Have a look at this site
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"Batteryless Bicycle Flashing Light System" "A Non-Friction Bicycle Dynamo (Generator)" Kits available from as low as 4(UK Pound).
Their marketing hype wording was drafted by a lawyer, no friction, but there must be a drag :-)
While on the topic, see two related and intersting bicycle light sites
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Gerhard v d Berg CSIR