The Industrial Revolution reinvented the wheels of progress. It began in the United Kingdom in the 18th century and slowly spread to other parts of the world. The world’s per capita income in the next two centuries went up by 10 times and the global population by six times. Nobel laureate Robert E. Lucas, Jr. had remarked “For the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth.”
The production of goods through machines made goods more affordable. It killed manual production, but raised human productivity. Consequently, the consumption of energy too went up. Even in those heydays of the revolution, English poet and painter William Blake had cautioned through his poem dark satanic mills that the fumes coming out of the machines would destroy the environment. Blake’s observation is prophetic.
The progress initiated by the Industrial Revolution has completed its circle. The threat on the earth is real. But throwing the baby with the bathwater is not a solution. Thankfully, the human mind too has evolved with fresh thinking and new impetus. One of the finest developments has been the reward to pollute less. Emitting toxins less into the air is an incentive, a revenue stream, to improve the overall profitability of the venture. It has challenged the mind to develop new technologies that are more efficient than those existed before.
Saving the environment too is no longer a fad, but a serious business. As the lifeline of any business is funds, a number of funds have come up that support companies which are reducing their emissions that causes global warming. The arrival of Green Mutual Funds (GMF) is a reflection of the maturity of the financial markets. Like a conventional mutual fund, the GMF is a managed collective investment scheme, which pools money from many investors to invest in short-term and long-term instruments in various environmental markets—carbon, markets, renewable energy, market and energy efficiency markets.
Boston-based Winslow Green Mutual Funds are excellent global examples of green mutual funds. The Winslow Green Growth Fund is a growth equity fund. Though it invests in companies of any size capitalisation, the fund’s focus is to invest a significant portion of its assets in domestic small capitalisation companies with a market capitalisation of below $2 billion. It targets companies with clean and efficient business practices that seek to minimise their environmental impact and those enterprises, whose products or services offer solutions to environmental problems. Though the fund is industry agnostic, it prefers sectors such as clean energy, water management, resource efficiency, sustainable living, environmental services, green transportation and green building products.
GMF engage integration of financial and environmental analysis in existing and emerging markets’ trends and policies and, identify the prospects for development of a comprehensive investment portfolio. Investing in green funds, however, does not necessarily bring higher or lower returns than the average mutual fund. In fact, these funds may not be suitable for short-term returns, as they are prone to price fluctuations throughout the trading period. The inherent volatility in the carbon prices makes these funds unsuitable for buy and hold strategy. “For risk-averse investors, GMF would prove beneficial under long-term investment objective,” says a report from an energy consulting firm.
Since the investments required are large, the GMF may be suitable for high net worth clients like large corporations, industries, foundations, endowments, and insurance and pension funds. The retail customers may find it difficult to invest in GMF, at least in the short to mid-term, owing to the large investment needs of the GMF and tertiary role of individuals in the green or carbon markets. But the good thing is, a journey has been made. The interests of business and environment have converged. It augurs well for the society.
Saturday 16 July 2011
Tuesday 5 July 2011
The Benign Power of Water
Small is beautiful. But small could also be effective. Time is ripe to focus on small hydro power units to bridge the gap in the country’s demand-supply of energy. It is prudent as the domestic gas availability from the once glorified Krishna-Godavari basin diminishes and price of imported coal rises from Australia to Indonesia. The benefits of using micro hydro power plant in India are many. It is economical, non-polluting and environmentally benign. They have the potential to provide energy in remote and hilly areas, where extension of grid system is not commercially viable. On the top of it, the gestation period for such installations is very short and cost maintenance is minimal.
The history of micro hydro power units is not only fascinating, but offer insight even today. Since 100 BC, analysts observe, the water wheels existed to grind wheat into flour. They were slowly replaced by water turbine by the end of 19th century as Industrial revolution progressed across the world. The basics are simple. The electricity is produced when water falls on the turbine and the blade rotates. However, what varies is the amount of electricity generated. “The quantity of electricity that a hydropower setup produces depends on the amount of water that passes through the turbine, or, the height from which the water falls. The greater the flow and higher the height; the more electricity is produced,” says a report on Indian power sector analysis.
Micro hydro power plant in India existed since the beginning of 20th century. The first installation, a 130 kW plant, was set up at Darjeeling in 1897, some 15 years after the world’s first micro hydro power plant was started at Appleton in the US. The success of Darjeeling led to the set up of a two-MW plant in 1902 at Shivasundaram in Mysore. It was followed by a three-MW unit in 1907 at Galgoi in Mussoorie, a 1.75-MW in 1914 at Chaba and a 50-kW at Jubbal in 1930 near Shimla. Analysts observe that between 1930 and 1950, such units came up on a number of canals on the Ganga. However, the major hindrance in those days was the lack of development of high voltage transmission lines. It resulted in heavy losses during transmission of electricity over long distances. But times have changed and technology has evolved to ferry electricity across places with minimum losses.
As a comparison with China is the flavour of the season, let me delve a bit on China’s record in this sphere. China has built a total of 43,000 small hydro projects with an installed capacity of over 35,000 MW supplying electricity to over 300 millions residing in China’s mountainous areas. It has not exhausted all its water resources, but has utilized only about 29 percent.
India’s geography favours use of hydropower. The small hydro power projects also complement other renewables such as solar, wind, tidal and biomass. Together they can do more than a few coal-based mega-projects. Though the government has taken initiatives in the past decade, time has come for a big push for small hydro projects. How else it is going to add 100,000 Mw to India’s power-generation capacity during the 12th Plan (2012-2017)?
The history of micro hydro power units is not only fascinating, but offer insight even today. Since 100 BC, analysts observe, the water wheels existed to grind wheat into flour. They were slowly replaced by water turbine by the end of 19th century as Industrial revolution progressed across the world. The basics are simple. The electricity is produced when water falls on the turbine and the blade rotates. However, what varies is the amount of electricity generated. “The quantity of electricity that a hydropower setup produces depends on the amount of water that passes through the turbine, or, the height from which the water falls. The greater the flow and higher the height; the more electricity is produced,” says a report on Indian power sector analysis.
Micro hydro power plant in India existed since the beginning of 20th century. The first installation, a 130 kW plant, was set up at Darjeeling in 1897, some 15 years after the world’s first micro hydro power plant was started at Appleton in the US. The success of Darjeeling led to the set up of a two-MW plant in 1902 at Shivasundaram in Mysore. It was followed by a three-MW unit in 1907 at Galgoi in Mussoorie, a 1.75-MW in 1914 at Chaba and a 50-kW at Jubbal in 1930 near Shimla. Analysts observe that between 1930 and 1950, such units came up on a number of canals on the Ganga. However, the major hindrance in those days was the lack of development of high voltage transmission lines. It resulted in heavy losses during transmission of electricity over long distances. But times have changed and technology has evolved to ferry electricity across places with minimum losses.
As a comparison with China is the flavour of the season, let me delve a bit on China’s record in this sphere. China has built a total of 43,000 small hydro projects with an installed capacity of over 35,000 MW supplying electricity to over 300 millions residing in China’s mountainous areas. It has not exhausted all its water resources, but has utilized only about 29 percent.
India’s geography favours use of hydropower. The small hydro power projects also complement other renewables such as solar, wind, tidal and biomass. Together they can do more than a few coal-based mega-projects. Though the government has taken initiatives in the past decade, time has come for a big push for small hydro projects. How else it is going to add 100,000 Mw to India’s power-generation capacity during the 12th Plan (2012-2017)?
Subscribe to:
Posts (Atom)
Follow Us On