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Tuesday, January 03, 2006

LED Lighting and disruptive innovations - 1

People often ask me why I quit a cushy software job and am struggling to bring LED lighting into India. The reasons are actually quite simple and not that altruistic. There is a huge market out there for lighting that is currently being met by fossil fuel based energy sources. This is unsustainable and will have to move to modern electric lighting. The problem is that no Indian provider (public or private) is going to wire up hamlets and villages as it does not make economic sense to get these people on the grid for the $10 worth of electricity they will consume per month. Not maintain expensive grid infrastructure in inhospitable terrain. What we are trying to do with LED lighting is what mobile phones did to telecom in India. Leapfrog the tough bits and provide light using sustainable energy sources. This is where LED's step in. When most urban consumers come to us for LED solutions they tend to compare the output to flourescents if not metal halide lamps. The same guys come running back to us when they have a longish grid disruption and their UPS runs out of juice ;-)

I have been touring small villages and up country locations, one net lesson that I learned is that rural folk are very keen on sustainable light sources that give them adequate backup to cook, clean, study without having to give it a second thought. The reception we get for our products is phenomenal and even entry cost is often not a consideration. As my friend Atul Vora (a hard core bean counter and CFO if there ever was one) points out, people are not going to adopt eco-friendly technologies in urban settings till they pay true costs. The true cost of grid power is hell of a lot more if the costs of environmental damage caused by hydro and thermal generation are levied on the consumer. What we are seeing is a gradual privatisation of distribution networks where consumers are being billed with greater accuracy.

A case in point is the entry of private players into Delhi for power distribution. The first thing that they did was to replace the mechanical watt/hour meters with digital ones of lower least count. Instantly the home owners saw a huge rise in the billing as even the resistive load of wiring showed up as consumption. Net effect was the jump to save power. No one in this country is going to save an erg of energy till all this subsidy business is stopped and the government imposes a green tax on energy in-efficient electrical products. If farming at the current scale is not possible without subsidies in power, then we should change the methods of farming, not provide free power. All we are doing in this model is postponing the inevitable and creating an unsustainable population on fossil-fuel based agriculture. Think of what would happen when (not if) power tariff shot up 300 %. Famine is the word for it. Our entire 'green revolution' is based on hybrid seeds that need oil derived fertilizers and pesticides and coal derived power to pump water. The politicos who allegedly support the rural masses are driving them into a deeper hole.

to be continued...

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