I spent the last couple days learning about how countries in Latin America, Africa and the Caribbean might best to stimulate the implementation of renewables at the first annual REEM Conference. The conference was largely an attempt to identify and some lessons learned and best practices from the EU, and even the US, which could help shape policy in these regions.
I would contend that knowledge sharing is always constructive. Yet, as some of the entrepreneurs on the panel explained their decidedly unique and varied frustrations and successes surrounding each of their projects, I could not help but feel that the concept of pontificating on would be effective policies for a developing countries from a well lit and air conditioned downtown San Francisco hotel ball room was a bit cheeky, if not resoundingly inadvisable.
I fall firmly in the camp of “Projects will Define Policy” as the experience of those projects will highlight the economic opportunities and constraints that each country presents, and countries can, hopefully, efficiently develop systems to promote sustainable solutions, and I think that the conference organizers should be confident that some of the connections made through the conference will lead to both.
The underlying premise for the conference seemed to be that these emerging markets shared some common constraints and subsequently opportunities, namely:
Poor Infrastructure – rail, road, shipping ports and grid
Poor Electrical Penetration
Energy needs to increase productivity
Technically Trained Workforces
Demand – Rising Per capita energy use in emerging markets
And more broadly all markets experience pressures from:
Environment – and the impact of fossil fuels
Security – and the opportunity surrounding sourcing energy locally to reduce geo-political friction
Cost – and that the marginal cost of renewables is falling, fast.
One of the most enlightening presentations surrounding financing roadmaps for developing renewable projects in emerging markets, came from my friend and renown “carbon guru” Dr. Alexander Rau of Climate Wedge, a carbon consultancy with offices in San Francisco and London. Essentially he said that by only highlighting the market and potential revenue source available from emission reductions to project developers, countries could stimulate the local development of renewables. Dr. Rau presented that with current prices of CO2 the revenue available from carbon reductions (on a ‘dirty grid) equates to roughly the 30% tax credit offered in the United States. With the exception of Brazil and southern Africa, Africa and Latin America have not been particularly active in CDM projects; the opportunity to capitalize on developing projects is there for the taking.
Numerous times parallels were made between mobile telephony and electricty – where by countries might be able to ‘skip’ needing to lay down expensive transmission if only they get distributed (and hopefully renewable) electricity into rural settings.
The concept of a micro grid presented by Envision Solar was compelling, for developing community power plants powered by renewables, particularly PV. They currently use 50 KWh flow batteries they are $1/Wh batteries are about 3-5 years out from achieving “grid parity” to completely obviate the need for a fully interconnected grid.
I found it a bit ironic to chat about the California’s “load order” immediately after discussing rural electrification (ie, invest in reducing consumption through efficiency, then developing renewables, and only then in fossil fuels), when within many areas of the countries represented there is no energy to be efficient with in the first place.
The opportunity that efficiency presents is clear especially given how scarce and expensive energy, particularly renewable energy, is. The point, that should sound like a broken record until we have achieved maximum efficiency (we can’t) is, that there is a direct benefit in developing efficient living and working environments.
As further incentive, by aggressively reducing the amount of energy consumed by new buildings, energy demand can feasibly be fulfilled by local renewable energy generation, obviating the need for expensive transmission lines.
During one of the last panels Josh Becker, a partner at local VC firm New Cycle Capital and well-regarded policy “wonk,” highlighted the importance of policy to stimulate the deployment of renewables, efficient architecture and new building materials to achieve these aims. As you might suspect from a Venture Capitalist, he touted the importance of stimulating the local entrepreneurs to develop locally tailored leapfrogging solutions. Josh and I caught up, and at least one person asked him to put them in touch with the founders of the CleanTech Open.
Bottom line: I was very impressed with the direction the conference is going, and I am eager to see how the conference organizers capitalize on the success of their debut, and perhaps actually contribute somehow next year. I finally caught up with a couple entrepreneurial Colombian sustainable architects, and they thought that the contats they made here in the US were great, and appreciated the participation of so many different countries.