3. Introduction - Resilience
Resilience - the enduring power of a body or bodies for
transformation, renewal and recovery through the flux of
interactions and flow of events
Resource Resilience – Natural Grid
Financial Resilience – Open Capital
4. Natural Grid – Resource Resilience
Since 1980 Denmark's GDP rose 78%, while energy
use has been stable and carbon fuel use declined
How?
Mandate - minimum carbon fuel input for a given
output of electricity, heat or power
Least energy cost policy; not Least DK (or €, $, £) Cost
Massive investment in renewables, heat, energy
efficiency, transport
Outcome – decentralisation – trend to a Natural Grid
5. Open Capital – Financial Resilience
300 year Market 2.0 paradigm of 'closed' proprietary
finance capital and 'for profit' intermediation
- Debt (Banks) and Equity (Joint Stock Company)
- October 2008 the Market 2.0 paradigm broke
Market 3.0 - emerging networked market paradigm
Open Capital
- neutral, collaborative framework - Capital Partnership
- prepayment for production or use over time - Prepay
6. Application - Eastern Mediterranean
Eastern Mediterranean Nondominium
- neutral framework for East Med energy co-operation
- Gas Pool of future production, Gas Grid, Gas Hub
/Balancing Point benchmark
East Med gas Prepay instrument
- gas clearing union (mutual guarantee)
- direct 'gas loan' investment by energy investors,
especially gas consumers
7. Eastern Mediterranean Nondominium
Stakeholders
- Custodian – Clearing Union of Littoral Nations
- Producers and Consumers – Littoral Nations
- Manager – private sector service providers
- Investor – energy funds & energy users
9. Nondominium – What it is and is not
Nondominium is neither an Organisation (eg Energy
Charter) nor a Trust (eg UK North Sea Master Deed)
- consists of 2 parallel collaborative agreements
Clearing Union - agreement between stakeholders jointly
- governs & guarantees prepay unit issuance, exchange
& return
Capital Partnership - agreement between stakeholders
individually
- governs allocation of flows of production
10. Nondominium – How it Works
All existing legal rights transferred to Clearing Union as
joint Custodian
Production shared by nations and service providers in
accordance with project-specific 'enterprise
agreements' within Capital Partnership framework
Balance of production available to create and issue
prepay units to Investors
No nation or stakeholder has dominant rights
Stakeholders have agreed rights of veto
11. Nondominium – Outcomes
Neutrality
– no sharing of sovereignty as in Condominium
– takes politics out of energy
Equity – ethical sharing of risk and reward
Stability – no stakeholder has an interest in volatility
Resilience – risk is distributed
Complementary – not alternative but addition to existing
agreements eg Law of the Sea, Energy Charter
13. Gas Prepay – What it is & How it Works
Undated credit returnable in payment for gas supplied
Prepay unit issued & sold by gas producers at discount
$1.00's worth of gas sold for 80c gives absolute return
of 25%
Rate of Return - rate over time at which prepay unit
returnable to issuer in payment for gas supplied
Rate not fixed - depends on existence & amount of flow
No right to supply – accepted in payment for supply
14. Gas Loans
Prepay - direct investment in future gas production or
gas savings
- the earlier the investment, the greater the risk, and the
greater the discount
- return in energy: no $ paid for the use of $
15. Gas Loans – Value proposition
Producer
- sells gas forward and locks in price
- interest-free gas loan until unit returned against supply
Consumer
- prepays for gas and locks in price
Investor
- direct 'inflation hedge' investment in energy
- Consumers buy units from Investors at best price
below physical gas price & return them against supply
16. Outcomes
East Med Benchmark – gas unit could become energy
standard unit for East Med energy investment
Carbon Currency – denominated in energy, not $
Energy Subsidy - energy dividend of prepay units
- incentive to save energy, & exchange units for value
East Med energy pool fund
East Med Green Deal – energy loans invested directly
in renewable energy and energy saving projects
