Energy is a multi-trillion dollar industry globally and yet the demand-supply gaps are extremely large, whether at the top of the pyramid or at the BOP. From United States and EU to China or India, the demand for energy is fuelling ferocious competition for fossil fuels such as oil and gas. This has countries and companies competing alike. But why?

It is because energy is the basic raw material that impacts the conversion of raw materials and resources into semi-finished and finished products and services. So the need for energy is critical and serves as a catalyst to social and economic capital and impacts the very sustainability of day to day living, scalability and competitiveness of societies, companies and countries. Yet there are billions of people with little or no access to electricity for their day to day living in their home or in their schools or in their farms or their businesses. And the reasons are that the current technologies and business models don’t make them economically viable. But the BOP spend over $400 billion on energy and that is a market and with a few hundred billions more to spend should the models change.

http://www.nextbillion.net/blogs/2007/03/14/the-next-4-billion-market-size-and-business-strategy-at-the-base-of-the-pyramid

http://earthtrends.wri.org/pdf_library/data_tables/ene3_2005.pdf

http://pdf.wri.org/n4b_chapter7.pdf

http://www.iht.com/articles/2002/11/06/rgas_ed1_.php

But the challenge is that fossil fuel economics are not necessarily paying off and the impact on the environment will last for a very very long time to come. This is why carbon credit trading is estimated to be over $10 billon and growing fast.

http://www.rediff.com/money/2007/jun/20futures.htm

So what are the impacting changes on the horizon? In my opinion;

a. Renewable technology ~ Wind, Solar and Hydro VS. Fossil fuels

b. Business model disruption ~ Direct Last Mile/Cooperative/Micro-Energy Entrepreneurs VS. today of large highly capitalized and centralized generation, Transmission & Distribution to Last Mile

c. Economics ~ < 4c~7c per kWh

All three in combination will have a deep impact that is on the horizon and will be a great big opportunity for social entrepreneurship and CSR to be embedded into new capitalist models, instead of being separate initiatives.

Just look at how the PCO revolutionized telecommunication access and density in India!

http://www.thehindubusinessline.com/bline/2004/01/09/stories/2004010900260500.htm

I am working on an interesting initiative and will keep you updated.