Collecting the Funds for Wind Power Business through Introducing the "Green Premium Card" and Returning Benefits
In this paper, a new business model has been proposed to lunch the wind power business by participating a large number of people. And it is aimed at creating a "Green Community" by using wind energy against the global warming. The new card "GPC", i.e., "Green Premium Card" is, therefore, introduced to collect the funds from the people for making wind power stations and to return the profit and benefit to the card members. This model is collaborated by the Cardholders, Credit Card Company, Merchants, Wind Power Company, Wind Generator, and Electric Power Company. This scheme can be connected to some new ways, such as the mechanisms of the Kyoto Protocol, environmental taxes (or, carbon tax, etc), and local currencies.
Key Words: Wind Power, Green Premium Card (GPC), Credit Card, Green Community, Kyoto Protocol, Carbon Tax, Local Currency
The "green energy" is a keyword for the sustainable society in the 21st century. Wind, solar, and biomass energies are representatives and fuel cell
system is an expected candidate. The wind energy comes of age for the wind power business. The capacity of wind turbine installed has been increasing exceptionally in the world and in Japan for later three years. This is a movement to prevent the global warming and a way to enforce the Kyoto Protocol in 1997. Recently a message of the "Wind Force 12" (1) was released from Greenpeace and the EWEA that 12% of global electricity will be met by the wind power by 2020.
The movement for promoting green energy has been developed in European countries, in America and also in Japan. As a result, Germany becomes the world's leader of the wind application and the people and government policies welcomed it. Denmark has the world wind turbine industries and has half of the world market share. Also, Spain has achieved the most high increase rate of wind power development in the world. Also Japan is now developing dramatically.
In this paper, the author has proposed a new business model in combination with the credit card system to develop the wind power station using the funds contributed from many people who hope for wind energy.
2. The model for the wind business
2.1 Pre-exiting scheme for green power business
The aim of this model proposed is to create a "green community" that is a society based on environmental network. In Japan, the wind power development was started at first by electronic power companies, and then by local autonomous bodies, public enterprises, and private companies. On the other hand, in Europe, typically in Denmark and Germany, a form of wind power association has been organized locally for using and buying electricity since 1970's. An association of wind power station has been organized in Japan too in 2000. That is an epoch in the wind business in Japan from the point of view of the business by the common people.
There are other schemes to urge the wind power business or enterprise by participation of the common and partner companies. The one is "Green Power Fund" (2) and the other is "Green Power Certification System"(3). Electric power companies have managed the former and a private company of Japan Natural Energy Co. Ltd. has organizes the latter. These programs bases on personal or corporate donations. Although for the present a number of people and big companies have been participated, the increase rate is decreased. In order it is necessary to be a system that all the people can participate easily, friendly, and beneficially. It is aimed to create a sustainable "green community" in the world as well.
2.2 Green Community
The "green community" is defined as a society that the people cherish a sustainable future and act to be friendly with the green energy, or renewable energy, and such social systems are built.
2.3 Green Premium Card system
Today the wind business has grown in the big wind farm composed of a number of megawatt class wind turbines. The cost of installation decreased to lower than 200,000 yen per kilowatt, and the cost of one-megawatt turbine is about 200 million yen. This is, however, not cheap in the individual and small organization.
In taking account of such a cost problem and collecting fund to establish the green community, the credit card system is introduced in the business model. Figure 1 shows the scheme proposed here. In addition to the standard credit card elements of Credit Card Company, Cardholder, and Merchant, three key elements of Wind Power Company, Wind Generator and Electric Power Company are added.
Fig. 1 Schematic diagram of the elements of the GPC system and follows of money, service, goods, benefit, profit, electricity, information, etc.
|Notation for flows:
1a entrance fee
1b profit back
2b good or service with benefit
4b business profit
6a selling electricity
7a electricity payment
There are many people, associations, NGOs and NPOs, communities, groups, town councils, etc., who hope to cherish the environment but have not enough money to embark on a wind business. In this model such people's agent is welcomed.
The Credit Card Company issues a prime credit card with "Green Premium" to a society. The name is "Green Premium Card", or, "GPC". Then the people thinking of green and renewable energy will become its Cardholders. The Merchants, who are also familiar to environment and thinking of increasing customers, offer the best benefits as their services to the Cardholders. For example, department stores, super market stores, petroleum stations, hotels, cleaning stores, theaters, convenience stores, etc. offer the prime benefit when pay for their services by the GPC. This cycle of offering the best benefit services and goods among Cardholder, Merchant, and Card Company makes a consume community respecting for "green and environment".
Of course, the capital for the business is money contributed to the Credit Card Company from the Cardholder as the entrance fee to the GPC system. All the money collected through GPC to built the wind power station. The Credit Card Company is the best framework of the business, because it has good functions and abilities to give and receive information, money and benefit.
2.4 The roll of Wind Farm Holding Company
The Wind Farm Holding Company is the other hub element of the GPC. It plans and conducts responsibly the task of wind farm construction and management, i.e., wind farm siting, wind farm systems design, operation, finance, application for public office, information management, and so on.
2.5 Profit from the GPC
The profit on the wind business, which depends on the magnitude of the wind farm, the site, the wind conditions, the availability, and other factors, is return to the Cardholders. The profit is not so much, but it is expected to be about 5% of the investment. This is not so much but the GPC gives other various benefits offered from the Merchants. That is, the Merchants cooperated to the GPC can offer the cardholders their special benefits according their conditions, for examples, discount, reducing and free consuming tax, special giving point, giving free ticket, limited members offer, etc. 2.6 Keeping the value of "Green" and "Green Premium".
The development of GPC can promote the wind business. There are cardholders of over one billion people, merchants of over 44 million, and market size of 290 trillion yen in the world. In Japan, the biggest Credit card has cardholders of over 38 million people, merchants of over 8 million, and budget of over 4827 billion yen. As estimation, the GPC member of 3.8 million, i.e. 10% of the biggest card member, makes 38 million yen when one person pays 10,000 yen as the entrance fee. It can install about two hundred wind turbines. In 2000, the Japanese government proclaimed that the goal of wind generation capacity should be installed by 2010 changed from 300MW to 3000MW. (4) Therefore, about 200 wind turbines can be installed by the budget of the GPC of only a credit company. The GPC has, therefore, a big potential to promote the wind energy development.
However, it is important to keep the quality of the "GP", because it tends to degrade the value of the "GP" by the rush and fight in the GPC business. In order to keep the value of the "GPC", an organization for proving the system and value of Green Premium, is required. The GPAO, i.e., Green Premium Attestation Organization, should be imported into the GPC system for being justice and international activities around the world.
3. The extended model
The original model has been modified through combining global and local elements for increasing number of members and achieving the effect of Green Premium. The extended model is shown in Fig.2 and the outline is as bellows.
3.1 Applying the Kyoto Mechanisms
The Kyoto Mechanisms(5) consist of the three methods for decreasing green effective gases, i.e., Exhaust Trading (ET), Joint Implementation (JI), and Clean Development Mechanism (CDM). Although these mechanisms are basically applied for the international actions, similar mechanisms could be done and have been discussed in domestic application. Companies, such as stock, power, oil, iron and steel, etc, have programmed some ideas. Therefore, the wind power generation business is not only income due to electric generation but also auxiliary income due to carbon dioxide extrusion trading. The GPC should be combined with these programs.
The annual electric power consumption of normal household is about 3360kWh in Japan. A wind turbine of capacity of 1MW generates electricity of 2000MWh a year at average wind speed of 6m/s, and it is equals to electric power of 600 families. The extrusion of carbon dioxide for the above electric power quantity is 1980 ton for thermal power generation and 74 ton for wind power generation. Therefore, the wind power generation can save carbon dioxide of 1900 ton and get money of 2 million yen due to extrusion trading. This is corresponds to the figure ranging from one fifths to one thirds of the annual income due to supplying electricity to an electric power company.
3.2 More expanded scheme
Some European countries have been introduced the policies to secure the fulfillment of severe environmental goals. That is the same as the scheme of the Kyoto Protocol and makes government policies and new business. The factors that can introduce the GPC are "carbon emission trade", "environmental tax (carbon tax)", and "local currency".
Fig.2 shows the new expanded scheme rather complicated. The basic scheme is the same as Fig. 1. To add to the elements of Cardholder, Credit Card Company, Merchant, Wind Power Company, Wind Generator, and Electric Power Company, the element of Local Community is introduced. The Local community in concerned in the detail account of wind power generation and the effects on decreasing carbon dioxide. The local community issues the amount of the carbon tax according to the effect, and when the decreasing is greater may reduce the amount as a reward. This is to be an incentive to wind business.
Notation for flows:|
1a entrance fee
1b profit back and goods list with carbon exhaust report
2b good or service with benefit
6a selling electricity
7a electricity payment
8a reqiest and proporsal
9a income declaration
9b reduced environmental taxation as incentive
10a income declaration
10b environmental taxation and local currency as incentive
11a power generation and income declaration
11b carbon trade return and incentive
Fig. 2 Schematic diagram of the elements of the GPC system into which environmental tax and local currency are introduced and their flows.
In the credit card settlement, there is a risk of bankrupt. So such a hazard should be resolved using the information technology. After that there is a new concept to save energy and decrease the carbon dioxide emission by controlling like an household. This is easy by using the information buying the goods and paying by credit cards. Because the purchase lists are created by every item. Usually the amount of carbon dioxide is accounted. In this case it is also expected to reduce the energy consumption and forward the environmental preservation. This is right to create the "Green Community" what this paper is intended.
In this paper the author has been proposed a business model for promoting the wind business to contribute the action against the global warming. In the model it is made a point of that all participates are behave easily and happily. The business model proposed here is, therefore, to be organized by the fund that credit cardholder pay the money as an entrance fee to get the "Green Premium Card" (GPC) that is offered a lot of services from the Card Merchants. The model has potential to expand the wind business by combining the scheme of the Kyoto protocol, environmental tax (carbon tax), and local currency. This is a way to create the "Green Community" by attending common people who are thinking of sustainable environmental society.