Renewable Energy Developments: Weekly Review 8/25 – 8/29

Renewable energy solutions continue to contribute to solving the world’s energy crisis. Below are recent articles highlighting recent news and developments in the space.

Renewable Energy Capacity Grows at Fastest Ever Pace Terry Macalister on The Guardian

A recent report by the International Energy Agency revealed that renewable power capacity grew at its strongest ever pace last year and now produces 22% of the world’s electricity. More than $250 billion was invested in “green” generating systems in 2013 yet the speed of growth is expected to slow due to politician’s concerns over the costs of deploying renewables. Maria van der Hoeven, executive director of the IEA, said: “Renewables are a necessary part of energy security.” She advised: “Governments must distinguish more clearly between the past, present and future, as costs are falling over time.”

The level of investment in renewable is lower today than it was at its peak of $280 billion in 2011. It is expected to average only $230 billion annually going forward unless governments make increasing policy commitments to increase spending. The growth rate will need to improve to meet climate change targets.

Powering the World’s Poorer Economies: A Response to Bill Gates and Jigar Shah Carl Pope on Green Tech Media

There is an ongoing debate between Bill Gates and Jigar Shaw over the best way to provide energy access to the world’s poor. Gates is an advocate for centralized, fossil-fuel-based electrification while Shah calls for prioritizing distributed renewable solutions yet neither can provide evidence to support which is the cheapest, most reliable solution to reach the 3.2 billion people living in energy poverty. Carl Pope, former executive director of Sierra Club, weighs in with the facts.

New fossil-fuel electricity can reach the poor cheaply, quickly and reliably, if:

  • The households or businesses have already been wired to the grid
  • The coal (or natural gas) is local, easily extracted and doesn’t require massive disruption of existing communities.
  • The population to be served is small enough that plants don’t need pollution-control equipment
  • The region has a sufficient water surplus

Fossil fuels won’t work in most energy deprived regions because the costs of grid extensions, fuel importation, pollution clean-up and water shortages are too high to hope to provide affordable and reliable electricity.

The idea that renewable electricity costs more than fossil fuel power is simply no longer true. Renewables are increasingly cheaper than fossil alternatives for both on-grid and off-grid customers.

Let’s Stop Just Consuming and Become Part of the Internet of Energy on CleanTechies

When Ryan Wartena started our portfolio company GELI, his ultimate goal was the boost the use of energy storage so that “we can run the world on renewable energy,” he said. To achieve this, he created an “operating system” for decentralized energy. With this energy storage platform, companies that are generating more power than they need using renewable energy (i.e. achieving energy decentralization) are able to generate and store power, track energy price changes, and ultimately sell it back to the grid.

The company’s business model focuses on getting energy storage out there as quickly as possible. GELI provides integration software and allows its customers to go to their OEMs to get components, saving them money. The system can control electric vehicles, solar, storage, diesel backups and mechanical systems and there are many opportunities for to better integrate resources and focus on the “Internet of Energy”. “We need to focus on being producers, rather than consumers,” said Wartena.

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Integrating Mobile Money into Agricultural Development: Weekly Review 8/18 – 8/22

The Mobile Financial Service industry has made financial inclusion possible for millions in developing nations. Today, there is an opportunity to integrate mobile money into agriculture development with the potential to benefit farmers, buyers and mobile money providers. Below is a series of articles by Lee Babcock, digital finance thought leader, suggesting the best way to jumpstart mobile payments in the agriculture sector.

Three Steps to Jumpstart Agriculture Mobile Payments by Lee Babcock on Next Billion

Research to be published by The Technical Centre for Agriculture and Rural Cooperation (CTA) reveals that large commodity buyers are competing to provide the fastest speed of payments to their smallholder farmers. Farmer’s transition from cash to mobile payments is a huge opportunity for mobile financial service providers. Cash payment schemes present a value chain efficiency gap that calls for an intervention that will transition payments to mobile. Becoming cashless has multiple benefits for farmers, buyers and mobile finance service providers:

  • Farmers obtain a financial identity while becoming more productive by spending less time traveling to and from cash transactions.
  • Large commodity buyers can provide instant payment to farmers, while significantly reducing administrative costs associated with distributing cash to thousands of farmers.
  • Mobile financial service providers register new users, while promoting loyalty and reducing churn among existing customers.

Considering the interest by and benefits for all stakeholders in agriculture, how might we help the sector transition to mobile payments?

Step 1 – Researching smallholders’ financial behavior to help them transition to mobile payments

The first step in helping the sector transition to mobile payments is to conduct cash usage behavioral research with farmers, to inform the design of the ecosystem of cash-in/cash-out agents and merchants that are tightly aligned along the targeted value chain. This research can also assess the financial literacy of farmers and identify the latent demand for financial products. As either a stand-alone exercise or integrated into a pre-project analysis effort for an agricultural development intervention, this market research will provide visibility into details of cash transactions. With new insight into farmer’s behaviors and because agriculture is often the only source of income for households at the base of the pyramid, mobile financial service providers will welcome partnerships with agriculture entities.

Step 2 – Forming strategic alliances

The mobile money industry has rapidly saturated large urban areas in Africa and the rest of the developing world. The next challenge for the industry will be to penetrate rural areas while beginning to generate a return on investment.  Strategic alliances with large commodity buyers that source from smallholder farms may be the way to achieve this. The commodity buyer benefits from an efficient, low-cost digital payment mechanism, the mobile payments provider benefits from a regular payment stream flowing into mobile wallets that generate transaction fees and farmers benefit from convenient and safe receipt and storage of crop payments plus the convenience of making their own mobile payments for personal expenditures.

An upcoming report by the CTA explores three strategic alliances that leverage the procurement policies of large buyers of commodities that source from smallholder farmers. Each has the common mission to replace cash payments to farmers with mobile payments.

Step 3 – Overcoming farmers’ illiteracy, financial illiteracy and lack of trust

The third and final step to jumpstarting mobile payments in agriculture will be to overcome illiteracy, financial illiteracy and lack of trust by embedding the use of mobile payments into agricultural value chains. Farmers are often unable to read the forms required to open bank accounts and/or live nowhere near a financial institution. Meanwhile, research has shown a consistent pattern of interest on the part of farmers to learn how to receive and send mobile money. Subsequently, there lies an opportunity for the agricultural partner in a strategic alliance to leverage its status as a trusted intermediary to promote education about the features and benefits of mobile finance.

Babcock states, “As mobile money providers and the agriculture sector continue to align, we will realize the potential of mobile finance to do for the base of the pyramid what commercial banking did for the industrial revolution.”

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Sustainable Investing Developments: Weekly Review 8/11 – 8/15

At Invested Development, we strive to make a global impact through our investments in innovative solutions to global challenges. The articles below look at the evolution of sustainable investing and explore what the future might look like for the space.

Mission-Driven Business by Eric Nee on Stanford Social Innovation Review

One of the guiding principles behind the launch of the Stanford Social Innovation Review (SSIR) in 2003 was the belief that social innovations would arise from the “creative crossing of boundaries by organization from the nonprofit, for-profit, and government sectors” according to Nee, managing editor of SSIR. At the time, this proposed sector crossing was uncommon. Businesses and investors needed to find ways to incorporate a social mission into their strategy, nonprofits needed to find ways to apply business approaches to solving social problems and government needed to refocus the way it worked with each sector, respectively.

Today, this approach to solving social problems is increasingly commonplace. This article recognizes two businesses that have successfully adopted a social mission as part of their work.

The Next Stage of Sustainable Investing by Joe Keefe on Huffington Post

In the coming years, investing will become more about goals and solutions than simply equities vs. fixed income or large-cap vs. small-cap. Following the economic downturn in 2008, the market saw an influx of non-correlated or alternative offerings and the financial services industry will continue to come out with new products, both in response to actual investor needs and those simply designed to gather assets and revenues.

Even after the market has surged back and investor’s assets have been largely restored, many remain spooked by the market. Joe Keefe, President and CEO of Pax World Funds suggests that to truly serve investors today we need to have at least a partial answer to the question of trust and related risk that is at the heart of investing. One way to do this is to look beyond diversification and asset allocation and speak to investor’s goals that involve what they wish to accomplish in their lives, and how their money relates to that. Sustainable investing, in that regard, can be part of the solution.

Gender-Lens Investing: From Margins To Mainstream by Stephanie Marton on Forbes

The gender-lens investment movement calls for investors to use gender as a category for analysis in company diligence, prioritizing deals on value opportunities in companies that are led by women, that promote gender equity and those that benefit women through products and services. The investment thesis supporting the movement states that gender-lens investing is both the right moral move and the smart financial play. This economic thesis emerged from the moral imperative to support women in business yet by using the moral language of a social movement, we risk halting our progress forward. Marton, a management consultant specializing in strategy and organization suggests that it’s time to leave behind the social cause in order to attract the most committed capital and capable investors.

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