pay as you save (pays for clean transport€¦ · pay as you save (pays®) for clean transport...
TRANSCRIPT
Pay As You Save (PAYS®) for Clean Transport
Prepared for C40 Cities Finance Facility
Berlin, Germany
Holmes Hummel, PhD Clean Energy Works
2
Driving Transportation from Oil to Electricity
Howfastcanwemobilize$1billioninfinancingfortheincrementalupfrontcostof4,000EVbuses?
-andthenext$10billion?
Utilities can invest, and recover cost on the bill
BaCery
Solution: PAYS for Clean Transport
PAYS for Clean Transport reduces the upfront cost of EVs, starting with transit buses, by harnessing a utility’s capacity to invest in on-board batteries and recover its cost as a service charge.
5
Impact and Potential for Scale
[Figures are for a 100-bus transaction in Santiago, Chile]
Based on results for 6 cities on 3 continents:
• Reduced grant dependence by 1/3 up to 100%
• High leverage of private capital for each grant from doubling to >70:1
• Harness utility interest in new revenue over life of EV buses, $15-40M/100 buses
• Cut pollution with global potential of 60 MtCO2/year in transit alone, before moving to more vehicles
Attributes Battery Lease Agreements PAYS®
•Noupfrontpar,cipantcost ü ü
•Par,cipantmustacceptaliabilityontheirbalancesheet ü
•Par,cipantacceptsanopt-inu,litytariff(NOTadebtoralong-termlease),edtoitsmeteredloca,on ü
•Es,matedsavingsmustexceedcostrecoverycharges ü
•Costrecoveryisthroughafixedchargeontheu,litybill ü
•Par,cipantacceptstariffwithdisconnec,onfornon-payment ü
•PaymentsendifbaEeryfailsandisnotrepairedorreplaced ü
PAYS vs Battery Lease Agreements
Recognition for Transformative Potential
Winner of 3 international competitions and a Design Funding award from Convergence Blended Finance.
8
Endorsed by the Global Innovation Lab for Climate Finance
PAYS for Clean Transport met Lab criteria and displays transformative potential:
ü INNOVATIVE: Applies proven model… with low-cost, low-risk secure repayment mechanism.
ü FINANCIALLY SUSTAINABLE: Relies primarily on commercial capital today, improving over time as technology costs fall.
ü CATALYTIC: Leverages many multiples of investment capital versus comparable approaches.
ü ACTIONABLE: Commercially viable in many major markets with key stakeholders aligned to implement, scale, and replicate.
9
Pathway to Market, with Initial Investments
* Estimates are for selected representative cities. Procurements may be many multiples of this figure, depending on fleet replacement timelines.
Capital Amount (USD) Role of Capital
Debt $20-30m per 100 buses*
Finances the utility’s investment in electric bus batteries and charger
Grant support to leverage
investment
$0.5-6m per 100 buses*
Covers costs remaining, if any, once utility has invested up to the
point of cost-effectiveness
Grant support for technical assistance
$1-1.5m for an initial project
Establish the PAYS model in-country, design the tariff, and catalyze scale-
up and replication
In collaboration with implementation partners, we will:
• Complete in-country feasibility studies with leading utilities
• Execute initial transactions with blended finance
• Expand application to more vehicles and additional geographies
We welcome inquiries:
www.cleanenergyworks.org
@cleanenergywrks
Thank you