Investment into low-carbon projects Doug Prentice Dep CEO
Abatement potential in Scotland SOURCE: Scottish Government
Criteria for Energy Sustainability SOURCE: Dr. Gerhard Knies, Chairman of the Supervisory Board DESERTEC Foundation
The costs of technologies are likely to fall over time
RE: what & where? SOURCE: Desertec
Potential of various renewable energy sources as compared to global energy needs SOURCE: Asif & Muneer Napier University
Solar & wind energy potential wrt geographical latitude. Note: available energy is expressed as a fraction of the maximum potential SOURCE: Asif & Muneer Op Cit
Monthly av daily PV AC energy –measured outputs
Stylized Aggregate Marginal Cost Abatement Curve
Abatement potential – detail SOURCE: McKinsey
RE sectors where there is expected to be most dealflow in next 12 month SOURCE: M&A in RE Rhodl & Partners 2010
Expectations on principal external deal drivers
Expectations on principal internal deal drivers
Significant obstacles to deals
Governmental policy type(s) believed to be the most effective in driving investment in the renewable energy sector
Expectations of changes in private equity investment in RE in next 12 months
Sub sectors where deal activity is expected
Capital markets Climate Initiative SOURCE FT 7 Sept 2010 • Greg Barker launched the Capital Markets Climate Initiative (CMCI) at the London Stock Exchange where he highlighted the City of London’s potential to become a global hub for green finance and why low carbon investment is a huge opportunity for the UK’s financial services industry. • The CMCI aims to help unlock the private sector’s ability to help meet the $100 billion of new green investment required annually by 2020 to tackle climate change in developing countries. • Greg Barker said: "The vital role of capital markets in tackling climate change has been overlooked for far too long. The finance needed to help developing countries become low carbon isn’t flowing at the rate and scale needed. I have convened today’s meeting to bring together our key players from the City and internationally to help drive green economic investment."
Surprise £1bn Green Tax SOURCE: FT Westminster Blog 20 Oct 2010 • George Osborne has come up with a £1bn a year toll, mainly on businesses, which is so complicated that some may not spot it straight away. • Under the CRC Energy Efficiency Scheme which applies to about 5,000 heavy users of energy ( mostly companies but also councils and government department s) those who cut their carbon use receive net payments out of the programme paid for by those who are penalised for their heavy use. • That “revenue recycling” is going to end. Prepare for an extra £715m cost on business in 2011/12, rising to over a billion pounds in 2014/15.
Possible structure of Community Partnership Could be for Community Energy Partnership or Community Transport Partnership • Trustee Member • Investor Member • Developer/Operator Member • User/Occupier Member
Pros and Cons PROS: • low/no cost to RSL (or LA) • low carbon electricity • helps alleviate fuel poverty • ownership of the PV installation reverts to RSL (LA) after Payback CONS: • need to set up LLP/SPV structure • need to ensure generation is sufficient to produce sufficient FIT revenue to attract private investors • cumbersome where there are many tenants/supplier customers/FIT recipient • Vandalism/insurance costs
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