Two University of Virginia students have started a business producing energy from rice husks in rural India. The pair are already producing power for 10,000 Indian villagers.

Husk Power Systems, started by Darden School of Business students Charles Ransler and Manoj Sinha, takes the rotting husks produced as waste by the rice industry, and burns them to produce energy. The company, which has established two pilot plants in India, is currently saving up to 200 tonnes of CO2 per village per year, according to Sinha.

"Farmers get their rice milled in a local rice mill and we collect husk from these mills. This is local and hence has very low transportation cost," said Sinha, who expects the firm to break even in three years.

The two villages took 10 to 12 weeks to electrify with husk power, and came onstream last August. In addition to electricity, the process also produces ash, which can either be used as fertilizer or as an ingredient in cement, the company said.

Rice Husk Power recently won $50,000 in prize money from the Social Innovation Competition at the University of Texas. It also won $10,000 in April from Darden's annual business plan competition.

Electricity production from rice husks is a burgeoning business in regions with strong rice production industries. West Bengal has received funding under the Kyoto Accord's Clean Development Mechanism to help rice mills use their husks for energy production, while Korea Electric Power Corp is among a number of energy players proposing to build rice husk plants in Vietnam.