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New Delhi

THE tiny village of Ranidhera in Chhattisgarh’s Kabir Dham district has never known what it is to have electricity and has experienced no develop-ment. But when lights do go on in the huts of its 120 households at the end of February, Ranidhera will be catapulted into a world class league of users of renewable energy.

The power it will get will be generated from the oil-rich seeds of jatropha trees that the villagers have been growing. Ranidhera’s backwardness is a terrible shame. Its power solution on the other hand is a triumph of innovation, useful technology and social entrepreneurship

It will be the first example of an entire village’s electricity needs being met through the use of a biofuel. Waiting in line are another 24,999 Indian villages, which are so remote that they have no chance of getting linked to grids and conventional sources of generation and supply. The initiative at Ranidhera came from Winrock International India, a voluntary organisation which wanted to prove that it is possible to use vegetable oil to run generation sets and supply power to a small area through a local grid. Winrock’s mission is to rescue villages from their chronic backwardness through local energy solutions. Three years ago Winrock began by canvassing for the idea among the villagers. Convincing them took time, but their involvement was necessary. After this, Winrock helped the villagers plant jatropha, a tree really no bigger than a shrub.

The jatropha plant takes about two to three years to give useful seeds and now about 25,000 saplings have matured. The seeds will be crushed and oil from them will be used to run a 6 horse power generator that will give each hut at Ranidhera two lights, a TV and a fan. The supply will be for four to six hours a day. A village electricity committee will own the system. It will be trained in maintenance of machines and billing. The villagers will also have to manage the supply of jatropha seeds and ensure that they are available in adequate quantities to keep the system running. Winrock’s Somnath Bhattacharjee emphasises the need for technological innovation. Two years was spent debugging the engine. It was equally important to carry the local people along. “We had to first convince the people that this electricity generated from vegetable oil would be the same as what they would have got from the grid.Then we had to mobilise them and get them to work with us as partners,” explains Bhattacharjee. Villagers grew jatropha on common land and around their fields in addition to their normal crops. “Biofuels must help to raise income levels of villages,” says Bhattacharjee. “We should not rely on subsidies for running local biofuel electricity networks.” The pilot has cost Rs 1 crore, but that includes the engine modifications and a host of other development charges. It could be replicated for much less. “We need critical numbers. It needs to be upscaled in a big way,” says Bhattacharjee.

GLOBAL RACE FOR BIOFUELS :

Ranidhera is just one small indicator of the winds of change that have been sweeping the world as different economies seek to address the twin objectives of global warming and energy security. Biofuels have come to be seen as one way forward. Bio-ethanol and bio-diesel have been slowly replacing conventionally used petrol and diesel in transportation in the developed world. An international conference on biofuels held by Winrock in Delhi in February showcased some of the learning that has been happening internationally. The best energy solutions are being born out of a combination of political vision, speedy scientific experimentation and business initiatives. Canada claims to be the ‘Saudi Arabia’ of biomass and is relying on ethanol production. Its national target is to reach 8 per cent of ethanol use by 2010 and two per cent bio-diesel by 2012. A range of second generation crops are being examined by Canada’s Green Crop Network: seeds with high oil content, stems with high cellulose and roots with high lignin. In Europe, Germany has forged ahead. “We are number one users of biofuel in Europe,” says Guido Reinhardt, from the Institute for Energy and Environment Research, Hiedelburg, with some pride. About 3.5 per cent of Germany’s transport needs are met by biofuel. Last year it saved CO2 emissions equal to 1.5 million inhabitants in Germany. But the bill for that was a whopping 3.8 million euros because of tax exemptions given to biofuels. Europe overproduces food. So the farmer gets paid for leaving a part of his farm fallow. On this he can now grow energy crops. Biofuels actually cost three times more than fossil fuels. The price of diesel was raised in Germany so that biofuel cost 10 per cent less. Consumers opted to buy it. Since the price is not sustainable, tax exemptions are expected to begradually removed. In Sweden, cars that run on bio-diesel get free parking. Brazil is all set to become the world’s biggest producer of biofuels. Today motorists can choose to fill their cars with 100 per cent ethanol at half the price of gasoline or petrol blended with ethanol at 30,000 filling stations. Although the life cycle assessment of jatropha has not been examined by international environmental scientists, by and large biofuels are better than fossil fuels as far as energy saving and greenhouse gas emissions are concerned. However, there is concern about water pollution, pesticide use, food security and soil acidification.

GROWING AMBITIOUS TREES :

Will cars and trucks in India drive on biofuels? In the short term it seems unlikely. What is certain is that entrepreneurs are placing their bets on bio-diesel for rural India. There is unanimity of opinion that it can energise villages and rev up Bharat’s economy if communities get involved in the bio-diesel business. Other entrepreneurs are eyeing the European market. Under the Kyoto Protocol, Europe has to bring down its greenhouse gas emissions. India imports nearly 72 per cent of its petroleum needs. The import bill is increasing one and a half times annually and this could drag down India’s economy. A draft National Biofuels Policy envisages five per cent blending each for petrol and diesel by 2012 and 10 per cent by 2017. The draft policy proposes use of crops like sugarcane, sweet sorghum, cassava, maize and tree-borne oilseeds like jatropha and karanja. A National Biofuels Board has been proposed. But the policy remains under formulation by the Ministry of New and Renewable Energy (MNRE) and there is no clear direction as yet. Entrepreneurs interested in the bio-diesel business say the government’s offer of Rs 26.50 per litre for bio-diesel is a dampener. They want to be paid just a little less than the price of diesel. There is also an acute shortage of raw material and land on which to grow oil-bearing trees. Ethanol is being mooted as the fuel for cities. According to RS Kureel, director of the National Oilseeds and Vegetable Oils Development Board, who was one of the most closely heard speakers at the Winrock conference, there is a huge opportunity in turning the country’s entire annual petrol consumption of 9.4 million tonnes into ethanol. “If the consumer demands petrol vehicles, then companies will have to put petrol cars on the road and this will lower diesel consumption. The reason consumers go for diesel cars is because diesel is cheaper.” Not everyone agrees with Kureel. For instance, Bhattacharjee believes the emphasis should be on bio-diesel because diesel accounts for 80 per cent of the fuel consumed by the transport sector. Changing customer preferences would be difficult, perhaps even impossible given the investments already made by automobile manufacturers. It is also important to calculate the overall environmental load that results from using bio-diesel and ethanol. Once processing and transportation over long distances are added up, the chances are that it could be less polluting to just use petrol and diesel. Most entrepreneurs say it may be better to rely on fuel efficiency, CNG and electric vehicles for cities.

FUEL FOR BHARAT :

Bio-diesel’s big promise is in local uses. For distant villages like Ranidhera, forgotten and underdeveloped, oil from plants provides new intimations of prosperity because it makes it possible to run tractors, pump sets and generators. A leading auto manufacturer is test driving a tractor on bio-diesel. Biofuels link Bharat to the global economy. There is a lucrative market for bio-iesel in Europe, for instance. A growing market for the seeds of trees could also mean more rural employment and efficient use of land. Different models by which local communities and not just entrepreneurs can earn money from trees need to be created. Bio-diesel comes from trees like jatropha, karanja, jojoba and neem. It could also be taken out of used cooking oil disposed of by McDonalds’ outlets or palm and other vegetable oils. Ethanol comes from sources as varied as sugarcane,cereals, sugarbeet, potato, mahua flowers, sweet sorghum and molasses.“To meet the national target of replacement of five per cent diesel with biodiesel we need 2.5 million hectares for production of jatropha,” says RS Kureel,“That seems to be a little difficult. Hopefully by the 11th Plan we will be able to meet this target. At present we have around 300,000 hectares in 23 states for cultivation of jatropha.” There is, once again, talk of using wastelands. But such lands are either encroached, or under litigation or the soil quality is so poor that even the hardy jatropha can’t survive. Getting farmers to grow jatropha around their farms and on common land is being suggested. Kureel points out that jatropha has to be cultivated at some scale for it to get commercialised. “We are promoting cluster plantations in several villages. Nearby we can promote a cottage industry for extraction. We can set up an esterfication plant. The electricity can be consumed locally,” says Kureel. Much work remains to be done in developing high-yielding varieties of jatropha and increasing its oil content which varies between 20 to 40 per cent. Kureel claims research institutes across India are working on this and new varieties including those that will make jatropha into an annual crop will be put out soon. A related problem is water. Ethanol comes from sugarcane, among other crops, and is hugely water intensive. This has to be factored into the environmental cost. Thenagain, in India it does not make good development sense to divert cereals and other food crops to ethanol as has been done inEurope.We are making ethanol only by using molasses. But we have options like sweet potato, cassava, potato, maize. Also cellulose material like paddy, wheat straw or any vegetable waste,” says Kureel. Currently the alcohol and pharma sectors consume most of the molasses produced in India. If imports are permitted and local molasses diverted for ethanol production, the government will need to resort to a delicate pricing strategy. Bio-diesel, however, is different because it comes from trees like jatropha, which are not water intensive though they need 600 mm of rain and can be grown in relatively adverse soil conditions. These trees require a soil depth between 1.5 to two feet. Technology is needed to invent small generators that can run seamlessly on bio-diesel. For instance, Winrock turned to a company called PM Diesel to develop an engine for the Ranidhera pilot. PM Diesel is known for its brand called Field Marshall. The company invested in the experiment because it saw the possibilities of a market opening up. Similarly, BP Castrol joined in to produce a lubricant that would be right for an engine using jatropha oil. As for bio-diesel extraction plants there is no shortage, says Kureel. At least 25 bio-diesel extraction units with a capacity of one tonne to half a tonne a day have come up but are waiting for raw material. On quite another scale Indian Oil and Reliance have mega plans for being processors and exporters. Below them come players who are setting up processing units, which will receive palm oil imports and export bio-diesel. Lurgi, the reputed European firm, is waiting for the market for the really big plants to open up. Says Amitava Banerjee, Lurgi’s GM (Technology), “In our plants at one go jatropha seeds can be converted into bio-diesel. We have set up one 30 tonne per day plant in Kakinada and we have also sold technology to Nova Bio Diesel in Panipat. A 10,000 tonne plant costs Rs 20 to Rs 25 crores.” But huge exports based on imports of vegetable oils do not exploit the full economic potential of bio-fuels. “We do not think this the way to go,” says Kureel. “The idea behind bio-fuels should be to provide India with energy security and simultaneously to provide an opportunity to farmers. Otherwise one can simply import fuel.”

GROWING MORE TREES :

In the absence of a national policy on using biofuels in transportation, states and entrepreneurs have been cutting their own paths, seeking to create local markets and make the best of the growing international demand. Uttarakhand and Chhattisgarh have invested the most in jatropha. Uttarakhand has forged a three-way partnership involving the state government, the forest development corporation and the entrepreneur. They together form the Uttaranchal Biofuel Board. “Many entrepreneurs approached us, but they all wanted land on lease for plantations. We wanted to develop a model where everyone benefits: the community, the environment, the entrepreneur and the government,” says Veena Sekhari, a senior Indian Forest Service officer on the Uttaranchal Biofuel Board. She says the Uttarakhand government understood that the entrepreneur required certainty of raw material supply. So the Forest Development Corporation (FDC) was brought in to supply the seeds and the saplings were planted on Van Panchayat land for cultivation by people, invariably the poorest of the poor who get wages and Rs 3.50 per kg of seeds. So far, saplings have been planted on 200,000 hectares.

The entrepreneur’s role is to buy the seeds from the FDC and convert it into bio-diesel in Uttarakhand itself. The state government gets a certain percentage of the bio-diesel and the rest can be sold. Says entrepreneur Atul Lohia, who has teamed up with the Uttarakhand government : “I’m making an investment of Rs 21 cores to set up a plant for biodiesel. I hope to be able to produce 50 tonnes a day. But I’m not going to sell to the oil companies because they pay just Rs 26.50 a litre. I’m going to sell it to a whole range of other industries that can use it for their machines.” Lohia will pay Rs 3.50 per kg of seeds (though with wastage they will finally cost him Rs 5). Of this, fifty paise will go to the FDC. Of the remainder 15 per cent will go to the gram panchayat and 30 per cent to the collector of the seeds. The Van Panchayat will get 15 per cent. “We expect a yield of 300,000 tonnes from 100,000 hectares. Our total investment is about Rs 15 crores,” says Sekhari. In Chhattisgarh, jatropha is an indigenous tree. Its uses have been known by tribals for a long time. CS Patel, a farmer, came to the Winrock conference from Basna Zilla, 136 km from Raipur in Chhattisgarh. Last year,Patel saved Rs 500,000 from selling jatropha saplings. A small wiry man, clutching a dairy and mobile phone and dressed in adhoti- kurta, Patel has a hotline to the President of India who has been trying to grow jatropha at Rashtrapati Bhavan. “I have taken20 acres on a five-year lease from our local panchayat,” says Patel. “On that I run a nursery for jatropha. It is called the Ratanjyot Patel Nursery. I have distributed saplings to the Chhattisgarh government, to entrepreneurs and most of all to the local farmers. When the land around their fields is laying vacant why not plant jatropha and earn some extra money. Even if it takes two or three years, why not earn some extra cash from land lying empty is what I tell them.” Patel says it is a myth that jatropha does not need water. It is important to have a tubewell. He buys seeds that are collected from the wild by poor people. He found that of his saplings, 60 to 65 per cent survive. Sagun Saxena has an MBA in social entrepreneurship from Oxford and a chemical engineering degree from the University of California Berkeley. He and Shashank Verma set up

CleanStar after a project they did on socially responsible businesses at Oxford. CleanStar has taken investments to build a biofuel business based on jatropha in the backward Beed district in Maharashtra. The CleanStar business plan involves using degraded land to grow jatropha. The biofuel will be sold for use in tractors and for other local requirements and also for transportation. As seed cake it will serve as fertiliser and be used in biogas and biocoal plants. Bio-diesel oil depots can be set up though modalities for that have not been worked out as yet. The project hopes to generate employment and thereby reverse migration. It will provide cheaper fuel alternatives and create infrastructure. It hopes to reduce greenhouse gases, slow down land degradation and improve water management. The project is in Phase 1 where CleanStar has acquired 50 acres, which is five per cent of the land targeted for plantation. The idea is to show the local people that it is possible to grow trees on the degraded land. In the next stage CleanStar will take land on lease to account for 30 per cent of the targeted plantation and then in the third stage go in for contract farming for the remaining 65 per cent. The challenge that CleanStar has taken up is to increase scale without passing on risk to the farmers. To achieve this, CleanStar’s supporters have given the business five years to produce financial results and not a shorter deadline of two or three years. The 50 acres CleanStar has acquired have been divided into 12 demonstration plots with some 15,000 trees. Local people have been involved in collecting jatropha seeds and planting the saplings to build their confidence. “They just didn’t think it was possible at first,” says Saxena.