Weekly Review May 16-20


This Weekly Review focuses on the economic and social opportunities in renewable energy and clean technology, especially within emerging markets to better the lives of the world’s poorest citizens.
SELCO solar panels in India at Simpa Site Visit
We know that there’s a certain connection between mobile technology and alternative energy, which is why they are our investment focus. Researchers at the Texas A&M and University of Houston are studying piezoelectric material that could harvest sound waves for energy. Researchers at a Korean university are studying particular ways to harvest sound waves that are abundant in urban environments. So far, tests show that “100 decibels of sound can generate 50 millivolts of electricity,” which is perfect for charging cell phones during conversations. Harvesting the sound energy from traffic has the potential to produce abundant clean energy, but would require extensive urban planning. The article reports that harvesting sound energy is still in its early stages, but something to look out for in the future. Capitalizing on energy that is readily available and potentially highly affordable will be beneficial to the poor populations in urban areas. 
It’s clear that the global community needs to find sustainable and renewable energy sources before we run out of oil or do any more environmental damage. In order for this to happen, change is necessary. Realistically, people and, more importantly, companies won’t change their energy consumption habits unless the government requires them to do so. With some governmental policy, the Intergovernmental Panel on Climate Change reports that “the world can get 80% of its power from renewable sources by 2050.” This includes everywhere from the US to Tanzania (where EGG-energy operates), to India (where Promethean Power and Simpa Networks operate). The report from the Intergovernmental Panel on Climate Change offers many great stats, including “the investment that will be needed to meet the greenhouse gas emissions target demanded by scientists is likely to amount to $5 trillion in the next decade, rising to $7 trillion from 2021 to 2030. “ What the article doesn’t touch upon, however, is that many investments will come from impact investors who have social goals beyond those that are simply environmental. Impact investors’ contributions will promote economic development and improve citizens’ lives in emerging markets. Clean energy and technology in emerging markets can do more than save the environment (which is important, too). Investing in renewable energy in emerging markets can create jobs and provide products and services that the people there need to get an education or overall better their lives.  
ExxonMobil’s latest Energy Outlook Report states that global energy demand “will be up 35 per cent in 2030 compared to 2005.” What’s interesting is that the demand coming from countries outside of the Organization for Economic Cooperation and Development (OECD) will “increase by 70 per cent in 2030.” See here for a complete list of OECD member countries. Non-OECD countries include India, all of Africa and most of South America. In other words, the three major areas where we seek to invest. Furthermore, “the types of energy consumed [are] also forecast to change in the coming years,” and we’re confident that the switch will be towards renewable in both developed and developing countries.
Simon Rolland is the secretary-general for the Alliance for Rural Electrification. He argues (and we agree) that people in Africa need to turn towards renewable energy sources. However, as we’ve noted before, there are many challenges for the social entrepreneurs who try to bring renewable energy to rural regions. The Alliance for Rural Electrification helps to alleviate some of those challenges by developing key recommendations for companies or those involved in the renewable energy sector “to guide governance and decision makers.” Rolland says, “Markets must be shaped according to the needs of the private sector because the first needs in developing countries are for reliable technologies, suitable business models and investment.” The Alliance believes that energy access in rural areas will contribute to sustainable development and progress. Here at ID, we seek to invest in those very companies that aim to electrify rural areas.
How Start-Ups Will Lead the Clean Tech Revolution” by James Parle from Presidio Graduate School’s MBA program on Triple Pundit
Clean tech is one of the “fastest growing sectors in the economy.” Parle points out that GE’s Ecomagination foreshadows that “start-ups and not large corporations will lead the clean tech revolution.” More specifically, small start up social enterprises like those in our portfolio and clean tech incubators like our friends at Greentown Labs will have maximum impact and the greatest influence in the clean tech revolution. The most successful clean tech incubators, Parle notes, are those that operate with sustainable business practices with a triple bottom line: people, planet, profit. A combination of investors who are willing to offer patient capital and sustainable clean tech incubators will lead the clean tech revolution both in the US and in emerging markets. 

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