Start-up: Biogas solutions for the sub-tropics
Dutch start-up SimGas has developed two improved biogas systems for the sub-tropical regions. These small-scale systems convert manure and organic household waste into methane gas.
Biogas is a proven technology to provide clean energy in sub-topical areas. Currently, the existing systems are inefficient and expensive. The SimGas product is designed to be affordable and mass-produced to lower the costs and make biogas available for millions of households.
SimGas has developed two improved biogas systems for the East and Southern African countries, targeting both the urban and the rural market. These small-scale systems convert manure and organic household waste into methane gas, which can be used for cooking and lighting. SimGas delivers a complete system, including training.
This young and ambitious company is based in the Netherlands and in Tanzania. The Dutch team are focused on research & development and finance, whilst the Tanzanian team take care of production, sales, installation and maintenance.
Inspiration via studying
SimGas was founded in 2009 by the brothers Sanne and Mirik Castro. Inspiration for the company emerged from Sanne’s Master thesis research. It addressed the feasibility of large-scale biogas systems in Tanzania and Ghana. Local production creates jobs: currently the company has 42 employees, 7 in the Netherlands and 35 in East Africa (Tanzania and Kenya). The staff team is forecast to organically grow, creating over 100 jobs in marketing, sales, distribution, installation & service, microfinance, management and administration in 2014. The number of jobs created will increase substantially when SimGas expands to other regions.
SimGas has now sold 1,000 systems and sales are increasing rapidly by targeting schools and hospitals. SimGas is aims to sell 20,000 systems from their own factory in 2015. Private Investors have invested 1.2 million euro already and additional funds are received from the European Development Fund and PSB, a Dutch Innovation Programme. This money is mostly earmarked to be spend in East Africa. Climate-KIC provides support in housing the Dutch office.
The design of SimGas systems is based on affordability, transportability and quality. Strong, durable plastics are used in production making it easy to handle, install and maintain, with minimum environmental impact. SimGas uses recycled plastics in its production where possible.
Impact on climate change and daily life
The environmental impact relates to a reduction in carbon emissions and reduced forestation. As each household is replacing its current fuel, the energy savings are calculated based on the average yearly use and price of wood-fuel, charcoal and kerosene. Depending on the baseline, the biogas system reduces 5-10 tonnes per year. The reduction of greenhouse gas emissions are calculated very precisely for the CO2 registration.
Households depending on wood-fuel spend many hours a day collecting wood. Additional time is saved by faster cooking: biogas can immediately be used, compared to charcoal and wood stoves that need to heat up first. Therefore, households benefit from workload reduction and increased productivity.
The slurry that comes out of a biogas system can be used as fertilizer. Depending on the feedstock of the biogas system, 50 kg of slurry prevents the use of ca. 1 kg of chemical fertilizer.
Biogas households save on average USD 25 / year on health care as a result of improvements in both indoor air quality and sanitation. Cooking on gas reduces indoor air-pollution related illness and death by 90%.
Other social impact created is the improvement of animal conditions, of soil condition and the position of women in the household. In the majority of East African societies, women are still primarily responsible for cooking and household management. Biogas provides for cooking energy that is less labor-intensive, more convenient, and safer.
More to come in Africa
Currently SimGas is exploring new markets for their existing products. Kenya proofs to be an excellent market, due to market size, the average income of households, as well as open minded people and the education level, which makes it easier to find the right employees. Next on the list is Uganda and Ruanda where SimGas have a joint venture agreement with a plastics manufacturer, which helps for further market entries in East Africa and Mozambique. Additionally, SimGas has been on a fact finding mission to explore the Asian market, starting with India. They are currently developing a business plan, doing market research and work on a demo for a first launching customer.
Stoves are now imported from China, based on product qualifications from Simgas. In the future they might be produced in East Africa, to have even better stoves and more adapted to African cooking. This will contribute significantly to creating jobs and social impact in the countries where SimGas works.
Exploring sanitation and cooling
SimGas wants to explore the opportunities for new products, aiming to serve crowded places, where the need for hygienic treat for (human) waste is high. The question is what happens with the digestion of human waste in the current system. The output should not contain any pathogens. There is a lot of demand for a system like this, from boarding schools and hospitals, where the system can be used for multiple purposes: cooking, lighting, and sanitation.
Cooling systems might have added value in areas, where farmers already are main target group for the rural system. If farmers have their cattle in the stable, are able to collect the manure in the system and use the generated energy for cooling the milk. They are able improve the quality of the milk for a longer period of time. They might even be able to sell the milk to factories and keep it fresh for collecting and transport. This will improve the income and the standard of living for SimGas current target audience.
Climate-KIC secured our business
“Almost all our funding was earmarked to be spent locally in Tanzania on the production facilities and employ local people. Climate-KIC grants were crucial to help us through our cash-flow issues caused by our R&D activities in The Netherlands. Without this money a lot of time would be wasted to gather small amounts elsewhere, like competitions, and divert our energy from developing the core business. Literally, Climate-KIC helped us through the Valley of Death,” says Sanne Castro, director and founder of SimGas.
Winnie Versol, business developer, SimGas continues: “Of course Climate-KIC is not only about the money. By attending master classes we gained new insights in finance and sales. Climate-KIC connected us to the best experts in their network on Carbon revenue business models, which we implemented with the help of a dedicated coach from the Climate-KIC Acceleration Programme. Now SimGas is ready to meet with additional investors.”
“Simgas has proven to make something people want. Simgas has a great team and with their carbon trading an interesting business model”, says Joachim Blazer, Climate-KIC acceleration coach.