june 2019 investing in local energy survey: greater …...2019/06/18 · case study 3: 2019...
TRANSCRIPT
Investing in Local Energy Survey: Greater South East
June 2019
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Who is here?
Local Authorities
Investors
BEIS
LEPs
Developers
Technical consultants
Researchers
Local Energy Hubs
Community energy
“Low carbon projects are a priority for our
authority/LEP”
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities
What is the investment
potential of your pipeline of low
carbon projects over the next 5
years?
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities
90% at conceptual or feasibility stage
At what stage are the
majority of these projects?
Choose the one which
makes up the majority.
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities
“We are aware of the different low carbon
opportunities there are
(transport, heat storage,
renewables)”
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities “We have worked with developers and third party
funders on low carbon
projects in the past.”
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities Priorities for assessing low-carbon projects
67% Return on investment
45% Satisfying broader political goals
36% Potential for income generation
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities
“What challenges do you face when trying to develop projects?
46% Political uncertainty
45% We don’t have any money for
engineering or commercial studies
36% We don’t have any real development expertise in-house
27% There are too many government
departments
27% We lack the confidence to know
what to do and how
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Local Authorities
“What kind of central government support would help you to develop projects?
64% Development capital
55% A more pro-active District
Network Operator
55% ‘Critical Friend’ advice
55% A single gateway to all support
45% A more proactive regulator
45% Financial support for construction
costs
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Investors
“Deal size is too small”
“Projects are mostly conceptual or poorly
formed.”
“Inexperienced in dealing with project investment appraisal”
“Projects are at conceptual phase and/or similar projects have failed before.”
“Investors will always expect a degree of risk, whether its low/medium or high. Focus is
needed on how to mitigate that
risk.
Long term cash-flows with bench marking
examples goes a long way to make
investments attractive.”
32, GREAT SUTTON STREET, LONDON EC1V ONB | [email protected] |
UK100 – Investors
'Critical friend' advice to guide people through the development
process
Support in developing a business case for a project
A proactive regulator service
Clean Energy Action Partnerships
FINANCE
CITIES: EXPRESS
INTEREST
IDENTIFY
POTENTIAL BUILD PROJECT
EXECUTE ROLL
OUT
CRACK
CENTRAL
TEAM
LOCAL
AUTHORITY
LED
PROJECTS
AS
K
OF
FE
R
HCA
• Domestic retrofit
HNDU
• District Heating
SALIX
• Building retrofit
OFGEM
• Grid capacity
Research
programmes
Clean Energy Action Partnerships OLEV
• Electric vehicles
National Productivity
Investment Fund
• £23bn
CITIES: 1. EXPRESS INTEREST 2. IDENTIFY POTENTIAL 3. BUILD PROJECT 4. EXECUTE ROLL OUT
ASK OFFER Integrated
projects Scaleable
Replicable Delivery
Feedback
Technical &
Commercial Support
Access to finance
CRACK CENTRAL TEAM + REGIONAL OUTREACH
• Development
• Commercial
• Financing
• Energy networks
• Technical
• Regulation
• Critical friend support
• Manage funding support
• Liaison with financing
community
• Remove centrally driven barriers
(e.g. regulatory changes)
• Policy development from
experience
Role Expertise
LOCAL AUTHORITY LED PROJECTS Integrated Projects that can be scaled for national impact | Credible plan for gaining public consent &
support | Local delivery team with necessary expertise
• Land developers
• Local Enterprise
Partnerships
• DNOs
• House builders
• Industry
• {Systems integrators}
• Academic/research
institutions/catapults
• Energy Companies
Potential Partners Potential Outcomes • Local energy resilience
• Robust income streams
• Affordable energy supply
• Local grid rebalancing
• New industries and global
exports
• Renewable energy
deployment
• City-scale transformation
• Clean transport
• Demand reduction
Expression of
interest from cities (EoIs)
EoIs selected that
offer the greatest potential to accelerate Clean
transition
Clean Energy Action
Cities supported by a crack team of experts develop and deliver
integrated projects
National roll out: successful
approaches are applied at the national scale & supported into applicable export markets
Cost of Capital
High
High LowLow
Private sector equity
Bank Finance
Private sector developers
Bond investors
Bank Finance
Private sector equity
Government technical assistance
Government Grant / Equity
Government revenue support
Key risks• Cost of construction• Time to complete• Will it work?• Operating costs• Market uptake & certainty of revenue• Interest rates
Development cycle
Risk
GovernmentR&D funding
Concept / data gathering / feasibility
Development / commercialisation
Construction Operation
Very limited private sector
appetite to invest at these stages!
Risk / reward curve
Private sector R&D
Governmentdata gathering
The Funding Conundrum
Financing Energy in the Greater South East18th June 2019
Maxine Narburgh – Regional Hub Manager
Home energy efficiency retrofit
4%
Public sector energy efficiency and street lighting
replacement5%
Business and industrial energy efficiency retrofit
4%
Energy infrastructure for new development or
improvements in construction standards
12%
Renewable or low carbon electricity generation (Solar,
Onshore wind, Offshore wind, Tidal)19%
Renewable heat generation (Geothermal, Heat pumps,
Biomass, AD and Biogas)12%
Electricity distribution network improvements, including smart grids and
storage15%
Gas distribution network
improvements, including works to enable supply of
decarbonised gas …
Heat networks, combined heat and power (CHP)
generation, energy from waste and industrial heat
recovery11%
Carbon capture, use and storage
2%
Energy supply/refuelling for low carbon vehicles
12%
Project Pipeline
Research January 2019
• 216 projects• 27% network improvement/smart
grids/new developments• 23% renewable heat/heat
networks• 19% renewable electricity
generation• 13% energy efficiency• 12% EV/low carbon infrastructure
Project Status
0
20
40
60
80
100
120
140
Not yetidentified
Proposition inprogress
Application inprogress
Negotiations inprogress
Signed off Blank
No
. EO
I
Finance StatusProject Development Stages
0 10 20 30 40 50 60
Pre-feasibility (concept)
Options appraisal and feasibility
Business case
Design & Planning
Financing
Procurement
Detailed design and construction
Commissioning
Prioritisation Process
0 5 10 15 20 25
Heat led
Garden cities/housing developments
Public sector energy efficiency
Policy/strategy/research
Business energy efficiency
Housing retrofit/off gas
Grid constraints
Renewable Electricity (& storage)
Community sector project
EV charging (PV & storage)
EV charging (infra)
Multi vector
Other transport
Skills
Aggregated High Priority
Project themes & development stages
0 1 2 3 4 5 6 7 8 9 10
Heat led projects
Garden cities/housing developments
Public sector energy efficiency
Policy/strategy/research
Business energy efficiency
Housing retrofit/off gas
Grid constraints
Renewable electricity (& storage)
Community sector project
EV charging (PV & storage)
EV charging (infra)
Multi vector
Other transport
Skills
Number of priority projects
Pre-feasibility (concept) Options appraisal and feasibility Business case Commissioning Blank
Contacts
Maxine Narburgh
Regional Hub Manager
07395 799475
General Enquiries
07542 226976
www.energyhub.org.uk
Victoria FletcherB.Sc. M.Phil. MCIEEM MIEMA C.Env
Environment & Heritage [email protected]
Sarah GilbertEnergy Strategy Manager
Countryside Access
Natural Environment
Flood Risk Management
Energy & Climate Change
Waste Strategy
• 16 staff• Small teams; broad
coverage
Thames Valley Environmental Records Centre
• Planning• Policy• Advice• Data & information• Behaviour Change• Projects• Partnerships
Environment & Heritage
Archaeology
Internal Energy Strategy 2016- 2020
Target (2008-2019): To reduce emissions by 3% p.a. year • 2017/18 emissions = 18,163 t CO2e• 43% less than in 2010/11 - an annual average reduction of over 6% p.a
Creating a modern streetlighting estate
The estate60,000 streetlights15% modern LED lighting51,000 aging columns
The project£40m investment over 4 years Replace 51,000 lanterns with LEDsReplace 24,000 end of life columnsInstall Centralised Management System
Business case• Reduced carbon – 28% of footprint• Reduced costs of electricity• Reduced maintenance budgets• Enhanced community safety• Customer satisfaction - flexible and more
responsive system
Creating a modern streetlighting estate
Climate Emergency Motion 2019
1. Acknowledge the ‘Climate Emergency’;
2. Pledge to make the Oxfordshire County Council carbon neutral by 2030, taking into account both production and consumption emissions;
3. Call on Westminster to provide the powers and resources to make the 2030 target possible;
4. Continue to work with partners across the county and region to deliver this new goal through all relevant strategies;
5. Report to Council within six months with the actions the Council will take to address this emergency.
Climate Emergency - Carbon Neutral by 2030 on own estate
• £40m smart local energy grid project• £13.8m Innovate UK Funding• New ways of working• Brings together partners to do things differently• Enable growth in local renewables, electric vehicles (EVs), battery storage
and demand side response, • Local, flexible and responsive electricity grid• Help reduce costs for consumers• Bring forward plug in projects on own estate Low Carbon Hub
Open Utility
Origami Energy
Oxford University
Oxford Brookes University
Oxford City Council
Oxfordshire County Council
NUVVE Ltd
SSEN
Local Energy Oxfordshire – securing infrastructure to support growth
Local Energy Oxfordshire – securing infrastructure to support growth
100,000 new homes
Low carbon growth possible – but needs significant investment in infrastructure -£100 million/year to 2030
Value of the low carbon sector - generates £1.15 billion/year in sales and employ 8,800 people: 7% of Oxfordshire’s economy.
Investment could add £1.35 billion annually to the Oxfordshire economy by 2030, creating over 11,000 new jobs
Local Energy Oxfordshire - Delivering the Energy Strategy
1. Secure a smart, modern, clean energy infrastructure – including increased electricity grid capacity - which supports our planned housing, industrial and commercial growth, and changing energy requirements
Planning for growth Overcoming constraints
2. Lead nationally and internationally to reduce countywide emissions by 50% compared with 2008 levels by 2030 and set a pathway to achieve zero carbon growth by 2050.
Estimated emission projections to 2030 and beyond-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% -
1,000
2,000
3,000
4,000
5,000
6,000
7,000
GH
G e
mis
sio
ns
(ktC
O2)
Business as Usual Oxfordshire Target 50% Scenario C
Local Energy Oxfordshire - Delivering the Energy Strategy
3. Enhance energy networking and partnership working across Oxfordshire to focus on the low carbon energy challenges and funding opportunities created through the Clean Growth
Strategy and the Oxfordshire Industrial Strategy.
Local Energy Oxfordshire - Delivering the Energy Strategy
UK 100
18th June 2019
Do we really
have to talk
about risk?
Sheryl French
Project Director
Content
Managing energy investment risk
Three case studies
Three different sets of investment risk
Key lessons learned
Two Solar Farms
Case Study 1: Risks 2014-2017 Case Study 2: Risks 2018-2021
Same asset class – different risks
Investment case differencesBusiness case
• Four years apart
• Cost of grid connection quadrupled
• No finance incentive available
• Lower IRR despite larger project
Regulation
• OFGEM TCR = finance impact
• Stressed distribution network = major reinforcement costs
Market changes
• Lower wholesale price for sales
• Private wire sales to increase revenues
• Solar Panel costs lower
Case Study 3: 2019
Regulatory change - COMPLIANCE WITH NZEB
“Where a building is erected, it
must be a nearly zero-energy
building.”
Building Regulations 2010 part 6
(as amended in 2013),
Regulation 25B:
• Opportunity or Cost?
• New business model development
based on benefit share
• New flexibilities - stakeholders
• S106 agreements -viability
• Shared understanding DfE, BEIS,
MHCLG, Developer, LPA, County
KEY LESSONS
Every investment carries a different risk
bundle due to changing regulation +
markets
Every investment case can not be based on
absolute certainty (LA culture!)
Take a long term view ( 205) to put risk
into perspective and achieve societal
change
First steps inInvesting in Energy assets
Daire CaseyBusiness Development Manager
18 June 2019
Our vision
• National Grid ‘Two Degrees’ Future Energy Scenario
• Develop Strategy to achieve this
• Identify & develop opportunities
Our roles
• Facilitator
• Off taker
• Investor
Our priorities
• Exposure to market risk
• Generate renewable electricity
• Manage revenue expectations
A changing unit price
0
5
10
15
20
25
20
04
/05
20
05/
06
20
06
/07
20
07/
08
20
08
/09
20
09
/10
20
10/1
1
20
11/1
2
20
12/1
3
20
13/1
4
20
14/1
5
20
15/1
6
20
16/1
7
20
17/1
8
20
18/1
9
20
19/2
0
20
20
/21
20
21/
22
20
22
/23
20
23/
24
20
24
/25
20
25/
26
20
26
/27
20
27/
28
20
28
/29
20
29
/30
20
30/3
1
20
31/3
2
20
32/3
3
20
33/3
4
20
34/3
5
20
35/3
6
20
36/3
7
20
37/3
8
20
38/3
9
20
39/4
0
20
40
/41
Historic unit price (p/kWh)
Low profile
WSCC profile
High profile
Generation & Demand
Wholesale
Capacity
DUoS
TUoS
Policy
Generation & Demand
Wholesale
Capacity
DUoS
TUoS
Policy
Wholesale
Capacity
DUoS
TUoS
Policy
Progress to dateTangmere solar farm – one of
the first council-owned solar
farms in the country generating
5MW of solar and availing of
Feed in Tariff
Westhampnett Solar Farm & battery storage
system – subsidy free generating over 7MW of
solar and 4MW of battery storage
Technology risk
• Detailed specification
• Warranties
• Refresh requirement
Revenue risk
• Market opportunity
• Cost of Capital
• O&M costs
Over to you
• Do you have granularity of your cost base?
• Can you make a sensible projection of your future
energy costs?
• Would you know what a good deal looks like for
your organisation?
• If you expect an investor to invest in your project,
why wouldn’t you?
Private Sector Perspective
Greater South East Energy Hub (‘GSEEH’) Workshop
Invests as partner (varying stakes) or sole entity (concession).
Oversee or manage build and commissioning
Early project evaluation and due diligence for project investment.
All plant and platforms. Includes performance, availability and replacement.
Responsibility for full customer service for all types of customer 24/7/365.
Energy modelling, design optimisation, management services
Investment | Risk | Development Partner
FEASIBILITY FINANCE DESIGN BUILDOPERATION
& MAINTENANCE
BILLING & CUSTOMER
SERVICE
What do we do?
Smart Cities & Places Vision
Infrastructure
Assets
Connectivity
Management
Visibility
Smart.
Joined Up.
Integrated.
• Standalone Fibre roll out• Standalone LED procurement• Standalone Heat procurement• Standalone EV procurement• Standalone Energy procurement• Standalone Smart City procurement
Smart City
Vision
The
RealitySilos prevail –Breaking down silos requires:• Vision from the top, which needs…• An understanding of the financial
benefits of joined up thinking
So how about Smart City partnerships…
SSE
A long term partnership which allows a solid platform, upon which each partner can bring their respective strengths:
Investment
Project delivery
Asset management
Smart City Partner
Ensuring project performance
Heat and electricity loads
Planning powers
Fulfilling policy/ masterplan vision
Relationship with end users
Smart Platforms
How could it work…
Risk and Reward Sharing
Capital InvestmentDevelopment
ResourceControl eg
Tariff & IRR Partnership
Commission and Operate
Design BuildAsset Management
& Performance Optimisation
Customer Service
Procurement of Services
What are we looking for?Early feasibility stage or later (but not too late)
Higher than local authority levels but linked to project specific risk. Early engagement will sound this out.
25 years + (depends on project type)
Core energy loads owned by as few entities as possible (but so does everyone else!). The key is strategic growth.
To develop project delivery models that can be navigated through easily, especially if we’re going to get funding spent.
IRR
Timing
Risk profile
Long Term Agreements
Pace
Thanks for listeningEnjoy the day!
Get in touch:
Jennifer BelkProject Development ManagerSSE Enterprise | UtilitiesE: [email protected]
Sourcing Private Finance
Greater South East Energy Hub (‘GSEEH’) workshop
18 June 2019
Official
Balance sheet gap – heat networks
>700TWh heat consumed per year
TODAY
14TWh of which met by heat networks
(c2%)
>110TWh needed by 2050 from heat
networks (c20%)
2050
Demand side reductions but still
likely >600TWhHow do we meet a
100TWh supply increase from heat
networks?
Community Bonds
June 2019
About Allia C&C
• Allia C&C is a new type of fixed income stockbroker
Raising debt for Charities and Impact Organisations
Credit worthy small and mid size corporates
• Supported by a distribution and broking platform: Servicing institutional and professional clients
Focused on retail eligible bonds and specialist illiquid bonds
• It is controlled by Allia Limited: A charity set up in 1999 to deliver positive social impact
Operating “incubators” for charities and impact organisations
Supporting charities and impact organisations on raising debt
AlliaLimited
Staff & partners
C&C Limited trading as Allia C&C
Regulated as a BIPRU Firm FCA No. 765603
Passported in:
GERMANY | IRELAND | LUXEMBOURG |NETHERLANDS | NORWAY |
2
About Community Bonds
• Community Bonds was set up by Allia in 2016 to facilitate funding by charities interested in:
reaching out to their natural supporters for debt finance, while
also appealing to institutional investors interested in bonds with high social impact.
• It is designed for organisations looking to fund capital investment:
for amounts of between £1m – £10m, and
maturities ranging between 5 and 7 years.
• Allia C&C operates Community Bonds and provides a wide range of services connected with successfully raising and managing the debt:
Due Diligence on the funding
Surveying supporters
Managing the sales process
• Community Bonds represent a cheap and efficient way of raising debt frominvestors that are aligned to the objectives of the organisation.
Preparing documentation
Advising on pricing
Handling execution
The Information Memorandum
Identifying institutional investors
Acting as the paying agent
How Community Bonds work
How it works
How it works
• Appealing to your supporters is likely to generate a wide range of responses
For amounts that can vary between £1000 and £500,000.
• Success requires three things:
A professional and well presented business case,
A strategy for reaching out to the investors, and
A sophisticated client management system that can:
Manage a wide range of enquiries
Conduct KYC enquiries
Issue the individual loan notes (Bonds)
Provide updates on performance
Repay principal on maturity
Identify individual investors
Handle a large number of individual payments
Record the receipt of payments
Manage interest payments
Repay principal on maturity
Information requirements
Information request
1. History
2. Social impact
3. Constitution and Governance
Constitutional documents, vires to borrow
4. Financial statements
5. Project and project plan, including any reports submitted to trustees
6. Business plan
7. Existing loan arrangements
8. Details of supporter groups
9. History of support/giving
E: [email protected]: 020 3039 3453W: alliacc.com
City & ContinentalCheyne HouseCrown Court62-63 CheapsideLondonEC2V 6AX
Contact us
Allia C&C is a brand name of City & Continental Ltd, an Allia company.The information contained in this presentation should not be distributed beyond the intended recipients and should not to be reproduced in any form without the express consent of City & Continental Ltd.This presentation may have been supplemented by additional information discussed during any meetings, phone calls or oral presentation(s) between us, and this should be taken into consideration when reviewing this presentation.If you require any information, explanations, or specific advice, please contact us and we will be happy to discuss this with you. City & Continental Ltd is registered in England and Wales (no. 9997053). Authorised and regulated by the Financial Conduct Authority. Registered office: Cheyne House, Crown Court, 62-63 Cheapside, London EC2V 6AX.
introduction to
Sustainable development capital
www.sdcl-ib.com
26
Strictly Private & Confidential
SDCL Energy Efficiency InvestmentsFinancing Energy in the Greater South East
www.sdcl-ib.com
18 June 2019
2
Examples of institutional stakeholders, investors and capital partners
Investing throughout the project life-cycle
Development Phase
Construction Phase
Operational Phase
• Established investment firm with four prior institutional funds focussed on efficient & decentralised energy.
• 5 Offices and 15 investment professionals in London, Dublin, New York, Hong Kong & Singapore
• On-site energy and energy efficient solutions: deep experience in project development and investment in the UK and other markets.
• Substantial experience at grid scale across multiple renewable technologies.
UK Ireland Singapore New York
International investment offices focussed on energy efficiency in EMEA, North America and Asia
Introduction to SDCL Energy Efficiency: total equity investment capacity of over £1 billion.
3
Private Sector Finance for Public Sector Projects
Opportunity:
✓Significant amount of capital available✓Ability to leverage additional funding (including public sector)✓Commercial expertise and flexibility✓Fully commissioned project with no up-front capex payments for client✓Reduced opex with performance based payment terms under service charge✓All associated risks (construction, commissioning, operating) assumed by SDCL project company✓Innovation, flexibility and industry best practice
Benefits to Client:
✓Financial:✓Cost certainty and risk transfer✓Reduction of operating costs through PPA/service charge for energy produced
✓Environmental:✓Greenhouse gas emission reductions✓Opportunities to add other energy generation, conservation and procurement solutions
✓Infrastructure:✓Improve efficiency, productivity, management and resilience✓Potential for export/campus/micro-grid opportunities✓Potential to generate energy to provide services for the grid
Providing clients with value, transparency and choice:
✓Regular performance based service charge: pre-determined payments over contract term offering long term price certainty; or✓Purchase option following successful implementation for a pre-determined price during a commissioning period; or✓Purchase option post the commissioning period at a price calculated by discounting the remaining service charge payments
4
Private Sector Finance for Public Sector Projects
Challenges:
✓Procurement✓Favours lowest cost not highest quality✓Rigid and inflexible✓Risk of gaming the tender✓Often expensive and time consuming to bid
✓Authentication of carbon reduction✓Public funding
✓Low cost and undemanding public funding crowds out private sector✓Inefficient use of public capital
✓Development Risk✓Projects often need extensive development work to establish feasibility✓Lack of resources or skills to conduct this – favours conventional solutions
✓Unrealistic/Mismatched expectations
How can these be addressed:
✓ESCO approach:✓Focuses on delivered efficiency rather than capex✓Straightforward to monitor carbon reduction✓ESCO carries design and implementation risk✓Risks can be partially or fully allocated to the private sector
✓Service Agreements:✓Recognised as off-balance sheet for PSBR purposes✓Relatively straightforward to procure✓Performance based – payment linked to delivery of services✓Flexible – can be long term and possible to extend
introduction to
Sustainable development capital
www.sdcl-ib.com
26
Strictly Private & Confidential
Case Studies
www.sdcl-ib.com
6
Location London
Size & Type 2.8 MW Combined Cooling and Power (CCP)
Project Description
▪ SDCL provided a long term service contract for Citi,equivalent to a PPA, to deliver cooling and power for Citi’s critical datacentre in East London.
▪ SDCL identified and worked directly with the leading contractor(s) on design, engineering, procurement and construction.
▪ SDCL oversaw development and construction and addressed all design and planning risks and challenges (including issues related to coordination with local infrastructure, site conditions, commissioning and local authority).
▪ No capex for Citi, risk transfer and savings.
Client Goal Energy Cost Savings, Carbon Emission Reduction
Project Completion
2015
Team Members SDCL, Clarke Energy, GE
CHP Case Study 1Citi data-centre combined cooling and power, London
7
Location London
Size & Type 6.6 MW CCHP
Project Description
▪ Combined cooling, heating and power for a major corporate’s global headquarters in New York, designed to be the greenest building in Manhattan
▪ SDCL identified, contracted and worked directly with the best-in-class professional on design, engineering, procurement and construction.
▪ Major challenges includes site location (rooftop installation), noise, weight, line of sight, emissions.
▪ SDCL oversaw development and construction and addressed all design and construction risks and challenges (including issues related to installation).
Client Goal Energy Cost Savings, Green Building, Resilience
Project Completion
2019
Team Members SDCL, contracting to Vanderweil, FMMC, NES, GE
CHP Case Study 2Corporate global headquarters, New York
Location London
Size & Type 1.4MW Combined Cooling Heat & Power (CHP)
Project Description
▪ Electricity generation with waste heat recovery for production of hot and chilled water
▪ Retrofit in Central London hospital
▪ First CHP project to be third party funded through a PFI variation
▪ No up front capital cost, reduced operating costs and transfer at end of contract
▪ Managed through all contracting and construction challenges, including PFI variation with NHS Trust and all stakeholders and the delay and cost associated with discovery of Roman remains during excavation and construction
Client GoalEnergy Cost SavingsCarbon Emission Reduction
Project Completion
2016
Team Members SDCL, Skanska, GE
CHP Case Study 3St Barts Hospital, London
9
Capex £17.5 million
Energy Savings 50%
Project Description
▪ SDCL to provide lighting services, designed and delivered by GE Lighting, for 10 years in all branches
▪ More than 90,000 LEDs to be installed across Santander’s entire UK estate of 800 branches and 14 office buildings
▪ 50% Energy savings and greenhouse gas emissions cut by more than 7,000 tonnes
▪ Improvements to the quality of lighting with a better customer experience
Investment SDCL UK - 100% equity investment
Contract Term 10 years
Financial Close Q4 2015
Stage Installation
Sector Banking
CLIENT:
TECHNOLOGY
Lighting Case StudySantander nationwide estate - UK’s largest fully-funded LED retrofit project
10
Capex £23 million
Size & Type 30MW rooftop solar PV
Project Description
▪ A large UK retailer has appointed SDCL as one of three suppliers, from a list of 15 bidders, to roll out rooftop solar PV across its stores
▪ SDCL has partnered with Kingspan which is a leading rooftop EPC contractor and who has a strong solar rooftop track record in the UK
▪ The energy solution:
✓ Offers substantial savings from current electricity supply prices available in the market
✓ Be set for 20 years (only subject to RPI indexation) therefore offering a long term hedge on electricity supply costs
✓ Secures substantial carbon savings
Investment SDCL UK - 100% equity investment
Contract Term 20 years
Financial Close Q1 2019
Stage Development
Sector Retail
Solar PV Case StudyLarge UK retailer
GSEEH Finance Event
June 2019
Who we are
Integrated approach to design of new energy models.
Joint Venture Partners:• Pure Leapfrog • Lux Nova Partners• ITP Energised
PURE LEAPFROG Charity # 1112249
Access to tools, templates and knowledge for communities wishing to invest in renewable energy and energy efficiency
LEAPFROG FINANCE
Social and environmental impact investment through bridge finance for community & local energy construction, acquisition installation
Bridge Finance Offer
• 100% bridge finance for construction, acquisition, installation
• De-risks projects for council investment
• Potential to bring in community investment too
• Social impact design, planning, reporting
• Support for understanding technology, process, structuring
• Array of technologies
• Experienced team
Council Projects
Solar
• 2016 Plymouth Energy Community• 4.5MW project
• Bridge Fund Construction
• Council + Community refinance
• 2019 Warrington• York 35MW + battery
• Hull 27 MW
• Bridge Fund EPC Construction
• Council purchase on completion
Heat• Community scale
• 1 small scale pilot in Scotland
• 2nd larger pilot with 2 councils – 1 London; 1 Scotland expected 3Q 2019
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
Using Alternative Finance to Build a Better WorldInnovative investments in environmental and social infrastructure
Background
Abundance
– First regulated crowdfunding platform
– First to launch a pension and ISA
– Co-founders of the UKCFA
– Raised £4.5m for Swindon Borough Council from residents
Financing For Society Pilot Fund
– https://baumaninstitute.leeds.ac.uk/research/financing-for-society/
– Abundance crowdfunding adviser
– 3 Local Authorities and 3 NHS Trusts
– Developed concept of Community Municipal Bond
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
2
Green Energy
Transition
Housing
+ Health, Education, Municipal
Community Municipal BondsBond issued by the public sector directly to the public via Abundance’s
platform Emulate, as far as possible, established issuance processes but in a much
more streamlined way
Compete with listed market borrowing rates
Platform for communicating with customers and building trust as well as
driving additional social value
Accessible to ordinary investors; low minimum and ISA eligible, helping to
improve financial security
Principles of listed green bonds are followed but no formal rating is required,
reducing time and cost
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
3
Investor Appetite
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
4
“We are interested in your reaction to the idea of … an
investment bond which would be backed by local authorities,
which would pay regular interest over the long term, and be very
low risk.
The outcome would be funding for local social and green
infrastructure such as green energy, health and education.”
62% of UK Investors said they would be interested or very
interested in this product.
89% of Ethical Investors said they would be interested or
very interested in this product
Survey by OnePoll of 2,000 demographically representative UK
adults, March 2019
A number of separate surveys evidence strong demand for low risk investments, and strong interest in supporting social
and green initiatives delivered by their local authority.
Survey of Isle of
Wight Residents,
Financing for Society
(2019)
Retail Investment Market Example (Suffolk)Population of the Suffolk County Council region
757,000 people
567,000 adults
Retail Investment Market
East of England 47% adults have an ISA. The average holding is £25,208 – HMRC ISA Statistics 2018
Suffolk CC ISA holdings = estimated to be £6.7bn
Pension and general savings will tend to be 3x the ISA number
Therefore total savings and investment held by residents in region of £26bn
Estimated that ~£4bn (15%) could match to the return profile of a Community Municipal Bond
Current long term borrowings of the Council are £300m
5
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
Social RES – Horizon 2020 Funding
£20-30k grant available for 5-6 councils piloting a Community Municipal Bond
The grant has to be used with authorities where the bond raise is notionally used for green / low
carbon projects
The grant comes with research wrap provided by Trinity College Dublin, this will be used to
research changes in attitude of resident investors to climate change and local authority
Need to identify LAs by end 2019 with funding event happening by end 2020
Grant is sufficient to cover any external costs to pilot a Community Municipal Bond as well as
internal time
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
6
Abundance is authorised and regulated by the Financial Conduct Authority (525432)
[email protected]:02034758666
Prospering from the
Energy Revolution
Proving cleaner, cheaper local energy
approaches that deliver what users want.
Industrial Strategy Challenge Fund
The Industrial Strategy Challenge Fund
Energy Revolution: The Opportunity
Costs Digital UK Strengths
Consumer Local Finance
Technology
Energy Revolution: Pull, not push
‘Traditional’ energy innovation approach
A new approach
System ServiceBusiness
model
Value
chain
Technology System ServiceBusiness
model
Energy Revolution: Programme ObjectivesProve investable, scalable local business models by 2022, that
• deliver cleaner, cheaper energy services
• build more prosperous and resilient communities
• benefit the whole energy system
• use integrated, intelligent approaches
Unlock 10x future private investmentin local integrated energy systems in 2020s (vs business as usual)
Accelerate new products and services to commercialisationcreating real world proving grounds
Build UK leadership in integrated energy services provision
Demonstrators & Designs:
Integrated intelligently
to please consumers
In scalable, replicable
and investable models
Town-Scale power, heat
and mobility services
Future energy model proving
£40m £30m
Energy Revolution: £102m programme
Innovation Accelerator
Research, Expertise, Capability, Coordination
£22m
Practical demonstrators Future designs
£10m
Energy Revolution: The Opportunity
Costs Digital UK Strengths
Consumer Local Finance
Thank you