Renewable Energy Lights Up India

Husk Power Systems
Sundeshar Ram, a “husk loader” for Husk Power Systems, collects rice husks to feed to the reactor. He works in a village in the Muzaffarpur District of India, which receives only sporadic electricity from the government grid.

Green capitalism is thriving in India and nowhere more so than in the renewable-energy sector. Take the entrepreneurs behind the homegrown company Husk Power Systems. Seeing an opportunity to both do good and make money in its home state of Bihar, Husk Power helps provide electricity to a region where 85 percent of the 80 million inhabitants are not connected to the electric grid. The company provides power to the poorest communities by turning rice husks that would otherwise become agricultural waste into reliable, clean, low-cost lighting for rural villages.

To produce electricity, piles of rice husk are fed into small biomass gasifiers, where the gas produced is then used to fuel an internal combustion engine. Husk Power sells the electricity generated to local villagers at the cost of about $1.75 a month. This is less than half of what families were previously paying for kerosene lamps, with far fewer environmental and health hazards than those associated with burning traditional fuel sources such as kerosene, wood, or dung.

In order to reach this previously underserviced market, Husk Power needed to provide an affordable and simplified product in a state whose average per capita income is the lowest in India. The company can offer rock-bottom prices not only by using waste products but also by simplifying electricity production and transmission.

“What we do well is combine many pieces together in a way that works efficiently and lowers overhead and expenses,” says Manoj Sinha, one of the company’s founders. When wiring a village for electricity, for example, Husk Power uses readily available and inexpensive bamboo poles to hang wires overhead instead of spending money and time to dig holes and run wire underground.

The company’s simplified electricity model also allows it to employ local villagers. Husk Power employs over 300 local residents to run its 60 plants and plans to train 2,500 more people in the next two years.

The market opportunity for clean electricity serving India’s rural poor was recently estimated at $2 billion by the World Resources Institute (WRI) and the Centre for Development Finance at the Institute for Financial Management and Research. Sinha and his colleagues aim to grow their business beyond Bihar, planning 2,000 new plants that they hope will serve several million customers by 2014.

Such innovative entrepreneurs will be crucial in preserving the environment and natural resources as emerging economies grow exponentially over the coming decades. New Ventures, the center for environmental entrepreneurship at the WRI, has helped Husk Power and over 250 other promising environmental businesses in six emerging markets to grow their operations by providing business training and access to investment. To date, New Ventures has facilitated over $200 million in investment to these companies.

Sinha hopes that new investors will challenge Husk Power to outdo even its current ambitious plans. “We need aggressive people to push for extremes,” he says. “We need people to say, ‘So you’re planning 2,000 new plants, why not 5,000?’”