produced by 1kg of husk = 0.7 KWH of electricity Therefore, total electricity which can be produced with 10% utilization = 8,400,000,000 KWH Total electricity consumption in India = 568 billion KWH So, nearly (8.4 billion/ 568 billion) 1.4% of total electricity consumption in India can be meet by husk based electricity production. With support from ministry of renewable energy, the calculation though seemingly farfetched is definitely possible in coming years. "Tamaso m jyotir gamaya" means "From darkness, lead me to light". Husk power systems is a small lamp to make India an energy surplus country in next few years

References:
y y y y y y www.huskpowersystems.com
http://www.indiastat.com/agriculture/2/foodgrains/17180/rice/17194/stats.aspx

Decentralized Renewable Energy In India, UNEP Report http://www.ivili.org/video/electricity-from-rice-husks Environmental Assessment of Electricity Production from Rice Husk: A Case Study in Thailand China Power Contractor: rice husk gasification power generation project