Investment into low-carbon projects Doug Prentice Dep CEO Abatement - - PowerPoint PPT Presentation

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 departments) 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
• wnership 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