DeKo: An electricity-backed currency proposal

Nick Gogerty & Joseph Zitoli

ngogerty@thoughtfulcapital.comjzitoli@thoughtfulcapital.com

Split, Croatia July 2012

Drivers of Human Development

1. Technology & Applied Information

2. Energy Density

3. Political and Economic Policies

Debt-Backed Currency Subject to Defaults% of Countries in default or restructuring 1800-2009

Gold-Backed Currency is Volatile vs. Electricity

Source: U.S. Energy Administration and World Gold Council

Delivered Kilowatt Hours (DeKo) are backed with PPAsPower Purchase Agreements (PPA):

Two party contract: A generator of electricity for the purpose of sale (the seller) and one purchaser of electricity (the buyer or off-taker).DeKo central bank purchases electricity from power generators at long term fixed prices and sells electricity to off-takers at market prices.

DeKo – Higher Utility and More Certain ClaimCertainty of claim relates to future realizable valueUtility is Social and Economic value creation potential

Simplified Central Bank Balance Sheet

AssetsForeign Exchan

ge Reserve

s

SecuritiesLoans Gold

Electricity

Delivery PPAs

Liabilities

IssuedCurrency

Government Deposits

Bank Deposits

DeKo Proposal

Countries % Electricity Production from Renewable Sources

 Paraguay100.00  Lesotho 100.00  Iceland 100.00  Albania 100.00

 Tajikistan 100.00  Bhutan 99.97

 Mozambique 99.92  Zambia 99.71

 Nepal 99.67  Dem. Rep. Congo 99.42

 Burundi 99.04  Norway 96.63  Angola 96.45

 Belize 94.88  Kyrgyzstan 93.30  Costa Rica 93.15

 Laos 92.46  Brazil 88.88

 Ethiopia 88.18  Malawi 86.58

 Colombia 85.66  Georgia 85.50

 Republic of the Congo 82.08  Central African Rep. 81.25

 Cameroon 77.29  New Zealand 76.73

 Ghana 75.09  Uganda 74.95  Namibia 70.82

 Austria 70.02  Venezuela 69.57

 Fiji 68.04  Madagascar 66.82

 Canada 64.23  Ecuador 64.12  Panama 63.29

Source: http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=2&pid=2&aid=12

Renewables: Fastest growing source of energy consumption. A place for central bank PPA investment?

Source: http://www.iea.org/weo/

http://energy.aol.com/2011/09/20/global-energy-outlook-puts-china-and-india-at-the-fore/

Due to TFP increase Value to Energy is not fixed.Since 1980: 90% more efficient at producing GDP

Source: http://www.eia.gov/forecasts/aeo/pdf/0383(2012).pdf