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Social contracts   green deal
 

Social contracts green deal

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    Social contracts   green deal Social contracts green deal Presentation Transcript

    • Bristol and the Natural GridA Capital Partnership ApproachChris CookBristol 21st June 2013
    • “21stCentury problems cannot be solvedwith 20thCentury solutions”
    • Market ParadigmsMarket 1.0 – decentralised, disconnected, physicalMarket 2.0 – centralised, connected, intermediated- Debt (Banks) and Equity (Joint Stock Company)- October 2008 – the Market 2.0 paradigm brokeHow do we achieve a resilient Market 3.0 ?
    • Introduction - ResilienceResilience - the enduring power of a body or bodies fortransformation, renewal and recovery through the flux ofinteractions and flow of eventsResource Resilience – Natural GridFinancial Resilience – Open Capital
    • Resource Resilience – Natural GridSince 1980 Denmarks GDP rose 78%Energy use has been stableCarbon fuel use has declinedHow did Denmark achieve this?
    • Resource Resilience - Natural GridLeast Energy Cost principle- not least Danish Krone cost (or least $, € or £ cost)- minimum carbon fuel input for a given output ofelectricity, heat or power- investment in renewables, heat, transport, energyefficiency
    • Emerging Outcomes of Natural Grid policy- decentralisation- skills base of knowledge and knowhow: eg Vestas isthe biggest global wind turbine manufacturer......in acountry of 6m people- trend to energy security and energy independence- not forgetting........reduction in carbon use
    • Financial Resilience – Open CapitalPrepay – credit returnable in payment for valueNondominium- People-based (P2P) Credit – Guarantee Society- Asset-based Credit – Capital Partnership
    • PrepayTax
    • Tax PrepayTax Prepay – credit returnable in payment of taxesTax Return – stock part of tally stick returned to TreasuryRate of Return - rate over time at which stock is returnablefor cancellationeg Prepay £8 for £10 tax - £2 profit 25% pa rate of return- not fixed - depends on existence & quantity of flow
    • 21stCentury PrepayLand – credit returnable in payment for land rental orproduction from landEnergy – credit returnable in payment for energy
    • Land PartnershipCustodian(Community)Custodian(Community)InvestorInvestorOccupierOccupierRentalPrepay%%ManagerManagerRental
    • Land Prepay – the Value PropositionCommunity- sells rentals forward and locks in price- interest-free loan until prepay unit returned vs rentalOccupier- prepays rental and locks in price
    • Land Prepay – the Value PropositionInvestor- direct inflation hedge investment in land- Occupiers buy prepay credits from Investors at bestprice below issue price & return against rentalManager- shares in gross rentals or production- interests aligned with Investor- no Principal/Agency problem
    • Land Partnership - OutcomesSocial Contract - relationship-based not transaction-based“4 Bs” model - costs transformed to revenue sharesNeutral – removes ego and politicsCollaborative - stakeholder interests alignedSustainable - all have interest in minimising cost over time
    • Energy PartnershipCustodian(Community)Custodian(Community)InvestorInvestorConsumerConsumerPrepay %%ManagerManagerPayment
    • Energy Prepay – the Value PropositionCommunity- sells energy forward and locks in price- interest-free loan until prepay unit returned vs supplyConsumer- prepays for energy and locks in price
    • Energy Prepay – the Value PropositionInvestor- direct inflation hedge investment in energy- Consumers buy credits from Investors at best pricebelow physical energy price & return against supplyManager- shares in gross revenues or production- interests aligned with Investor- no Principal/Agency problem
    • Energy Partnership - OutcomesSocial Contract - relationship-based not transaction-based;costs transformed to revenue sharesNeutrality – removes ego and politicsCollaborative - stakeholder interests alignedSustainable - all have interest in minimising cost over time
    • Mega Watts and NegawattsMega Watt production of renewable energy sells at thewholesale market bid priceNega Watt production is made by consumers at the retailmarket priceBut Green Deal has two problems- compound interest on bank £ loans- even if £ is saved, no guarantee energy will be saved
    • Bristol Green DealInvestor paying £1k for Units in Bristol Energy Pool- 20 1Mwh prepay Units @ £50 each- 2000 10 Kwh prepay Units @ 50p eachFund invests at community level through energy loanseg community CHP/co-generationLoan repaid via energy bills through buying prepayenergy units at market priceInterest-free loan – return to investor in energyUnless consumers save energy they will not save £
    • Bristol Green DealCustodianBristol Energy PoolCustodianBristol Energy PoolInvestorsConsumersManager£ EnergyLoanBuy unitsat market price£PrepayPrepayUnits££
    • 21stCentury problems cannot be solved with 20thcentury solutions.........
    • …....21stcentury solutions pre-date modern finance