Business Model NettoWatt

Transcription

1 Business Model NettoWatt The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein. 7

2 Business Model 1. Customer Segment, relationships, and value proposition... 2 Cooperative Members / Investors... 2 Site Owners... 2 Physical persons... 2 Municipalities, public entities... 2 Private Organizations... 3 Other clients... 3 Partner Supplier Key activities & resources needed... 4 Activities... 4 Resources... 4 Site finder: build the portfolio of sites... 4 Negociator : negociate exploitation agreement with site owners... 5 Funds Raiser : negociate loans with Banks, apply for subsidies... 5 Communicator : communicates about the cooperative, organize shares offering program 5 3. Key partnerships (Outsource)... 6 Architects... 6 Engineers... 6 Banks (or other financial institutions) Costs and Revenues Summary

3 1. Customer Segment, relationships, and value proposition Cooperative Members / Investors Cooperative members are people or organisations that own a minimum of one share in the cooperative and thus have signed the Shares Offering agreement. They will form the General Assembly and will govern the cooperative according to its statutes. They will appoint some Directors to run the cooperative, and will meet at least annually in the General Meeting to approve their major decisions. The bulk of the cooperative members will most likely be environmentally- minded citizens eager to play an active role in a local, green, project. The return on investment will not be their major driver. They are wealthy enough to afford to invest part of their money in a long term local project. A cooperative share is around 260, which means that sparing 5 a week for one year for a family could enable them to invest in the project. They can also be organisations interested in the project as part of a CSR strategy, or local organisations willing to be part of the governance because they have a stake in the cooperative : site owners, municipalities, existing citizen lobby group, etc... Site Owners Site owners are people or legal entities that own the rights of a site with micro hydro potential. Physical persons These would probably be the most difficult people to convince, especially if they live in the mill. Noise could be a blocking factor for them. On the other hand, the revenue generated by the project could serve for restoration or maintenance of such a site that may otherwise be quite expensive and could enhance the living standards of the family (share revenue proposal is in the order of magnitude of one month salary). Other concerns like preserving the patrimonium of the family could play a role. Municipalities, public entities Municipalities and other public entities could be interested in the good image generated by the local production of green electricity, the dynamism brought to the region as well as thepositive cultural, historical, educational, and tourisim aspects. 2

4 Private Organizations Private organisations would be interested in the environmental image and the publicity generated. For a SME, the revenues are significant and could be reinvested in the Company. Sites owners will be proposed a commercial agreement that will : - Compensate for the disturbance (noise, implementation works, ) - Compensate for the day- to- day maintenance of the site, and incentivize the owner to keep the site operational (optional but strongly recommended) The agreement can be : - Time bound or not, but with a minimum duration securing the return on investment - Based on different financial models : usufruct, revenue sharing, lump sum, etc A case by case agreement will be discussed and made. Before investments are done in a detailed prestudy of the site, a formal Letter of Intent must be signed (between the cooperative and the site owner) to secure involvement of the site owner. If result of the pre- study is positive, this agreement will be formalized into a contract. The help of a Jurist will be sought if needed. Other clients The "other clients" are linked to other sources of revenues (other than selling electricity). They can be : - Electricity Suppliers buying a certain quota of Green Certificates - Government providing incentives (feed in tariffs) - Grid responsible providing fees for decentralized production stabilizing the grid - Etc Partner Supplier Our Partner supplier would buy Electricity the cooperative provide to the grid to feed its portfolio of energy mix proposed to his clients. A supply agreement will be signed with those entities. End users End users buy electricity directly from the cooperative. The legal frame for direct selling is subject to local law. End users are consuming near the production scheme through a direct line. They are most probably still tied to another electricity supplier, since hydro production cannot guarantee a continuity in services, and have a second supply agreement with the cooperative. 3

5 2. Key activities & resources needed Activities Below is a Graph of the key activities of the cooperative green activities have been performed before cooperative creation. Blue activities are activities performed by the cooperative. More information can be found here in the Cooperative Guidelines FIGURE 1 - HIGH LEVEL VIEW OF THE CREATION OF A MICROHYDRO COOPERATIVE Resources Resources are needed internal capacity and competence Site finder: build the portfolio of sites - experience in microhydro schemes 4

6 Negociator : negociate exploitation agreement with site owners - Knowledge of different legal framework for site exploitations : usufructs, revenue sharing, etc... - Client Relationship, negociation skills - Basic technical, legal, environmental, financial knowledge Funds Raiser : negociate loans with Banks, apply for subsidies - Negociation skills (banks) - Administrative skills (structural funds, grants, etc...) Communicator : communicates about the cooperative, organize shares offering program - Expert in viral communication, social networking, web communication, etc... - Organization skills for events & campaign (share issuing) 5

7 3. Key partnerships (Outsource) Architects Architects will design the sites until the point it can be proven that operations would be both feasible and profitable. Engineers Engineers will implement the sites as designed by the Architect within the constraints of budget and timing. Banks (or other financial institutions) Will help fund the project based on a detailed Financial Plan proving the profitability. 6

8 4. Costs and Revenues Main revenues come from : - Selling Electricity to our Partner Supplier - Selling Electrivity to local end- users - Other sources of revenues like Government incentives Major costs are : - Equipment maintenance - Dividends to investors - Owners compensation - Loans reimbursement (banks) More information can be found in the Financial tool provided with the Cooperative Guidelines 7

9 5. Summary FIGURE 2 SUMMARY BUSINESS MODEL 8