HPS Advisor Meeting

Report
Power to Empower
COVER
Rural Electrification using Biomass
Husk Power Systems (HPS)
Mario Ferro
Kolkata CUTS seminar
25 June 2011
1
More than 125,000 villages in India after sunset
My Village and 24,999 other Villages at Night
2
Conventional Solutions Can’t Deliver
+
=
Over 550,000,000 rural Indians
without reliable power
3
The Main Challenges
Which technology?
How to attract and retain customers?
Where to find funds?
4
The Solution?
We explored the options …
5
The Solution Requires
Creativity
Innovation
Partnership
Technology
Supply Chain
Operations
Revenue & Funding
6
The Solution - Technology and Supply Chain
Distributed Generation
Non-conventional Technology
Renewable Resource
7
The Solution - Technology and Supply Chain
8
The Solution - Technology and Supply Chain
Plenty of rice husk to serve 125K un-electrified villages in India
Rural Power Market
• 125,000 villages starving for
power
• 18,000 “not reachable”
• $102B rural power mkt.
• Replacing diesel and kerosene
Rice Belt
Rice Production
• ~132MT rice produced
• ~ 40MT husk
• ~27,000,000 MW
Yellow – low per capita electricity
Source: World Energy Outlook 2006, World Resources Institute
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The Solution - Supply Chain and Operations
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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
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The Solution - Revenues
Plant level
2014
2010
Revenue
50%
95%
Electricity Gen.
4%
0%
CER Sales
25%
5%
21%
0%
RHC
Product
Fulfilment
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
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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
13
The Solution - Funding
Ministry of New & Renewable Energy, Govt. of India
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Summary
Challenge
Our experience
Which technology?
• Find the most appropriate technology
for your specific context
• Innovate
• Build your own capacity (training)
How to attract and
retain customers?
• Let the customer chose
• Affordability
• Quality of service
• Partner with local entrepreneurs
Where to find funds?
• Check all the available public schemes
• Generate positive cash flow with different
complementary revenue streams
• Look for committed private investors
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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
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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
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.
15th Aug.2007
Won Global Business
Plan Competition and
received a $250K
investment from DFJ
and Cisco
3 Power plants
First 40KVAplant
2007
Won $100K in prize
money in business plan
competitions in US.
HPS set up with 4 CoFounders
Dec 2008
Over 5 yrs of perseverance pays
off. Rice Husk gasification proves
to be a solution to the problem of
Installed over 30 new
plants and launched 3
Business models for
future growth
19 Power Plants
Master RamBalak Ji,
Create 10,000 Jobs in
rural India, save 72,000
tons of CO2 per year and
lighten 1 million
Households
Dec 2009
Aug 2010
Dec 2012
Dec 2014
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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
18
Husk Power Systems – Contacts
Phone No. +91-612-2283333
for partnerships:
[email protected]
for general query:
[email protected]
19
HPS Sends over 250 kids to school
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Back Up Slides
• Back Up Slides
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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
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Husk Power Systems
In pursuit of bringing Power to Empower
millions of rural population, We provide
reliable, renewable and affordable electricity
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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