A Light in India - Innovation

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Some of the greatest advances come from taking old ideas or technologies and making them accessible to millions of people who are underserved.

One area where this is desperately needed is access to electricity. In the age of the iPad, it’s easy to forget that roughly a quarter of the world’s population — about a billion and a half people — still lack electricity.

However, no country has more citizens living without power than India, where more than 400 million people, the vast majority of them villagers, have no electricity. The place that remains most in darkness is Bihar, India’s poorest state, which has more than 80 million people, 85 percent of whom live in households with no grid connection.

This is why I’m writing today about a small but fast-growing off-grid electricity company based in Bihar called Husk Power Systems. It has created a system to turn rice husks into electricity that is reliable, eco-friendly and affordable for families that can spend only $2 a month for power. The company has 65 power units that serve a total of 30,000 households and is currently installing new systems at the rate of two to three per week.

Husk Power was founded by four friends: Gyanesh Pandey, Manoj Sinha, Ratnesh Yadav and Charles W. Ransler, who met attending different schools in India and the United States.

One day Pandey ran into a salesman who sold gasifiers — machines that burn organic materials in an oxygen restricted environment to produce biogas which can be used to power an engine. There was nothing new about gasifiers; they had been around for decades. People sometimes burned rice husks in them to supplement diesel fuel, which was expensive. “But nobody had thought to use rice husks to run a whole power system,” explained Pandey.

In Bihar, poverty is extreme. Pretty much everything that can be used will be used — recycled or burned or fed to animals. Rice husks are the big exception. When rice is milled, the outside kernel, or husk, is discarded. Because the husk contains a lot of silica, it doesn’t burn well for cooking. A recent Greenpeace study reports that Bihar alone produces 1.8 billion kilograms of rice husk per year. Most of it ends up rotting in landfills and emitting methane, a greenhouse gas.

Pandey and Yadav began bringing pieces together for an electric distribution system powered by the husks. They got a gasifier, a generator set, filtering, cleaning and cooling systems, piping and insulated wiring. They went through countless iterations to get the system working: adjusting valves and pressures, the gas-to-air ratios, the combustion temperature, the starting mechanism. In they end, they came up with a system that could burn 50 kilograms of rice husk per hour and produce 32 kilowatts of power, sufficient for about 500 village households.

They reached out to people in a village called Tamkuha, in Bihar, offering them a deal: for 80 rupees a month — roughly $1.75 — a household could get daily power for one 30-watt or two 15-watt compact fluorescent light (CFL) bulbs and unlimited cell phone charging between 5:00 p.m and 11:00 p.m. For many families, the price was less than half their monthly kerosene costs, and the light would be much brighter. It would also be less smoky, less of a fire hazard, and better for the environment. Customers could pay for more power if they needed it — for radios, TVs, ceiling fans or water pumps. But many had no appliances and lived in huts so small, one bulb was enough. The system went live on August 15, 2007, the anniversary of India’s independence.

It worked. Back in the United States, their colleagues Sinha and Ransler, who were pursuing M.B.A.s at the University of Virginia’s Darden School of Business, put together a business plan and set out to raise money. They came first in two student competitions, garnering prizes of $10,000 and $50,000. The company received a grant from the Shell Foundation and set up three more systems in 2008. It has since raised $1.75 million in investment financing. In 2009, they had 19 systems in operation; in 2010, they more than tripled that number.

Shops in the Sariswa Village market use power generated by Husk Power Systems.

When the company noticed that customers were purchasing poor-quality CFL bulbs, which waste energy, they partnered with Havells India, a large manufacturer, to purchase thousands of high quality bulbs at discount rates, which their collectors now sell to clients. They also saw that collectors could become discount suppliers of other products — like soap, biscuits and oil — so they added a product fulfillment business into the mix.

And they found ways to extract value from the rice husk char — the waste product of a waste product — by setting up another side business turning the char into incense sticks. This business now operates in five locations and provides supplemental income to 500 women. The company also receives government subsidies for renewable energy and is seeking Clean Development Mechanism benefits.

With growth, human audits have proven inadequate to control electricity theft or inadvertent overuse. So the company developed a stripped-down pre-payment smart-card reader for home installation. The going rate for smart-card readers is between $50 and $90. Husk Power is near completion of one that Pandey says will cost under $7.

Alone, none of these steps would have been significant. Taken together, however, they make it possible for power units to deliver tiny volumes of electricity while enjoying a 30 percent profit margin. The side businesses add another 20 percent to the bottom line. Pandey says new power units become profitable within 2 to 3 months of installation. He expects the company to be financially self-sustaining by June 2011.

Article:

http://opinionator.blogs.nytimes.com/2011/01/10/a-light-in-india/?ref=op...