• Save
Presentation to Combined Heat and Power Roadshow 30 05_13
Upcoming SlideShare
Loading in...5

Like this? Share it with your network

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads


Total Views
On Slideshare
From Embeds
Number of Embeds



Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide


  • 1. Funding the Natural GridGreen Deals which actually workChris CookCHP Conference 30th May 2013
  • 2. “21stCentury problems cannot besolved with 20thCentury solutions”
  • 3. Denmark – and the Natural GridSince 1980 – Danish GDP increased by 78%;energy use stable; carbon fuel use declinedOver-riding criterion - what happens in the system ifthe consumer uses one more KwH or Mmbtu?Least energy cost - not least $, £ or € cost whichgave the Dash for Gas & now the Roll for CoalOutcomes - decentralised production, storage,distribution and use of energyNatural Grid – not National Grid
  • 4. DenmarkCommunity-based– 60% district heating of which 80% is CHPmainly urban– Heat storage, solar heat, ground & airsource heating– But UK very different institutionally fromDenmark– 86% of wind turbines are co-ops mainlydebt financed with municipal guarantees– Municipal heat infrastructure
  • 5. Funding the Natural GridFinancing – short term, high risk, people-basedFunding – long term, low risk, asset-basedConventional Financing and Funding- either Public=State or Private=for profit- Public sector - cant or wont afford it- Private sector - terminal shortage of bank creditSo how do we finance and fund the Natural Grid?- its not a case of either/or; +1 or -1; +ve or -ve- there is, and has always been, Open Capital
  • 6. Open CapitalCapital Partnership – neutral co-operative of co-operatives framework for productive assetsPrepay – forward sale at a discount of production oruse value
  • 7. Capital PartnershipCustodianCustodianInvestorInvestorUserUser% %UseManagerManagerValue
  • 8. Capital Partnership - OutcomesNeutral – removes ego and politicsCollaborative - stakeholder interests aligned in co-operative of co-operatives: no principal/agent problemSocial – shared surplus/ not for loss - relationship-basednot transaction-basedSustainable - everyone has an interest in minimising costsover time
  • 9. PrepayTaxation
  • 10. Pre 1700 - Tax PrepayStock – part of a tally stick, used either as a receipt(memorandum tally) or as an IOU (loan tally)Issued by the Exchequer to tax-payers at a discount inexchange for value receivedTax Prepay – undated credit returnable in payment of taxesTax Return – stock returned to ExchequerRate of Return - rate over time at which stock is returnablefor cancellationPrepay £8 for £10 tax gave £2 profit. £10 tax pa = 25% p.a.rate of return: £5 tax pa = 12.5% pa rate of return etc
  • 11. Back to the Future - 21stCentury PrepayRental Prepay – units returnable in payment for rentalsEnergy Prepay - units returnable in payment for energyissued and exchanged for value by producersRate of Return - literally the rate at which prepay Unitsmay be returned to the issuer against useRate of Return - not fixed, but depends on theexistence and quantity of the flow
  • 12. Natural Grid Policies & ProjectsLinear EdenReal Green DealMany other policies eg Ultra Light Rail, Fuel Pool
  • 13. 1942 – J F Pownalls Grand Contour Canal
  • 14. North South Canal – a Linear Eden?Amenity Value- people dont want to live next door to the M99; to HS2or to Runway Three......….but they will pay a lot of money to live by waterLand Rental Value- capturing a small part of increased land rental valuewill fund the canal- a linear – non-statutory - development corporation- funding through land rental Prepay eg 50 yearsrentals sold to investors at a discount
  • 15. A Real Green Deal - Energy LoansEnergy investors invest in Energy Pool fundReturn in energyEnergy Loans made to properties and projectsLoans repaid by buying back Units from the Pool at theenergy market retail priceEfficient - no compound interestEffective – unless energy borrower saves energy he willnot save £
  • 16. Real Green DealCustodianCustodianInvestorsConsumersDeveloper/ManagersEnergy loan£ or UnitsReturnedPrepayUnitsUnitsUnitsPrepay
  • 17. Natural Grid – and the Transition TradeTwo Big Trades of the 21stCenturyResolution Trade – older generation long of Land andshort of Care for themselves and the Land- so exchange value of care for value of land useTransition Trade – need for a low carbon economy- so exchange intellectual value (skills, knowhow andIP) for the value of carbon fuels savedTransition to a low carbon economy through energyprepay; energy accounting; and energy co-operation