Renewable Energy Transition in Asia in Africa

At the eve of the World Environment Day on June 5th 2024, we are facing the ever rising risk of global climate and environmental crisis which calls for immediate action in all spheres of life including the energy industry. In 2024 the world has witnessed surging heatwaves in Asia and Africa, floods in Brazil, cloudburst in Dubai and persisting impacts of wildfires in Hawaii and Canada among many other extreme weather events. Globally, people are banding together to come up with innovative solutions to the changing climate and renewable energy industry is one such area of constant flux. Renewable energy sources such as solar energy and waste products like husk and crop byproducts are useful in rural and semi-urban settings as a low amount of energy is required by these areas in comparison to metropolitan cities and industrial areas. The advantage of these mini grid energy setup is that it uses renewable sources as well as waste product which otherwise would have caused a nuisance if burnt or disposed. In today's article we will explore an actively emerging mini grid company which is based in Asia and Africa.

Image: Mini-grid Power Station at Lalganj, Bihar, India

From September 15-17, 2023, the Environmental Journalism Network (EJN) hosted a Communicator's Workshop on Renewable energy in Patna, India. One of the interesting activity of the workshop included a field visit to a mini grid station by a renewable energy company the Husk Power Systems with a short introduction of their initiative by Saugata Dutta, India Country Director of the company. I was among the participants of the workshop and we visited the Husk Power Systems station at Lalganj, a village in Bihar and engaged in a detailed conversation with Rizul Choudhury, Director of Marketing for Husk Power Systems (India) to understand the company’s transformative role in the rural energy sector.

Image: In conversation with Rizul Choudhury at Lalganj, Picture Credit: Manasi Pinto, EJN

Transformative Role in Renewable Energy

Husk Power Systems,employs a hybrid model combining solar PV and biomass gasifier technologies to provide reliable, renewable energy to off-grid and weak-grid communities led by Manoj Sinha, the Founder & CEO from Bihar. Rizul Choudhury emphasized the importance of mini-grids, stating, “Mini grid... can play a big role in transforming the energy landscape.” This approach not only meets energy needs but also fosters local development and inclusivity.

Image: Engineer at the Power Station, Lalganj

Community Engagement and Technological Innovation

Choudhury highlighted how Husk Power’s initiatives are focused in community engagement. The company employs advanced AI and IoT technologies to ensure theft-proof and efficient energy distribution. "We are working with many communities within this small region,” he noted, showcasing the mutual growth fostered by their community-centric model. “From our head office, we can observe which plant has how much energy is generating, how much energy is going, and then the smart meter also tells us how much each end customer is consuming. This connected system allows us to immediately address any issues, ensuring efficiency and security.”

Image: Birender, Proprietor of Jyoti Engineering Works at Lalganj (Vaishali)

Empowering Through Employment and Training

A key aspect of Husk Power’s strategy is its commitment to local employment and training. Choudhury shared plans for an all-women Network Operating Center, reflecting their efforts to empower local talent and promote gender inclusivity. “We have created around 500 jobs for local community members, training them and deploying them in our operations.” he explained, underlining the importance of investing in people.

Sustainability and Profitability

Choudhury’s insights revealed that sustainable solutions can also be profitable when approached strategically. Husk Power’s integration of sustainability into their business model has opened new markets and driven long-term profitability. “In 2022, we became the first company in mini-grids to be profitable because we are consistently working with the community, understanding their needs, and helping them grow,” he noted. “When the community grows, we grow together.”

The Pay-as-you-go System: A Digital Revolution

The introduction of the pay-as-you-go system by Husk Power has been well-received in rural areas. Choudhury explained, “Initially, there was a problem due to limited smartphone penetration, but after the 4G revolution, people started using smartphones more widely. Through our app, they can easily manage their energy consumption.”

Image: Local Apparel Shop and Boutique Proprietor

Local Solutions for Local Needs

Beyond just power, Husk Power Systems is deeply involved in understanding and catering to local needs. They provide not only energy but also energy-efficient appliances directly to consumers. “We have partnered with top OEMs (original equipment manufacturer)** like Samsung and LG to offer durable consumer products at the doorstep of rural customers, with EMI options and without interest or processing fees,” Choudhury explained. This model ensures affordability and convenience for rural customers.

Commitment to India’s Renewable Energy Goals

Choudhury expressed confidence in Husk Power’s role in supporting India’s commitment to meeting 50% of its energy requirements with renewable energy. “We are part of the government’s plan, and we also motivate private investors to join this transition. Mini-grids will play a pivotal role in reaching net-zero emissions, especially in rural areas where 60-70% of the population resides.”

Record Capital Raise for Expansion

In a significant development, in October 2023, Husk Power Systems raised $103 million to fund a sevenfold expansion in India and Africa. This record funding round includes $43 million in equity and the rest in debt, enabling the company to increase its mini-grids from 200 to over 1,500 in four years. Investors include France’s STOA, the US’s Development Finance Corp., and Proparco. Husk Power currently operates mainly in Bihar, Uttar Pradesh, Nigeria, and plans to expand to the Democratic Republic of Congo and other African countries. They aim to replace diesel generators with solar and biomass-powered mini-grids. In April 2024, Husk Power Systems secured $4 million in funding from ElectriFI, a Europe-based Electrification financing initiative.

Conclusion

The visit to Husk Power Systems illuminated the practical application of renewable energy solutions and highlighted the potential for sustainable practices to drive both community development and business success. Choudhury’s insights reinforced the essential role of innovative companies like Husk Power Systems in the global fight against climate change, showcasing that sustainability and profitability can indeed go hand in hand.

In the words of Choudhury, “This industry is completely different, where you are helping the community to grow,and you see the direct benefits and satisfaction on their faces. It’s about equitably benefiting everybody and growing together.”

Glimpse of Market Area or Bazzar at Lalganj

The conversation with Rijul Choudhury and local community members led me to believe the mini grid system is a functional system that is useful to the rural community of Bihar, especially women entrepreneurs with small businesses earn a livelihood utilizing the renewable energy source who were earlier bereft of proper electricity services as is the case in rural India. This transition towards betterment of rural and semi urban settlement is positive development for our society where masses are not dependent on fossil fuel based energy for their survival and increase in mini grids like these across the world might be the energy transition we need so urgently.

References:

1. Five ways to jump-start the Renewable Energy Transition Now (2024) United Nations. Available at: https://www.un.org/en/climatechange/raising-ambition/renewable-energy-transition.

2. Husk power secures additional USD 4 MN from Electrifi to expand solar minigrids business - ET energyworld, ETEnergyworld.com. (2024) Available at: https://energy.economictimes.indiatimes.com/news/renewable/husk-power-secures-additional-usd-4-mn-from-electrifi-to-expand-solar-minigrids-business/109329695.

3. U.S.-based husk power raises record $103 million for mini-grids projects in Africa and India (2023) YouTube. Available at: https://www.youtube.com/watch?v=xGoH-TVr6NE .

Please visit the official website of Global Climate Association for more interesting information on climate science, literacy tools, initiatives and narratives at https://globalclimateassociation.org/.