Agri So rces

Sources

A Business
Solution to
Energy for
Cooking
Acara Challenge 2010

Rosa Guzman Rupal Naidu

Shannon Higgins Madhumita Sarkar
Masumi Izawa j p Singh
Rajdeep g
Beth Roberson Nishant Sonthalia
Priyanka Watane
Problem: Provide stable, affordable,
gy for cooking
local access to energy g

As wood becomes more difficult to forage

andd the
th price
i off LPG rises,
i communities
iti
in rural India need a steady and
affordable energy source for cooking.

A myriad of efficient stoves have been

developed over the years to improve the
ambient air quality for the user
user, nonetheless
nonetheless,
these stoves rely on energy sources that are not
always locally sourced.

Poor road infrastructure and vastly scattered

localities make the distribution access to
appropriate cooking energy sources a challenge
in rural India
India.
Business Profile: Agri Sources

AgriAble
g Sources connects goals
rural communities stability provide an economically
throughout India to and ecologically sustainable cooking
sustainable services and fuel
products necessary for
affordability offer a less costly
affordable and efficient alternative to LPG
cooking.
source locally utilize local
agricultural and human resources to
further reduce costs
Proposed
partnership
access decentralize the
with: g fuel for cheaper
distribution of cooking p
and easier access
Agri Sources Business Model

Community Self Help Group run and finance decentralized business for the 
p
production of pellet fuel using agri‐waste
p g g

3 stakeholders contribute to implement solution

Self Help Group

Facilitator: 
Source of 
educator, ,
stove and 
t d Financing and 
Fi i d
manufacturer 
pelletizer  operations
and  
technology
distributor
Agri Sources Business Model

Phase 1 Develop self help group and secure funding

Phase 2 Purchase stoves for house and pelletizers to produce fuel

Phase 3
Phase 3 Start –up production

Phase 4
Phase 4 Operation by self help group
p y pg p

Phase5 Monitoring maintenance and continuing education

Monitoring, maintenance and continuing education
Role of stakeholders in each stage of
business model
WOTR Provides AgriAble Sources  Self Help Group
Provides
Phase 1 Knowledge and  Human capital, 
help aggregating  community 
group and applying  information, 
for funding
for funding stability
Phase 2 Technology Manufacturing and  Money for the 
distribution purchase of 
materials
Phase 3 Assistance to start  Employees,
up and operate revenue, and waste
business
Phase 4 Employees, 
revenue, and waste
Phase 5 Information Employees,
p y ,
revenue, and waste
Agri Sources role will be as facilitator

R
Responsibilities
ibiliti S
Sources of Funding
f F di

• Identify potential  • Revenue from sale of 
community partners stoves and pelletizers
• Implement projects • Fees from continued 
assistance in start up
assistance in start‐up 
and maintenance

Large, scalable market translates to a tremendous opportunity for AgriAble Sources in 
the role of facilitator.
 A Scalable Endeavor

Image source: Google Images
Indian market presents tremendous
p
potential
Estimated 
Percent 
Households in 
Households in Revenue
Revenue  Potential Project 
Potential Project
market we 
Rural India per  Revenue
can capture
household

138,000,000 2.0% 800 INR $50,000,000 

In terms of market size, the business opportunity presents a compelling 
opportunity.
Agri Sources is cheaper and
more efficient than competition
AgriAble Sources BP EnviroFit Local/Existing System
Stove
Stove  WOTR stove
WOTR stove  Urja stove
Urja stove       various stoves LPG stove; traditional 
various stoves     LPG stove; traditional
Product 800 INR 675 INR  500‐2000 INR chulha
pellets            pellets varies depending  LPG ‐ 450 INR per 
3.5 INR per kg 4 INR per kg on type of stove  cylinder; biomass 
Fuel Product
Fuel Product
purchased (wood and dung) ‐
free but limited
decentralized; no  centralized;  varies depending  LPG ‐ centralized and 
personal travel personal travel 
personal travel  personal travel on type of stove 
on type of stove travel is required every 
travel is required every
costs incurred due  costs incurr if  purchased 1.5 months to refill 
Distribution
to local sourcing fuel cannot be  cylinder; biomass is 
delivered to  decentralized however 
community  l
limited 
d

The combination of an efficient stove product, affordable fuel, and direct access to the 
fuel source make for a well‐rounded convenience factor for the user who chooses 
AgriAble Sources.
Implemented correctly business will be
sustainable

Potential Market is 138 million households

R li bl di
Replicable distribution
t ib ti model
d l

Superior to competition

Effective implementation and management will make AgriAble an effective enterprise.
p g g p
Sustainability of Business

Risk Management
Competition Consumer education
• Stove models
• Possibility of newer, cheaper • Focus on lower price
technology emergence • Demonstrate benefit of “clean” fuel

M k t
Market Utilize traditional supply chain
• Scalability; gain buy-in and distribution model
• Accessibility; distribution • Empower community

Operations
Pilot Community
• Agri-waste availability
fluctuations
• Gain insights
• Pelletizer repair and
maintenance

Operations in pilot community will answer risk and

management
g issues
 Pilot Community

Image source: Google Images
Pilot Community: Bhivri Village, Pune

Bhivri Village Characteristics
Population: 4500

Number of Households: 900

Number of Households: 900

Average Income: 80,000 INR 

T i l
Typical occupation: agriculture  
ti i lt

Current energy usage: LPG and biomass 

General cooking needs: 3 hours per day
Practicality and ethnographic research
suggest
gg positive
p response
p
High Fuel Cost
INR 
LPG for 
4,056 INR 
cooking
300
Coal for
Coal for 
water
INR  Field ethnography
1,800
conducted in Bhivri
Total: 6,156 INR indicate that villagers
8% of Average Annual Income are open to adopting
in
i our Target
T t Community
C it low cost solutions.

Behavior and economics suggest that the target market will be eager to adopt the product.
Supply Chain and Distribution Model

Government
Agri
g Sources Self-help Loan

Pelletizer Stove Village Self Help Group

Agri-Waste

Participating
Villagers
Village Pellet
Production Hub
Pellets
Cost of an AgriAble Solution to the
End User

One-time stove cost 800 INR

Biomass Pellet cost per kg 4 INR

Biomass pellets needed per hour (kg) .75 INR

Hours stove is used per day 3 hours

Biomass pellet cost per month 270 INR

Biomass pellet cost per year 3240 INR

Biomass pellet cost per year with one time stove fee 4,040 INR
(less than current cost of fuel in pilot)
Resulting in Long Term Cost Savings for
our End-User
Loss of  AgriAble 
Annual Fuel  Cost Savings for 
g
Government
Government  Solution
Solution 
Cost in Pilot  End User in First 
subsidy for  Stove and 
Community Year
LPG Pellet cost

6,156 INR 320 INR 4,040 INR 2,436 INR

Cost Saving on Fuel frees up cash  for other uses. Cost savings to the end user 
will increase in second year to  3,236 INR because stove will be paid for.
Market Size: Pilot Community

Bhivri Village, Pune District, India

Number of  Households 900 households

Capturable Market in Community (50%) 450 households

Stove Cost 800 INR

360,000 INR
Potential Revenue from Sale of Stove in Market $8,124.00
Moving forward – Potential field work to
implement pilot project

Focused Market Research Infrastructure Research

• Turn market into 
market into • Energy availability
customers                          • Seasonal fluctuations in 
‐ Build customer profiles    agri‐waste
‐ Identify price
Id if i

Proof project is a scalable endeavor justifies moving forward with the pilot project.
 Impact

Image source: Google Images
Impact will be monitored and evaluated
with metrics

Current Problem Evaluating Metrics Goals for Pilot

Poor indoor air  # of households reached 400

quality from 
q y
traditional cooking  Improvement in indoor 
N/A
methods quality from new stove

Household expense on fuel 600 rupees/month
Clean energy sources 
are unaffordable Average difference over other 
‐400 rupees/month
fuel sources
fuel sources

However, full impact will not be easily evaluated because it will touch many different  
areas of household and community life.
y
Potential impact of project cascades across
various aspects in the value chain

Environmental Impact
• Reduction in carbon 
Reduction in carbon
dioxide emissions
• Aesthetic improvements
Health Effects
• Reduction in diseases 
Reduction in diseases
from poor indoor air 
quality

Social Changes
• Time freed for other 
Time freed for other
pursuits
Economic Growth
• Growth of local business 
Growth of local business
revenue
• Local employment 
opportunities

AgriAble Sources has within it a triple bottom line impact of economy, people and 
environment. 
i t
 Questions?

Image source: Google Images