1. WEC Knowledge Network on
Innovative Financing Mechanisms
“Smart grids from invention to implementation”
Preliminary Findings

2. Innovative Financing Mechanisms
WEC Knowledge Network
To formulate Policy Recommendations towards Innovative SG Financing Mechanisms
EU North America Japan South Korea China India Brazil
* Brazil has recently joined
Spring 2011 End of June 2012
Preliminary Analysis
 Regional Context Summer 2012
 Main SG drivers
 Main challenges Policy Recommendations
 Currently available Late 2012
Financing Mechanisms
Final report

3. SG Main Drivers and Challenges
WEC - Preliminary Findings
Drivers strongly depend on the regional context
Low Carbon and Energy Efficiency • OECD Countries
Green Economy Growth Agenda • OECD Asian Countries Main
Drivers
Fast Growth Infrastructure • Emerging Countries
Business case and Financing • Most Countries
Main
Regulation • EU and North America Challenges
Public awareness/acceptance • EU and North America
No significant challenges reported by South Korea
Just a few from China (where state-owned network companies enable rapid construction)
High technical and non technical losses reported in India (mainly from thefts) and Brazil

4. Available Financing Mechanisms
Some Best Practice examples WEC - Preliminary Findings
• European Union: EU •USTDA $686,447 grant
for SG implementation
funding programs for
RD&D projects (FP7, •DRUM Training Program:
IEE, NER300, $30 million by the USAID
Connecting EU and the Indian Ministry of
facilities) Power for SG development
• USA: over $4 billion
from DOE
Public External
Funding Grants
Private Regulatory
Funding Incentives
• North America:
Partnership • New Tailored Mechanisms:
GE/venture capital
•AEEG (IT) ‘Del39/10’
firms
•OFGEM (UK) ‘RIIO, LCNF’,
• South Korea: IFI, RPZ’,
Government + private •‘R-APDRP’ (India)
funds (0.5 +18.1
billion USD)

5. BACK UP

6. SG Innovative Financing Mechanisms (1/2)
WEC - Preliminary Findings
EU North America Japan South Korea China India
Re-examination
Low Carbon Grid upgrading and Green Economy Fast Growth Fast Growth
of nuclear
Agenda energy efficiency Growth Agenda Infrastructure Infrastructure
energy policy
 Infrastructure  Boosting  Long-term
Main  Enhancing
 Integration of RES upgrade manufacturin economic  Rising
Drivers  Surge in wind
energy
g and IT growth demand
 Infrastructure security
upgrade capacity industry  Energy  High levels
 Environment
 Energy  Consumption consumption of losses
al protection
efficiency growth growth
Large Scale Demos
 Coordination needs
 Unsuitable Funding  Unclear
(inappropriate Regulation Few reported  Inaccurate
regulatory frameworks)  Insufficient funding Insufficient barriers
No significant billing
funding
Main Deployment  Abundance of reported State-owned  High
(need of
natural gas (over network electricity
Challenges  Technology appropriate tariff challenges up to
RES) mechanisms companies thefts
Standards date
 Consumer reported) enable rapid  Insufficient
 Unclear Regulation pushback to smart finances
construction
 Negative Business meter rollout
Cases
 Public awareness

7. SG Innovative Financing Mechanisms (2/2)
WEC - Preliminary Findings
EU North America Japan South Korea China India
Public National Funds
Govt. USD 134 million from government
EU funding (FP7, IEE) Private Public Funds
Funding/Venture on 8 pilot s
National
Regulatory Incentives Capital External grants
Funds Funds from •USAID and the Indian Ministry of
 New Tailored Best practice Private/Public State Grid Power : $30 million also with
funding mechanisms example: METI funds Corporation training
Main (Italy ‘Del39/10’, partnership among National 18.6 billion USD of China •USTDA : $686,447 grant for SG
Ofgem’ RIIO, LCNF’, GE and venture Funds (157 by 2030 (SGCC) implementation
available IFI, RPZ’) capital firms M USD+ (0.5 billion USD
Regulatory Incentives
financing  Changing
111 M USD from Regulatory Re-structured Accelerated Power
in 2012 for government + incentives
mechanisms Framework (Finland, Public Financing large scale 18.1 billion USD
Development and Reforms
Portugal) With funding from Policies for Programme (R-APDRP) is a Govt.
demos) from private
the Recovery Act, onto-grid of India financial incentive scheme
 Traditional funds)
(~ USD 9 billion) for strengthening
Regulatory the DOE invested No electricity
over 4 billion USD prices of and up gradation of sub-
Frameworks regulatory
renewable transmission and distribution
(Austria, Germany) incentives
energy network through adoption of IT and
implementation of SG technologies
Preliminary Analysis
Summer Formulating Policy Recommendations
Late 2012 Final report
* to be presented at an Int. Conference still to be chosen