Volos st Century Financing & Funding Chris Cook Volos 16 th July 2014

“21 st Century problems cannot be solved with 20 th Century solutions”

Volos 3.0 ? Volos 1.0 – decentralised but disconnected, physical market presence Volos 2.0 – centralised and connected, market presence through intermediaries Volos 3.0 – decentralised but connected, network market presence

Volos Economy Land – Volos as a location or place Physical – resources embedded in (eg buildings) and passing to/through (eg solar energy) Volos Intellectual – people of Volos and intellectual value created over millennia

Financing & Funding Financing - short/medium term credit needed for circulation of goods & services and creation of productive assets - people-based credit (P2P) issued by people individually or jointly (eg Company) Funding - long term credit embedded/invested in productive asset - asset-based (Peer to Asset) credit

Protocols & Prepay Protocols - People-based (P2P) Credit – Guarantee Society - Asset-based Credit – Capital Partnership Prepay – asset-based credit returnable in payment for use value over time (utility) of productive asset

Prepay Tax

Tax Prepay Tax Prepay – credit returnable in payment of taxes Tax Return – 'stock' part of tally stick returned to Treasury Rate of Return - rate over time at which stock is returnable for cancellation eg Prepay £8 for £10 tax - £2 profit 25% pa rate of return - not fixed - depends on existence & quantity of flow

21 st Century Prepay Land – credit returnable in payment for land rental or production from land Energy – credit returnable in payment for energy use Intellect – credit returnable in payment for use of intellectual property eg knowledge, software, video

Resource Resilience – Natural Grid Since 1980 Denmark's GDP rose 78% Energy use has been stable Carbon fuel use has declined How did Denmark achieve this?

Resource Resilience - Natural Grid Least Carbon Fuel Cost principle - not 'least Danish Krone cost' (or least $, € or £ cost) - minimum carbon fuel input for a given output of electricity, heat or power - investment in renewables, heat, transport, energy efficiency

Emerging Outcomes of Natural Grid policy - decentralisation - skills base of knowledge and knowhow: eg Vestas is the biggest global wind turbine manufacturer......in a country of 6m people - trend to energy security and energy independence - not forgetting reduction in carbon use

Protocol - Land Partnership Custodian (Community) Custodian (Community) Investor Occupier Rental Prepay % % Manager Rental

Land Prepay – Value Proposition Community - sells rentals forward and locks in price - interest-free loan until prepay unit returned vs rental Occupier - prepays rental and locks in price

Land Prepay – the Value Proposition Investor - direct 'inflation hedge' investment in land - Occupiers buy prepay credits from Investors at best price below issue price & return against rental Manager - shares in gross rentals or production - interests aligned with Investor - no 'Principal/Agency' problem

Land Partnership - Outcomes Housing as a Service - relationship-based not transaction- based model - costs transformed to revenue shares Neutral – removes ego and politics Collaborative - stakeholder interests aligned Sustainable - all have interest in minimising cost over time

Protocol - Energy Partnership Custodian (Community) Custodian (Community) Investor Consumer Prepay % % Manager Payment

Energy Prepay – Value Proposition Community - sells energy forward and locks in price - interest-free loan until prepay unit returned vs supply Consumer - prepays for energy and locks in price

Energy Prepay – the Value Proposition Investor - direct 'inflation hedge' investment in energy - Consumers buy credits from Investors at best price below physical energy price & return against supply Manager - shares in gross revenues or production - interests aligned with Investor - no 'Principal/Agency' problem

Energy Partnership - Outcomes Energy as Service - relationship-based not transaction- based; costs transformed to revenue shares Neutrality – removes ego and politics Collaborative - stakeholder interests aligned Sustainable - all have interest in minimising cost over time

Mega Watts and Negawatts Mega Watt production of renewable energy sells at the wholesale market 'bid' price Nega Watt production is made by consumers at the retail market price Uk Green Deal (bank loans to fund energy efficiency measures) has two problems - compound interest on bank £ loans - even if £ is saved, no guarantee energy will be saved

Volos Natural Grid Investor pays £1k for Units in Volos Energy Pool Mwh prepay €50 each Kwh prepay 50c each Fund invests through energy loans eg Volos hydro power; CHP/co-generation; cooling Loan repaid via energy bills through buying prepay energy units at market price Interest-free loan – return to investor in energy Unless consumers save energy they will not save €

Volos Green Deal Custodian Volos Energy Pool Custodian Volos Energy Pool Investors Consumers Manager € Energy Loan Buy units at market price € Prepay Units € €

Guarantee Society - Seller accepts Buyer's IOU SellerBuyer IOU Value

IOU is guaranteed by Sellers & Buyers mutually SellerBuyer IOU Value Pool Guarantee

Seller & Buyer pay guarantee charge into Pool held by Custodian SellerBuyer IOU Value Pool Guarantee Fee

Buyer settles credit in € or '€'s worth' eg energy- based or land-based currency SellerBuyer Value Pool Guarantee Fee

If Buyer defaults: system pays sellers and collects from buyer if possible Seller ABuyer Default Pool Collects Pays Seller B Default Pays

Service provider sets guarantee limits, handles defaults & manages system SellerBuyer IOU Value Pool Guarantee Fee Manager Fee Service

Clearing Union Guarantee Society is the social contract within which Sellers accept Buyers' credit and settle balances Sellers and Buyers pay a guarantee charge and share costs of operation and defaults Manager allocates guarantee limits, manages platform, ensures transparency, handles defaults

Clearing Union Producer Consumer Pool Guarantee Fee Manager Fee Service

It'll Never Work For 140 years, Protection & Indemnity (P&I) Clubs have mutually guaranteed risks Lloyds won't cover For 125 years P& I Clubs have been managed by Thomas Miller

21 st Century problems cannot be solved with 20 th century solutions

… st century solutions pre-date modern finance