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Lessons from the Birmingham Green New Deal

Objectives and context of the Green New Deal. Economic development and employmentCarbon reductionPrivate and public sector housingCity leadership. Roles and status. Project funded and runningEncraft/LWM designed the project, wrote the business plan and raised the seed financeOngoing involvement

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Lessons from the Birmingham Green New Deal

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    1. Lessons from the Birmingham Green New Deal Liverpool June 2010

    2. Objectives and context of the Green New Deal Economic development and employment Carbon reduction Private and public sector housing City leadership

    3. Roles and status Project funded and running Encraft/LWM designed the project, wrote the business plan and raised the seed finance Ongoing involvement Adaptation to changing political and funding context Long term commitment

    4. The Birmingham Model 1

    5. The Birmingham Model

    6. Making it work Using the opportunity of Feed in Tariffs Make programme self funding Local Authorities can get 8% plus from Fits and borrow at 4 – 5%. Can give owners free PVs etc in return for FIT. Encourage further works. Create mature market.

    7. The mechanics are straightforward

    8. Whole house solutions are often more efficient than PV

    9. But PV excites people and makes it easier to encourage whole house solutions

    10. Birmingham does more Owner occupiers, and business premises. RSLs can do it themselves

    11. Creating employment Retrofitting and local job creation Linking to training and recruitment The importance of scale Having the right systems procurement, training, business support Removing barriers to market entrants

    12. Employment opportunities

    13. How the GND helps CRITICAL MASS PILOT USE OF EXISTING FRONT LINE STAFF COMMON FINANCIAL MODELS INTEGRATE WITH LOCAL COLLEGES SCALE MATERIALS PROCUREMENT PROBABLE SPV, PROJECT MGMT FOCUS ON USING LOCAL SMEs VOLUME AND SUPPORT Market entry costs Customer management Financing and incentives Installation skills and training Low cost materials and sourcing Maintenance and warranties New business models/flexibility Insufficient demand to manufacture

    14. Best use of what exists Need to keep costs down – use what exists Private sector housing team Summerfield eco neighbourhood Employment action team and approach Urban Living Procurement systems

    17. Lessons from BGND Funding Used. WNF, EST, EU?, Utilities? Own resources. Legal advice and contracts Coping with a difficult environment (cuts and pragmatism) Procurement systems Training and recruitment systems Scale Failings of national approach?

    18. A national retrofit programme Probably sufficient money from energy savings and Utilities requirements to invest. If Prices equivalent to best in Europe Use Lowest interest rates Create effective local supply chains with skilled workers. Get right structures in place. Such an approach would support localism

    19. Financing options and issues

    20. FiT opportunities add to existing efficiency opportunities

    21. How the numbers can work

    22. Project risks need to be understood

    23. ESCOs are ways to manage a range of revenue and cost streams (and risks!)

    24. There are different models Possible models Co-financed ESCO Independently financed ESCO with commitments Social ownership ESCO

    25. Financing Options Local Authorities – Prudential borrowing and EU. Owners grants and loans. Kick Start and PAYS? RSLs bank borrowing and bonds. The Utilities (CESP and CERT).

    26. Structural Issues and Risks 3 A Possible Model? Joint fund Council (s), banks CESP? Main determination biggest funder

    27. Cooperative Bank Model

    28. Attracting Private Finance Risk v income Rent your roof space. Private finance wants higher returns than PSLB or EIB, wants certainty, scale, track record and replicability. National benefits v local economy.

    29. What Other Countries Do Germany, US, Spain, Italy, France, Australia, Denmark (etc) funding for FITs Germany Utilities pay taxes and licence fees to local authorities and in some areas so do energy users. Local authorities use to fund retrofitting schemes. Local banks provide private finance to individual projects

    30. How is the GND helping develop these opportunities

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