Husk Power Systems

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Husk Power Systems provides reliable, renewable, and affordable electricity to rural underserved villages in India. Husk builds, owns, and operates gas-based mini power plants that cost-effectively convert rice husks into electricity.

Market Opportunity:

• In the state of Bihar, 85% of the population is not connected to the grid.

• The three founders, all from the state of Bihar, were motivated by the electricity shortage problem in Bihar. The electricity shortage presented an opportunity for renewable, distributed power generation.

Unique Business Solution:

• Business Model: Husk Power Systems gasifies rice husks to create the fuel for the mini power plants. Husk Power Systems keeps the systems simple and the costs low to deliver affordable electricity. For example, rather than use a conveyer system to upload rice husks, the husks are manually loaded. Customers buy electricity on a pay-for-use basis.

• Competitive Advantage:

  • Husk Power manages the process from beginning to end—from power generation to maintenance to revenue collection.

  • Husk Power invests in R&D and makes strategic partnerships to design simple equipment and keep costs low.

  • Husk Power is able to increase value for everyone:

    • Rice mills receive additional, consistent income. Husk is ensured a consistent supply of rice husks at a low price.

    • Local people are trained and employed to operate the power plants and receive a market rate income without having to immigrate to the cities, helping to create local buy-in.

    • Households and businesses that receive power from Husk save at least 35% in costs by replacing kerosene lanterns or diesel genset-based lighting.

Environmental & Social Impacts:

• Husk Power generates electricity from rice husks, avoiding the use of fossil fuels.

• The use of rice husks for fuel does not create competition with food crops since the rice husks would otherwise be agricultural waste.

• Each power plant serves 500 households and 8-10 small businesses and replaces 42,000 liters of kerosene annually.

• Currently, Husk Power owns and operates 60 power plants that power 30,000 households and serve 150,000 people.

• Husk Power partners with other organizations to offer compact fluorescent lamps at a discounted price.

• Husk Power has trained 350 local men and women to operate and manage the power plants.

• With access to electricity, Husk customers no longer need to use kerosene lamps, which creates cost savings, reduces health risks, and increases opportunity (students can study longer and shops can stay open later).

Successes:

• Husk Power has been able to reduce the total landed cost of installation, which includes equipment cost, cost of wiring 2-3 villages, and construction costs, to about $800 per kilowatt. This price makes Husk Power Systems the cheapest biomass system available and cheaper than similarly sized solar and wind systems.

• India has high electricity leakage rates (from theft and illegal connections) of over 30% but Husk Power has managed to achieve leakage rates of less than 5%.

• Husk Power has been able to provide electricity to rural villages and hamlets that even the government deemed virtually impossible to reach.

Future Plans & Challenges:

• Husk Power’s target is to install 2,000+ plants in 5 years.

• Husk power plants are modular and can easily be adjusted for other feedstocks. Husk plans to explore this possibility in the future.

• Energy policy can be an area of risk. To mitigate this risk, the Husk Power senior management team has been working with the Energy Secretary of India to influence energy policies.

• Attracting highly talented people to work in rural areas can be challenging, but Husk Power has partnerships with premier institutions in India to reach out and attract passionate people.

Partnering with New Ventures:

• The New Ventures-IFMR research publication “Power to the People” estimates the Indian clean energy market for the rural Base of the Pyramid (BoP) to be US$2.11 billion. This estimate validated the Husk Power team’s market size estimate, adds credibility to this new market opportunity, and provides a benchmark and target for Husk Power Systems.

Financial information on this company has not been included for confidentiality reasons. Please click here to learn how you can receive more information about this company.

Profile updated: February 2011

Husk Power Systems attended the New Ventures Global Investor Forum: Green Opportunities in Tomorrow’s Markets in New York City on April 6, 2011 along with five other innovative New Ventures environmental enterprises. Click here to read about the Global Investor Forum and to learn more about upcoming regional investor forums.