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April 1, 2008

Spring Newsletter 2008 - Energy for the Developing World

Written by Paul Glader, Knight Bagehot Fellow 2007-2008, this article recaps a panel of experts discussing energy policy and for profit energy solutions in emerging economies.

Micro-hydro, Carbon Offsets and Corporate Reputations
Written by Paul Glader, Knight Bagehot Fellow 2007-2008

Energy policy and solutions are developing rapidly, but winning for-profit ideas will compete for supremacy in coming years according to energy experts on this panel.
“You may think you have the solution for energy supply, but that depends on where you are sitting,” said Calliope Webber, Director of gas, power and renewable projects at BP. She noted that BP is trying to stay ahead of the fast-moving curve and realize one truth: “Energy use and human development go together.”
Her company and others realize that energy use and poverty reduction go hand in hand. The world’s poor, when they don’t have to spend time generating their own energy sources to cook food or stay warm, are able to spend their time doing other things such as getting an education, starting a business or being involved in civic life.
BP’s corporate reputation benefits from the company’s attempt to tell its story of doing well while making money, according to Webber. She said that bringing energy to the developing world also leads to more diversification in the economy and increased employment, and that the company is working on cross-sector partnerships and access to energy for the poor and is part of climate change initiatives.
Eron Bloomgarden, a graduate of Columbia University, talked about trends in carbon offsets. As country director of U.S. operations for EcoSecurities, he deals with carbon finance, emissions trading and renewable energy. He focuses on carbon-offset projects in North America and said the landscape is shifting as more corporations in America realize the potential impact of environmental issues.
“Global warming is happening,” he says. “It’s a crisis situation. It’s a real emergency.”
His firm, of course, aims to profit by providing solutions. Bloomgarden thinks the market can be significantly developed, since he views the world response to climate change, so far, as woefully inadequate.
Bloomgarden described the emerging    voluntary market for energy products in the United States as the UN’s Kyoto Protocol’s Clean Development Mechanism continues to spur projects to reduce emissions of greenhouse gasses and as ideas develop around how to make markets in this area. EcoSecurities is growing rapidly. “What we need in the U.S. is a price on carbon,” he said.
Panelist Ron Smith, founding partner of   Verdant Power Inc., wants to commercialize kinetic hydropower systems that use small turbines in rivers and other moving water sources to produce power. “All of us can recognize that in flowing water, there is    potential to harness that power for human use.”

Verdant Power is working with partners in New York to introduce turbines to a special section of the East River near Roosevelt Island. The 30-person firm wants to grow projects globally and compete with three firms in the United Kingdom that are pursuing the same idea with different technologies.
Smith believes the technology can be applied to man-made channels, aqueducts and flumes. This micro hydro technology poses several operational challenges as well as issues of scale. Initially, it brings minimal power to the grid; however, Smith argues, it will accumulate as his company and others expand.
The biggest challenge, however, is providing sustainable power while protecting wildlife, such as fish.
“That has been the fundamental issue for us,” Smith said, responding to a question about the safety for wildlife as turbine blades spin under water. He said his firm is working with the Coast Guard and other interests as they test speeds and make sure the process does not injure fish. His firm has spent $3 million on sonar technology to monitor the fish movements around their turbines.
Such investments, Smith said, make micro hydro start-up businesses more expensive to enter.

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