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Transcript of For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services For...
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Green Financing
Ten Take-aways
Andy SwadloSiemens Financial Services
Page 2 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
National Trends
January 2007 European Commission proposes European Energy Policy:
Greenhouse gas reduction by at least 20% by 2020 (v1990)
Energy Efficiency increase by 20%
Renewable energy share at least 20%
Biofuels at least 10%
Page 3 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Take Away 1
Governments increasingly want action : they are setting tough targets
Page 4 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Target v Results
Take Away 2: Targets are not being met
OECD: “…if current trends continue unabated, global emission would by 2020 reach levels that are more than 30% above 2005 levels” OECD, May 2010
Page 5 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Energy costs
May 2011: China increases electricity costs in 14 provinces and rations consumption
March 2011: Russian electricity prices rise / hydro charge capped at 15%
BRIC is substantially increasing consumption of energy causing rising world pricesTake Away 3: energy prices increasing over th
e long term
Page 6 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
World Going Green
OECD Member countries:
(includes France, Spain, India, USA, Russia, Poland, UK, Germany)
96% of (large) businesses
indicated they have started
energy saving measures
Page 7 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
World Going Green
Take Away 4: Reducing energy costs is the prime business driver to go ‘green’
Their motivations:
“improve image”
“expected legislation”
Number 1 driver:
“reduce energy costs”
Page 8 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Cost of not changing
Take Away 5: Financial benefits to new equipment are more than energy efficiency
Total Cost of Ownership
The older the technology
The greater the maintenance costs
the higher the mean time between
equipment failures
All pushes up the cost of service
and parts and increases
unproductive downtime.
Page 9 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Access to Capital
USA: “Cash, the lifeblood of business, has been scarce for middle market companies since the recession began in 2007” KPMG May 2011
Eurozone: “…the perception of risks worked in the direction of higher net tightening of credit standards” ECB, July 2011
TRIC: “…our problem is slowing down the pace of lending” CB Governor, Turkey 2011
“Beijing would look to curtail borrowing by local governments” Premier Wenn
Page 10 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Access to Capital
Take Away 6: The world is awash with money yet money is increasingly scarce!
Page 11 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Affording energy efficient investment: Leasing
Take Away 7: Leasing industry is well positioned to provide solutions that (many) banks don’t want to
‘Offset’ equipment financing: where payments flex to match energy savings
Sometimes Government sponsored support
E.g. Carbon Trust UK: Energy Efficiency Financing Scheme with SFS
Carbon Trust assess energy savings
SFS provides financing
One package: energy efficiency assessment, equipment, installation, maintenance and service, all via a loan, lease or hire purchase.
Payments equal to, or lower than, the energy savings
Page 12 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Affording energy efficient investment: Performance Contracting
Take Away: Leasing industry is perfectly positioned to provide solutions
Guarantee that energy savings will cover costs of equipment and service
Page 13 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Affording energy efficient investment: Performance Contracting
Take Away 8: Captive Leasing industry is perfectly positioned to provide solutions
Guarantee that energy savings will cover costs of equipment and service
Phases:
Preliminary energy analysis
Investment Grade Audit
Construction and Installation
Regular measurement and verification of savings
Page 14 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Siemens ‘Top Ten’ energy savingsopportunities
Take Away 9: Energy saving covers a huge range of equipment
Page 15 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Fastest returns – outright purchase paybacks:
Take Away 10: Financing can change the whole payback equation!
1. Monitoring and Targeting Systems 1-3 months
2. Low Energy Lamps 1-12 months
3. Variable Speed Drives 3-12 months
4. High Efficiency Motors 3-12 months
5. Building Controls 3 months – 4 years
6. Intelligent Lighting Controls 1-4 years
7. Increased Factory or Process Automation 1-4 years
8. Power Management Solutions 1-4 years
9. Supply Voltage Optimisations 2-5 years
10. Combined Heat & Power 2-7 years
Page 16 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
More than theory
Astrom Steel Works
Loan of £400,000 for new compressors
Annual cost savings £80,000
Annual CO2 savings 600 tonnes
“When we sat down with the loan figures I didn’t believe it,”
“Effectively the replacement is cost neutral for the first four years, and after that we’ll be saving 50% on electricity costs.” Mike Hutchinson, Operations Director
Page 17 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
But…..
Page 18 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
But the proof of the pudding is in the eating……
Page 19 Feb 2012 Andy Swadlo
For internal use only / Copyright © Siemens AG 2012. All rights reserved.
Financial Services
Andy Swadlo
Andy SwadloSiemens Financial Services
Phone +44 (0)7929 207717E-Mail [email protected] www.siemens.com
Final Thought (take-away 11: OK, I lied, there are 11):
In a world where the image of financing has never
been worse, we can make the most positive difference to the world