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Power to Empower. COVER. Rural Electrification using Biomass Husk Power Systems (HPS). Mario Ferro Kolkata CUTS seminar 25 June 2011. More than 125,000 villages in India after sunset. My Village and 24,999 other Villages at Night. Conventional Solutions Can’t Deliver. +. =.

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  1. Power to Empower COVER Rural Electrification using Biomass Husk Power Systems (HPS) Mario Ferro Kolkata CUTS seminar 25 June 2011

  2. More than 125,000 villages in India after sunset My Village and 24,999 other Villages at Night

  3. Conventional Solutions Can’t Deliver + = Over 550,000,000 rural Indians without reliable power

  4. The Main Challenges Which technology? How to attract and retain customers? Where to find funds?

  5. The Solution? We explored the options …

  6. The Solution Requires Technology Supply Chain Operations Revenue & Funding Creativity Innovation Partnership

  7. The Solution - Technology and Supply Chain Distributed Generation Non-conventional Technology Renewable Resource

  8. The Solution - Technology and Supply Chain Turning a waste into a resource

  9. The Solution - Technology and Supply Chain Plenty of rice husk to serve 125K un-electrified villages in India Rural Power Market Rice Belt • 125,000 villages starving for power • 18,000 “not reachable” • $102B rural power mkt. • Replacing diesel and kerosene Rice Production • ~132MT rice produced • ~ 40MT husk • ~27,000,000 MW Yellow – low per capita electricity Source: World Energy Outlook 2006, World Resources Institute

  10. The Solution - Supply Chain and Operations

  11. The Solution - Operations and Revenues • BOOM – Build Own Operate Maintain • Company’s ownership, operation, maintenance • BOM – Build Own Maintain (only for individuals willing to either to be operators or tariff collectors) • Operations by local entrepreneur • Entrepreneur’s share of capital cost – Rs 2.0 lakh – Rs 2.5 lakh • HPS share of the capital - rest • HPS owns the plant machinery and cables • BM – Build Maintain • Agencies own and operate the plant (for large orders i.e > 50) • Cost per 40 kVA plant (including training and knowledge transfer) ~ Rs 15 lakh • MNRE Subsidy Rs 15k / kW + Rs 3.0 lakh for more than 3 km of distribution • 3-4 month’s gap between inception of project and release of subsidy • Fee to cover plant repair and non-regular maintenance • HPS to aid monetization of additional streams • Special Incentive Scheme from UP NEDA for HPS Projects

  12. The Solution - Revenues Plant level 2014 2010 Revenue RHC 25% 21% 5% 0% 4% 0% 50% 95% Product Fulfilment CER Sales Electricity Gen. RHC – Rice Husk Char can be used as base material for a variety of products such as – Incense Sticks, Fire Bricks, Briquettes for home cooking, Silica etc 12

  13. The Solution - Funding • Access to finance – • HPS has launched a model for partnership with rural unemployed youth/diesel gen set operators • In this model, the Entrepreneur invests ~Rs 2.5 lakh upfront and a fixed monthly fee for the operating rights of the plant • A major roadblock is the funding arrangements for these entrepreneurs • Some linkages with financial institutions and extension of rural credit schemes • HPS has also launched a franchise model where interested individuals may own and operate a plant • Government of India provides a subsidy of ~Rs 7.5 lakh per plant which is realized after 6-7 months • A facility for bridge financing would be great step forward

  14. The Solution - Funding Ministry of New & Renewable Energy, Govt. of India

  15. Summary Our experience Challenge • Find the most appropriate technology for your specific context • Innovate • Build your own capacity (training) Which technology? • Let the customer chose • Affordability • Quality of service • Partner with local entrepreneurs How to attract and retain customers? • Check all the available public schemes • Generate positive cash flow with different complementary revenue streams • Look for committed private investors Where to find funds?

  16. Husk Power Systems World Leader in decentralized generation and distribution • Inception in Aug’ 2007 ( first in the world to successfully operate 100% Rice Husk based electricity generation using gasifiers) • More than ~75 operational plants • Catering over 400 villages /hamlets • Capex ~$1 / Watt for Generation and distribution • Cheaper than the conventional thermal • World class team (IITs, ISB, Oxford, UT Austin, Darden, RPI) • Over 40 months of operational experience • A comprehensive training program • HPS university curriculum to train operators, mechanics, managers and entrepreneurs • A series of Technical Innovations • Pre-paid meters, smart monitoring / smart grid, dry exhaust gasifier, absorption chiller, Incense Stick maker • A motivated team of more than 250 on-ground employees • Excellent Investing partners • IFC, Acumen Fund, Oasis Funds, LGT VP, DFJ, CISCO, Shell Foundation, MNRE • Very strong commitment to HSSE

  17. Husk Power Systems - Growth No. of Plants My colleagues at Acumen and I have watched this team progress from a prototype of a new business model to bring electricity to rural villages in India, to now a full scale company that has now deployed over 24 individual systems serving over 50 individual villages in rural Bihar. 2014 Power Plants Create 10,000 Jobs in rural India, save 72,000 tons of CO2 per year and lighten 1 million Households 500 Power Plants Employ 700 operators, 35 cluster level managers, 10 mid-level managers and 5 senior managers Raj Kundra, Acumen Fund 50 Power Plants India got independence from England 60 years ago, but this village got its independence today. Installed over 30 new plants and launched 3 Business models for future growth 19 Power Plants Master RamBalak Ji, 15th Aug.2007 Won Global Business Plan Competition and received a $250K investment from DFJ and Cisco 3 Power plants Won $100K in prize money in business plan competitions in US. HPS set up with 4 Co-Founders First 40KVAplant Dec 2012 Dec 2008 Dec 2009 Aug 2010 Dec 2014 2007 Over 5 yrs of perseverance pays off. Rice Husk gasification proves to be a solution to the problem of rural electrification

  18. Husk Power Systems – Value for Money • Reliable electricity • Cheaper and quality products of general consumption at door-steps • Livelihood generation for 100’s of households • Operators • Electricians • Rent Collectors • Managers • Husk loaders • Incense Stick Makers • Hassle-free sale of Rice Husk for Rice Millers • Dignity and Pride

  19. Husk Power Systems – Contacts Phone No. +91-612-2283333 for partnerships: projects@huskpowersystems.com for general query: info@huskpowersystems.com

  20. HPS Sends over 250 kids to school

  21. Back Up Slides • Back Up Slides

  22. The Solution - Financials • Capex • ~15 lakh + taxes for 30 kVA • ~16 lakh + taxes for 40 kVA • Opex • ~50 kg / hr of Rice Husk (or other biomass) • 1 Operator + 1 electrician / collector + 1 husk-man • Maintenance/repair of wear and tear ~8,000 – 10,000 per annum • Total of less than Rs 30,000 per month • Revenue • Upto 20 kW of electricity to sell • More than 2 tons of RHC per month • Consumable –fulfillment • More than Rs 60,000 pm if all the above streams realized • Bonus of CDM

  23. Husk Power Systems In pursuit of bringing Power to Empower millions of rural population, We provide reliable, renewable and affordableelectricity that wows the world It involves changing paradigms It involves inventing machines and gadgets It involves finding different ways to think

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