![Page 1: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/1.jpg)
Dr Chiara CandeliseCEO Ecomill
Bocconi University
Smart financing and empowerment: crowdfunding in energy
![Page 2: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/2.jpg)
CROWD-FUNDING
![Page 3: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/3.jpg)
Crowdfunding models
![Page 4: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/4.jpg)
Crowdfunding market
Source: Massolution 2013, 2015
![Page 5: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/5.jpg)
Crowdfunding in energy
Candelise, C. “The application of crowdfunding to the energy sector”. In Crowdfunding for Sustainable Entrepreneurship and Innovation. Ed. W. Vassallo, IGI Global. 2016
![Page 6: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/6.jpg)
• Need for new sources of funding (since financial crisis)
• Transformation of energy sector (liberalization energy markets, decarbonize energy systems, decentralized generation):
Drivers
![Page 7: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/7.jpg)
![Page 8: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/8.jpg)
![Page 9: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/9.jpg)
• Need for new sources of funding (since financial crisis)
• Transformation of energy sector (liberalization energy markets, decarbonize energy systems, decentralized generation):
-> smaller, modular energy projects-> open entry to new players, e.g. small firms, local authorities, citizens-> energy consumer can become producers (prosumer)-> Communities, local authorities, can become energy producers
Drivers
![Page 10: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/10.jpg)
![Page 11: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/11.jpg)
• Need for new sources of funding (since financial crisis)
• Transformation of energy sector (liberalization energy markets, decarbonize energy systems, decentralized generation):
-> smaller, modular energy projects-> open entry to new players, e.g. small firms, local authorities, citizens-> energy consumer can become producers (prosumer)-> Communities, local authorities, can become energy producers
• Diffusion of community energy and shared ownership approaches
Drivers
![Page 12: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/12.jpg)
![Page 13: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/13.jpg)
• Need for new sources of funding (since financial crisis)
• Transformation of energy sector (liberalization energy markets, decarbonize energy systems, decentralized generation):
-> smaller, modular energy projects-> open entry to new players, e.g. small firms, local authorities, citizens-> energy consumer can become producers (prosumer)-> Communities, local authorities, can become energy producers
• Diffusion of community energy and shared ownership approaches
citizens as participatory actors, invest little amount of money, harvesting benefits of clean energy investments, contribute to CO2 emission reduction
Drivers
![Page 14: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/14.jpg)
New, but dynamic
• Begins in 2012• At Nov 2015
29 active platforms 13 in pipeline ~ 390 projects
• PV, wind, hydro, biomass, energy efficiency
• Majority investing crowdfunding
Financial/Investing (~80%)
![Page 15: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/15.jpg)
![Page 16: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/16.jpg)
![Page 17: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/17.jpg)
Some numbers• Total volume raised:
~ €165mil ~ 0.75% of worldwide
funding volume
(at Oct 2015)
![Page 18: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/18.jpg)
Larger projects
![Page 19: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/19.jpg)
Higher success rate
![Page 20: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/20.jpg)
… who is investing (and why?)
Source: Abundance generation (2014)
Experienced older investors, who plan for their financial futures
Younger investors, looking for new opportunities to expand their portfolio
Actively consider the impact of their investment activities
![Page 21: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/21.jpg)
Projects proponents
Source: CrowdfundRES, 2015
![Page 22: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/22.jpg)
Community vs institutional finance?
ModelNumber of
projectsMoney raised €
Average raised per project €
Average returns
Lending (with Trillion Fund's lending projects ) 219 127,555,407 768,406 9.29%Equity (community shares) 38 22,740,049 733,550 7.00%Hybrids (no Trillion Fund's lending projects) 40 13,949,090 348,727 4.58%Donation/reward 93 814,883 14,050 -
Trillion Fund Equity Community shares Loan Fund
Money raised € 4,747,208 6,972,470 34,017,910 56,358,206
Number of projects 1 9 13 3Average return 9.5 5.29% 7.34% 15.13%Average raised per project € 4,747,208 774,719 2,616,762 18,786,069
• Peer to business lending dominates (more projects, more money raised, larger size) – third party financing
• Still, strong environmental and public engagement mission and explicit community and local focus (e.g. Lendosphere)
• However, loan and fund raised over 50% of total worldwide funding volume
![Page 23: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/23.jpg)
Trends• From ‘family and
friends’..• ..grass root
projects• to scaling up:
Larger projects New instruments (e.g.
loan and fund) Collaboration with
utilities and institutional finance
![Page 24: Smart Financing and Empowerment: Crowdfunding in Energy](https://reader031.vdocuments.net/reader031/viewer/2022021922/5873b74a1a28abbc788b4b5f/html5/thumbnails/24.jpg)
• Improved citizens access to investments in clean energy• Started as a niche practice in grass root, community energy projects• Showing signs of scaling up and entrance of institutional actors
Open questions:
• will participatory and shared ownership approaches coexist with institutional and structured finance?
• Financing energy efficiency? In EU: reducing policy support to renewable energy sources (RES) and increasing need to develop and implement energy efficiency
Looking forward