Case Study: HUSK Power System

India has a serious shortage of electricity, and people living in villages suffer the most. This  is particularly acute in the state of Bihar, where even for those that are connected, the  supply is very unreliable. Most households have to use kerosene for lighting, and  businesses turn to diesel generators for power. The founders of HPS looked for affordable  ways to address this shortage of electricity, and identified the potential for making gas  from rice husk – a plentiful local resource – and using this for power generation at village  level.

Key information

l   HPS builds plants where there is local demand for electricity, and a source of rice husk or  other agricultural residues within 10 km.

l   Plant consists of rice husk gasifier, series of filters to clean the gas, gas engine, 35 kW  generator and 240 V ac electricity distribution system to connect customers within a 2km  range of plant.

l   Plants run each evening for up to eight hours..

l   Basic connection supplies two 15 W CFL lights and phone charging. Costs US$2.20 per  month. Customers can pay more for a higher power connection.

l   HPS trains a local operator, electrician, fuel handler and fee collector to run each plant,  with specialised regional staff available to help with problems. All customers are trained  in safe use of electricity.

l   High availability of power (over 93% of scheduled time) due to design of equipment, and  the rigorous maintenance, safety and monitoring procedures instituted by HPS.

l   By March 2011, 65 plants in operation, supplying electricity to about 32,500 households  and businesses.

l   Household kerosene use cut by 6 to 7 litres/month, saving about US$4.40 per month or  twice the cost of a basic connection.

Future plans

HPS has a target of over 2,000 plants in operation by the end of 2014.

Husk Power Systems is a for-profit company, registered in 2008. It has a mission to provide  renewable and affordable electricity to rural people in a financially sustainable way. Most of its income comes from electricity sales.

The organisation

The first power plant that ran on 100% producer gas was commissioned in 2007. In 2008  Husk Power Systems (HPS) was registered as a for-profit company with a mission to provide  renewable and affordable electricity to the rural population around the world in a  financially sustainable way. Three of its founders (Gyanesh Pandey, Ratnesh Yadav and  Manoj Sinha) come from Bihar, and Charles Ransler comes from the USA. Most have had  education and professional careers in the USA.

The growth of HPS has been helped by substantial grant-funding from the Shell  Foundation, which has supported R&D, strategy and training. US$1.65 million investment  from six social investors (Acumen Fund, Bamboo Finance, International Finance Corp,  Draper Fisher Jurvetson, LGT Philanthropy and CISCO) was secured in December 2009. In  2010/11 HPS had 270 employees. About 80% of its income comes from sales (mostly  electricity, but also char products) and 20% from Government subsidies to new power  plants.

The programme

Power plants are installed in places where there is a reliable source of rice husk and other  biomass residues within a distance of 10 km. HPS staff visit a village, at the invitation of  village representatives, to assess its suitability for a plant and explain how the scheme  works. If 400 or more households commit to paying a monthly fee for electricity, HPS will  install a plant (rice-husk gasifier, gas engine, generator and 240 V electricity distribution  system) and connect the homes and small businesses that have signed up. A village  operating team maintains and runs the system, which supplies electricity each evening for  up to eight hours.

The technology

How does it work?

Sackloads of rice husk or other biomass residues are poured into the gasifier hopper every  30 to 45 minutes. The biomass burns in a restricted supply of air to give energy-rich  producer gas. The gas passes through a series of filters which clean it, and it is then used as  the fuel for an engine that drives the electricity generator. Electricity is distributed to  customers via insulated overhead cables.

The basic connection provides a household with two 15 W compact fluorescent lights and  mobile phone charging throughout the period each day that the plant runs (up to eight  hours in the evening). Sometimes poorer households share a basic connection and get one  light each. If a household or business wants to pay more for a higher power connection,  then this can be provided. A fuse blows if the customer attempts to use more than their  agreed power. Each plant serves about 500 customers, and has sufficient capacity to allow  for demand to increase. About 70% of homes within the distribution area get connected.

How much does it cost and how do users pay?

US$1 = INR 45 (Indian Rupees) [April 2011]

Electricity fees start at INR100 (US$2.2) per month for a basic connection. One month’s  deposit is required when a customer signs the supply contract with HPS. The local HPS  collector goes from house to house to collect the fee each month in advance, and checks  that everything is working well. All complaints are logged and followed up. Under the terms  of the contract, HPS agrees to provide service for at least 27 days every month, and pro-rates  the fees if this level is not met. However, average provision is now over 28 days per month  (93% availability).

The total landed cost of a 35 kW plant, including distribution system, is less than US$1,000  per kW. HPS is paid a subsidy of up to INR 320,000 (US$7,100) for each plant, by the Ministry  of New and Renewable Energy. The remainder of the capital comes from investment and  sales revenue. HPS loses only about 4% of revenue through default on payment or electricity  theft, considerably lower than most power suppliers in India, who often lose 30%.

Benefits

By the end of March 2011, HPS had 65 fully operational plants, and a further ten under  construction or starting operation. 48 plants are wholly owned and operated by HPS, and  the other 17 run under some type of franchise or partnership.  Plants have 500 customers on average, so about 32,500 households are supplied. With five  or six members in a household, this means that about 180,000 people benefit from HPS  electricity.

l   Environmental benefits

Surveys show that households stop using kerosene lamps when they get HPS electricity,  and save 6 - 7 litres/month of kerosene on average. The total kerosene saving for the  32,500 households supplied at the end of March 2011 is therefore about 2.7 million litres  per year.

Kerosene savings cut greenhouse gas emissions by an estimated 125 tonnes/year CO2 equivalent per plant (assessed as part of CDM certification). Thus the total saving for the 65  plants in operation at the end of March 2011 is about 8,100 tonnes/year of CO2

l   Social benefits

Having a reliable electricity supply makes families feel more settled and connected to the  wider world. Even in villages with grid power, households and businesses choose to  connect to the HPS supply because of its greater reliability and lower cost. HPS makes sure  that customers understand how to use electricity safely, and that every member of the  household agrees to abide by safety rules. Good-quality lighting throughout the evening is a huge benefit to households. Children can  study properly, housework is easier, and families can relax and socialise. Better lighting  deters petty crime, and reduces the frequency of snake-bites and dog-bites – a common  reason for emergency hospital admission in Bihar.

l   Economic and employment benefits

Households with HPS power save typically INR 200 per month on kerosene, so their net monthly saving (after paying for their CFLs) is about INR 100 (US$2.2). With household earnings of typically US$75 to 100 per month, this frees up a significant amount of cash.

Further skilled and professional employment is provided in the cluster-level, regional and  central operations. HPS provides full medical benefits and retirement contributions for its  full time employees, who number about 270. Rice husk char is produced as a by-product of the gasification process. HPS is investigating  ways of using this that will add value and create employment. At five plants, groups of about  15 women work part-time making incense sticks from char, and can earn about INR 80  (US$1.8) per day