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Some 1.2 billion people — or 16% of the global population — don’t have access to electricity. Entrepreneurs are developing innovative, off-grid energy solutions to bring power to those populations, but challenges of varying kinds are slowing down their progress.
For Nikhil Jaisinghani, co-founder of Mera Gao Power, a provider of low-cost, off-grid solar power to villages in India’s Uttar Pradesh state, a prime challenge is attracting investors who are used to large, publicly funded grid-based power projects with government subsidies, and are unfamiliar with projects like those of Mera Gao Power. “We’re trying to put this into a model where we’re serving ultra-poor customers without public funding, and we’re trying to create a profitable model with a three- to four-year payback period on infrastructure,” he said.
In Australia, David Allen works for a family office that has met with success in its investments in renewable energy projects aimed at benefiting indigenous communities and reducing the carbon footprint. But Allen, who champions a for-profit model for sustainability, finds it disconcerting when the entrepreneurs he backs prefer to service middle-income consumers instead of stretching their business model to reach poorer people at the bottom of the pyramid. “That’s one of the risks we’re now turning our attention to,” he said. “How can we bake the social purpose into some of these businesses?”
Jaisinghani and Allen shared their perspectives on the guiding principles for impact investing with Knowledge@Wharton for a new podcast series called “From Back Street to Wall Street.” The series is being produced in partnership with Impact Investment Exchange (IIX), a Singapore-based organization that serves as a bridge between investors and development goals in Asia. (Listen to this episode using the player at the top of this page. Find the first episode here and the second episode here.)
‘Lighting-as-a-Service’ Model
Jaisinghani was struck by the idea for Mera Gao Power (“Mera Gao” means “My Village” in Hindi) some two decades ago when he worked in the Peace Corps in a small village in Nepal. The village had no electricity, and people got by with kerosene lanterns. Over the years, he thought up a “lighting-as-a-service” business model, and founded his firm in 2010 in Lucknow, Uttar Pradesh
Mera Gao Power started out by designing a solar-powered micro grid that provides seven hours of electricity from 7 p.m. every day to village households in Uttar Pradesh. Priced at less than $2 a month, the service powers two light points and a phone charger; the latter is crucial for households to charge their mobile phones, on which they watch movies and other entertainment.
The company started with a few pilots in 2010 and 2011, and started growing slowly in 2012. Today it serves some 20,000 households with 100,000 people in 1,500 communities of Uttar Pradesh. Its plan is to grow to 50,000 households by end-2018. “We wanted to focus on a level of service that was going to be as impactful as possible, but still affordable to our customers,” Jaisinghani said.
Mera Gao Power has enabled people to earn more income, such as shop owners who can stay open for longer hours in the evening. “The biggest impact we can measure is on the amount of time children spend studying,” said Jaisinghani.
Scalable Business Model
Mera Gao Power’s model is scalable with relatively lower capital costs than grid-based facilities, and with its ability to get projects installed quickly. Compared to the capital cost of $15,000 to connect a village to the national grid, Mera Gao Power’s investment in a micro grid is just $900. That covers the costs of two panels, two batteries, a number of distribution lines, and installation of lights and phone chargers in its customers’ homes. Each community has about 150 households, and a staff of untrained people — not skilled electricians – completes installation of the grid in a day. “What makes it great is how simple it is,” Jaisinghani said of his firm’s model.
“The biggest impact we can measure is on the amount of time children spend studying.” –Nikhil Jaisinghani
Last June, Mera Gao Power raised $2.5 million in equity funding with support from IIX that would enable it to extend its services to more than 50,000 households with 300,000 residents in Uttar Pradesh. It is now raising funds on a German crowd funding platform.
Jaisinghani estimated that Uttar Pradesh alone has more than 100,000 communities that are off-grid, which makes up a significant market for his firm’s services. Yet, it has been a challenge to get prospective investors to appreciate the soundness of low-priced, off-grid, renewable power projects. “Potential investors like the idea that we’re using renewables and serving core communities, but we’re doing so in a way that they’re completely unaccustomed to,” he said. “Over time, we’d love to be able to showcase it as a real model for a true rural or geographic electrification strategy.”
An Urge to Give Back, Use Skills
At the other end of the planet, Allen as executive director at a family office juggles a different basket of opportunities and challenges. The family, which ran a global business, wanted to “achieve impact at scale,” for which it has used instruments such as grants and investments. It has four focus areas — indigenous Australia, disability, climate change, and the Christian faith. That suited Allen, who studied manufacturing engineering in the U.K. and France, and pursued a career in investment banking, private equity and three startups, but wanted to use his skills to find out what doing business and doing good looked like.
With an objective to support “livelihood and climate solutions” for indigenous communities in Australia and in Southeast Asia, the family office has invested in projects aimed at reducing carbon in the atmosphere, for example, with renewable power such as solar and biodigesters or biogas. Such power is cleaner than fossil fuels, and it helps communities to raise incomes and improve health and living standards, he said.
For-profit, for Good
Allen is convinced that such projects can only be addressed with a for-profit model. “There are a billion people without toilets in the world, so how do you give away a billion toilets and keep them serviced?” he asked. “You just can’t. You need a profit model that will deliver them, install them and keep them maintained. It’s the same with energy access as well. The profit motive helps us achieve scale and achieve energy access for the masses because it’s the only thing that can keep these services sustainable.”
“I see the role of family offices and charitable trusts in using their capital as pioneer money.” –David Allen
Allen said the family office is looking for a model that is “inherently profitable and scalable,” and focuses on three aspects: the number of people affected, carbon reduction and income enhancement.
One of the investments is with a Cambodian biodigestor firm that enables rural communities to convert manure and kitchen waste into biogas. The company also has a scalable model where its biodigestors could be easily manufactured at any plastic facility with the rights to the design.
Allen is not the happiest when the enterprises he backs don’t quite deliver the desired impacts. One of Allen’s investments has become a big and successful multinational business, but it has found it more profitable to serve middle-class customers instead of those at the bottom of the pyramid. “We’re not quite having the impact at the social level that we had hoped when we first made the investment a few years ago,” he said.
Even so, Allen said it is critical that entities like his embrace those risks because traditional Wall Street investors don’t have the appetite for them. “I see the role of family offices and charitable trusts in using their capital as pioneer money.” When risks are lower and the business model has proven itself, he expects pension fund managers and other profit-driven investors to back those projects.
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One Comment So Far
Anumakonda Jagadeesh
Excellent.
Here is a Blue Print for Power Generation and Energy Conservation for a developing country like India.
HAND OPERATED BATTERY CHARGER
Batteries are going to play a crucial role especially in rural power supply. Here Human power can come handy for small scale battery charging.
A healthy adult human being can generate 100 W Energy. The trouble with this pedal power is that one cannot pedal it continuously that too in the posture portrayed in the picture. I have one Hand Operated Battery charger where I use hand as if one is tired of left hand,one can use right hand. Are not hand operated sewing machines run by humans for about 10 hours a day !By rotating this generator one can charge three 12 Volt Batteries in parallel.I just replaced the grinding stone used in the knife sharpening treadle machine with low RPM Generator.
In pedal power there is advantage and disadvantage. When you push it,body weight falls and goes down quickly and to bring it back you need to exert more energy. My Innovations including Pedal operated Washing Machine and Hand operated Battery Charger.
DUAL POWERED READING LIGHTS
Normally in rural areas people use Tube Lights,CFL in houses. Forstudying the student uses 40 Watts bulb which is substantial. Thanks to the Solar Energy, DUAL POWERED LED(SOLAR & ELECTRIC) Reading lights are available. They consume only 0.2 Watts and offer light for 8 hours on a single charge and when bulk produced cost about Rs 250. Wonderful and sturdy designs are available from China. I have had been using the Reading light for the last 5 years. I have several models of the same. The Government can draw a scheme to supply these Reading Lights to Schools and Colleges at a subsidized rate.
ENERGY SAVING IN ELECTRIC MOTORS
The agricultural electric motors being old consume lot of power because of lower efficiency. These can be changed with more efficient ones . The Farmer can contribute about Rs 5000(1 US $ = Rs 64) towards the cost of the new Motor(one can get it from old motor cost + some contribution). Never give anything free.There are 260 Million Electric Pump sets in the country. A saving of 30% in power is possible. Next to Industry,major consumption of Electricity is in Agriculture. The advantage with Energy Saving is the the beniit comes from day one of the operation.
Why not the Governments in Developing countries go for Bio energy from Care-free growth,regenerative CAM Plants Sisal Agave and Opuntia?
Biofuel/Biogas power from Agave and Opuntia: Another area which yields
immediate results and gainful employment is to grow care-free growth plants like Agave and Opuntia in waste lands. There are millions of hectares of waste lands. In the debate Food Vs Fuel the alternative is to grow plants with multiple uses which have care-free growth. Yet another option is Biofuel from Agave and
Biogas from Opuntia and power generation. Agave is a care – free growth plant which can be grown in millions of hectares of waste land and which produces Biofuel. Already Mexico is using it. Another Care free growth plant is Opuntia which generates Biogas. Biogas can be input to generate power through Biogas Generators. Biogas generators of MW size are available from China.
Yet another option is Water Hyacinth for biogas. Water Hyacinth along with animal dung can produce biogas on a large scale and then power. In Kolleru lake in Godavari and Krishna Delta in Andhra Pradesh in India it is available in 308 Sq. Km for nearly 8 months in a year. Crassulacean acid metabolism, also known as CAM photosynthesis, is a carbon fixation pathway that evolved in some plants as an adaptation to arid conditions In a plant using full CAM, the stomata in the leaves remain shut during the day to reduce evapotranspiration, but open at night to collect carbon dioxide (CO2). The CO2 is stored as the four-carbon acidmalate, and then used during photosynthesis during the day. The pre-collected CO2 is concentrated around the enzyme RuBisCO, increasing
photosynthetic efficiency. Agave and Opuntia are the best CAM Plants.
Researchers find that the agave plant will serve as a biofuel crop to produce ethanol. “Agave has a huge advantage, as it can grow in marginal or desert land, not on arable land,” and therefore would not displace food crops, says Oliver Inderwildi, at the University of Oxford.The majority of ethanol
produced in the world is still derived from food crops such as corn and
sugarcane. Speculators have argued for years now that using such crops for fuel
can drive up the price of food. Agave, however, can grow on hot dry land with a
high-yield and low environmental impact. The researchers proposing the plant’s
use have modeled a facility in Jalisco, Mexico, which converts the high sugar
content of the plant into ethanol. Another plant of great use is OPUNTIA for
biogas production. The cultivation of nopal((OPUNTIA FICUS-INDICA), a type of
cactus, is one of the most important in Mexico. According to Rodrigo Morales,
Chilean engineer, Wayland biomass, installed on Mexican soil, “allows you to generate
inexhaustible clean energy.” Through the production of biogas, it can serve as
a raw material more efficiently, by example and by comparison with jatropha.
Wayland Morales, head of Elqui Global Energy argues that “an acre of cactus
produces 43 200 m3 of biogas or the equivalent in energy terms to 25,000 liters
of diesel.” With the same land planted with jatropha, he says, it will produce
3,000 liters of biodiesel. Another of the peculiarities of the nopal is biogas
which is the same molecule of natural gas, but its production does not require
machines or devices of high complexity. Also, unlike natural gas, contains
primarily methane (75%), carbon dioxide (24%) and other minor gases (1%), “so
it has advantages from the technical point of view since it has the same
capacity heat but is cleaner, “he says, and as sum datum its calorific value is
7,000 kcal/m3. In the fields where Jatropha is being grown,Agave and Opuntia
can be grown as Inter cropping. Also Energy conservation yields quick results
than energy generation. In India Agricultural pumpsets consume power next only
to Industry. There are about 26 Million Agricultural Electric Motors. Many of
them are quite old and inefficient. For Agricultural pumpsets the power tariff
is nominal or nil in some states. A scheme can be chalked out By both Central
and State Governments to replace the old and inefficient agricultural pumpsets
with efficient ones by giving a subsidy. Electricity is a high grade energy
which finds use in Industry,lighting etc. As such it must be judiciously used
especially in the agricultural sector.
Often energy studies aim at benefitting the rich but rarely concentrate on
poor. A simple example is Box Type Solar Cooker. Box Type Solar Cooker is
almost 60 years old. Why it has not taken off especially in a populous country
like India? Only 0.6 million Box Type Solar Cookers sold but not used.
Technology is culture specific while science is universal. There is no
provision for frying in box type solar cooker ,only boiling. One cannot have
two cooking systems one for boiling and another for frying. In Innovation
theory there are two approaches,Technology Push Vs Demand pull. The Box type
solar cookers belong to Technology Push category.
There are small wind mills for water pumping developed by Centro La
Gaviotas,Bagota,Colombia. I wonder still why such a fine water pumping windmill
has not spread to other countries.
PVC Pipes for small and medium irrigation to save water and Power:
We have farms where open canal watering is common. Especially in Summer and in sandy loam soils the water loss due to seepage and evaporation very high.
My father introduced Farm irrigation through Cement pipes in 1960s itself in our Fields in Mutukur ,Nellore Dt .AP.India next to the piped canal were planted Coconut Trees. Unfortunately the roots of the coconut tree penetrated into the Cement pipes resulting in the breakage of Cement pipes. Unfortunately at that time PVC pipes were not common. so We could not replace them.
Having experienced this I have an idea. PVC Pipes can be provided to Small and Medium Farmers especially in Dry Farming at Subsidised rates.
Energy saving by having low angled truncated cone at the delivery end in agricultural pump sets:
There are 2.6 Crore electric agricultural pumpsets in the country and 15 lakhs in AP. There are lakhs of Diesel pumpserts also. In the pumping system through bore wells there are two losses: Entry Losses and Exit Losses. One cannot do anything about entry losses as the pipe will be underground. Something can be done to solve the problem of exit losses. Most of the Electric pumpsets is determined by semi skilled Mechanics who knows only to prescribe 3 x 3 type pipes irrespective of water table availability. Thus there is a mismatch between suction and delivery. One way to reduce exit losses is to use a wider pipe. But when the water table goes down in summer it won’t work. Without disturbing the existing system how best to conserve energy.
When the area at the Exit end of the pipe is limited water comes and stays for a while,with the result back pressure develops. In order to push it more energy is needed which will be from source.
The SOLUTION:
Attach a 1 foot long 10 degrees angled cone made of steel at the exit end(depending on the diameter). The water at the discharge end while passing through the Truncated Cone (Since area is more) freely passes . This low angle is needed so that the water grazes through the cone with out separation.
Experiments conducted revealed that there will be about 5% saving in power. Just imagine the enormous power at the country level. This steel cone costs just Rs 300(about US$5).
Even between GI pipes and PVC pipes there is a saving of 5% of power because of frictional losses through RUSTING inside GI Pipes.
I have had been involved in the research and
development of Renewables for over 3 decades. Our basic approach is 3D: Design,Demonstrate
and Disseminate. We have over 20 Innovative Renewable Energy Gadgets.
I have an action plan for India on Renewables to bring in Rural Prosperity:
1. Promote Offshore Wind Farms.
2. Promote small wind generators as decentralised systems
3. Roof Top PV Solar
4. Creating Renewable Energy Fund. Investment by Income Tax Payers to be
exempted under Section 80C.
5. Wind Farm Co-operatives on the lines of those in Germany,Denmark etc.
6. Solar Co-operatives on the lines of those in US.
7. Energy Conservation by replacing most of the inefficient 2.6 million
irrigation electric pump sets(About 30% power can be saved). Agriculture
consumes much power next only to Industry
8. Reading lights with reliable and quality dual powered(Solar/Electricity/USB)
to save enormous energy.
9. Biofuel/Biogas for power generation and cooking from Agave/opuntia care-free
growth,regenerative and CAM plants. In China Biogas for cooking is supplied
trough pipes.
In the vast vacant land in India Agave and Opuntia can be grown and power
generation established as decentralised locally.
10. Simple Box Type Solar Cooker with frying facility( 3D
approach,Design,Demonstrate and Disseminate)
11.Cost effective vertical and cylindrical,mobile solar water heater design.
12. Low head Micro hydro device to generate power from the head of falling
water from the delivery pipe of Electric/diesel pumpsets.
13. KW size Biogas power/cooking plant for villages.
14. Simple solar drier
15. Growing CAM Plants in Waste and Vacant lands which act as Carbon Sink.
Put the RENEWABLES to WORK: To get inexhaustible,Pollution- Free
Energy which cannot be misused.
Dr.A.Jagadeesh Nellore(AP)
Renewable Energy Expert
Environment Specialist
Recipient
Margaret Noble Foundation Seattle Award in Energy Technology.