Saturday, June 7, 2008

Renewable Energy

I have been spending a lot of time looking at different renewable energy technologies being developed both in the Bay Area and around the World, and it is quite clear that the revolution is underway and. This is particulary important in the Africa context because of two main reasons, distributed generation and low barrier of entry (specifically in biofuels).

Why is distributed generation important? Because just as the cell phone industry has had rapid adoption, power will leap frog traditional central production and distribution models. Why are low barriers of entry important? Because they ensure viral (sic) adoption.

Some of the biofuel technologies I like include Amyris - developing a similar fuel to traditional biodiesel using yeast, cane juice and a ton of money in capital investment. If I were Mumias, I would track these guys down. Coskata - makes ethanol from garbage including municipal waste. With Kenya mandating ethanol blending, there is an opportunity for an enterprising individual with access to capital to adopt this technology. The biggest advantage would be the opportunity to clean up Kibera and Mathare while making money doing so. In low barrier of entry, while I haven't seen this myself, I have learnt that there are communities growing jathropa, have developed oil press equipment and are making biodiesel that is being used for Kerosene lighting.

Some of the solar thermal energy companies I really like are eSolar
- makes modular solar plants that start at 33MW and are scalable. While this is primarily a utility connection plant, it is a great solution because it is relatively quick in installation and can help bridge the power supply deficit that Kenya currently has. Sopogy is an interesting twist on eSolar. Its plants are much smaller at 200kw and would be an ideal system for rural electrification. Solar thermal is a great technology because it is more efficient than PV and provides a certain level of energy storage. Since land isn't very expensive in most cases, it makes a lot of sense. In urban areas where land is limited, PV plants are a good alternative.

In March, the Kenya Govt. issued guidelines on a Feed in Tariff for renewable energy. Feed in tariff (FIT) is the price that KPLC will pay a power producer for connecting to the Grid and supplying power. FITs have been credited for the phenomenal growth of the solar industry in Germany.

Clearly, what works in the West cannot be photocopied and implemented in Africa. However, innovative business models ( copied from other successful industries such as the mobile phone industry), innovative finance and knowledge. I would love to hear thoughts on a game plan to implement these in Africa ASAP. Engineers, financial engineers, policy experts etc, I am all ears.

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