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Financing Strategies to implement CNG Powered FAV Berlin

VIEWS: 4 PAGES: 27

									Financing Strategies to implement
     CNG-Powered Vehicles



             Kerstin Kallmann
      Berliner Energieagentur GmbH

            Clean Energy Forum

          Berlin, 13th October 2005
       Berliner Energieagentur GmbH




aims at
Identification and development of potentials for energy saving and
reduction of costs

via
          Rational Use of Energy
          Expansion of Combined Heat and Power
          Implementation of Renewable Energies
          Energy Saving Constuctions
          Integrated Traffic Concepts
          Energy Services
        Berliner Energieagentur GmbH




is a service partner of
        Industry and Commerce
        Trade and Service Companies
        Real Estate and Housing Companies
        Utilities
        Politics and Government
        Cities and Regions
        Public and Non-Profit Organisations


offers
• Consulting
• Energy Services
• International Know-how Transfer
             Berliner Energieagentur GmbH




has four equal partners
•   the State of Berlin
•   Bewag AG (electricity utility)
•   GASAG AG (gas supplier)
•   KfW Bankengruppe (public law corporation)

disposes of
2,56 million € of capital stock

employs
35 employees

resides at
Französische Straße 23
10117 Berlin
Telephone: +49 - (0) - 30 - 29 33 30 - 0
eMail:       office@berliner-e-agentur.de
Internet:    www.berliner-e-agentur.de
          Financing Strategies to implement
          CNG-Powered Vehicles


Content

•   Market analysis:
       user groups & applications, relevance of NGV leasing
•   NGV leasing principle
       structure & conclusions for contract
•   Residual value
       success factors for leasing & purchase
•   NGV leasing
       Examples
•   Market development activities
       Experience exchange & Public Relation
           Financing Strategies to implement
           CNG-Powered Vehicles


Main NGV user groups

Nowadays main NGV user groups     Possible users of NGV-leasing

•   Municipal utilities           •   Own establishment (e.g.

•   Gas providers                     municipal utilities)

•   Parcel services               •   Parcel services

•   Crafts enterprises            •   Food and beverages retailers

    (e.g. heating installation)   •   Pharmaceutical retailers

                                  •   Department stores

                                  •   Public authorities


                                             Source: market analysis Berlin Energy Agency
            Financing Strategies to implement
            CNG-Powered Vehicles


Relevance of financing and operation services in fleets

                   Large-scale     Medium-scale           Small-scale
                   enterprises     enterprises            enterprises


Fleet operation?   Outsourcing     Tendency for           1-5 own vehicles
                                   outsourcing


Purchase/          High rate for   Increasing rate        High rate
Leasing?           leasing         for leasing            purchase


External fleet     High rate       Increasing rate        No
management?



                                              Source: market analysis Berlin Energy Agency
          Financing Strategies to implement
          CNG-Powered Vehicles


Reasonable applications for NGV

Yearly Kilometres for different applications

•   Staff car                              20 – 40.000 km/a

•   Sales & distribution, field staff      30 – 50.000 km/a

•   Installation & maintenance             30 – 40.000 km/a

•   Long distance traffic                  80 – 120.000 km/a

•   inner-city freight distribution        40 – 60.000 km/a




                                               Source: market analysis Berlin Energy Agency
         Financing Strategies to implement
         CNG-Powered Vehicles


Market relevance of NGV leasing

Total NGV rates in Germany
Statistical data of KBA*
•   Average                   0,05 %
•   Berlin                    0,1 %


NGV rates in the leasing market
specifications of different providers
•   Average                   <<1%
•   New Lands                 up to 10 %


                Source: market analysis Berlin Energy Agency, *Federal Bureau of Motor Vehicles and Drivers
          Financing Strategies to implement
          CNG-Powered Vehicles


Market relevance of NGV leasing

Conclusion:


•   Leasing is the favoured financing strategy in some public and
    business sectors and therefore a promising instrument for the
    market stipulation of NG vehicles.


•   Leasing can become a relevant factor in the leasing providers
    turnover, if promoted actively and thus can become a competition
    benefit.




                Source: market analysis Berlin Energy Agency, *Federal Bureau of Motor Vehicles and Drivers
        Financing Strategies to implement
        CNG-Powered Vehicles


Principal structure NGV leasing – Comparing example Diesel




           Start   1. Year   2. Year   3. Year          4. Year             Residual
                                                                             Value

                                         Le a s in g   f u e ls   R e s id u a l v a lu e
        Financing Strategies to implement
        CNG-Powered Vehicles


Principal structure NGV leasing– economical example

                                                                                 ~ Diesel

         Comparison yearly costs Diesel




         ~ Diesel




          Start      1. Year      2. Year   3. Year          4. Year             Residual
                                                                                  Value

                                               Le a s in g   f u e ls   R e s id u a l v a lu e
        Financing Strategies to implement
        CNG-Powered Vehicles


Principal structure NGV leasing– in-economical example



            Comparison yearly costs Diesel

                                                                                                             < Diesel




           > Diesel




             Start      1. Year             2. Year            3. Year             4. Year             Residual
                                                                                                        Value



                                  Le a s in g   f u e ls   R e s id u a l v a lu e N G V   D if f e re n c e t o D ie s e l
          Financing Strategies to implement
          CNG-Powered Vehicles


Principal structure NGV leasing – conclusions for contracts

Financial rewarding leasing contracts are defined by

       Requirement contract period ≥ 2 – 4 years

•   Supplementary grant:           NGV = diesel

•   Leasing rates:                 NGV > diesel

•   Sum of leasing rate & fuel costs:
                                   NGV ≤ diesel

•   Residual value:                NGV ≥ diesel
          Financing Strategies to implement
          CNG-Powered Vehicles


Residual value – success factor for leasing & purchase

•   residual value in NGV leasing contracts 2002 ranges
     between gasoline engine - 30% and 100 % diesel engine

•   residual value in NGV leasing contracts 2005 ranges
     between 100% gasoline engine and 100 % diesel engine

•   residual value in NGV leasing contracts in future is
     >> diesel engine

       Residual value decreasing risk for leasing provider
       Increasing financially rewarding leasing contracts


                                                 Source: market analysis Berlin Energy Agency
         Financing Strategies to implement
         CNG-Powered Vehicles


Residual value – success factor for leasing & purchase

Comparable developments to residual values?
•   Introduction of catalytic converter in late 1980
•   Introduction of diesel soot filter in early 2000


EurotaxSchwacke 2003 estimated average residual value
    difference with/without diesel soot filter
•   Age 12 month: > 200 € or 2%
•   Age 72 month: > 900 € or 10%


                                           Source: Expertise of EurotaxSchwacke in order of
                                                     Federal Ministry for Environment 2003
        Financing Strategies to implement
        CNG-Powered Vehicles


Residual value – success factor for leasing & purchase


                 Analysis residual values Opel Zafira 1.6 CNG

          14.000,00

          12.000,00

          10.000,00

           8.000,00

           6.000,00

           4.000,00
                                               residual value NGV
           2.000,00                            residual value Otto
               0,00
                       2001       2002       2003       2004



                                                 Source: German Automotive Trust 2005; www.dat.de
        Financing Strategies to implement
        CNG-Powered Vehicles


Residual value – success factor for leasing & purchase


                Analysis residual values Fiat Multipla Bipower

            14.000,00

            12.000,00

            10.000,00

             8.000,00

             6.000,00
                                            residual value NGV
             4.000,00
                                            residual value Diesel
             2.000,00                       residual value Otto
                 0,00
                        2001       2002      2003         2004




                                                    Source: German Automotive Trust 2005; www.dat.de
                    Financing Strategies to implement
                    CNG-Powered Vehicles


     Residual value – success factor for leasing & purchase




        Analysis residual values Volvo S60 Bi-Fuel                       Analysis residual values VW Golf
                                                                                 Variant IV Bi-Fuel

18.000,00
16.000,00                                                    16.000,00

14.000,00                                                    14.000,00

12.000,00                                                    12.000,00

10.000,00                                                    10.000,00
 8.000,00                                                     8.000,00
 6.000,00                            residual value NGV       6.000,00                       residual value NGV
 4.000,00                            residual value Diesel    4.000,00                       residual value Diesel
 2.000,00                            residual value Otto      2.000,00                       residual value Otto
     0,00                                                         0,00
             2001       2002       2003        2004                       2001      2002      2003       2004




                                                                 Source: German Automotive Trust 2005; www.dat.de
         Financing Strategies to implement
         CNG-Powered Vehicles


Residual value – success factor for leasing & purchase

DAT publishes average residual values in 2005, calculation of
    differences based on selected examples
•   NGV comparing to gasoline engine:        2.000 € or 20 %
•   NGV comparing to Diesel engine:          400 € or 3%


No statistical evaluation, but conclusion:
•   All NGV have equal or better residual values than Diesel
•   Market development results in low risks for NGV residual value



                                             Source: German Automotive Trust 2005; www.dat.de
         Financing Strategies to implement
         CNG-Powered Vehicles


Residual value - conclusions

•   The good progress in the NGV market and thus of the residual
    value makes the purchase of NGV financially rewarding with a
    minimum of risk


•   The development has direct positive impact to the design of
    leasing contracts, which becomes increasingly attractive.


       A vivant market development is the main success factor for the
       introduction of leasing for every other propulsion technology as
       well.
         Financing Strategies to implement
         CNG-Powered Vehicles


NGV leasing – Example calculation municipal utility Brühl

Comparison NGV – Otto from January 2004

•   Basis specifications:

       Contract period: 36 month

       Km/year:             20.000

       net prices:          no VAT

       Prices gasoline:     0,88 €

       Prices CNG:          0,55 €
               Financing Strategies to implement
               CNG-Powered Vehicles


   NGV leasing – Examplary calculation municipal utility Brühl

                           Supplement   Leasing      Fuel          Total         Total
                           ary grant    rate/month   costs/month   costs/month   cost/36
                                                                                 month
FIAT Mulitpla 100 16V      1.466 €      235 €        126 €         361 €         14.473 €
ELX


FIAT Multipla BiPower      1.466 €      266 €        53 €          320 €         12.968 €
ELX


FORD Focus Turnier         1.700 €      241 €        111 €         352 €         14.388 €
Futura 1,8i Zetec 115 PS


FORD Focus Turnier         1.700 €      292 €        51 €          343 €         14.054 €
Futura Erdgas
           Financing Strategies to implement
           CNG-Powered Vehicles


NGV leasing – Example Colour Bulk Buyer Timpe & Mock GmbH

•   Vehicles:    12 Opel Zafira 1.6 CNG
•   Leasing Provider: Master Lease Germany
•   Start:       24.01.2005




From left to right: Georg Kusche, Timpe & Mock; Bernd Endler, Master Lease; Ingrid
   Dannbeck, GASAG; Frank Hüstege, Timpe & Mock GmbH
           Financing Strategies to implement
           CNG-Powered Vehicles


Market development activities

•   Market analysis NGV leasing:
         Potential NGV, restraints and success factors, strategy
         development
•   Experience exchange between:
         Provider-provider & provider-user; strategy adjustment
•   PR
         Press release, target group specific articles
•   Project Website
         www.erdgasfahrzeuge-leasing.de
          Financing Strategies to implement
          CNG-Powered Vehicles


Project website

•   Supports:
       potential customers in finding a partner
       leasing providers in marketing activities
•   Content:
       information about the advantages of NGV leasing
       Presentation of five providers who, due to their experience with
       NGV leasing, can offer attractive leasing contracts
       Good practice examples
•   Implementation:
       Published in May 2004
       more than 8.000 visits – increasing tendency
       1.200 visits alone in September 2005
         Financing Strategies to implement
         CNG-Powered Vehicles


Conclusion

•   NGV leasing is relevant for the market introduction of NGV in
    general – as well as for other clean propulsion technologies

•   The NGV leasing market is in rapid development – and can be
    affected by activities

•   Further marketing activities are necessary and appreciated

•   www.erdgasfahrzeuge-leasing.de will be developed and promoted
    further on

•   The Berlin Energy Agency will extend their activities to economic
    clean propulsion on basis of these experiences

								
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