20140311 mott mac donald smart communities malaysia
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Dr Euan Low Where goes the smart money in smart infrastructure ? Lessons learnt from business planning of Smart Community Projects SMART CITIES SEMINAR PROGRAMME UKDTI Mission
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Transcript of 20140311 mott mac donald smart communities malaysia
Dr Euan Low
Where goes the smart money in smart infrastructure ?
Lessons learnt from business planning
of Smart Community Projects
SMART CITIES SEMINAR PROGRAMME
UKDTI Mission
• Creating value in smart communities
• Defining Target Markets
• Business planning for success
Topics
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Mott MacDonald is one of the world’s largest multi-disciplinary management, engineering and development consultancies. A wholly independent professional services company, engaged in over 120 countries.
Our £1 billion employee owned business, with over 14 000 staff, combines management, commercial and technical specialists.
Mott MacDonald is established as the world’s No 1 infrastructure transaction advisory firm and have expertise across a broad range of sectors.
Working both buy and sell side, we understand the risks and opportunities of investments.
Smart Communities can
• create new revenue generating assets;
• increase land and property asset values;
• improve mobility asset values through optimising transport options directly catered to individual people’s needs while reducing negative community impacts from vehicle use & ownership;
• offer living solutions that are typically more resilient to external factors and are often more economically sustainable, and therefore can offer lower risks to asset values;
Potential Contributions to Balance Sheet: Increasing Asset Value & Decreasing Liabilities
Smart Communities can
• reduce living costs (energy & mobility) for Smart Community residents and increase consumers’ disposable income;
• generate new revenues for residents from sale of excess renewable energy or sharing transport capacity;
• increase revenues from sale of land & property development;
• generate new revenues through creation of new markets for selling smart & sustainable services, products, & software solutions;
• enhance resilience to revenue streams & reduce the cost of mitigating contingencies thus strengthening economical sustainability
Potential Contributions to Income Statement: Increasing Revenues and Decreasing Costs
Creating Asset Value – Green Buildings
Market Dynamics
Electric Power Consumption Dynamics per capita
Pump price by Type of Fuel, US$/litre
Mobility (to/from work)25%
Mobility (work related)19%
Mobility (non-work re-lated)31%
Electricity18%
Kitchen Gas7%
average household energy bill : RM6,600/year
Environmental risks
Demand risks
Off-taker credit risk
High debt / Poor cash-flow
Fiscal Regime
Currency devaluation
Political & regulatory risk
Price or Service Competition
Ability to bill consumer & collect cashPolicy or Rule changes
New entryDominant party behaviour
Market Dynamics - Threats to revenue
Construction & Operation RisksMarket Risks
Financial RisksPolitical, Legal & Regulatory Risks
Construction Risks
Performance Risks
Supply Risks
Institutional strength
Land acquisition risks
Social risks
Revenue
Sub - sovereign
Project risks
Network Constraints
Demand
Volume
Tariff
Collection rate
Demand profile
Value of service
Taxes
Subsidies
Tariff categories
Metering & meter reading
Billing
Collection efficiency
Ability & willingness to pay
GDP wealth distribution
Sociology
Population
Seasonal variation
Demographic
Urbanisation
Living patternsEconomic growth
Land availability
Land price
Demand
Corporate tax
Grants
V.A.T.
Carbon tax
Green concessions
Feed in tariffs
$
Supply
Capital expenditure
Operating
expenditure
Financing
Engineering design, procurement & construction
Obtaining permissions, authorizations
Operations
Management
Fuel costs
Management
Administration
Operations labor
Spares & repairs
Equity
Debt
Insurances
Taxes
Profits
Dividends
Commercial risk profile for lenders
Commercial risk profile for insurers
Corporate tax
V.A.T.
Income & social taxes
Import tax
Carbon tax
$
Project Development Costs
Maintenance
Customer care
Equipment
Build your business case
Source: Brief Report on Existing Policies Affecting Smart Grid Development and Analysis of Barriers in Thailand (January 2012), WADE Thai
Stakeholder engagement
Development of SMART communitiesV
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ConceptGovernance
Planning & design Procurement
Options
DesignProcesses Procurement
Implementation
Land AssemblyOperation &Maintenance
DiagnosticReview
Thank you to this Malaysian-British
smart community
