ENTERPRISE MODEL FOR BIOMASS SUPPLY_REZ_Datia_INDEX

8/7/2019 ENTERPRISE MODEL FOR BIOMASS SUPPLY_REZ_Datia_INDEX.

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AlternativesENTERPRISE MODEL FOR BIOMASS SUPPLY

A PROJECT PROPOSAL

ON

Community based enterprise model for biomass supply

A sustainable approach to enhance rural economy

Project location: Datia, (M.P)

Submitted to

Punjab National Bank (PNB), Datia, (M.P)

Submitted by-

Development Alternatives,Orchha, (M.P)


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INDEX

Executive summery

SR NO. PARTICULARS PAGE

NO.Executive summery iii

1. Introduction iv-v2. Problem statement vi3. Project background, goal and

objectives

vii-viii

4. Project location, climate and

soil

ix-x

5. Project implementation

activities

xi-xii

6. Expected benefits xiii7. Financials x i v8. Roles of stakeholders x v

9. Annexure x v i


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India faces severe problems in the power sector resulting in energy shortages. In 2001 this was 8% and

peak demand exceeding supply by about 13%. The industrial sector today consumes approximately 35%

of total electricity generated in the country. At the same time, high quality stable power is required to

attain the higher growth rate projected for this sector. Majority of industries in India require both

electrical and thermal energy. Today, they either buy power from the State Electricity Boards, or generate

their own power largely through diesel generators and meet their thermal energy requirements through

captive means mostly utilizing fossil fuels such as coal, oil or natural gas. As fossil fuels are limited, and

have adverse environmental impact, it would be appropriate to use non-conventional energy sources

including biomass resources such as crop residues and agro-industrial wastes for generation of energy in

the industries mainly through biomass gasification technology for meeting their total

requirements for both electrical and thermal energy.

India, being a tropical country, has tremendous potential for energy generation through biomass and its

residues.

Development Alternatives has taken initiatives to generate electricity through biomass which will further

be a source of electricity generation for micro and small enterprise hub, run by community people.

Promotion of micro and small enterprise will boost the rural economy.

The project involves supply of biomass to the biomass-based power generation plants with a total

capacity of 40 kW for uninterrupted electricity supply to the micro and small enterprise hub. The fuel

used is primarily Ipomea weed, which is abundantly available in the surrounding area of the site. Ipomea,

having calorific value of 3800 kcal per kg and bulk density of 160 kg per cubic meter is a cost-

effective way to generate electricity.

1. Project introduction


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Access to quality, reliable and affordable energy is critical for promoting economic and social

development in rural areas. The energy situation in rural India is characterized by low quality of fuel, low

efficiency of use, un/semi reliability electricity supply and limited access leading to lower productivity of

land, water and human effort, ultimately leading to less development and environmental degradation.

Dependence on centralized grid electricity supply to low-load rural situations is characterized by

fluctuating voltage, unreliable supply and shortage of power in most parts of rural India. Dependence on

coal-based electric power plants (accounting for 70% of power generation) is leading to environmental

degradation; local (land degradation), regional (air, water and soil pollution) and global (greenhouse gas

build-up leading to climate change).There is a realization on the need to search for decentralized and

renewable energy-based options to meet the rural energy needs in a sustainable way. Among all the

renewable energy sources, biomass is the largest, most diverse and readily exploitable resource.

Government of India strongly encourages the utilization of biomass energy.

Biomass Potential

India is a tropical country blessed with abundant sunshine and rains, thus offering an ideal environment

for Biomass production. Further, the vast agricultural produce also makes available large quantities of

agro-residues which can be used to meet energy needs. With an estimated production of about 350 million

tonnes of agricultural waste every year, residual biomass is capable of mitigation of GHG emissions to

the extent of 300 million tonnes / annum.

MNES estimated the biomass power potential in the entire country as 19,500 MW. The estimated

potential of Biomass based renewable energy options in India are as follows:

Biomass Energy 16, 000 MW

Bagasse Co-Generation 3, 500 MW

Total 19, 500 MW

Biomass for electricity generation can be available in various forms like agricultural residues, biomass

from animal waste, forest biomass and municipal wastes. Other sources of biomass are weeds like

Ipomea, cholla,prosopis julifora, lantana camera etc which grow on waste lands and have no or very little

use. Of these weeds, Ipomea is found in abundance in the Datia region, which grows in marshy areas.

Major features of ipomea are given below-


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On direct combustion, this gives a very pungent odor and hence is not generally used as fuel

wood for cooking purpose.

For the purpose of gasification, ipomea needs to be harvested from the marshy areas and near

water body.

It further needs to be chopped in to small pieces of about 2 inches. The chopping is done in the

green condition. It is then sun-dried from an original moisture content of about 85% to 34-38%,

before it can be fed in to the gasifier.

One hectare yields approximately 160 tonnes of green biomass, which is equivalent to 64

tonnes of useful feed stock for gasifier.

The calorific value of ipomoea is 3800 kcal per kg and bulk density is 160 kg per cubic

metre.

Biomass power is an important alternative for providing energy in the rural sector. The inherent

advantages in utilization of biomass are that employment opportunities are created even for

cultivation, collection, transportation and storage of biomass.

2. Problem statement


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Indias energy development programme has been put to severe pressure with the ever increasing demand

supply gap (8 to 10%) and mismatch of resources coupled with non-uniform growth curve.

ENERGY SOURCE DEMAND SUPPLY GAP/SHORTAGE

Electricity(Jan 2006) (In million KWh) 5,21,872 4,80,242 (41,630)

Though, SMEs are not a priority sector for State Electricity Boards. Consequently, lack of

quality power and poor voltage conditions compel rural enterprises to look for alternative

sources (captive diesel generator sets) which is very costly.To fill this gap, Development

Alternatives, has demonstrated new Renewable Energy technology (Desi Power) at TARA gram

Datia that can be a source of assured power supply for clusters of new industries manufacturing

building materials based products(bricks, Micro-concrete roofing, Paving blocks,Fly-ash bricks

and Pre-cast door/window frames). Development Alternatives has set-up gasifier of 32 kW

(biomass based renewable energy generation and distribution system)and currently

supplying electricity to these industries. Energy demand for these industries is 3735.78 units

(kWh) per month. To provide assured and uninterrupted power supply to these industries,

700kg/day ipomea is needed as feedstock to the biomass gasifier to run it for at least 10 hrs.

This huge demand of biomass will give rise to another line of business which will be a biomass

based enterprise. In this way biomass sourcing can be treated as an opportunity to create an

alternative source of income generation.

Although it seems to be a remarkable idea, but in this process of supplying dry biomass, there are

certain issues which may reduce the profit of entrepreneur

a) Efficiency of labor to cut biomass due to which quantity of biomass sourced /day is reduced

b) The cost of transportation of biomass from field to the chopping place and from the chopping

place to the endpoint is 32 % of the total cost.

c) Use of motorized gini-cutter will increase the pace of operation. Hence the volume of the

business can be increased.

To make biomass sourcing a convenient and quick process, group of entrepreneurs involved in it

require proper equipments to meet the demand supply gap of biomass.

3. Project background, goals and objectives


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To develop community based enterprise for supplying dry biomass to the

gasification plant to ensure regular electricity supply of SMEs .and rural

development.

3.3. Project Objective

To establish biomass supply chain mechanism and demonstrate its socio-commercial and

institutional (SHG run) viability.

To create an alternative source of livelihood for the rural women of Datia region by

preserving and harvesting natural resources and agro waste

To ensure sustainable supply of biomass to run the power plant as well as SMEs so as to

ensuring sustainability proposed first REZ in India

3.4. Biomass Supply chain and

4 labors (@ 4

quintals/day)

=400/- Labor cost = 100

Biomass harvesting

Cost oftransportation=Rs

200/-

Transportation of wet

biomass

Labor cost = 100/-

Chopping of wet

biomass

Drying up to 50% of

moisture content

Cost of

transportation=Rs

350/-

Transportation of dry

biomass


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4. Project location,climate and soil

4.1 Background

Datia had formerly been a state in the Bundelkhand region. The state was administered as part of the

Bundelkhand agency ofCentral India.The state suffered from famine in 1896-97, and again to a lesser

extent in 1899-1900.

4.2. Project Location

Datia district in the state ofMadhya Pradesh, India, is situated nearGwaliorand on the border

with Uttar Pradesh (U.P); the town ofJhansi in U.P. is only about 25 km away.

State: Madhya PradeshDistrict: Datia

Coordinates: 2540N7828E/ 25.67, 78.47

Time zone IST (UTC+5:30)

Area Elevation 302 m (991 ft)

Population 627,818 (2001)

The district has an area of 2,038 km, and a population 627,818 (2001 census). The population of

Datia District increased by 26% from 1981 to 1991, and by 22% from 1991 to 2001. The districthas 445 villages and 3 towns, Datia, Seondha, and Bhander. Datia is bounded by the Madhya

Pradesh districts ofBhind to the north, Gwaliorto the west, and Shivpuri to the south, and by

Jhansi District ofUttar Pradesh state to the east. The district is part ofGwalior Division.

The project area covers barren and degraded lands and lands such as roadside, canal side and

railway lines, covered with weeds like Ipomea, Cholla, Lantana Camera in geographic regions of

District Datia especially. The project proposes to harvest weeds like Ipomea for green energy

supply. These weeds can be called as green energy plants.

4.3. Soil Type
http://en.wikipedia.org/wiki/Bundelkhandhttp://en.wikipedia.org/wiki/Central_India_Agencyhttp://en.wikipedia.org/wiki/Datia_districthttp://en.wikipedia.org/wiki/Madhya_Pradeshhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Gwaliorhttp://en.wikipedia.org/wiki/Uttar_Pradeshhttp://en.wikipedia.org/wiki/Jhansihttp://en.wikipedia.org/wiki/Madhya_Pradeshhttp://en.wikipedia.org/wiki/Geographic_coordinate_systemhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://en.wikipedia.org/wiki/Time_zonehttp://en.wikipedia.org/wiki/Indian_Standard_Timehttp://en.wikipedia.org/wiki/UTC%2B5:30http://en.wikipedia.org/wiki/Geography_of_Indiahttp://en.wikipedia.org/wiki/Elevationhttp://en.wikipedia.org/wiki/Populationhttp://en.wikipedia.org/wiki/Seondhahttp://en.wikipedia.org/wiki/Bhanderhttp://en.wikipedia.org/wiki/Bhind_Districthttp://en.wikipedia.org/wiki/Gwalior_Districthttp://en.wikipedia.org/wiki/Shivpuri_Districthttp://en.wikipedia.org/wiki/Jhansi_Districthttp://en.wikipedia.org/wiki/Uttar_Pradeshhttp://en.wikipedia.org/wiki/Gwalior_Divisionhttp://en.wikipedia.org/wiki/Bundelkhandhttp://en.wikipedia.org/wiki/Central_India_Agencyhttp://en.wikipedia.org/wiki/Datia_districthttp://en.wikipedia.org/wiki/Madhya_Pradeshhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Gwaliorhttp://en.wikipedia.org/wiki/Uttar_Pradeshhttp://en.wikipedia.org/wiki/Jhansihttp://en.wikipedia.org/wiki/Madhya_Pradeshhttp://en.wikipedia.org/wiki/Geographic_coordinate_systemhttp://stable.toolserver.org/geohack/geohack.php?pagename=Datia&params=25.67_N_78.47_E_region:IN_type:cityhttp://en.wikipedia.org/wiki/Time_zonehttp://en.wikipedia.org/wiki/Indian_Standard_Timehttp://en.wikipedia.org/wiki/UTC%2B5:30http://en.wikipedia.org/wiki/Geography_of_Indiahttp://en.wikipedia.org/wiki/Elevationhttp://en.wikipedia.org/wiki/Populationhttp://en.wikipedia.org/wiki/Seondhahttp://en.wikipedia.org/wiki/Bhanderhttp://en.wikipedia.org/wiki/Bhind_Districthttp://en.wikipedia.org/wiki/Gwalior_Districthttp://en.wikipedia.org/wiki/Shivpuri_Districthttp://en.wikipedia.org/wiki/Jhansi_Districthttp://en.wikipedia.org/wiki/Uttar_Pradeshhttp://en.wikipedia.org/wiki/Gwalior_Division


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The soil erosion and unsustainable land use practices contribute to severe degradation and loss of

soil and soil organic carbon each year and is a major factor contributing to about 50% loss of soil

productivity.

4.4. Socio Economic Profile

As of 2001 India census, Datia had a population of 82,742. Males constitute 53% of the

population and females 47%. Datia has an average literacy rate of 68%, higher than the national

average of 59.5%: male literacy is 75% and, female literacy is 60%. In Datia, 15% of the

population is under 6 years of age.

The project intends to initiate project implementation activities in the following villages of Datia

district

Estimation of available biomass-

Sr. no. Species Village

Bio-Mass ( in Tractor

Loads)

Biomass(dry) in

(Quintal/s)

1 Ipomea Shyamlal ka Dera 15 240

2 Ipomea Jhakhoria 10 160

3 Ipomea Sitapur 5 80

4 Ipomea Samroli 4 64

5 Ipomea Gari 4 64

6 Ipomea Borgaon 10 160

7 Ipomea Uprai 5 80

8 Ipomea Agora 3 48

9 Ipomea Durgapur 5 80

Ipomea Guliapura 10 160

8 Ipomea Cherula 20 320

Ipomea Rena 5 80

TOTAL 1536
http://en.wikipedia.org/wiki/Censushttp://en.wikipedia.org/wiki/Censushttp://en.wikipedia.org/wiki/Census


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5. Project implementation activities

Activity 1- Community Mobilization

Activity 2-Ensuring govt grants and subsidy

To purchase certain equipments for making biomass sourcing a lucrative process, villagers or

potential supplier groups need government grants and subsidy.

Activity 3- Identification of potential supplier group.

Potential supplier groups for biomass (ipomea) should be identified according

willingness to accept this business model.

Activity 4- MoU with the supplier group for the supply of demanded quantity and quality

of biomass.

To clear the roles and responsibility between demand and supplier group, MoU will be signed

between them.

Activity5 Purchasing equipments like biomass cutter and Gini-cutter.

Weed like ipomea, when used as biomass for electricity generation needs to be chopped up at

green stage. For this ipomea needs to be brought at chopping place as early as possible. Thus

certain equipments like wood cutter and gini cutter are required to make this process faster .

Activity 6- Assuring supply of biomass at pre-determined time and rate to the location

with a guarantee of substantial profit to biomass supply group.

After biomass chopping/slicing, it is being dried for two to three days. As soon as drying process

completes, biomass will be supplied to DA center, Datia. DA will fix the rate of dried biomass

and disburse the amount within two days to the supplier group.


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GANT CHART

Activities W1 W 2 W 3 W 4 W 5

Community Mobilization

Ensuring govt grants and subsidy

Identification of potential supplier group

MoU with the supplier group for the supply

of demanded quantity and quality of

biomass

Purchasing equipments like biomass cutter

and Gini-cutter.

Assuring supply of biomass at pre-determined time and rate to the location

with a guarantee of substantial profit to

biomass supply group


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6. Expected benefits

The aforesaid proposed enterprise model will lead to the following benefits to the suppliers -

Local employment:-This will create an alternative source of employment for the community

people (especially women) as well as fill the demand-supply gap of electricity generation to run

micro and small enterprises which will boost up the rural economy. Here community plays dual

role both as supplier (biomass supply for electricity generation) and consumer (purchase of

electricity to run enterprises).

Assured power supply:-This project will ensurecontinuous biomass supply for electricity

generation through gasifier which will assure regular electricity supply to micro and small

enterprise run by community people.

Utilization of waste resources: - Utilization of weeds like weeds like ipomea and Cholla, which

are grown in marshy places, as biomass for electricity generation will increase their economic

value.

Demand-supply gap: - Total demand of biomass (ipomea) /year is 96000 kg (per hour biomass

consumption= 40 kg; working hours= 8 hrs; working days=300) in TARAgram. Available

biomass (ipomea) in the vicinity is 1536 quintals. Hence it can be inferred from the given figures

that biomass demand supply gap can be fulfilled easily, if the whole system operates in a

mechanized way.


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7. FINANCIALS

Project cost:-

ECONOMICS OF DRY BIOMASS

PARTICULARSRATE QTY

AMOUNT

Capital Expenditure

Hand cutter 300 5 1500

Chopping machine900

0 1 9000

Total cost (A) 10,500WORKING CAPITAL(for oneweek)

labors @ 3 qtls/day 100 20 2000

Loading of biomass (1 labor) 100 2 200

Transport from field to farm 300 2 600

Cutting 100 2 200

Transport from farm to firm 350 1 350Depreciation @ 5% perannum 525

Total cost (B) 3875

TOTAL PROJECT COST(A+B) 14,375

The total project cost is Rs. 14,375 (Fourteen thousand three hundred seventy five, only).

Projected profitability per supply (within 4 days in a week):-

PARTICULARSAMOUNT

AMOUNT

AMOUNT

WORKING CAPITAL Weak1Week

2Week

3

Labors @ 3 qtls/day 2000 2000 2000

Loading of biomass (1 labor) 200 200 200

Transport from field to farm 600 600 600Cutting 200 200 200

Transport from farm to firm 350 350 350Depreciation @ 5% perannum 525 525 525

Total cost (B) 3875 3875 3875

Revenue generated 4500 4500 4500

Revenue realized 625 625 625


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8. Roles of stakeholders

Role of supplier group

Supplier group will have a key role in this business as they have to cut, dry and supply

ipomeas according to the consumer (DA) demand.

Supplier group will ensure for the quality supply of biomass(At 50% or less moisture

content).

Role of DA-

DA will act as a consumer in this business.

DA will have the responsibility to measure the dried ipomea (Should not be more than

50%).

Full Payment to the supplier group will be made on time.

Role of Panchayat/ Other Govt players-

To provide fund to the biomass suppliers. This support will assist sup

establishing their business.


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Annexure-1

Comparison of the revenue realized by the supplier and the COST TO THE END USER

ECONOMICS OF DRY BIOMASS ECONOMICS OF WET BIOMASS

ARTICULARSRATE QTY AMOUNT PARTICULARS

RATE QTY

AMOUNT

Capital Expenditure Capital Expenditure

Hand cutter 300 5 1500 Hand cutter 300 4 120

Chopping machine900

0 1 9000 Total cost (A) 1

Total cost (A) 10500 WORKING CAPITAL

WORKING CAPITAL labors @ 4 qtls/day 100 4

abors @ 3 qtls/day 100 20 2000 Loading of biomass (1 labor) 100 1 10oading of biomass (1abor) 100 2 200 transport from farm to firm 400 1 40ransport from field toarm 300 2 600 depreciation @ 5% per annum

utting 100 2 200 Total cost (B) ransport from farm torm 350 1 350 Revenue generated 0.8

1440 115

epriciation @ 5% pernnum 525 Revenue realized by the suppliers

Total cost (B) 3875 COST TO THE END USER

Revenue generated 1.5300

0 4500 Amount paid to the supplier 0.8144

0 115Revenue realized by theuppliers 625 Cutting cost(1 labor for 2 days) 100 2

COST TO THE END USERLoss (5 % of the cost paid tosupplier) 5

Amount paid to theupplier 1.5

3000 4500 Storing 100 1 10

toring 100 2 200 TOTAL 150

TOTAL 4700 COST/KG

COST/KG 1.6 COST/KG After drying 7202.096

6

(1500kg/day)*4day

=60qtlwillbecutin

4daysby5labor

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ENTERPRISE MODEL FOR BIOMASS SUPPLY_REZ_Datia_INDEX