Going Green in India - Story of Solar Entrepreneur

An excellent article on story of a Solar Entrepreneur in WSJ - http://online.wsj.com/article/SB126090748287292467.html

It speaks of how the costing of solar power is difficult and the entrepreneur needs incentive (or subsidy...any way you see it is fine) from the Central Government. IMHO, just reduce the environmental hazard element from the cost and the equation will get balanced. (Yes I know it is not that simple...but then what is?)

The article is also a reflection on how much more we, as a country, have to travel to become a truly pro-entrepreneurial society.

Just one question, why use farmland for such energy generation when we have deserts and mountains that are relatively free from farming / cattle grazing needs? I am sure there is a reason, just that, I am not aware.

Investing in Alternative Energy - Scenario Analysis

Fundamentals of Alternative Energy

OK...no introduction in this post. We know alternative energy is one of the biggest possibilities in the future. There are several technologies in the arena - Wind, Solar, Nuclear, Tidal. Each one has its own technical needs. Each one has been invested in from investors across the world.

The obvious reasons these are promising are because they are independent of burning fossil fuels. That means lower carbon emissions and hence reduction in warming. I know, there is still some debate on whether global warming is really happening. I am not an expert but I believe in the phenomenon. In my opinion, it is the manifestation of the effects of the uncontrolled experiment of letting smoke into the atmosphere.

Current Status and Hindrances

Wind power needs only incremental changes to turbine technology but it has huge land needs and site selection is critical. Solar technology is still behind in efficiency terms. Nuclear energy poses the challenge of toxic waste.

Add to the above, the above are not yet financially competitive. And each one is facing the uphill task of competing with traditional power. One of the problems is of economies of scale. For example, the demand for solar cells is not high enough to cause scale production. This means higher cost of equipment which translates into higher price per watt.

 Also, the incumbents are not going to easily make space for new technology. While they continue to invest in this area, they are still ok since green power is still not the automatic choice of consumers.

Possible Tipping Point?

Across the world,  the moment substantial incentives are announced such that they make solar / wind energy affordable, then the demand for green energy will shoot up. Green energy has an inherent appeal for most people. When challenged with questions like, "Would you not like your grand-children to breathe cleaner air?", people choose green energy over thermal energy. Then it is left to how much they can afford to pay?

When the incentives come and eventually costs match, consumers will start shifting. Then, the current conventional power companies will start heavily investing in generating green energy (Remember, they already have the required land needed to put up solar or wind plants.) This will further push up the supply and bring down the costs.

The Big Question

Incentives are already existing that encourage these alternative energy sources. It is said that these are not enough. So, either they will be raised or newer incentives (like bonus for saving emissions / coal / etc.) will be introduced.

The question is When? That, my dear reader, is anybody's guess. The real winners will be those investors who would have been already invested in this sector when the announcement(s) come.

Going green - Smart power using wireless tech

Smart Grids are the talk of the town. The per capita consumption of power in developed nations is higher than that of developing / under-developed nations. The developed nations have been working with the idea of Smart Grids for some time now.

The idea here is to have smart devices and smart tariffing that encourage consumers to adjust consumption as per the overall demand of the city/area. For example, the price is high during peak hours. Something like airlines, most of whom demand more money when you book for weekend. You book a red-eye flight, you get lower fare...sometimes even a bump up to business class :)

And it is not only about tariffs. It is about intelligent management of power. For example, schools and offices close after 5pm....then the substations and other devices used by them exculusively can be regulated or switched off as and when the grid "detects" a drop below a certain level.

Some cities like Austin have been experimenting with this idea for sometime. Check this link which describes how operational expenses and other savings were effected through smart grid.

For example, reading meters wirelessly, communicating consumer needs are some of the examples of this case of use of smart grid.

The case of India

Indian power sector is reeling in crisis. Outages, T&D losses and theft are some of the perpetual pain points for India. At the moment the T&D losses are somewhere around 35% of the overall generation. The associated loss to output is also a definite worry.

Smart grids can address some of these issues. Use of wireless devices connected to central management systems can revolutionize this sector.

For example to reduce theft it can point to problem areas, generate alarms and flags when the consumption goes beyond set patterns etc. Also, an increase in regular consumption can also flag off the need of new equipment and tariff plans.

Check this NYT news piece and this interesting paper from WiFi alliance which NYT refers to.

The cost may be very high for countries like India but it should be considered in terms of direct losses mentioned above plus the opportunity cost in terms of lost business due to the above problems.

Going Green - Case of incentives to Solar and other green options

One more article that reflects thoughts on incentives that many green power supporters have been speaking about - http://www.livemint.com/2009/11/05214331/Will-India-light-the-fuse-for.html?h=B

I had also written an article some days ago about the need here http://indian-eagle.blogspot.com/2009/10/going-green-with-lower-solar-costs.html

Here is an interesting link that gives month-by-month price indices of Solar electricity. Lots of other links that have great info -  http://www.solarbuzz.com/solarprices.htm

One more great link is the fast-facts link http://www.solarbuzz.com/fastfactsindustry.htm

Warren Buffet invests in Railways.

Warren Buffet is investing in railways in US. Looks like he is convinced on the economy's rebound as well as the return of consumer buying in the US.

More importantly it seems that the he is convinced that US will see a rise in usage of railroad infrastructure over highways etc. That also indicates an interest in green infrastructure initiatives.

BNI also has presence in Asia which is continuing as the growth story across the world. The railway co.'s shares jumped a good 30% (from a P/E of 14 to almost 18).

Here is the LA Times story - http://www.latimes.com/business/la-fi-berkshire4-2009nov04,0,6604215.story

NY Times is also reporting that Buffet is paying a part of this deal in Berkshire stocks for tax purposes.
http://dealbook.blogs.nytimes.com/2009/11/03/berkshire-to-buy-rest-of-burlington-northern-for-44-billion/?ref=business

Going Green with Lower Solar costs

This NYTimes Green Inc. article reports a decline in cost per watt to generate solar energy. In US, it has reduced from by about $0.30. 

What I found interesting is this line - "...though the actual cost to homeowners actually increased slightly as state incentives for installing solar arrays fell faster than module prices."

I remember doing a study on solar power generation during my studies. We actually realized that the installed base of wind power has increased at a far higher rate than solar in India in last 10 years or so. We concluded that while technology improvements will bring down costs, yet Government focus on this sector is very important. 

Especially for a technology that is seemingly stagnant for a long period. Probably the only nation that has solar power firmly on its radar is Germany. Most other nations are allowing industry to come up with solutions that have to compete with traditional power generation.

There is a need to stimulate demand that will lead to reduction in prices. Such stimulus comes through incentives. Another way is to allow individual users to use solar tech to bypass the grid. Perhaps small steps are the way to reduce our dependence on fossil fuels.

Going Green with Mobile Technologies (Location Based Services)

It is a no-brainer on how much greener the earth will get if folks start using public transport where possible. Interesting ways to encourage people to board that bus or railway train will help reduce emissions.  It also helps improve health since you need to walk at least a few steps farther than the garage to the bus or train stop. Location based services uses location of a mobile to deliver value added services.

I am impressed by this game that Bay Area public transport authorities have started to encourage usage of public transport systems. Reached this location from NewYork Times BITS page.

Countries like the US, where urban dependence on public transport is pretty low, do need such initiatives. Particularly impressive is the use of the location based technology. What makes you play this game are incentives such as "being a Mayor gets you some freebies".

Awesome!