Husk Power Systems: Lightening up the Indian Rural Lives

** Won 2nd Prize in OIKOS Global Case Writing Competition on Social Entrepreneurship
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Case Details:

Case Code : LDEN085
Case Length : 19 Pages
Period : 2007-2012
Pub Date : 2013
Teaching Note : Not Available
Organization : Husk Power System
Industry : Power, Off-grid Industry
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"I can guarantee that the pleasure and happiness you will get when you see a village light up every evening is literally "priceless". No amount of Wall Street bonuses or Hedge Fund's profit sharing can bring you that level of satisfaction, happiness, and of course recognition" 1

-Manoj Sinha, Co-founder, Husk Power Systems, in September 2011.

In June 2011, Husk Power Systems (HPS), a social enterprise based in Bihar, Eastern India, won the prestigious Ashden Award for Sustainable Energy , considered as the 'Green Oscar'. The international award carried prize money of 120,000. On this occasion, Gyanesh Pandey (Pandey), Co-Founder and Chief Executive Officer (CEO) of HPS, said, "Winning the Ashden awards is a big achievement for Husk Power Systems. Almost a third of India's population has no access to electricity and the role of energy is vital in catalyzing the economic development in India". Jacqueline Novogratz, CEO, Acumen Fund said, "Companies like HPS are working to impact positively not only the environment, but to ensure that someday everyone, including the poorest of the poor in rural India, will have access to clean and affordable electricity."

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Even as of 2012, Electricity and electrification remained a major problem in India, especially in rural hinterlands. Around 125,000 villages in the country do not have any kind of electricity connection. This situation was worse in Bihar, third most populous state in the country. In Bihar, per capita consumption of electricity was just 117.48 kilowatt hour (kWh) in 2009-10 whereas the average per capita consumption in India as a whole was 570.9 kWh. Due to lack of electricity 89.3% (94.5% in rural areas and 39.9% in urban areas) of the households in Bihar use kerosene to light up their houses after sunset. Raghunath Prasad Chauhan (Chauhan), a farmer in Tamkuha, Bihar, describing the situation, said, “It was dark and because of that there were so many problems. There used to be a lot of thefts and snakes and dogs would bite. There was problem to go out in night. My children could not study at night.” The slow economic development, political corruption, and red tape were the root causes for absence of electrification in Bihar according to analysts.

However, things changed after HPS set up its first power plant in Tamkua, Bihar, on August 15, 2007. HPS was the brainchild of Pandey and his friend Ratnesh Yadav (Yadav). Later, Pandey’s friend Manoj Sinha (Sinha) and Sinha’s friend Charles W. (Chip) Ransler, IV (Ransler) joined them. The plant generated power using rice husk which was abundantly available in Bihar.

As of September 2011, HPS made an impact on the lives of almost 250,000 people in the rural and remote areas of India. Moreover, HPS had plans to become a global provider of off-gird electrification and to reach out to millions of people in the underdeveloped countries. But, such expansion requires quick availability of funds and deep and clear understanding with local knowledge.

Also, experts stated that the HPS model was the cheapest in the world as it was able to generate and distribute electricity for capital expenditure less than US$ 1 per watt . However, some experts expressed doubts over HPS’s ability to generate cheap electricity in the long run due to rising input costs.

Electricity Crisis in India - Next Page>>

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