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  1. 1. WEC Knowledge Network onInnovative Financing Mechanisms“Smart grids from invention to implementation” Preliminary Findings
  2. 2. Innovative Financing Mechanisms WEC Knowledge NetworkTo formulate Policy Recommendations towards Innovative SG Financing Mechanisms EU North America Japan South Korea China India Brazil * Brazil has recently joined Spring 2011 End of June 2012 Preliminary Analysis  Regional Context Summer 2012  Main SG drivers  Main challenges Policy Recommendations  Currently available Late 2012 Financing Mechanisms Final report
  3. 3. SG Main Drivers and Challenges WEC - Preliminary Findings Drivers strongly depend on the regional contextLow Carbon and Energy Efficiency • OECD Countries Green Economy Growth Agenda • OECD Asian Countries Main Drivers Fast Growth Infrastructure • Emerging Countries Business case and Financing • Most Countries Main Regulation • EU and North America Challenges Public awareness/acceptance • EU and North America No significant challenges reported by South Korea Just a few from China (where state-owned network companies enable rapid construction) High technical and non technical losses reported in India (mainly from thefts) and Brazil
  4. 4. Available Financing Mechanisms Some Best Practice examples WEC - Preliminary Findings• European Union: EU •USTDA $686,447 grant for SG implementation funding programs for RD&D projects (FP7, •DRUM Training Program: IEE, NER300, $30 million by the USAID Connecting EU and the Indian Ministry of facilities) Power for SG development• USA: over $4 billion from DOE Public External Funding Grants Private Regulatory Funding Incentives• North America: Partnership • New Tailored Mechanisms: GE/venture capital •AEEG (IT) ‘Del39/10’ firms •OFGEM (UK) ‘RIIO, LCNF’,• South Korea: IFI, RPZ’, Government + private •‘R-APDRP’ (India) funds (0.5 +18.1 billion USD)
  5. 5. BACK UP
  6. 6. SG Innovative Financing Mechanisms (1/2) WEC - Preliminary Findings EU North America Japan South Korea China India Re-examination Low Carbon Grid upgrading and Green Economy Fast Growth Fast Growth of nuclear Agenda energy efficiency Growth Agenda Infrastructure Infrastructure energy policy  Infrastructure  Boosting  Long-termMain  Enhancing  Integration of RES upgrade manufacturin economic  RisingDrivers  Surge in wind energy g and IT growth demand  Infrastructure security upgrade capacity industry  Energy  High levels  Environment  Energy  Consumption consumption of losses al protection efficiency growth growth Large Scale Demos  Coordination needs  Unsuitable Funding  Unclear (inappropriate Regulation Few reported  Inaccurate regulatory frameworks)  Insufficient funding Insufficient barriers No significant billing fundingMain Deployment  Abundance of reported State-owned  High (need of natural gas (over network electricityChallenges  Technology appropriate tariff challenges up to RES) mechanisms companies thefts Standards date  Consumer reported) enable rapid  Insufficient  Unclear Regulation pushback to smart finances construction  Negative Business meter rollout Cases  Public awareness
  7. 7. SG Innovative Financing Mechanisms (2/2) WEC - Preliminary Findings EU North America Japan South Korea China India Public National Funds Govt. USD 134 million from government EU funding (FP7, IEE) Private Public Funds Funding/Venture on 8 pilot s National Regulatory Incentives Capital External grants Funds Funds from •USAID and the Indian Ministry of  New Tailored Best practice Private/Public State Grid Power : $30 million also with funding mechanisms example: METI funds Corporation trainingMain (Italy ‘Del39/10’, partnership among National 18.6 billion USD of China •USTDA : $686,447 grant for SG Ofgem’ RIIO, LCNF’, GE and venture Funds (157 by 2030 (SGCC) implementationavailable IFI, RPZ’) capital firms M USD+ (0.5 billion USD Regulatory Incentivesfinancing  Changing 111 M USD from Regulatory Re-structured Accelerated Power in 2012 for government + incentivesmechanisms Framework (Finland, Public Financing large scale 18.1 billion USD Development and Reforms Portugal) With funding from Policies for Programme (R-APDRP) is a Govt. demos) from private the Recovery Act, onto-grid of India financial incentive scheme  Traditional funds) (~ USD 9 billion) for strengthening Regulatory the DOE invested No electricity over 4 billion USD prices of and up gradation of sub- Frameworks regulatory renewable transmission and distribution (Austria, Germany) incentives energy network through adoption of IT and implementation of SG technologies Preliminary Analysis Summer Formulating Policy Recommendations Late 2012 Final report * to be presented at an Int. Conference still to be chosen