Wednesday, November 7, 2012

Clean Techno-ergy

This week's post builds on the thought provoking article in McKinsey's report on the "Five crucibles of innovation that will shape the coming decade". I would particularly like to focus on crucible 5: Pricing the Planet. This crucible talks about the sky-rocketing demand and prices for coal, oil and other natural resources and explores the concept of clean energy. I have been researching clean energy technology for quite sometime now to understand its potential, implications and importantly the business opportunities associated with it. In doing so I will harp on Google's initiative in renewable energy and how that can be seen as a harbinger not only for a cleaner environment but for a sensible investment.

China is said to be the leading developer of clean energy. Suntech Power, a Chinese company that builds solar panels now commands 12% of the US market. Google has invested close to $1bn in renewable energy not only to power its offices but also because it views it as a viable business opportunity. It is predicted that clean energy will emerge as one of the biggest growth industries in the next decade with investments upward of $2 trillion. 

So what is it all about? Where do technology and technology companies fit into this? Well for starters technology companies are some of the few that use electricity the most and also some of the few who would be most apt at doing something about it. Google is now the size of 1 exabyte (10^18 bytes). Amazon, Microsoft and Apple are close to its feet consuming massive electricity. With 'cloud computing', and 'big data' becoming the norm the size-value of data is gets lesser each day. This gives birth to increasing infrastructure and computing capabilities -- something that requires tons of processing power generating a massive carbon footprint. And of course, population is increasing, everyone wants to digitize every second of their life and no one wants to delete a mail or a photograph or a document. So where am I going with this? Well, for starters the very technology companies that create our virtual happiness can be used to create a better, cleaner future for us. What's more it can be an important element of their core strategy. They know the size of their operations, the demand for the next decade and how best to meet that demand. Running servers and other infrastructure on non-renewable energy will cost much higher in the coming years. On the other hand a massive investment in clean energy currently will pay itself out. For example, Google invested in a 1.7MW solar panel installation -- the largest corporate installation of its kind and says that it will pay itself out in two years. I feel other companies should follow lead and invest in multiple clean energy technologies which are reaping results such as photo-voltaic cells, bio-fuel transportation among others. Developing countries can be viewed as a hot bed for testing such technologies as it would be easier to test there and where transmission of energy from other coal and fossil fuels would be more expensive.

As I was typing this out my last thought remains on adoption of clean energy. There has been considerable progress in clean energy technology but adoption of such a means has been woefully slow. I again revert to my suggestion of popular tech companies with brilliant engineers taking this initiative. These companies are widely known, more recognized and highly admired. I believe with clean energy becoming the norm and more and more people will follow their footsteps.

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