Turning Waste into Economic Value for Low-Income Farmers in Pakistan

Hasan Anwer, founder of EnMass Energy, shares how a renewable energy startup harnesses agricultural biomass to generate power in Punjab, Pakistan.

September 08, 2018

Growing up in Pakistan, Hasan Anwer witnessed a noticeable gap between the supply and demand for of renewable energy, particularly for the poor.

“I realized very early that, whether it comes to energy, education, water, or a lot of the other problems that we currently face [in Pakistan], there has been this gap between supply and demand. A lot of the solutions are designed for individuals or communities who consume that particular good the most, as opposed to those who need it the most.”

Urban residents and industry tend to consume power at the highest level per capita so most energy projects are designed to meet their needs. This leaves out people who have limited access to electricity, or none at all.

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Hasan Anwer, co-founder of EnMass Energy
Hasan Anwer, co-founder of EnMass Energy

Hasan found that the impact of large-scale agriculture, energy, or water projects often never fully reach rural communities because they are so far removed. “These solutions were not close enough to [the] people who needed their problems solved,” he says.

The Need

Before Hasan started EnMass Energy, he worked for a mini-grid project in Punjab conducting social economic impact analysis. Hasan remembers moving into the community and looking for someone to help transport his equipment.

The person he found was a laborer who worked for other smallholder farmers; he wasn’t a landholder himself. At the end of each season, his employer - a subsistence farmer - would pay him in the crop’s waste product, cotton stalks, because they could be resold to others looking for a source of fuel.

Hasan recounts, “I ended up paying him about 1000 rupees... And as soon as I had given him that one thousand rupee note, he told me that this was the first time in about six years that he had seen a thousand rupee note.”

One thousand rupees is roughly equivalent to $10 USD, and this was only the man’s second time in his 40 years seeing a one thousand rupee note.

Hasan continues, “He was only able to use maybe 5-6% of [cotton stalks he received]. The rest was a waste product; he wasn't able to do anything with it. People would buy it from him during the winter seasons to burn for heating and cooking purposes, but most of it was left as waste. He would have to burn it eventually; otherwise, it was a cause of diseases.”
 

The Turning Point

When Hasan’s previous company went bankrupt, he boldly decided to continue the work on his own, realizing that he had existing connections and access to infrastructure that should not be put to waste. “I felt that the project had enough of a market, enough of an impact, but also that we had the necessary exposure to the market to be able to continue.”

Although Hasan had eventually pictured running his own business at the nexus of energy and agriculture, he had imagined it would be much further into his career. However, this combination of opportunity and determination propelled him into a CEO position at a relatively young age. “Whoever is willing to start out needs to believe that they can make a change -- that it is possible to make a change however small or incremental it may be,” he says.

Hasan’s original goal was to create an entirely self-sustaining community with localized mini-grids. A mini-grid system would mean collecting waste from farmers, processing it, and using it to generate power for the same rural farming communities. The result would be an entirely zero-waste system.

However, mini-grids cannot be implemented in Pakistan in the near future due to regulatory changes. Hasan is still lobbying for these regulations to be overturned but, in the meantime, he is focused on the agricultural biomass itself, which has economic value.

EnMass Energy wants to shift the status quo from exploitative practices that leave farmers waiting months for compensation to a system where agricultural waste can be transformed into a product that has financial value.

The True Challenges

Recognizing the need for innovations, the EnMass Energy team undertook extensive research to evaluate the technical feasibility of power generation. They expected that building a power generation facility in the region would be the main hurdle.

“We thought that we just plunk our project in the middle of a community and then we would have enough biomass available with farmers coming to us,” Hasan recalls. However, he soon realized that “the power generation project itself was the least complex aspect of all of this. In fact, that was the easiest thing to figure it out.”

The more pressing challenge was assembling a supply chain to procure agricultural waste from farmers and transport it efficiently to the facilities. In their second year of operation, they also discovered that weather events and pests would cause major crop failures, and disrupt their supply chains.

“Very quickly, we realized that weather, crop failures -- all sorts of factors -- come into play when you're setting up an agricultural value chain.” The events showed how critical it was for EnMass Energy to diversify their supply chain to include multiple regions and crops.

“We are moving towards a more proactive model of operation, but in the past, I think it has been very reactive. It’s a hazard of being an entrepreneur and being resource constrained… You always have more problems than resources that you can use to solve them,” Hasan reflects.

EnMass has been digitizing their supply chain and introducing  custom software to collect data about farm level production, weather, nearby disease outbreaks, and historical cropping patterns. The historical data helps project future variations in the supply chain, protect against competition, and help farmers improve their productivity.

EnMass Energy has also focused on improving their transportation to ensure that they are using the most efficient routes possible.

Technical Solutions Are Only Part of the Equation

When Hasan began, there wasn’t a single biomass-fired project in Pakistan, whereas India and China had several. While it might first appear that market failures precluded renewable energy projects from succeeding in Pakistan, Hasan quickly realized there was more at play.

“When it comes to renewable energy, it isn't necessarily the case that there aren't enough technical solutions on hand. It's a case of the solutions not being designed, or not being applicable, for the beneficiaries of that system (that has prevented their widespread adoption).”

In other words, Hasan realized he needed to get more “customer-centered” in the design of his offerings: “You have to listen to the beneficiaries, and you have to sit with the beneficiaries to be able to actually design an appropriate solution,” he says.

He found himself asking, “How do I convince farmers to sell their biomass to me, and how do I convince the buyers to actually switch to renewable biomass power, as opposed to using coal or other fossil fuels?”

Hasan’s educational background in public policy and economics provided him with the skills needed to manage stakeholders and engage customers in the conversation. “Unless you go in with the ability to listen, the ability to understand and hear what is happening around you, you won't be able to design a solution even if you have the most advanced technology on hand,”  Hasan notes.

Circular Design in Action

As a result of carefully listening to the needs of their customers, EnMass Energy came up with the following offering. They work with groups of 40 to 50 farmers and each group appoints one individual as a representative.

Hasan explains their current process in detail:

  • The farmer group representative works with us to negotiate and set a price for the coming season.

  • About two weeks after the harvest, we collect the agricultural waste from the farmers.

  • After the agricultural waste has dried (which takes three days) it is weighed.

  • According to weight, we pay the farmers three days after we procure the biomass. We pay via mobile wallet digital payments, which allows for quick and transparent payments. (This is a very short turnaround compared to the two months farmers typically wait to be paid in the cotton sector.)

  • The biomass is dried, chopped, and compressed into small pellets in our processing facilities.

  • EnMass generation projects use these pellets for power.

  • The pellets are also sold as a cost competitive alternative fuel to other commercial clients for their power generation purposes (who typically rely on coal).

  • EnMass provides the pellets back to the farmers as a much more efficient energy option compared to charcoal or burning raw waste or wood. Farmers use the pellets in cookstoves or for heating.

This process shows the circular economy in action: biomass is generated in the fields, processed, and sold to industrial consumers and provided back to farmers for their energy needs.

Continuous Improvement to the System

As circular as the EnMass Energy process is - with agricultural waste being collected, processed, and reused for energy, - Hasan found points in the system that still needed innovation.

He and his team realized that the process left a considerable amount of ash and tar residue. They were looking for the best way to dispose of it when they realized that, since it was organic, here could likely be a beneficial use.

They discovered this residue was a type of biochar that would be ideal as a fertilizer. EnMass Energy now works with local fertilizer manufacturers and distributors to repurpose biochar generated in the burning process as organic fertilizer. The same farmers who provided the agricultural waste will use this new product as a replacement for synthetic fertilizers to avoid damage caused to local water resources. EnMass Energy is currently in the process of marketing this new product.

Hasan and his team also exploring the excess heat produced during power generation and figuring out if they can reuse it for for heating purposes within the communities or industries where they already work.

As they continue to perfect their systems and operations, and listen deeply to the needs of their customers, EnMass Energy continues to identify new opportunities to turn waste into economic value, and improve the lives low-income farming communities in the process.

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