Monthly Archives: December 2007

Bhilwara’s geothermal foray

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Bhilwara Energy Ltd, part of the LNJ Bhilwara Group is investing Rs. 1,000 Cr (USD 250 million) in the North East region of India to generate 100 MW of Geo thermal power..

This is the first such scheme to come out of India that I have heard of. The article has some other valuable information.

India has a geothermal power potential of 10,600MW, though the country is yet tosee a single commissioned project that harnesses this technology. Other benefits of geothermal projects include the fact that it needs much less land than a conventional power plant.

“Though the capital cost for generating energy through geothermal is Rs8 crore to Rs10 crore per MW, the operating cost is minimal. We are looking for developing such projects in Himachal Pradesh, Ladakh, Andaman and Nicobar islands, Chhattisgarh and Uttarakhand. We will also be applying for blocks in the remaining states,” said Ravi Jhunjhunwala, chairman, LNJ Bhilwara Group. “These projects will also entitle us to earn carbon credits,” added Jhunjhunwala.
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“Geothermal energy has a good future in the country. It will, however, not compete with oil or gas. Even (the) world over it is being viewed as a viable energy alternative,” said D. Chandrasekharam, professor, department of earth sciences at the Indian Institute of Technology Bombay.

The only issue is that they are not predicting the cost of a KwH when sold to the consumer and also, the last statement by Prof. Chandrasekharan does not make sense. In one hand he says it cannot compete with oil and gas and on the other, it is a viable energy alternative.

In the case of India, with the possibility of earning carbon credits can make it a good economic opportunity.

Akash Ganga – Water from thin air

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Arun Natarajan points to the profile of S. Sivakumar, founder of Akash Ganga in The Mint.

All his life, Sivakumar, who looks an unlikely capitalist in his casual trousers, shirt, and bushy white moustache, has been interested in understanding what makes some people rich, and others poor.

At the Delhi School of Economics, where he completed his doctorate, his thesis was on this subject. He studied 200 families across three generations in rural India. His conclusion: “Affluence is a matter of chance.”

That discovery changed his political viewpoint…His interest in understanding the genesis of wealth did not…he was convinced that water, or the absence of it, held the key.

The idea for Akash Ganga came to Sivakumar in 2004, mainly as an offshoot of his research…The scientific basis behind Sivakumar’s air-to-water conversion is the heat exchange process: In this case, it involves sucking in air from the atmosphere and blowing it over cold gas resulting in the creation of water (in much the same way, condensate, or water, forms on the outside of the windows of a heated room in winter or an air-conditioned room in summer).

To Sivakumar, Akash Ganga, named after the tributary of the Ganga that provides water to the heavens in Hindu mythology, is more than a company; it is a mission. “I am doing this under a business format because there is no other format to take it to the people,” he says.
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By mid-2004, Sivakumar and his team worked out how to make water from air. AGL invested in a modest 3,000 sq. ft manufacturing facility and started rolling out its products. Priced between Rs9,200 (USD 235) (for an 8-litre version) to Rs42,500 (USD 1,087) (for a 120-litre one), the machines were powered by electricity, and sold through stores that sold consumer durables such as television sets, washing machines and refrigerators. The Akash Ganga machines produced a litre of water at an average cost of Rs0.80 a litre (USD 0.02c), but, surprisingly, found little success. The company was unable to sell the product as it lacked the resources to market the product on a larger scale.
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Since the process of converting air to water results in a drop in temperature (one reason why some air conditioners leak water), AGI has pitched its products as a three-in-one as the company terms it: an airconditioner, water creator, and air cleanser.

The machine produces ISO standard water for drinking and the company has sold some 400 machines till now. Considering fresh water is a major decreasing resource in the entire world and particularly in India, this innovation has some good potential if the economics work out.

Recognizing the True Worth of Energy Efficiency

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Tom Konrad writes in Seeking Alpha about the importance of energy efficiency and the role played by legislation.

Crucially, the legislation allows for non-energy benefits, such as increased comfort, economic multiplier effects (i.e. jobs), and reduced volatility of energy costs be included in the evaluation of the benefits of programs. Since financial benefits are a relatively small part of net benefit, this allows the implementation of a large number of DSM programs with large net benefit, but which might have only small financial benefits.
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Studying non-energy benefits is still an inexact science, and one of the things CEEBC is pushing for in the PUC docket is to make sure that we do our own study of non-energy benefits in Colorado, so we can better understand what we are getting (besides an excellent financial return) for our money.

That understanding should lead to more DSM programs, because the results will be better and higher valued as people begin to recognize the true worth of energy efficiency. This has already benefited the companies, such as Energy Service Contractors, and providers of energy efficient products and the controls which enable them as more and more individuals, businesses, and utilities (gently prodded by the regulators), begin to choose A.

This is the similar to the general “business case” for sustainability.

Green Jobs – How to find them?

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The Environmental Magazine – E, has a list of 10 Green jobs to look at. The specific jobs are not important. What is important to understand is the potential of ‘green’ jobs.

“People think there is some kind of mystery, ‘Where are the ‘green’ jobs?’” says Marie Kerpan, founder of consulting practice Green Careers, “There are a bazillion companies where you can take your skills and put it to work in a ‘green company.’”

So how do you do this?

There’s no secret to getting a job in the new green economy. It’s as basic as applying the job skills you’ve already developed (web design, sales, management) to a nonprofit or sustainable industry, or coordinating sustainable practices from within a corporate entity. Sometimes, as in green building or solar panel installing, these green jobs require a specific set of skills—and classes are organizing to fill the growing need. Other times, as in the organic food industry, ecotourism or sales and marketing of energy-efficient technology, anyone with a good work ethic can get in and create a great green career.

This is exactly my thinking. As there are opportunities in different organizations to reach and embrace this green opportunity, there are avenues for people to do the same. This is the same thinking I am using for myself.

Emissions Trading and the Built Environment

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A very practical suggestion from Developer Lend Lease.

Lend Lease’s global head of sustainability, Maria Atkinson, who is at the Bali conference, said building emissions totalled 40 per cent of global greenhouse gas emissions.

Yet the built environment had more potential for quick, deep and cost-effective greenhouse gas mitigation than any other industry, she said.
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Ms Atkinson said an emissions trading system would address the “split incentives” nature of the industry — where the developer, owner and tenant of a building were often three different entities
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“But by being able to trade and effectively make a financial return on their investments in emissions reduction initiatives, developers and portfolio owners will have an incentive to deliver deep greenhouse gas emission cuts of 60 per cent or more.”

Ms Atkinson said the report showed high value carbon credits of $34 per ton (ton) of carbon dioxide equivalent could realistically achieve a carbon zero position in buildings at nil cost.

Green Tech 101

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Having a big picture idea of what is happening in any field is very wothwhile while thinking about problems, solutions and opportunities.

If you start looking for some ideas, VCs may be a good guide to this. They need to invest across the whole sector, guess the potential of various ideas and have a general idea of where things are.

A while back I wrote about the investments of Vinod Khosla in Energy. One great learning was the way he organized his entire investments in energy into various parts.

Now, BNET (a sister company of the successful tech publication CNET) has a Green Tech 101 video presentation from Adam Grosser, general partner of Foundation Capital. The beauty of this 5 minute video is the way he has organized the entire sector, highlighted the major challenge in each and made it east to remember.

He calls it E-E-E-M-I-T. EMIT less and Change the world. Check out the video.

India’s Energy Choices

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Anshu Bharadwaj, Director of the Centre for Study of Science, Technology and Policy in Bangalore writes about the possible choices facing India in Energy production in the light of the climate conference in Bali.

He provides an estimate from the Planning Commission that puts India’s total commercial energy supply at about 4000 billion kwh. This is estimated to grow to 20,000 billion kwh by 2030.

As suggested in my previous post on Rural Solar Electrification, basic electricity is still an issue. Now, how India achieves to even generate 20,000 billion kwh by 2030 is a challenge. Considering that some part of this should be carbon-free is a double challenge. How much should this be? 15%, 25%?

Bharadwaj provides some analysis on the possible choices facing India.

Wind power is a reasonably mature technology. India, with its installed capacity of 7,600 mw, is the fourth largest user in the world. Wind power potential is estimated at 45,000 mw…wind can generate about 100 billion kwh — which is less than 1 per cent of desired supply. Wind will, therefore, remain a marginal player.

Then there are bio-fuels. Oil-bearing crops such as jatropha and mahua can be used to produce bio-diesel. Likewise, ethanol can be produced from sugarcane juice, molasses and sweet sorghum…India has an estimated 30 million ha of cultivable wastelands. Using 20 million ha for cultivating oil-bearing crops can produce about 25 million tonnes of bio-oil equivalent to 300 billion kwh of energy. Add to this another 100 billion kwh from ethanol, and the total contribution of bio-fuels will be about 2 per cent of India’s energy supply.

India’s hydro-electric potential is estimated to be 84,000 mw…it will generate about 400 billion kwh — 2 per cent of the total.

The one source of energy India has in abundance is coal. It accounts for 51 per cent of power supply. Coal will certainly continue to dominate India’s energy mix in the near term.
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India’s installed nuclear power is 4,120 mw — less than three per cent of electricity generation… The proposed Indo-US nuclear deal could provide the opportunity to import ‘light water reactors’ with fuel. India could then gain 24,000 mw from this route by 2030.

Most parts of India receive a good average of solar radiation of 5-6 kwh/m2. Therefore, solar power generation over an area of 20 million ha can generate about 24,000 billion kwh even at a modest 10 per cent efficiency. This is more than India’s expected total energy supply and several times the desired carbon-free energy… Solar thermal power using concentrators is another attractive option for utility-scale power generation. A single stretch of land measuring 20 km x 20 km, say in sun-drenched Ladakh, can generate over 20,000 mw of power contributing 50 billion kwh of energy (eight coal power plants).

Since he has not cited any sources for most his numbers it can debated as to the validity of some of the estimates. However, the potential of solar energy is clear. Sometimes it is debated that this can be a costly exercise. But as Harish Hande has analyzed, the poor in India already pay exhorbitant prices for electricity and in that scenario, coupled with distributed generation, solar may be a good choice.

Greed vs Aid

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Africa’s tryst with development continues and the theories of development are never ending. Now, Reuben Abraham points to a Business World article titled “Can Greed Save Africa”. Or what can be more appropriately called “profit making”, it provides an example of how plain business sense can provide development opportunities to Africa.

In many ways, Africa’s economic situation seems hopeless. While $625 billion in foreign aid has poured in since 1960, there has been no rise in the region’s per capita gross domestic product, notes William R. Easterly, economics professor at New York University. What’s more, from 1976 to 2000, Africa’s share of global trade dropped to 1%, from an already negligible 3%. The U.N.’s scale of human development, which considers health, education, and economic well-being, ranks 34 African nations among the world’s 40 lowest. Thus far, foreign aid hasn’t made a dent.

Greed, however, might. Thanks to the global commodities boom of the past few years, sub-Saharan Africa’s economies, after decades of stagnation, are expanding by an average of 6% annually—twice the U.S. pace. And like bees to honey, investors are swarming into the region in search of the enormous returns that ultra-early-stage investments can bring. Blue Financial, for example, has already netted its early private equity backers a ninefold gain thanks to the 385% rise in its stock since its October, 2006, initial public offering in Johannesburg. Emerging Capital Partners has bought all or part of 42 African companies this decade and cashed out of 18, with gains on their investments averaging 300%. “The money we can make is matchless,” says Emerging Capital Partners CEO Thomas R. Gibian, a former Goldman Sachs (GS) banker.
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Masoud Alikhani is no moral crusader; he thinks the “We Are the World” movement of the 1980s, which sought donations to end African hunger, “made beggars of whole nations.” The burly 66-year-old is among the new wave of investors at the tenuous nexus of venture capital and agribusiness in Africa. Five months ago he pitched a large hedge fund in New York on the merits of ESV Biofuels, as his company is called. The fund’s partners agreed to take a tour of the facility in January. “We are capitalists and opportunists,” says Alikhani. “We are doing this to make money. That’s the only way to help.”

For more on this Profit vs Aid question, check out the work of William Easterly.

Rural Solar Electrification

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In the current Climate Change talks in Bali, there is a great debate about the role of India and China in cutting down their greenhouse gases. This story provides a good viewpoint of the current problem facing India.

The Mint has an interview with Harish Hande, the founder of SELCO-India and the winner of the 2007 Social Entrepreneur of the Year award in India.

The problem: In a country where we spend thousands of watts of electricity for a day and night cricket match, use the power greedy heater to ward off the winter chill, there lies another India where villages are dimly lit by paraffin lamps and dim lights battling darkening chimneys. For this cash-strapped India an ignited filament powered by current is a rare luxury, for they cannot even afford electricity.

Finding basic electricity is still an issue in India. How do you convince those people that they need to cut down their carbon emissions?

Hande is working towards building solar home systems for poor people in India with technicians on the ground understanding the actual requirements. He is collaborating with banks to provide an affordable way to own these systems.

In terms of economics, Hande has some interesting cost figures.

For example, there are 20 million street vendors in the country. In Delhi, a street vendor pays Rs15-20 everyday for an incandescent light. We do not pay Rs600 a month for a single light, neither do we pay Rs2,400 a month for four lights. That means poor people pay more for energy. It is the same case with Bangalore street vendors who pay Rs15 every evening for a kerosene lamp they use for four hours whereas solar costs Rs5-6, that too for five to six hours. It is a grave reality that the poor end up paying more for energy. Surely, this needs far more serious intervention.

And on the role of government.

In terms of central and state governments, the biggest plus is that they are not interfering. I have seen it in other countries like Dominican Republic where the government suddenly appeared on the scene, subsidized it, and spoiled the whole programme. However, the government can help by replicating our work on a mass scale. For that, we need many similar social enterprises and government policies that can creating caps in financial institutions, in much the same way as they did for agricultural financing 40-50 years ago.

Coir opportunities

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The Mint writes about new market opportunities for Coir. From the Wikipedia: Coir (Etymological origin: from Tamil and Malayalam – kayar – cord) is a coarse fibre extracted from the fibrous outer shell of a coconut.

Environmental degradation has had a surprising side effect. It has given a new lease of life to Kerala’s age-old coir industry and fuelled the rise in demand for two of its products—coir geotextiles and coir pith. Meshes or nets woven from coir are known as geotextiles.

A.C. Jose, chairman of the government trade promotion body Coir Board, says with efforts to check soil erosion and prevent landslides gaining ground globally, coir geotextiles have found new takers from the mining industry. These are laid on slopes to check soil erosion.
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Coir pith, made from retted or cured coconut husk after the fibres are separated, is being widely used as manure. The husk pulp is decomposed after immersion in water for 6-10 months. The fibre in them is then separated and the residue, pith, is dried and used as manure. Coir pith is the largest product being exported from India, says Jose.

Every day we see a new market opportunity being presented from the greening and environmental issues facing us.