Eco cities energy

Local Environmental Taxation Incentives and/or Subsidies?

Eco Cities Conference - OF4

Chris Cook

Nantes 27th September 2013

“21st Century problems cannot be solved with 20th Century solutions”

Introduction - Resilience

Resilience - the enduring power of a body or bodies for transformation, renewal and recovery through the flux of interactions and flow of events

Resource Resilience – Natural Grid

Financial Resilience – Open Capital

Resource Resilience – Natural Grid

Since 1980 Denmark's GDP rose 78%

Energy use has been stable

Carbon fuel use has declined

How did Denmark achieve this?

Resource Resilience - Natural Grid

Least Energy Cost principle

- not 'least Danish Krone cost' (or least $, € or £ cost)

- minimum carbon fuel input for a given output of electricity, heat or power

- investment in renewables, heat, transport, energy efficiency

Emerging Outcomes of Natural Grid policy

- decentralisation

- skills base of knowledge and knowhow: eg Vestas is the biggest global wind turbine manufacturer......in a country of 6m people

- trend to energy security and energy independence

- not forgetting........reduction in carbon use

Financial Resilience – Open Capital

Prepay – credit returnable in payment for value

Protocols – Contrats de Société/social agreements

Prepay

Tax

Tax Prepay

Tax Prepay – credit returnable in payment of taxes

Tax Return – 'stock' part of tally stick returned to Treasury

Rate of Return - rate over time at which stock is returnable for cancellation

eg Prepay £8 for £10 tax - £2 profit 25% pa rate of return

- not fixed - depends on existence & quantity of flow

Capital Partnership

Custodian(Community)Custodian(Community)

InvestorInvestor

UserUser

Prepay%

ManagerManager

Value

Capital Partnership

An agreement or Protocol: not an Organisation

A consensually negotiated framework agreement for self organisation to an agreed common purpose

Does not own anything; employ anyone; borrow anything; or contract with anyone

A Co-operative of Co-operatives or Partnership of Partnerships

Energy Partnership

Custodian(Community)Custodian(Community)

InvestorInvestor

ConsumerConsumer

Prepay %

%

ManagerManager

Payment

Energy Prepay – the Value Proposition

Community

- sells energy forward and locks in price

- interest-free loan until prepay unit returned vs supply

Consumer

- prepays for energy and locks in price

Energy Prepay – the Value Proposition

Investor

- direct 'inflation hedge' investment in energy

- Consumers buy credits from Investors at best price below physical energy price & return against supply

Manager

- shares in gross revenues or production

- interests aligned with Investor

- no 'Principal/Agency' problem

Energy Partnership - Outcomes

Contrat de Société - relationship-based not transaction-based; costs transformed to revenue/production shares

Neutrality – removes ego and politics

Collaborative - stakeholder interests aligned

Sustainable - shared interest in minimising cost over time

Nantes Green Deal – How it Works

Investor pays €1k for Units in Nantes Energy Pool

- 20 x 1 Mwh prepay Units @ €50 each; or perhaps

- 2000 x 10 Kwh prepay Units @ 50c each

Nantes Energy Pool invests at community level through energy loans eg community CHP/co-generation

Loan repaid via energy bills through buying prepay energy units at market price in €

Nantes Green Deal

CustodianNantes Energy Pool

CustodianNantes Energy PoolInvestors

Consumers

Manager

€ EnergyLoan Buy units @

market price

€

Prepay

Prepay

Units

€

€

Nantes Green Deal - Outcomes

Cost-effective - interest-free return in energy to investor out-competes conventional € debt funding

Incentives – consumers must save energy to save €

Subsidies – energy dividend of energy prepay units replaces € subsidies

Natural Grid - energy independence & resilience

21st Century problems cannot be solved with 20th century solutions.........

…....21st century solutions pre-date modern finance