Diffusion Analysis of Biogas for Cooking in rural Households

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1 118 5 Diffusion Analysis of Biogas for Cooking in rural Households 5.1. Overview Biogas technology promotion assumes significance due to its multiple environmental, economic and social benefits for rural people. Biogas plants provide clean and convenient fuel for cooking and lighting; enriched organic manure for use in agricultural fields and reduce the drudgery and improve health of women in rural areas (MNRE, 2007; Ravindranath et al, 2000). A brief history of biogas development in India is included in Appendix 5.1. (Table A5.1.1). A national level programme was designed by MNRE to tap an estimated total potential of 12 million biogas plants. Alternate estimates of family-type biogas potential are available from both the official and non-official sources, which vary from 12 million to 22 million family type plants in the country based on cattle wastes and ownership pattern of livestock (Planning Commission, 2002). The cumulative installation of biogas plants in India is 3.9 million in 2007, which is approximately 32% of the estimated potential of 12 million. Three States Andhra Pradesh, Madhya Pradesh and Uttar Pradesh have a biogas potential of over 1 million. However, the penetration levels are 39%, 17%, 21% respectively. Gujarat, Kerala, Maharashtra, Mizoram and Sikkim have achieved penetration levels of 70% and above. It is also observed that States with lower biogas potential have achieved higher penetration levels. Figure 5.1 indicates the State wise potential and achievements. Table A5.1.2 also gives biogas penetration levels by States. The diffusion of biogas plants is mainly driven by MNRE through its own institutional network. Some NGOs and private players also participate in the programme implementation.

2 119 Figure 5. 1: State wise biogas potential and cumulative achievements up to March 2007 (in numbers) Cumulative Achievements Estimated Potential Cumulative Achievement AP Arunachal Assam Bihar Goa Gujrat Haryana Himachal J & K karnataka Kerala MP Mahara Manipur Meghal Mizoram Nagaland Orrisa Punjab Rajesthan Sikkim Tamilna Tripura UP West A&N Chandig Dadra & Delhi Pondich Chattisg Jharkha Uttaran Policy initiatives The national policies to promote biogas mainly stem from rural energy and development policies. Biogas had been promoted by MNRE since 1980s. The NPBD was launched as a central sector scheme with additional subsidy being provided by some of the states to promote the programme. Table 5.1 gives the budgetary allocation for biogas sector. A major part of this central allocation normally goes for capital subsidy of biogas plants. Table 5.2 provides the pattern of central subsidy for setting up of Plants from onwards. The Table gives subsidies for 2-3 m 3 capacity plants (which are the most commonly installed capacities. There are also special privileges for poor, marginal farmers, North Eastern States and certain other categories. The amount of subsidy has largely been same although in percentage terms, it has declined from 25-35% in 1990 to 15% in The increase in subsidy to Rs for 1 m 3 plant and Rs. 27oo for 2 6 m 3 plant has led to increase in the share of subsidy to 30% of the capital cost of a typical 1 3 m 3 biogas plant.

3 120 Table 5. 1 Five-Year Plan outlay for biogas sector (in Million Indian Rs.) Sectors Total Allocation Biogas % of total for RE Source: Five Year Plans of Government of India

4 121 Table 5. 2 Capital subsidy for biogas plants (in Rs.) Year Rs. (for 2 m 3 per day capacity) Rs. (for 3 m 3 per day capacity) (NMMP) Not specified Not specified Not specified Not specified Source: MNRE Annual Reports

5 122 Although some States provide additional subsidies, it is mostly integrated through other rural development schemes and are not targeting biogas alone. The coordination of the programme at the district level is critical for mobilizing such additional State funds. Household loans are available but only few access loans for biogas plants. Usually, even if a household takes a loan from local commercial bank, which is refinanced by the National Bank for Agriculture and Rural Development (NABARD), the experience is that since biogas plant by itself do not yield higher incomes, the defaults in repayment of debt to the bank are very high (as per NABARD). Also, it is difficult to recover loans for various political and social reasons. The elements of the National Biogas Development programme (NPBD) capital subsidy, cash incentives and training and support are briefly discussed below. Setting up of target by MNRE is central to the NPBD implementation and is based on past performance of physical targets vs. achievements, fund availability and demand. Usually, efforts are made to achieve or exceed the targets as the budget allocation is influenced by the actual achievements. It is observed that the diffusion trend is closely linked to the targets (Figure 5.2). The gap between the targets and achievements has however gradually widened over the years. Although the reasons are not well documented, evaluation indicates that the non-performance of plants and lack of effective marketing could be reasons for shortfalls in achievements. It could be also due to high target fixation and rising costs of the biogas plants without corresponding increase in subsidy.

6 123 Figure 5. 2 Diffusion of biogas in India over 25 years ( ) MW Actual Target YEAR The institutional framework which is a multi tier and multi agency structure comprises mainly the nodal departments in the States, State sector corporations, departments and NGOs. There are a few enterprises which operate on a commercial basis. The agencies are also required to monitor and supervise construction, operation and disbursement of subsidy as per monitoring and supervision guidelines given by MNRE. In order to have better monitoring and supervision, MNRE carries out independent evaluation of the projects from time to time and involve Panchayat level officials for verification of subsidy. Cash incentives, turnkey fees and promotional support are the key components of engaging these agencies and individuals. MNRE allocates funds for training, research and development. The allocation for R & D, however, has been meager (2% of programme funds). There are nine biogas training centres. These centres conduct four types of training programmes for masons, turnkey workers, staff engaged in biogas development and the users, against the target assigned by MNES annually. These training programmes are assessed in terms of the number of trainings and personnel trained. In India several types of biogas plant designs have been developed. The two most widely used are the floating drum (KVIC design) and fixed dome (modified

7 124 Chinese design), which are approved by MNRE along with some more models. The share of the fixed dome plant is significantly higher due to its low cost and relative ease of maintenance. However, the subsidy is not linked to any specific model but to capacity, location and target users.the majority of biogas plants are built by masons in collaboration with the officer or inspector at the Block Development Office and the actual user. The programme is now implemented as National Manure Management Programme (NMMP), modified scheme of NPBD. However, most of the above elements of NPBD remain same Approach to biogas diffusion analysis The biogas programme is implemented nationally all over India. Even during this phase of liberalisation of India s economy, biogas remained as a socially oriented subsidy-driven programme of the government of India. Since the programme is completely run by the government machinery, it is realised that the regional variation, cultural factors and socioeconomic characteristics of households impact the diffusion. Five States are selected regionally (north, east, west south and central) based on potential and penetration levels for detailed analysis of diffusion of biogas plants. The period of diffusion has been considered from , when significant share of biogas plants were installed. The States selected for detailed analysis include UP with highest potential of 1.93 million biogas plant but at 21% penetration levels followed by West Bengal with 39% penetration levels in the Eastern region, Maharashtra with 70%, Karnataka with 58% and MP with 17%. Table 5.3 summarises the potential and penetration levels.

8 125 Table 5. 3 Select states for biogas diffusion analysis Region/States Northern Region Potential (in Numbers) Penetration levels in Installed as % of potential Uttar Pradesh Rajasthan Eastern Region West Bengal Orissa Bihar Western Region Gujarat Maharashtra Southern Region Karnataka Andhra Pradesh Tamil Nadu Central Region Madhya Pradesh (MP) Source: MNRE Annual Reports 5.2. Biogas diffusion curves and Best Curve Fits As per the methodology described in Chapter 3, diffusion curves are drawn and best fit using numerical method for reference values are attempted for subsequent optimisation for the actual given potential. The reference values obtained directly from the model equation for observed installation of biogas are not valid. For example, in the case of West Bengal, p = Due to negative values of p, minimization of Sum of Squares of Error (SSE) Sum of Squares has

9 126 been done through the use of an algorithm which computes the SSE for a range of values of the diffusion coefficients within the boundary conditions fixed m and positive p and q values. The Best Fit for the Optimum values using the same model equation is used for analysis of biogas diffusion in the selected States. The analysis for each of the State follows Karnataka Karnataka falls in the southern region and has actively implemented biogas programmes since The diffusion trend observed from 1992 onwards is given in Figure 5.3. It has achieved 58% of the estimated potential. The projections indicated in Figure 5.4 shows that biogas diffusion is in the growth phase although the growth is predetermined by the targets. At this rate, the potential could be realised by the year The initial installation N 0 at t =t 0 is Figure 5. 3 Observed cumulative biogas plant installations in Karnataka (in Nos.) Year(s)

10 127 Figure 5. 4 Biogas plant diffusion in Karnataka Best Fit for p=0.011, q=0.12, m= in numbers Observed Fitted YEAR Maharashtra The State has achieved 82% of the estimated potential. The initial installation given by N 0 at t =t 0 is biogas plants. The projections based on computed p and q values show that biogas is already in high growth phase and will decline in the coming years. The realisation of the balance 18% assuming no replacement or additional demand will take another years. Please refer Figures 5.5 and 5.6 show the cumulative numbers and model based estimates.

11 128 Figure 5. 5: Observed cumulative biogas plant installations in Maharashtra (in Nos.) Observed Year(s) Figure 5. 6 Biogas plant diffusion in Maharashtra Best Fit for p=0.02, q=0.07, m= in numbers Observed Fitted YEAR

12 Madhya Pradesh The State has achieved 17% of the estimated potential. It is observed that the diffusion is in the initial stages. The initial installation given by N 0 at t =t 0 is 44,104 biogas plants. The projections indicate that the potential will be realised only by the end of this century. Please see Figures 5.7 and 5.8. Figure 5. 7 Observed cumulative biogas plant installations in Madhya Pradesh Cumulative Installed biogas plants (in Nos.) Year(s)

13 130 Figure 5.8 Biogas plant diffusion in Madhya Pradesh Best Fit for p=0.01, q=0.024, m= in numbers Observed Fitted Uttar Pradesh Year Figure 5.9 gives the observed biogas diffusion trend in the State of UP. Figure 5.10 presents the projections of the diffusion curve based on the optimised values for the estimated potential. In UP, it is observed that the growth in biogas installations which is predetermined based on the targets set by the Government is still at the early stages of diffusion. The initial installation up to 1991 is estimated to be 210,283. The State will need another 50 to 60 years to realise full potential assuming the existing pattern of diffusion.

14 131 Figure 5. 9 Observed cumulative biogas plant installations in Uttar Pradesh ( in Nos.) Year(s) Figure Biogas plant diffusion in Uttar Pradesh Best Fit for p=0.002, q=0.099, m= ) in numbers Observed Fitted YEAR

15 West Bengal The State has achieved 39% of the estimated potential. The initial installation given by N 0 at t =t 0 is biogas plants, which is the number of biogas plants installed up to the year Figure 5.11 gives the observed cumulative biogas plant installations. From the diffusion curve shown in Figure 5.12, it can be seen that the biogas diffusion has entered the growth phase. The projections again indicate at least another 30 years to achieve significant potential realisation. Figure Observed cumulative biogas plant installations in West Bengal ( in Nos.) Year(s)

16 133 Figure Biogas plant diffusion in West Bengal Best Fit for p=0.007, q=0.1, m= in numbers Observed Fitted Year 5.3. Interpretation of diffusion parameters The value of p is highest for Maharashtra at and lowest for the State of Uttar Pradesh at Karnataka, Madhya Pradesh and West Bengal with p values at 0.011, 0.01 and are in a close range. Except for Madhya Pradesh, all other States have similar q values. q is highest for Karnataka and lowest for Madhya Pradesh. But, it can be seen that the values of p and q in general are low. In order to make effective comparison, t* is computed. As outlined in Chapter 3, the value of (1/m)(dN/dt) at t* have also been computed for comparison. Maharashtra has the lowest t* as compared to other States. A higher value of N 0 influences the diffusion rate. From the model results, it can be interpreted that despite the programme completely driven by the government, the parameters of diffusion are different indicating that conditions and policies at the State levels have an influence on the diffusion. Table 5.4 summarises the different parameter values obtained for biogas diffusion in different States.

17 134 Table 5. 4 Summary of diffusion parameters optimized for the given potential State/Country Given Potential (m) Assumed N0 up to 1991 N0/m P q t* dn(t)/dt at t* (dn/dt)/m at t* Karnataka Madhya Pradesh Maharashtra Uttar Pradesh West Bengal Note: Assumed based on the targets wherever cumulative data was unavailable Identifying select set of indicators (based on key policy and non policy factors) As can be seen from the results above, different States have different p and q values. The policy push factors include: 1) The central subsidy, cash incentives, etc. 2) Land availability; landholdings and ownership influences installation of biogas plants at the households level. 3) Institutional capacity: Capacity at the institutional mechanisms at the State level and their support; the availability of technical staff, trained masons and other repair infrastructure influence the performance and acceptance of the biogas systems. Also, the targets are achieved in States which have active nodal agencies, NGOs and Departments. 4) Alternative options such LPG, fuel wood, etc. Although the penetration rate of LPG is lower, rural households use mixed fuels to meet their various energy needs and usually all options such as fuel wood, kerosene and LPG are used as per costs and convenience. 5) Water availability; a critical input for sustained operation of biogas plants. Many parts of rural areas are prone to drought conditions and the overall water availability is also decreasing. Also, the average size of households and cattle also influence the cooking fuel usage patterns.

18 135 6) Institutional financing: Finance has been mainly provided through the refinancing schemes of NABARD to the national banks. The cost benefit analysis made by NABARD based on an approved model by MNRE estimates a net annual income of approximately Rs. 2300/- on a capital investment of Rs /-. NABARD s funding to biogas projects is shown as others that also include financing for Storage/Market Yards, Forestry/Waste Land Development, RIDF, Bullock and Bullock Carts, Bio- gas and credit flow through Private sector commercial banks for which sector-wise break-up is not available and this constitutes approx. 20% of the total term loan for agriculture and allied activities Estimation of weights for different diffusion factors and development of Composite Policy Index (CPI). The weights for the identified factors are determined based on literature review and data available from Census and Evaluation Reports. The main policy led factors comprise of: 1) Water availability 2) Land availability 3) Alternate fuel availability (LPG penetration rates) 4) Institutional capacity 5) Central and additional State Subsidy 6) Institutional financing

19 136 Table 5. 5 Estimation of weights Total Weight water availability land availability Alternative fuels institutional capacity Additional subsidy Institutional financing Total 62 The identified factors are quantified as follows: 1) Water and land availability were assessed through the relevant development indicators and Census data 2) LPG penetration rates are indicative of the access to better fuels and influence households to opt for biogas plants. It is seen in many villages that the biogas plants owners also have access to LPG, which they use as a standby and fuel wood for water heating etc. 3) Institutional capacity is measured as a percentage of non functional plants in the State 4) Capital subsidy; additional subsidy by the State or incentives as per information available and discussions with experts. 5) Institutional financing (NABARD schemes) Actual inputs to the CPI and computations are provided in Appendix A.2. Table A5.2.1 shows the basis of measure for key diffusion factors. The policies and implementation of biogas programme are reviewed based on the identified factors and multiplied by the weights determined to obtain the score. Table 5.6 gives a summary of the ranking for different States. Except for Uttar Pradesh, the scores are similar. However, the actual performance of the States is very different.

20 137 Table 5. 6 : State - Level Policy Ranking (CPI) for biogas sector development Kar Maha UP MP WB 1. Land availability Rank Water availability Rank Alternate fuels Rank Institutional capacity Rank Capital subsidy Rank Institutional financing Rank Overall Rank Significance of the above parameters The parameters p, q, t*, dn/dt at t*, NGRTI are examined for their correlation with the ranking of the policies based on CPI. The value of the CPI provide ranking in the expected manner but the values for three States with distinct differences in biogas penetration levels score in the range The scores do not reflect the highest level of penetration levels in Maharashtra at 82% of the estimated potential. Karnataka and West Bengal have penetration levels significantly lower than Maharashtra at 58 and 39 % respectively. Although the diffusion trend is driven by targets, these States are in different growth phases as the targets are predominantly based on the past performance. Figures 5.13 and 5.14 show the correlation between t* and CPI based rank and NGRTI.

21 138 Figure t* vs. CPI (rank) t* CPI based Rank Figure t* vs. NGRTI t* NGRTI (%)

22 139 Thus, biogas diffusion seems to be influenced by factors other than the usual policy push factors identified above. Based on further analysis, the following factors are identified to have influence on biogas diffusion: 1) Socioeconomic conditions of the households: The socio-economic background of the households among other things is considered as an important factor to influence decisions making for adoption of biogas. Since the financial support extended by the government to the beneficiaries in the form of subsidy is restricted to hardly percent of the cost of a plant for different categories of beneficiaries, a major share of the cost is raised through own resources or private/institutional borrowing, the economic background of the beneficiaries is invariably referred before making a final choice. Thus, household income is an important factor for diffusion. This also closely linked with other factors such as land holding patterns. Most poor in rural areas do not own land which is a key input for biogas installations. 2) The culture of cooking and openness for new fuel options vary regionally. Some of the northern states are found lagging in adoption of biogas plants as compared to western or southern States. 3) Changes in livestock; most evaluation reports mention about the changing livestock cattle, goat etc. in villages. These are affected by natural calamities, weather conditions and income. The above factors are used again to compute the CPI to assess the significance of the values. It is found that although the order of ranking does not change much, the values obtained based on socio economic conditions, cultural factors and livestock changes bring out significant difference in values and further signifying the impacts of these factors on biogas diffusion. Table A 5.2.2, Table A (a and b), Table A (a and b), Table A (a and b) and Table A (a and b) shows the values (for both policy and non policy driven factors )computed for the five States Table 5.7 summarises the CPI values estimated for different States. Maharashtra with score of 0.98 is highest followed by Karnataka. The estimate for West Bengal is also higher as compared Uttar Pradesh and Madhya Pradesh.

23 140 Table 5. 7 Summary of CPI and ranking for biogas CPI Karnataka Maharashtra Uttar Pradesh Madhya Pradesh West Bengal Policy factors Rank Non -policy Rank Diffusion analysis of biogas shows that the policy driven factors alone are not adequate to accelerate adoption. The States with better socioeconomic conditions and culturally progressive are perhaps adopting new technologies such as biogas plants faster. The regional variation due to diversity (resources, capacity) seems to impact on biogas diffusion.

24 141 Appendix 5. 1 Table A : Biogas development in India - a Historical Perspective 1897 Biogas from human waste utilized to meet lighting needs at the Matunga Leper Asylum, Bombay 1939 Principal of biogas production from cattle dung was first evolved at the Indian Agricultural Research Institute, new Delhi 1951 Field- worthy model of floating drum type biogas plant developed 1961 Khadi and village Industries Commission (KVIC) took up floating drums type biogas plant for extention In 12 Years only about 7000 Biogas plants could be built During this period of 7 years about 100,000 biogas plants were built 1979 Fixed dome janta model biogas plant developed by the Biogas Research Station, Ajitmal, Etawa, UP late 1980's UASB (Up Flow Anaerobic Sludge Blanket) Technology developed for medium and large size biogas plant for processing urban and industrial biogas wastes National project for Biogas Development (NPBD) to cater to family size biogas plants launched 1986 Deenbandhu model fixed dome biogas plant developed by Action for food production (AFPRO), New Delhi 1988 Community/ Institutional biogas programme launched 1988 BIS standard adopted for biogas burners BIS standard adopted for KVIC type Pragati and Deenbhandhu with brickmasonry models of biogas plants 1990 Ferro-cement domes digester and Fibre Glass Reinforced Plastic (FRP) gas holder for floating dome type biogas plants adopted 1990's Solid state biogas plant design for Janta and Deenbandhu models developed 1995 Flexi model biogas plant made of rubberized nylon fabric approved 1995 Urban and Industrial waste based Energy Generation Programme launched 1999 Deenbandhu ferrocement model with in-situ technique adopted 2002 Prefabricated RCC based fixed Dome Krishna Model Biogas Plant developed by

25 142 Shivsadan Renewable Energy Research Institute, Sangli, Maharashtra NPBD modified and renamed as National Biogas And Manure Management Programme (NBMMP) 2007 High Density Polyethylene (HDPE) material based complete prefabricated and portable Deenbandhu model biogas plant and dome taken up for field trial. HDPE based floating dome type complete biogas plants under consideration Technology getting scaled up for upgradation of biogas having 95% methane from its natural composition of %

26 143 Table A : State-wise biogas penetration levels (as on 2007) States Estimated Potential Cumulative Achievement Potential Harnessed (%) Chandigarh Dadra & Nagar A&N Islands Pondicherry Mizoram Nagaland Sikkim Arunachal Goa Delhi Meghalaya Tripura Manipur Uttaranchal Jharkhand Himachal J & K Kerala Haryana Assam Chhattisgarh Punjab Gujarat

27 144 Orissa Tamilnadu Karnataka West Bengal Bihar Maharashtra Rajasthan AP MP UP

28 145 Appendix 5. 2 Table A : Inputs to CPI development Performance of biogas plants Example : Index Value per capita income (av of 7 years ) Literacy levels/culture/ awareness; Census, 2001 LPG Penetration Rate Census, 2001 Karnataka Madhya Pradesh 76.9% in use (2002) 95% (92-93) 77.5% (2002) 79.7 % (92-93) Maharashtra 71.8 % (2002) 80.7% (92-93) Uttar Pradesh % West Bengal 95.2% (2002) 90.8% (92-93) Source: Planning Commission, 2002; MNRE Annual Report, ; Census, The above values are normalised using the highest value as 1. For. Example, West Bengal with very high performance levels scores 1 and all other values of the State are divided by 95.2% to discount performance levels relative to other States. Wherever scoring was not possible, ranking was given and normalised.

29 146 Table A a): Policy Index Karnataka Weight Score Total Water availability (Ranking) Land availability (ranking) Alternate fuel availability ( LPG penetration rates) Institutional capacity Additional subsidy Institutional financing Table A b): Non Policy Index Karnataka Weight Score Total Socioeconomic culture livestock changes

30 147 Table A a): Policy Index Maharashtra Weight Score Total Water availability (Ranking) Land availability (ranking) Alternate fuel availability ( LPG penetration rates) Institutional capacity Additional subsidy Institutional financing Table A b): Non Policy Index Maharashtra Weight Score Total Socioeconomic culture livestock changes

31 148 Table A a): Policy Index - Madhya Pradesh Weight Score Total Water availability (Ranking) Land availability (ranking) Alternate fuel availability ( LPG penetration rates) Institutional capacity Additional subsidy Institutional financing Table A b): Policy Index - Madhya Pradesh Weight Score Total Socioeconomic culture livestock changes

32 149 Table A : a) Policy Index - Uttar Pradesh Weight Score Total Water availability (Ranking) Land availability (ranking) Alternate fuel availability ( LPG penetration rates) Institutional capacity Additional subsidy Institutional financing Table A : b) Non Policy Index - Uttar Pradesh Weight Score Total Socioeconomic culture livestock changes

33 150 Table A : a) Policy Index - West Bengal Weight Score Total Water availability (Ranking) Land availability (ranking) Alternate fuel availability ( LPG penetration rates) Institutional capacity Additional subsidy Institutional financing Table A : b) Policy Index - West Bengal Weight Score Total Socioeconomic culture livestock changes

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