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2. business operations
3. business plans

Business Plan
Turning waste into fuel
A c a r a
C h a l l e n g e
F a l l
2 0 1 1
Source: http://www.thestar.com/news/world/article/1026114--why-india-can-t-feed-her-people
University of Minnesota (UMN) &The Energy Research Institute (TERI)
Alexander Schmidt, Anne Haws, Charlie Butterworth, Indira Manandhar, Zachary McGill
Harmeet Kaur, K. Aditya Reddy, Nida Yamin, Nitya Rachel George
Business Plan
Mentors
Kaleel Ahmed
Rahul Raju Dusa
Business Plan 2
Table Of Contents
Introduction
3
Problem
4
Business Description
5
Solution
5
Process
6
Value Proposition
6
Key Resources
7
Channels
8
Target Market
8
Key Activities
9
Time Line
9
Plan
9
Business Environment Analysis
10
Why Others Have Failed
10
Safety Concerns
10
Market and Competitor Analysis
11
LPG
11
Kerosene
11
ROT2ROTI Marketing
11
Financial Request
12
Start-up Cost
12
Initial Cost
12
Appendix
13
A - Team Profile
13
B - ROT2ROTI Business
14
C -1.a Financials; Start-up
15
C -1.b Financials; Start-up
16
C -2 Financials; Year 1
17
C -3.Financials; Income
18
C - 4.Financials; Break Even
19
D- Biogas Digester Specifications
20
E- Regulations and Subsidies
21
F - Risks and Mitigations
22
G - Labor Detail
23
H - Case Studies
24
I - References / Acknowledgement
25
Business Plan 3
Introduction
ROT
ROTI
Turning waste into fuel
Imagine walking along the streets of a slum in New Delhi,
India. All around you are people that struggle on a daily
basis to survive. Two key elements associated with this
everyday struggle include: acquiring food; and the necessary fuel to cook with. Across the street you notice an interesting sight. The largest fruit and vegetable market in Asia,
with vast amounts of wasted, rotting food. Not only is this
ironic and heartbreaking, but this is reality. ROT2ROTI is
the solution that will link these two problems, in such a way
that is beneficial to both the market and the slum residents.
Our plan is to introduce a local, community scale biogas
digester. We will use the rotting organic waste from the
market to produce clean, renewable fuel for the nearby
struggling families. The biogas fuel will be offered at a
lower rate than the current subsidized options. The digester
model is taken from a proven rural model and will be ap-
Source: http://www.ashden.org/media/
international_photos/2005
plied to the urban setting using vegetable waste, which is
more efficient than the typically used feedstock, cattle manure. We will employ three 6.7 ton batch detesters located in the Shalimar Slum that will provide 100 families in that slum with cylinders of biogas. Our
plan reduces an enormous waste problem in a market and provides the people in the slum with a much
needed alternative (cheaper) source of fuel. What’s more, our digester's byproduct is an ultra rich fertilizer
that we can sell to the same farmers that are bringing vegetables to the market. ROT2ROTI, turning waste
into fuel.
To implement this innovative idea, we are asking for funds to support our pilot test, and two members to
attend the ACARA Summer Institute in June.
Business Plan 4
Problem
Source: http://wastelines.com/2010/11/14/garbage-around-delhi-azadpur-mandi/
Azadpur Mandi is the largest wholesale produce market in Asia, covering more than 90 acres. The market is a
national distribution center for farmers who bring their produce to sell. A wide variety of fruits and vegetables including apples, oranges, bananas, mangoes, potatoes, garlic, onions, and ginger are sold. Almost all of the fresh
agricultural produce is transported from Jammu & Kashmir (the northern hill states of India), which are about 589
km from New Delhi, and from Himachal Pradesh, which is about 480 km away. Unfortunately, much of the produce that arrives at the market cannot be sold because it has spoiled or was damaged in transit. More specifically,
125 metric tonnes of organic waste is produced on a daily basis at Azadpur Mandi [1].
Next to this market live approximately 400 families in a slum known as the Shalimar Slum. The average family in
Shalimar earns between $1 and $2 per day. One of the major expenditures for these families is that of cooking
fuel. Based on current rates, this amounts to roughly one quarter of their annual income.
ROT2ROTI sees an enormous opportunity within this situation. First of all, fruit and vegetable waste contains
more than double the energy potential per unit weight compared to other organic material that is used in biogas
production, such as cattle manure [2] Second, this massive volume of waste is currently being transported to the
landfill where it decomposes, releasing methane into the atmosphere. This is the same methane that could greatly
benefit the people of Shalimar (and other communities) if utilized for cooking fuel. In addition, due to the proximity of Azadpur Mandi and the Shalimar Slum, building an on-site community size biodigester would alleviate a
social problem in a very sustainable way. Lastly, the digestate collected when a batch is finished is the most effective fertilizer a farmer can buy.
Business Plan 5
Business Description
Solution
ROT2ROTI is a renewable energy production business that
will convert the waste generated from the Azadpur Mandi
into fuel for the adjacent Shalimar Slum . Through this service ROT2ROTI is providing cheaper access to fuel and
creating jobs for the residents of the Shalimar Slum, while
reducing the environmental problems that landfilling the
Source: http://wastelines.com/2010/11/14/garbage-around-delhi-azadpur-mandi/
waste creates. The fuel will be produced with an anaerobic
digestion process in a small-size, batch process biodigester.
This fuel will be in the form of biogas, a renewable resource formed during the decomposition of organic waste.
Our biogas is 30% less expensive than the current cost of
fuel. In addition, the byproduct from the biogas production
will then be sold back to famers as bio-fertilizer, which will
increase their crop yield and ensure soil productivity for
Source: http://bio-gas-plant.blogspot.com/2011/08/biogas-generator.html
years to come. ROT2ROTI will provide Shalimar Slum
residents with a biogas-compatible burner for cooking,
along with a cylinder (tank) of fuel. The members of the
Shalimar Slum will also have an active role in the production of the biogas. ROT2ROTI will employ ten Shalimar
Slum residents (see Appendix H), who are continuously
faced with unemployment and poverty.
Source: http://www.ashden.org/media/international_photos/2004
Process
1. First, 8 hired slum residents will collect 6.7 tonnes waste from the Mandi with wheel barrows and bicycle
rickshaws. The waste will be brought to ROT2ROTI’s location in the Shalimar Slum and put into the batch
reactor.
2. We will have 3 different 6 cubic meter batch digesters that each will hold 6.7 tonnes of waste. Each digester
takes 40 days for the full reaction to take place, producing biogas during the reaction. The digesters will be offset by 13 days, so there is a continual supply of biogas.
3. The biogas is continually being compressed into cylinders at 4000 psi. The slum residents will pick up the
cylinders at the depot, where they are currently buying fuel.
4. At the end of the batch’s life, the laborers will take out the now decomposed fertilizer and package it into 50
kg bags, ready for sale. And the digester is ready for another batch of waste.
Business Plan 6
...Business Description
Value Proposition
The value of this business plan falls into two segments, customer value and social value. Although in the
beginning, our proposal is just a small step towards solving some of India’s largest problems, we believe our
plan is replicable and that upon proving that our model works, we can begin to play a greater role in solving
these problems. In addition, we can hopefully inspire others to do the same.
Customer Value
Currently, the residents of the Shamilar slum earn between $1 and $2 per day, for an annual income of $365
to $710. These same people pay approximately $128 per year for energy to cook their food. This becomes a
trade off for them between buying food and buying fuel to cook it with. More disturbing is that these energy
prices are subsidized by the Indian government and there is talk of these subsidies being lifted. This creates
the potential for an even greater burden on the slum residents.
Figure 1: Cycles of Mutual Benefits
Source: http://www.cbc.ca/dispatches/2010season/2010/10/21/october-21-24-2010-from-palermo-sicily---losangeles---new-york---kandahar---phnom-penh-cambodia/
Business Plan 7
...Business Description
Social Value
The customer benefits of our solution are simple, but the social benefits are more complex. First, is the problem of waste. The waste that is being generated by Azadpur Mandi is currently going to a landfill where it decomposes and emits methane into the atmosphere. Methane is one of the most potent greenhouse gases and a
major contributor to global climate change. One day’s waste from Azadpur Mandi gives off 10,000 cubic meters of methane as it decomposes. Our solution captures this methane produced from the waste. When methane
is then burned as fuel, the gas released into the atmosphere is in the form of carbon dioxide which is over 20
times less potent of a greenhouse gas, compared to methane [7]. In addition, we will [marginally] decrease the
rate at which India’s landfills are being inundated. In sum, our solution replaces traditional fossil fuel energy
sources with renewable, sustainable energy.
Another byproduct of anaerobic digestion is a high nutrient biofertilizer. This biofertilizer enhances water
holding capacity and soil aeration, accelerates root growth and inhibits weed seed germination [8]. Not only
does this fertilizer contain significant nutrient levels, but it also is very sustainable. Alternative chemical fertilizers actually deplete the quality of the soil over time and their manufacturing process is energy intensive. As
a result, our distribution of bio-fertilizer back to the farmers further increases the social value of the business
plan.
Key Resources
Organic fruit and vegetable waste
Azadpur Mandi will serve as our continuous source of (high yield) organic waste. More specifically, per kilogram of fruit and vegetable waste 91 liters of biogas can be generated [2]. The amount of waste that will be
acquired is 6.7 metric tonnes every 13 days, enough for one batch reactor. ROT2ROTI is in contact with the
APMC and it has been communicated to us that this amount of waste can be taken from Azadpur Mandi at
no cost, since it ultimately saves the APMC money.
Land plot for biogas plant
ROT2ROTI has a verbal negotiation with the Shalimar Slum Pradhan (community leader) that a small plot
of land can be leased for $100 per month. The Pradhan was pleased to let us lease the land due to the social
benefit to the slum. The area of land that ROT2ROTI is looking to lease is 10m x 10m. This includes space
for the three batch digesters, compressor, large storage tank, and tank vending station. As previously mentioned, the proximity provided by the Shalimar Slum is key to ROT2ROTI’s plan, as it will reduce transportation costs and allow the slum residents to be employed by us.
Business Plan 8
...Business Description
Expertise
One of the key elements to the success of ROT2ROTI relies on the hiring of a qualified, knowledgeable
maintenance worker. Proper knowledge of the specifics of biogas production (anaerobic digestion) is required due to the high risk of technical failure of the system. The employee must be familiar with common
reasons for biogas failure and their remedies. This includes an understanding of temperature and pH effects,
inoculant, and feedstock criteria. The ideal candidate will have a Bachelor’s Degree in Chemistry or an
equivalent discipline.
Channels
Distribution
Biogas will be compressed from the batch digesters into a large storage tank. From this storage tank, the
smaller individual cylinders will be filled. Filled cylinders will be kept on site where customers will come to
swap their empty tanks. A one time security deposit will be required in order to receive a tank. This system
will provide significant flexibility for distribution as well as opportunity for future expansion of the system.
Biofertilizer will be distributed at our plot in the Shamilar Slum. Due to our close proximity to the market and
our highly competitive price of fertilizer it is attractive for farmers to buy directly from us.
Biofertilizer will be distributed at Azadpur Mandi at a small vendor stand. ROT2ROTI will have a scale so
that individual farmers can purchase the exact amount which they desire. The biofertilizer will be packaged in
heavy duty plastic bags, and sealed with a zip tie. This will process will be both simple and efficient.
Target Market
Each phase of ROT2ROTI’s business plan implementation will focus on a different target market:
Phase I
Phase I of the business model includes the production and distribution of biogas to the customer: the residents
of the Shalimar slum. It also includes selling the byproduct of the biogas digestion system as bio-fertilizer to
farmers. The specific farmers to be targeted include those who are currently selling their produce to Azadpur
Mandi. By focusing on these farmers, we are catering to a centralized group of people already associated and
familiar with the market.
Phase II
In phase II we look to expand through replication. Once our plan is implemented, tested, and details are
smoothed out, we will focus on replicating our model to other slums and communities near Azadpur Mandi.
In the first five years of operation we will be able to afford to create several more digesters. We also believe
that the community-sized biogas solution is viable (and replicable) for many other markets in New Delhi and
throughout India.
Business Plan 9
...Business Description
Key Activities
Implementing our plan will require distinct steps. The order by which theses steps are carried out will be critical to
the overall growth and success of the model.
Timeline
Plan
Prior to implementation, ROT2ROTI will send two team members from Minnesota, to New Delhi, to
meet Teri University counterparts, on a preliminary, inception business trip. The purpose of the trip is to
solidify necessary contracts and partnerships, and to determine the feasibility of the business plan without
the full start-up cost.
The necessary contracts and partnerships include: APMC no fee waste removal (as discussed with the
head of the Sanitation Department); Land lease from the Shalimar Slum Pradhan (based on the $100 per
month lease quote); Azadpur Mandi vendor stand lease; Construction labor agreement; and Employee
statement(s) of hire.
Once the main contracts and partnerships are complete, and the feasibility is confirmed, ROT2ROTIwill
begin the actual business model implementation. For the biodigester construction, we have estimated a four
weeks duration. This time frame will also provide adequate time for the acquisition of key business assets.
These assests include: Rickshaws for the round trip transportation of waste to the biodigester and fertilizer
back to the Mandi; Compressor; Distribution tanks; and Biogas burners
Marketing will also be conducted during this time frame, in order to ensure a starting customer base. This
marketing will be for both the biogas and the biofertilizer. In addition, due to the biogas production lag
time (approximately another two months after construction is complete) more time for marketing will be
available. Training the facility operator with respect to maintenance and safety procedures will also take
place during the construction and lag time. Finally, after three months the sale of biogas and biofertilizer
will begin.
Business Plan 10
Business Environment Analysis
Why others have failed?
ROT2ROTI is well aware of the fact that a significant number
of biodigesters have failed in the past. However, the vast majority these plants are in rural areas and are operated by individual
farmers who have very basic knowledge and training in biogas
production (if any at all). Several sensitive factors such as feedstock consistency, loading rate, temperature, pH, hydraulic residence time, and inoculant addition affect the biogas production
process. Any one of these delicate parameters can cause failure
in the digestion process if a small error is made. Therefore,
ROT2ROTI believes that proper knowledge of the anaerobic
Source: http://realestatecostarican.com/blog/?p=213
digestion process and regular maintenance will significantly Biogas Digester in Residence, India
reduce our chance of failure.
Safety Concerns
Safety is another extremely important element to ROT2ROTI’s success. We plan to implement many layers
of safety precautions for this reason. There are three main areas of concern in the production of biogas. For
fire and explosion mitigation we will be producing biogas with approximately 60 percent methane, which is
a combustible concentration at normal conditions. For disease control, the digestion process naturally uses
some bacteria that may cause disease. Asphyxiation could be due to biogas (methane and carbon dioxide)
displacing oxygen, or potentially poisonous hydrogen sulfide. For an additional list of safety precautions see
Appendix H.
Mitigation Steps
The safest solution to the fire/explosion and asphyxiation risks is ventilation. Our digester will be outdoors
for maximum ventilation. This eliminates the risk of asphyxiation due to oxygen depletion by keeping open
air conditions which removes the likelihood of methane or carbon dioxide accumulation. All necessary precautions will be taken in the construction of the digester as well. These include flame traps, proper ventilation, and appropriate electrical precautions. Before the plant is in production, safety tests will be performed
such as leak tests, tightness checks, flammability tests, and gas concentration level tests. Proper safety training will be provided for all of our workers. Proper handling and washing techniques will be provided to minimize the risk of disease. Precautions regarding safe zones around the digester, gas storage, digester operations, shut-down, periodic safety checks, etc., will be standardized and documented.
Business Plan 11
Market and Competitor Analysis
The main competitor in the fuel market in India is the government. Currently the government puts a cap on
the price of LPG and kerosene to lower inflation in the economy. In recent years however, this cap has been
increasing, as the prices of subsidized and unsubsidized government provided fuel are increasing. This increase in prices has led the Indian government to look towards alternative energy sources that could eliminate these prices, and alleviate the cost burden on the government. The adoption of the Ministry of Nonconventional Energy Sources in India in 1992, has designated a higher status to renewable energy technology programs. The new policies aim to promote modernization and commercialization of biomass production,
combustion, densification, and electricity generation. Our biggest competitor is also an advocate of our product. Current government policy initiatives for biogas include: technical assistance and training nationally,
service charges or salary support to implementing agencies, and subsidies for plant construction. These subsidies could account for up to 40% of the initial start-up cost for a mid size biogas digester.
LPG
Currently, households purchase 3 million LPG cylinders per day and is steadily growing at 8% per year. To
meet the demand, approximately 23% of total LPG will be imported for 2011-12. To encourage households
to use LPG, the Indian government has subsidized the cost paid by consumers.
Kerosene
The government of India subsidizes the price of kerosene for use in cooking and heating, as part of the Public Distribution System which is designed to help eradicate poverty by ensuring food security for families
with incomes below the poverty line (200 million citizens). The majority of the rural population rely on kerosene for fuel for cooking, heating, and lighting. Though LPG is in high demand in urban areas, in rural areas, kerosene has been the best option for cooking fuel because of its availability and accessibility. Currently,
residents of the Shalimar Slum are expending $54 per year for using kerosene, and $72 per year for using
LPG, for a total of $126 per year. Our biogas will be sold at $90 per year.
We believe, with such high demand for fuel in India and also in light of the social, environmental and economical benefits to our targeted slum area and community, ROT2ROTI’s biogas is a plausible, marketable,
and sustainable product.
ROT2ROTI Marketing
ROT2ROTI is in a uniquely fertile position for marketing. Since business operations happen in close proximity to the customers, who live in a community that is close socially and geographically, word of mouth
will be especially effective. Furthermore, we have identified that members of this community often compete
for the cheapest products. If this method proves inadequate we will engage in educational campaigns or incentivize community reps for our products.
Business Plan 12
Financial Request
With a raw material of no cost and two favorable income streams, our business model is very profitable. A
start-up cost of $27,300 is very significant, but our high revenue displaces this cost quickly. With a very conservative ramp-up income , we will break-even in our 30th month. After this first year, we have a annual net
income of over $30,000.
Start-up Cost
Start-up costs are further broken down in Appendix C.1a and C.1b. A large portion of the start-up costs are in the
components that we will be providing for the customer.
Start-up Costs
Digester Construction
Customer Components
Other Start-up Components
ACARA Summer Institute
Pilot Test
Total Start-up Cost
$1,700.00
$9,800.00
$5,800.00
$8,800.00
$1,200.00
$27,300.00
Initial Cost
ACARA Summer Institute
For 2 people
Component
International Travel
Domestic (India) Travel
Tuition for Summer Institute
Room and Board
Cost
Rs
4000.00
208000
200.00
10400
3600.00
187200
1000.00
52000
Total Cost
457600 Rupees
$8,800.00 Dollars
USD
Pilot Test
Component
Biogas Stoves
Cylinders (Tanks)
Biogas to Sell
Biofertilizer to Sell
Travel to Dehli
Cost
USD
Rs
60.00
3120
40.00
2080
100.00
5200
200.00
10400
800.00
41600
Total Cost
59280 Rupees
$1,200.00 Dollars
We are asking for $10,000 of financial support for our initial testing period which includes the $8,800 for the
ACARA Summer Institute and $1,200 for a pilot test to determine the feasibility of our business and test our assumptions.
Business Plan 13
Appendix A
Team Profile
The ROT2ROTI team consists of nine students, five of whom are from the University of Minnesota (U of M),
Twin Cities, and four are from The Energy and Resources Institute (TERI), New Delhi, India. The students represent various disciplines, including Civil Engineering, Architecture in sustainable Design, Mechanical Engi-
neering and Entrepreneurship, Economics, Social Work, Psychology and Physiotherapy. As members of
a diverse group, the students have had the opportunity in developing this project to hear, consider, and address different perspectives. The ROT2ROTI solution was designed through that interaction.
Name
Qualification
Institute
Alexander Schmidt
MS, Civil Engineering
BS, Manufacturing Engineering
University of Minnesota
Anne Haws
BS, Civil Engineering
University of Minnesota
Charlie Butterworth
BS, Civil Engineering
BA, Biology, Society and Environment
University of Minnesota
Indira Manandhar
MS, Architecture in Sustainable Design
MA, Urban Planning
University of Minnesota
Minnesota State University
Zachary McGill
BS, Mechanical Engineering
BS, Entrepreneurship
University of Minnesota
Harmeet Kaur
BA, Social Work
MA, Sustainable Development Practice
TERI University
K.Aditya Reddy
BA, Economics
MA, Sustainable Development Practice
TERI University
Nida Yamin
BA, Physiotherapy
MA, Sustainable Development Practice
TERI University
Nitya Rachel George
BA, Psychology
MA, Sustainable Development Practice
TERI University
UW - Stout
Business Plan 14
Appendix B
ROT2ROTI Business
TRANSPORTING WASTE BY BICYCLE CARTS
BIOGAS
ROT2ROTI
SITE
AZADPUR MANDI WASTE
BIOGAS
BioDigester
BIOGAS
BIOGAS
BIOGAS
BIOGAS
SHALIMAR SLUM AREA
AZADPUR MANDI, MARKET
ROT2ROTI
MANURE
AGRICULTURAL FARMS
ORGANIC FRUITS AND VEGETABLES
Material
Stone
Sand (30 ltrs)
Gravel (30 ltrs)
Iron Rods
Cement 50 kg
Skilled Labor
Unskilled Labor
Emulsion Paint
Inlet Pipe
Gas Pipe
Gas Pipe Components
Main Gas Valve
Water Drain
Gas Tap
Neoprene Rubber Hose Pipe
Pressure Safety Relief Valves
Digester Construction Costs
Imported
or Local
local
local
local
local
local
local
local
imported
local
local
local
local
imported
local
local
local
USD
6.94
0.69
0.80
0.65
6.46
20.83
2.81
6.46
1.25
5.13
0.42
18.75
1.88
3.54
0.52
10.42
Rs
333
33.33
38.33
31.33
310
1000
135
310
60
246
20
900
90
170
25
500
Price/unit
Quantity
4.5
81
35
14
18
5
30
2
4
10
30
1
1
2
2
2
Units
m^3
bags
bags
kg
bags
men/day
men/day
ltrs
m
pcs
unit
no
no
nos
m
unit
USD
31.22
56.24
27.95
9.14
116.25
104.17
84.38
12.92
5.00
51.25
12.50
18.75
1.88
7.08
1.04
20.83
Rs
USD
1498.5 93.66
2699.73 168.73
1341.55 83.85
438.62 27.41
5580
348.75
5000
312.50
4050
253.13
620
38.75
240
15.00
2460
153.75
600
37.50
900
56.25
90
5.63
340
21.25
50
3.13
1000
62.50
Total Cost
Cost / Digester
4495.5
8099.19
4024.65
1315.86
16740
15000
12150
1860
720
7380
1800
2700
270
1020
150
3000
80725.2 Rupees
1681.78 Dollars
Rs
Total Cost (3 Digesters)
Business Plan 15
Appendix C.1a
Financials:
Start-up
Component
Compressor
Biogas Holding Tank
Fertilizer Storage Slab
Wheel Barrows
Bicycle Cart
Other Start-up Components
Component
Gas Stoves
Cylinders
Neoprene Rubber Hose Pipe
Pressure Regulator
Customer Components
Imported
local
local
local
local
local
Imported
local
local
local
local
Rs
800
2000
25
300
USD Rs
4166.67 200000
1041.67 50000
208.33 10000
20.83 1000
83.33 4000
Price/unit
USD
16.67
41.67
0.52
6.25
Price/unit
Quanti1
1
1
4
4
Quanti150
150
150
150
Units
unit
unit
unit
unit
unit
Units
set
unit
m
unit
USD
4166.67
1041.67
208.33
83.33
333.33
120000
300000
3750
45000
468750 Rupees
9765.63 Dollars
Rs
Rs
USD
200000 4166.67
50000
1041.67
10000
208.33
4000
83.33
16000
333.33
Total Cost
200000
50000
10000
4000
16000
280000 Rupees
5833.33 Dollars
Rs
Total Cost (3 Digesters)
Rs
USD
120000 2500.00
300000 6250.00
3750
78.13
45000
937.50
Total Cost
Cost / Digester
USD
2500.00
6250.00
78.13
937.50
Cost / Digester
Total Cost (3 Digesters)
Business Plan 16
Appendix C.1b
Financials:
Start-up
-$100
-$100
Monitoring
Retained Earnings
Net Monthly Rev
Compost
Biogas Monthly Rev
Revenue/family
Number of Families
Revenues
$0
$0
$0
$0
$0
$7.5
$0
$7.5
-$1,188
$450
$300
$0
$75
$150
$7.5
$20
-$1,148
-$500
$75
$7.5
$10
-$1,111
-$500
-$7.50
-$33
-$3.75
-$20
$0
-$488
-$100
4
-$20
-$488
-$100
3
$825
$600
$225
$7.5
$30
-$1,185
-$500
-$11.25
-$66
-$20
-$488
-$100
5
$1,200
$900
$300
$7.5
$40
-$1,222
-$500
-$15.00
-$99
-$20
-$488
-$100
6
$1,575
$1,200
$375
$7.5
$50
-$1,259
-$500
-$18.75
-$132
-$20
-$488
-$100
7
$1,950
$1,500
$450
$7.5
$60
-$1,295
-$500
-$22.50
-$165
-$20
-$488
-$100
8
$2,325
$1,800
$525
$7.5
$70
-$1,332
-$500
-$26.25
-$198
-$20
-$488
-$100
9
$2,400
$1,800
$600
$7.5
$80
-$1,338
-$500
-$30.00
-$200
-$20
-$488
-$100
10
$2,475
$1,800
$675
$7.5
$90
-$1,341
-$500
-$33.75
-$200
-$20
-$488
-$100
11
$2,550
$1,800
$750
$7.5
$100
-$1,345
-$500
-$37.50
-$200
-$20
-$488
-$100
12
-$21,600 -$22,788 -$23,975 -$25,011 -$25,710 -$26,070 -$26,092 -$25,775 -$25,120 -$24,128 -$23,065 -$21,931 -$20,726
$0
$0
Total Monthly Costs -$21,600
-$1,188
-$500
-$500
Operational Costs
Startup Cost
$0
$0
Fertilizer Packing
Depot Commission
(5%)
-$21,500
-$488
Land
-$488
2
Manual Labor
1
-$100
-$100
Start-up
-$100
Recurring Costs
Months
Year 1 Financials
Business Plan 17
Appendix C.2
Financials:
Year 1
Business Plan 18
Appendix C.3
Financials:
Income
Income Statement
End of Year
Startup
1
2
3
4
5
Recurring Costs
-$200.00 -$1,300.00 -$1,200.00 -$1,200.00 -$1,200.00 -$1,200.00
Land Lease
-$5,850.00 -$5,850.00 -$5,850.00 -$5,850.00 -$5,850.00
Labor
-$400.00
-$240.00
-$240.00
-$240.00
-$240.00
Monitoring
-$1,295.00 -$2,400.00 -$2,400.00 -$2,400.00 -$2,400.00
Fertilizer Packaging
Depot Commission
-$206.25
-$450.00
-$450.00
-$450.00
-$450.00
(5%)
-$6,000.00 -$6,000.00 -$6,000.00 -$6,000.00 -$6,000.00
Operational Costs
-$459.00
-$459.00
-$459.00
-$459.00
-$459.00
Planned Batch Failure
-$21,500.00
Total Start-up Costs
-$21,500.00 -$15,510.25 -$16,599.00 -$16,599.00 -$16,599.00 -$16,599.00
Total Year's Costs
Revenues
$100.00
$100.00
$100.00
$100.00
Number of families
$90.00
$90.00
$90.00
$90.00
$90.00
rev/family
$0.00
$4,125.00 $9,000.00 $9,000.00 $9,000.00 $9,000.00
Biogas Rev
$0.00 $11,700.00 $21,600.00 $21,600.00 $21,600.00 $21,600.00
Compost
$420.00
$420.00
$420.00
Carbon Offset
$0.00 $15,825.00 $30,600.00 $31,020.00 $31,020.00 $31,020.00
Net Year's Rev
Retained Earnings
-$21,500.00 -$21,185.25
-$7,184.25
$7,236.75 $21,657.75 $36,078.75
Business Plan 19
Appendix C.4
Financials:
Break-Even
Break-Even Analysis
$30,000
$20,000
Retained Earnings
$10,000
$0
0
12
24
36
-$10,000
-$20,000
-$30,000
Break-Even will occur in the 30th month.
Months
48
60
Business Plan 20
Appendix D
Biogas Digester Specification
Biogas Digester Design : 3 Batch Biodigesters
1.1 Properties
1.1.1. Substrate: Vegetable and Fruit Waste
1.1.1 Availability: 125 tons/day, Free
1.1.2. Favorable Temperature, PH Value and C/N
Temperature: Mesophilic; 20°C to 35°C
PH value : Neutral PH and ranges 6.8 to 7.2
C/N ration : Ranges from 20:1 to 30:1
1.1.3. Hydraulic Retention Time (HRT): 40 days
1.2 Volume of Biodigester: 18 m3
1.3 Geometrical dimensions of the cylindrical shaped biogas digester body
Wall Thickness, t: 5 cm
Length, L: 3m
Width, W: 1.5 m
Height, H: 1.3 m
Gas Outlet
Gate Valve Weight
Pressure Relief Valves
Sludge Outlet Hatch
1.3 m
Floor Sloping 2° Towards Outlet
Gate Valve
1.5
3m
[Figure 1.
Sketch of Biodigester]
(Biodigester Business Handbook, 1985)
1.4 Biodigester Type: Batch type, Rectangular Cement Model
Business Plan 21
Appendix E
Regulations and Subsidies
Controlled by the Ministry of Renewable Energy, Government of India
According to the National Policy on Biofuels
2.0 THE VISION AND GOALS
2.1 The Policy aims at mainstreaming of biofuels and, therefore, envisions a
central role for it in the energy and transportation sectors of the country in
coming decades.
3.1 The following definitions of biofuels shall apply for the purpose of this
Policy:
i. ‘biofuels’ are liquid or gaseous fuels produced from biomass resources
and used in place of, or in addition to, diesel, petrol or other fossil fuels
for transport, stationary, portable and other applications;
5.15 Investments and joint ventures in the biofuel sector are proposed to be
encouraged. Biofuel technologies and projects would be allowed 100% foreign
equity through automatic approval route to attract Foreign Direct Investment
(FDI), provided biofuel is for domestic use only, and not for export.
5.17 As biofuels are derived from renewable biomass resources they will be
eligible for various fiscal incentives and concessions available to the New and
Renewable Energy Sector from the Central and State Governments.
Source: [http://www.mnre.gov.in/policy/biofuel-policy.pdf]
Business Plan 22
Appendix F
Risk and Mitigation
Risk
Gas releases
Mitigation
-Regularly check the whole system for leaks
-Use Air Tight Sealant
Improper preparation of influent
solids
Why it’s a Problem?
Hydrogen Sulfide gas, Carbon
Monoxide gas, Biogas are flammable, explosive or immediately
toxic
When cleaning the biogas digester, exit strategies are necessary
Could lead to failure of entire system
leading to blockage and scum formation
Temperature fluctuations
Could slow down system
pH Fluctuations (need 6.8-8.5)
Bacteria Sensitive to pH, and reaction could stop working
Corrosion of gas holder, Occurrence of H2S leading to corrosion
Could lead to leakage
Pressure Increases
Could lead to explosion
Climate of India and
low-cost insulating materials
(sawdust, bagasse,
grass, cotton waste, wheat straw)
Continuous monitoring of pH
within the feed and the digester,
additives
regular
cleaning and use of proper sealant,
H2S removed by passing over
ferric oxide or iron filings
removal of water condensate from
piping system, use of pressure
gauages
Confined spaces
Failure of Biodigester
Ladder and retractable hatch door
Using 3 different digesters
removal of inert
particles: sand and rocks
Business Plan 23
Appendix G
Labor Details
Labor Details
Days
Number Wage Hired
Employee Hired $/Day per yr $/yr Job Description
Security
2
2
365 1460 Guards the digester, tanks, and equipment 24 hours a day.
Guard
Refills Tanks for customers. Checks digester operation status.
Laborer
8
3
90
2160 At the start of each batch, employee will collect organic waste
from Azadpur Mandi in carts and bring it back to the digester
(2 days). At the end of each batch, employee will clean out the
digester, and put the fertilizer into 50kg packages to be sold (1
day).
Manager/
Salesmen
1
5
350
1750 Manages the laborers and directs laborers to make proper adjustments for each batch. Directed by the expert to adjust operation parameters. Also, sells the fertilizer.
Expert
1
20
24
480 Tests and verifies operation parameters. Directs the manager
to adjust operation parameters.
Total Payroll $/yr:
5850
Business Plan 24
Appendix H
Case Studies
Pakistan
In 2006 a case study was performed on a rural community in Pakistan to analyze the effectiveness of bottling compressed biogas for a community. The targeted village has a large biogas plant with a volume capacity of 60 cubic meters. First, the gas is sent to the compressor where the raw biogas is compressed to a
pressure of 1000 kpa and fed into a scrubber to remove CO2 from the system and improve biogas efficiency. The gas is then compressed further to 20,000 kpa and stored in Compressed Natural Gas cylinders.
The case study found that the cost of bottling biogas is $0.25 per cubic meter. The application of biogas in
a small rural community worked well in this situation because of its economic feasibility, continuous supply of energy, and opportunity to provide employment to the community. The results of this study show
evidence of economic and social sustainability of a compressed cylinder distribution system for a low income community [4].
Thiruvananthapuram, India
A market level biogas plant was built in Thiruananthapuram,
India in march 2009 by the company Biotech NGO. This plant
consists of a 25 meter cubed digester with a floating drum and a
slurry continuous feed. The substrate in the plant was from the
local fish market. The biogas is used to produce electricity with
the help of special biogas generators. Biotech NGO’s employment structure worked well to ensure proper maintenance of the
plant as well as including some community involvement. The
market level plants are owned by local bodies by operated by
Biotech on a conceptual basis. This digester was monitored for
chemical composition and potential problems. Results from this
analysis show that market level biogas plants can be successful
in offering decentralized waste treatment systems on the basis of
proper waste disposal. The biogas digester in Thiruvananthanpuram, India is especially successful because they offer
semi annual operation maintenance contracts with the ever
changing local governments [5].
Market of the Sreekaryiam Grama Panchayat, Thiruvananthapuram (Picture: Florian
Heeb).
Business Plan 25
Appendix I
References
[1] "APMC." Interview by Harmeet Kaur. Print.
[2] Vijay, Virendra K. Biogas Technology: A Fit Option For Rural Energy. Indian Institute of Technology, New Delhi.
[3] Vasudeo, G. Biogas Manure: a viable input in sustainable agriculture - an integrated approach.
United Nations Asian and Pacific Centre for Agricultural Engineering and Machinery.
[4] Ilyas, Syed Zafar. "A Case Study to Bottle the Biogas in Cylinders as Source of Power for Rural
Industries Development in Pakistan." World Applied Sciences Journal (2006). Print.
[5] Heeb, F. 2009. 'Decentralised anaerobic digestion of market waste, Case study in
Thiruvananthapuram, India'. Swiss Federal Institute of Aquatic Science and Technology
(Eawag), Dübendorf, Switzerland.
[6] Alternative Energy Promotion Center. “Real Cost of Construction Survey of a Typical Biogas
Plant.” East Consult (P) Ltd. August (1999). Web.<http://www.snvworld.org/an/Documents/
Real_cost_of_constuction_survey_of_typical_biogas_plant_Nepal_1999.pdf>.
[7] Methane. US EPA. <http://www.epa.gov/methane/>
[8] Vasuedo, G. "Biogas Manure." Print.
[9] Westenbroek, P. A. and Martin, Jerry II. 2010. Anaerobic Digesters and Biogas Safety. Cornell
Dept. of Biological and Environmental Engineering. Ithaca, NY.
[10] Safety Rules for Biogas Systems. 2008. German Agricultural Occupational Health and Safety
Agency. Kiel, Germany.
Acknowledgement
Julian Marshall
Fred Rose
Sri Latha Ganti
Toby Nord
Connie Rutletge
Kaleel Ahmed
Rahul Raju Dusa
Udai Singh
Kent Cavender– Bares