Scientist Daniel Nocera said MIT’s technique has seen more than a year of preliminary research and hopes to produce enough electricity from a bottle-and-half of water, however dirty, to power a small home

In the first such effort, Tata group chairman Ratan Tata has signed on a leading scientist from the globally renowned Massachusetts Institute of Technology (MIT) to commercialize cutting-edge research that promises to produce cheap power from water.

Daniel Nocera, a professor of chemistry and energy, and his group of elite scientists at MIT attracted attention from Tata when he heard they had found a way towards one of science’s holy grails—to imitate photosynthesis, the process by which plants breathe, and produce power while doing so.

“I met him in September, and in October we signed,” Nocera said on the sidelines of EmTech India, a technology conference organized by MIT’s magazine for innovation, Technology Review.

Nocera would not disclose any more details of the deal. “I think you should ask Mr Tata that,” he said, before flying to Mumbai to meet Tata on Monday.

As he did with the Nano small car and the Swach non-electric water purifier, Tata hopes Nocera’s solution will be the latest in the group’s effort to serve the “bottom of the pyramid” and turn a profit while doing so, said a Tata group executive who spoke on condition of anonymity.

Tata’s hope is that Nocera’s “personalized energy” can produce a stand-alone, mini-power plant, perhaps a refrigerator-sized box, that could reinvent rural electricity supply and bring power to about three billion people worldwide who don’t have it.

Nocera said MIT’s technique has seen more than a year of preliminary research and hopes to produce enough electricity from a bottle-and-half of water, however dirty, to power a small home.

“We hope to have a prototype in a year-and-a-half,” said Nocera, whose other backers include Bob Metcalfe, co-inventor of the Ethernet and a former director of the US’ Central Intelligence Agency.

It is too early to say which Tata company will take MIT’s technology to market, the Tata official said. The Swach water purifier was developed by three Tata companies.

The deal with MIT is fundamentally new for the Tatas because Nocera’s technology is at a very early stage. As Nocera acknowledged, his research has not yet been published, though it is being submitted to the journal Science.

The idea of imitating the tiny chemical engines in plants, which essentially generate power from the sun by splitting water molecules, is not new and has energized science since the 19th century. Commercially available electrolyses devices can split water, but they are costly and need clean water.

Nocera’s solution can use even human waste water, “from the front and back”, as he put it euphemistically.

It was only 45 days ago that Nocera’s scientists made their biggest breakthrough, plunging an artificial silicon “leaf”, coated with a proprietary solution of cobalt and phosphate, into a jar of water and coaxed it to generate power at efficiencies that now exceed solar panels.

Still, the process of cracking the “most guarded secret of plants”, as Science magazine put it in 1912, is still in the research stage, and there are many issues that need to be solved. That includes dealing with the waste gases produced and how to get the system into a box that can be manufactured and sold on a mass scale.

“Mr Tata told me, ‘You know what you’re getting with me, right? Patience’,” said Nocera, who is also the energy industry’s go-to man for global energy calculations.

Nocera estimates that the world consumes 14 terawatts (TW) of power today. By 2050, it will need 16TW. If his solution works, said Nocera, it would need a swimming pool full of water every day to meet the world’s electricity needs. For the Tatas, the bet on Nocera and MIT is obviously likely to be a big one.

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A shift in speculative activity from equity cash market to derivatives market could be a factor, a Morgan Stanley​ study says

How long have investors in the Indian markets been holding on to stocks in the backdrop of high volatility and tepid returns in the past four years? Morgan Stanley has come out with an interesting report which addresses this question.

The study finds that investors are holding on to equity investments much longer now than they were during the bull phase between 2003 and 2007.

Back then, the average holding period was around 20 months, or a little over a year-and-a-half. It now stands at around 35 months, or nearly three years, having almost doubled compared with the bull phase. To be sure, the rise has been gradual since mid-2003, but has accelerated since 2009.

The average holding period for foreign institutional investors (FIIs), who account for a large part of trading in the cash market, had steadily come down to as low as 14 months by the end of the bull market in early 2008. Since 2009, it started rising sharply and now stands at 22 months, Morgan Stanley’s calculations show. This is the highest level for FIIs since 2004.

Why are investors holding on to stocks longer now than they did during the bull phase between 2003 and 2007, when the Indian markets rose by over 500%?

Morgan Stanley points out that one factor may be the shift of speculative activity from the equity cash market to the derivatives market.

Cash market turnover now amounts to less than 10% of derivatives market turnover. The extent of intraday trading in the cash market has come down. With less speculative activity in the cash market, the calculation of investors’ holding period would naturally be influenced.

Even so, it’s interesting to note that investors, including FIIs, are holding on to Indian stocks for longer periods.

In the past, such a rise in the level of holding period of stocks had occurred during bear markers and right before the onset of a bull phase, such as between mid-2000 and 2003.

But with the uncertainty in the global economy, and considering that Indian markets have already doubled from their lows during the financial crisis, it seems unlikely that they are on the verge of another bull run.

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