BIOMASS POWER FOR RURAL INDIA

1. Introduction
Energy, in all its forms directly and indirectly impacts on all human development
and is an essential input for sustainable growth in modern times. Energy is the
basis of all life and per capita energy usage is a good gauge of the level of a
country’s economic development. At 665 kWh/y, the Indian per capita
electricity consumption is about a fourth of the world average. In rural India, the
per capita consumption is much lower at 250 kWh/y.
Electricity being the most flexible form of energy, its generation and delivery
have exercised the imagination of our planners for the past 6 decades. In spite
of this, India has had a deficit of 12% in peak demand and 8% in electrical
energy right since independence.
This is all the truer of rural India, where more than half the households and over
80,000 villages do not have any “access to electricity”, even under the power
ministry’s very rudimentary definition of village electrification of 10% of such
households being provided with this access. Besides, rolling blackouts and
brownouts are a daily reality for India’s rural population and the lack of this
essential input pervades every aspect of rural life and economy.
How enabling infrastructure can create a boom in any sector can be seen in the
over 950,000 PCOs in India which started in 1987 as a few entrepreneur driven
operator assisted telephone booths. Today, this phenomenon generates 25% of
total telecom income in the country and over 300 million people use them.
If, with all the present constraints, rural GDP has shown a steady growth 4% the
past 4 years, its share will significantly increase from the current 50%, if true
access to electricity is provided.
More than 600 Million people or half of India’s population is below 25 and the
majority of them in the rural areas are either under or unemployed owing to
infrastructure constraints. According to McKinsey, about 63% of India’s
population will continue to live in rural areas even by 2025. Providing electricity to
such an energetic workforce would certainly release their true potential as
wealth creators and sustain the Indian economy for decades to come.
Though significant investments have been budgeted and spent the last few
years on schemes such as the Rajiv Gandhi Grameen Vidyutika ran Yojana of the
Power Ministry and the Village Energy Security Programme of the MNRE, the dark
reality of electricity deficiency on the ground is starkly faced by rural India daily.
This paper attempts to address the key gaps in this scenario and offers possible
solutions for the sustainable supply of affordable power to rural India that can be
replicated across the country.
The following factors underpin sustainability of rural energy in India :
2. Characteristics of rural power
a) Essentiality : Electricity is fundamental to the rural ecosystem and is the basic
force multiplier for the growth of other essential infrastructure such as food,
water, shelter, transportation, education, communication, finance etc.
without which no growth is possible. The sectors of the rural economy such as
agriculture, dairy, food processing, handicrafts and financial services all
depend on this crucial input. Any formulation should be conscious of the
central role of electricity to rural life. No power is as expensive as no power.
b) Interconnectedness: Rural electricity, like other infrastructure such as water,
transportation, finance, agriculture, education etc. cannot operate in
isolation and this interconnectedness needs a holistic solution. e.g. A water
solution would need finance for initial installation and operation, reliable
energy inputs for operation, trained manpower for continuous operation,
disincentives to migration of talent from the local economy, and an
agricultural economy that may also be a consumer.
c) Scalability : The energy delivery platform needs to be scalable from a kW to a
few MW depending on the end use application of the generated electricity.
d) Availability of skilled manpower : Most small scale stand alone power plants
suffer for want of skilled manpower to operate and maintain the power plant
on an on-going basis.
e) Sustainability : The electricity supply should be sustainable in the long run, in
terms of resource availability, ability to generate, ability to distribute and
ability to recoup both capital and operating costs.
f) Affordability : In a capital scarce and energy starved economy, the price
and availability of electricity determines the local inflation index. This implies
that energy resource should be local, abundant, dispersed and diverse. The
current reality in most off-grid villages today is that 5-10 kVA generators are
operated very inefficiently for about 6-8 hours per day @ exhorbitant cost
using fossil fuel diesel.
g) Resource efficiency : Rural electricity generation should make this already
scarce and often non-existent resource go a long way. This will also ensure
sustainability in the long run. In a growing economy, this may not be
immediately apparent, but over time both local and urban industry would
make inroads into the available resource, raising the cost and therefore the
access to energy.
h) Energy Security : Rural electricity should provide long term security so that the
micro economy is inflation proofed.
i) Environmental benignancy : Since most of the above requirements make
locally produced distributed and efficiently generated energy supply
desirable, rural electricity should be produced from renewable sources that
leave the smallest ecological footprint in terms of GHG potential and
disruption of the natural ecosystem.
j) Challenge and opportunity : Lastly, rural power addresses the needs of the
bottom of the pyramid, whose size is mind boggling in terms of geographical
and numerical spread. It is a logistical and economic challenge that needs
innovative solutions to be delivered in a scalable format.

3. Desirable features of the proposed delivery model :

Rural energy in India is characterized by the following features which need to
be factored into the solutions. We need to rethink our paradigms :
a) Last mile linkage : For any conventional energy producer, the rural economy
is always the last mile, most remote physically (being far away), mentally (not
being essential to its profits) and economically (the rural economy is seen as
a cross subsidy burden). The solution should avoid these stereotypes and
should be both economically inclusive and make business sense. In fact, the
term ‘last mile’ emphasises the producer’s agenda over the consumer’s.
b) Delivery responsibility : Though technologies are available for rural and off
grid power in the distributed mode, a self-sustaining mechanism vested with
the responsibility to maintain the systems and recover capital and
maintenance costs is essential for its longevity. Technical skills needed for
installing and operating energy systems are rare in rural areas and migrate to
higher paying urban sectors over time. They also need to be trained regularly
and continually both for sustaining existing installations and expanding to
new technologies and areas.
c) Emphasis on metrics : Though the rural economy has been studied
extensively by diverse agencies in the past, the rural electricity market has not
been treated as such. Accurate data is hard to come by on such issues as
existing demand profile, demand projections based on business as usual and
assured power scenarios, load characteristics, peak demand and supply fits,
integration with the local and the state grid, frequency of single phasing,
duration and frequency of scheduled outages and unscheduled black
outs/brown outs. This is also true of other energy usage such as demand and
supply of primary energy for cooking, transportation, industry and commerce.
We cannot manage what we have not measured.
d) Diversity : The rural economy is not a monolith and different geographical
regions at different stages of development and connectivity will need
different solutions. e.g. : In states like Tamilnadu and Kerala, grid access is
largely a given, while in Bihar, Jharkand, Orissa or Uttaranchal, the situation is
very different.
e) Financial Viability : The model should be based on commercial principles,
making internal business sense. The government/ NGOs can at best catalyse
this process by enabling easier credit delivery, enabling infrastructure such as
transportation and grid connectivity. Handouts for the first few Proof of
Concept projects can provide an initial fillip but, in the long run, the
programme has to finance and sustain itself. This has been proven successful
in long gestation and low revenue models such as tolled highways and
bridges.
f) Technology neutrality : Different local needs and conditions will call for
different solutions. Though a few technologies will dominate the solution, the
model should not be stuck with any preferred technology or vendor but
should take advantage of the latest advances to deliver energy efficiently
and at least cost to the consumer and the environment.
g) Distributed Delivery: Since rural energy spans the entire country (in fact the
global village), the delivery model should factor the distributed nature of the
business and should have local franchisees who will deliver the planned
solutions.

4. The Delivery Model

A hub and spokes Energy Services Company model is a good fit to these
characteristics. The following initial formulation is offered for deliberation :

1. An ESCO is floated by IFMR Trust which will be mandated to :

a. Generate accurate metrics on the rural energy economy in all its
diversity.
b. Identify and promote best fit technology suites for different local
conditions.
c. Invest in several initial proof-of-concept installations and document the
lessons from each installation.
d. Extend the reach with a franchisee model including providing equity
and debt for start-ups.
e. Formulate training modules for sustainable operation and maintenance
of installations in consultation with vendors.
f. Develop incentives for investment by local entrepreneurs, vendors,
consultants and technology vendors to invest in the rural energy
market as franchisee, vendor driven and consultant driven ESCOs.
g. Develop a package of practices for various technologies and
installations as best practices.
h. Constantly seek out and deliver new solutions to existing and new
problems.
i. Constantly reinvent its role as a catalyst in the delivery of rural energy.

5. Biomass Gasification – a possible solution

In this scenario, Biomass Gasification based power offers a possible solution
because:
1. Biomass resource is widely dispersed and locally available, ensuring low cost
of delivered power
2. Biomass resource being renewable, the supply and delivery of electricity can
be sustained in the long term with reasonable predictability as to cost,
availability and environmental impact.
3. The plant is scalable in human terms from 5 kWe to 5 MWe, helping early
adoption across different scales in the rural areas.
4. Since biomass resource is diverse and the power plant is omni-fuel capable,
power from such a plant has a natural hedge against monoculture induced
inflation.
5. Biomass resource is abundant and available throughout the year, ensuring
affordable pricing.
6. Biomass resource can be grown in the village commons, providing energy
security in the distributed mode.
7. The local cultivation of biomass ensures that the local economy retains a
considerable surplus in the local area, instead of paying for imported energy
resources.
8. Biomass is carbon neutral, neutralising the ecological footprint of
conventional power plants.
Two options are now considered for the initial delivery platform, one consisting of
115 kWe off-grid power and the other a 1.15 MWe grid connected power plant.

6. Stand alone Off-grid Option

1. The first options is a 115 KWe stand alone off grid power plant format
established in an islanded village using a gas engine generator coupled to a
biomass gasifier of suitable capacity. After meeting its parasitic load of 15
kWe, the power plant will deliver 100 kWe net output to the consumers, which
is dedicated to the village demand with no import or export of electricity
from the village. The following assumptions underpin its technical and
economic performance.
a) Demographics : The village has a population of 3,000 and 600 households.
The average landholding is 2 acres/household. The total extent of the village
is 1560 acres and the median distance from the power plant to each
household is 440 m.
b) Domestic demand: The peak power requirement for each household is
assumed to be 50 W consisting of 2 x 10 W CFL lamps and 1 x 30 W other
miscellaneous loads. Assuming that all the households are connected to the
power plant, the aggregate peak demand of the domestic sector in the
village is 30 kW operating for 6 hours/day.
c) Commercial demand: There are 10 commercial establishments such as
restaurant, provision store etc. @ 1 per 300 population. The peak demand of
each establishment is assumed to be 80 W consisting of 2 x 10 W CFL and 2 x
30 W fan/battery charger/other loads. The aggregate peak demand of the
commercial sector in the village is 9.60 kW operating for 12 hours/day.
d) Industrial demand: The village is assumed as having 6 industries such as
grain/spice mill, mechanic shop, tailoring shop, tiny scale industry etc. having
a peak load of 3.77 kWe consisting of 4 x 10 W CFL and 1 x 5 HP prime mover.
The aggregate peak demand of the industrial sector in the village is 22.62 kW
operating for 8 hours/day.
 e) Agricultural demand: The village has about 100 pump-sets of 5 hp each @ 1
per 6 households. Each pump-set is operated for a period of 2 hours/day and
in order to operate within the peak capacity of the plant, 10 pump-sets are
operated for 2 hours each at a time. The aggregate peak demand of the
agricultural sector in the village is 74.60 kW operating for 10 hours/day.
f) Village Commons demand : The village is assumed to have 8 loads of village
commons consisting mainly of CFL lamps @ 60 W each for lighting and the
aggregate peak demand of the village commons sector in the village is 0.48
kW operating for 10 hours/day.
g) Demand Analysis: The total electricity consumption of the village is 900
kWh/day and in all the time slot segments of the day the peak load does not
exceed 100 kWe, which is achieved by spreading the agricultural demand
over 10 hours. Of the aggregate, agriculture accounts for 66% of the energy
and 56% of the load, industries account for 2% of the energy and 17% of the
load and households account for 20% of the energy and 23% of the load.
The summary table of the loads and consumption in various time slots now
follows:

Total load summary

Sector Total electricity %age Total Peak %age Time Slots
(kWh) electricity Load (kW) peak load
0000- 0800– 1800- 2000-
0800 1800 2000 2400
Domestic 180.00 20.03% 30.00 23.35% 30.00 0.00 30.00 30.00
Commercial 9.60 1.07% 0.80 0.62% 0.00 0.80 0.80 0.00
Industrial 108.58 12.08% 22.62 17.60% 0.00 22.62 0.00 0.00
Agricultural 596.80 66.40% 74.60 58.05% 0.00 74.60 0.00 0.00
Village 3.84 0.43% 0.48 0.37% 0.00 0.48 0.48 0.00
Commons
Grand Total 898.82 100.00% 128.50 100.00% 30.00 98.50 31.28 30.00
Rounded to 900 130 30 100 30 30
h) Technical Analysis: The cold gas to electrical conversion efficiency of the
engine generator is 24%, resulting in specific fuel consumption of 1.30 kg/kWh.
Considering that the plant is operating @ 100% rated output for only 10 hours
in a day and @ 30% for the remaining 14 hours, the final specific fuel
consumption increases by 30% to 1.69 kg/kWh, owing to operation at lower
than rated output. Besides as against the capacity of the plant to deliver
2400 kWh/day @ 100% PLF, the maximum demand for the electricity is only
900 kWh leading to an average PLF of 38%. This results in sub-optimal utilisation
of a high cost asset. This is the main reason why, even after benchmarking the
tariff @ Rs. 8.00/kWh vis-à-vis the avoided cost of Rs. 12/kWh, the payback
period exceeds 10 years with and without subsidy and the project cost IRR is
also very low.
i) Some of the assumptions can change under different settings but the
underlying fact is that the plant cannot recoup the capital cost in a short
period with such low PLF and high specific fuel consumption.
7. Grid Connected Spider Net Option
1. The second option is a 1.15 MW grid connected power plant at the hub of a
spider net consisting of 10 villages within a radius of 5 km. For purposes of easy
comparison, each of the villages is assumed to have the same demand
profiles as in the first option. The central plant is in turn connected to the
state/national grid and the power plant is operated 24 x 7. After meeting its
parasitic load of 115 kWe, the power plant will deliver 1000 kWe net output to
the grid. The electricity needs of all the 10 villages are first met and any
surplus is sold on the Energy Exchange. The following assumptions underpin its
technical and economic performance.
a) Demographics : The 10 villages have a total population of 30,000 and 6,000
households. The average landholding is 2 acres/household. The total extent
of each village is 1560 acres and the median distance from the transformer
to each household is 440 m.
b) Domestic demand: The peak power requirement for each household is
assumed to be 50 W consisting of 2 x 10 W CFL lamps and 1 x 30 W other
miscellaneous loads. Assuming that all the households are connected to the
power plant, the aggregate peak demand of the domestic sector in the
village is 300 kW operating for 6 hours/day.
c) Commercial demand: There are 10 commercial establishments such as
restaurant, provision store etc. @ 1 per 300 population. The peak demand of
each establishment is assumed to be 80 W consisting of 2 x 10 W CFL and 2 x
30 W fan/battery charger/other loads. The aggregate peak demand of the
commercial sector in the village is 96.0 kW operating for 12 hours/day.
d) Industrial demand: The village is assumed as having 6 industries such as
grain/spice mill, mechanic shop, tailoring shop, tiny scale industry etc. having
a peak load of 3.77 kWe consisting of 4 x 10 W CFL and 1 x 5 HP prime mover.
The aggregate peak demand of the industrial sector in the village is 226.2 kW
operating for 8 hours/day.
e) Agricultural demand: The village has about 100 pump-sets of 5 hp each @ 1
per 6 households. Each pump-set is operated for a period of 2 hours/day and
in order to operate within the peak capacity of the plant, 10 pump-sets are
operated for 2 hours each at a time. The aggregate peak demand of the
agricultural sector in the village is 746.0 kW operating for 10 hours/day.
f) Village Commons demand : The village is assumed to have 8 loads of village
commons consisting mainly of CFL lamps @ 60 W each for lighting and the
aggregate peak demand of the village commons sector in the village is 4.8
kW operating for 10 hours/day.
g) Demand Analysis: The total electricity consumption of the village is 9,000
kWh/day and in all the time slot segments of the day the peak load does not
exceed 100 kWe, which is achieved by spreading the agricultural demand
over 10 hours. Since the plant is grid connected, it produces an additional
10,200 kWh/d of electricity @ 80% PLF. The summary table of the loads and
consumption in various time slots now follows:
 Total load summary
Sector Total electricity %age Total Peak %age Time Slots
(kWh) electricity Load (kW) peak load
0000- 0800– 1800- 2000-
0800 1800 2000 2400
Domestic 1800.00 20.03% 300.00 23.35% 300.00 0.00 300.00 300.00
Commercial 96.0 1.07% 8.00 0.62% 0.00 8.00 8.00 0.00
Industrial 1085.8 12.08% 226.2 17.60% 0.00 226.2 0.00 0.00
Agricultural 5968.0 66.40% 746.0 58.05% 0.00 746.0 0.00 0.00
Village 38.4 0.43% 4.8 0.37% 0.00 4.8 4.8 0.00
Commons
Grand Total 8988.2 100.00% 1285.0 100.00% 300.00 985.0 312.8 300.00
Rounded to 9000 1300 300 1000 300 300
Technical Analysis: The cold gas to electrical conversion efficiency of the 1.15
MW engine generator is 33%, resulting in specific fuel consumption of 0.93
kg/kWh. Considering that the plant operates @ 100% rated output for 24 hours of
the day, the final specific fuel consumption is unchanged @ 0.93 kg/kWh. Besides
the plant operates at average PLF of 80%, resulting in significant savings in cost of
generation. The electricity sold to the villages of 9,000 kWh/day is sold @ Rs.
8.00/kWh vis-à-vis the avoided cost of Rs. 12/kWh and the surplus of 10,200
kWh/day is sold on the Indian Energy Exchange @ Rs. 7.50/kWh. Owing to the
higher conversion efficiency of the larger system and the higher PLF, the
payback period is about 5 years without subsidy and 4 years and 5 months with
subsidy. The IRR @ 22.42% on project cost and 37.39% on equity are also very
attractive.

8. Conclusions
It is obvious that a grid connected spider network of a power plant hub with
consuming villages at the end of the spokes makes far better use of capital,
natural and human resources, and is therefore much more environment friendly
than the off-grid model. It is also more likely to succeed since the highly skilled
work force needed to run a power plant, small or big, has a better chance of
being sourced, trained, motivated, and retained in a larger system than a
smaller one. Though the cost of creating an electrical distribution grid is high, its
advantages as a bank for surplus power and an insurance policy for maximising
Plant Load Factor far outweigh the initial one-time investment.
A scheme of reimbursement of the cost of establishing the Spider network at
11/33/110 kV by the Ministry of Power under established benchmarks will reduce
the significant costs on grid evacuation and connectivity for the Spider network.
The Rajiv Gandhi Grameen Vidyutika ran Yojana provides for the establishment
of Rural Electricity Distribution Backbone (REDB) with one 33/11 kV (or 66/11 kV)
substation in every block where it does not exist. Concerted efforts to dovetail
the rural power generation initiative of IFMR with the Power Ministry’s plans for the
REDBs can reduce capital costs for future projects significantly. This may however
delay the establishment of the projects owing to bureaucratic delays.
 The major features of the two options are now compared :

NO. DESCRIPTION 115 KWE OFF-GRID PLANT 1.15 MWE GRID CONNECTED PLANT
1. Ease of Operation Easy to operate since it is More complex system needs
smaller higher skills, but lower effort in
running owing to automation
2. Manpower requirement Skilled and trained manpower Owing to scale economics,
usually unaffordable for skilled and trained manpower
continuous operation are affordable and can be
retained for continuous
operation
3. Plant operation cycle Plant is operated for 6-8 Plant is operated 24 x 7 rated
@ rated capacity hours/day at rated capacity capacity
4. Plant Load Factor Low PLF of 38% owing to lower Higher PLF of 80%. Power is
peak demand for 6-8 diverted to the surrounding
hours/day in islanded villages villages for 6- 8 hours/day and
the surplus power is sold to Third
Parties/Electricity
Board/Electricity Exchange
5. Specific fuel Higher specific fuel Lower specific fuel consumption
consumption consumption of 1.69 kg/kWh of 0,93 kg/kWh owing to larger
owing to smaller capacity, capacity, higher PLF and
lower PLF and operation at operation at the rated capacity
lower than rated capacity
6. Scalability Since the system operation Since the system operation easily
cannot recoup the capital recoups the capital cost in < 5
cost in < 10 years, this option years, this option will attract
may not attract investment investment from franchisees
from franchisees
7. Capital Cost/kW Higher capital cost/kWe Lower capital cost/kWe installed
installed installed owing to smaller owing to larger capacity, in spite
scales of additional cost for grid
evacuation
8. Pay back period Extended payback period >10 Shorter payback period of 5
years owing to lower PLF, years owing to higher PLF, lower
higher capital cost and lower capital cost and higher
conversion efficiency conversion efficiency