Transistions – SME or Contestable Energy Strategies

Energy procurement is significantly different in 2014 than previously. The models for success require a multifaceted theme for the energy procurement process this time around.  What is different is you must manage and arranged the information for what you see as the product, and have them – the energy retailer/supplier, evaluate whether they want to participate.  The critical success factor is no longer ‘did you get the best price’, it is ‘did you get enough participants to respond with a good price and adequately market test your result’. It was so much easier when performance was as simple as input becomes output = price paid, and outcome was the accountant is happy.

Some of you reading this may not understand that the original idea of being contestable was to adequately market test and as the market matured the real cost of generation and supply would settle at the economic point of being sustainable. This point may disappoint those that are building reputations on driving prices down, and that the market is doing as it is expected to do – show maturity of the design.

So, it is time to move on and change the model of the market? Wintelboff and CO2Land org are seeing the Australian Electricity Market and the rules are in itself bringing about change, and there is further evidence most participants in the market are not prepared for the changes. Most of the difficulties are not the will to change by the participants, but more likely to be the extent of the systems required and needed to bring about the change.

Consider that it is now clearly the market is in two different tranches, and when you last went to market the electricity market described itself as contestable down to 160MWh pa consumption, and then below that effectively you were termed domestic and regulated at a set price or reset by regulatory pricing structures and determinations. It was also much easier when you could use the meter type as the rule for whether you contested on price or sought a discount on your tariff with the incumbent retailers. The incumbent was usually your network company and default retailer.

This time around you are either on an agreed price to pay for energy as a contract rate above the threshold of 160MWh pa or seek a discount on tariff set by regulation under the rules of as a small business enterprise (called SME) from 100MWh pa. In the latter a retailer licenced to sell energy might offer aggregation of sites to a contestable size or elect to do nothing other than offer tariff rates.

Another assumption that can be dangerous is to assume as a contestable site the retailer/supplier has an association with the network service provider/utility that will work to your benefit. Changes from within the system in all likelihood  means we can no longer ring our loyal and trusted friend and say can we fix this on one side of the ring-fenced entity or the other and have the problem resolved to mutual satisfaction.  It is now a detailed process. To get a result usually you need to address what they call the asset on a project basis, and computer says yes for you to proceed. If you have previously watched the TV series ‘Little Britain’ you will understand that statement rings very true.

Pursuing sustainable outcomes too brings new awareness, and innovation and the introduction of technology would be assessed according to the business case. Where you are showing success at getting a good price for your energy it can undermine the business case for the sustainable outcome. Especially where carbon pricing is needed to level the playing field. If you have been following that approach you will be seeing with the Feed In Tariffs (FIT) and other incentives being distorted as a political whim that only brings uncertainty to the project, and uncertainty has a cost.

On the point of whims, carbon continues to be a problematic area and the federal Energy Reduction Fund (ERF) is still very much without detail other than a benchmark carbon price will be set by government as government dictates and that price can change when the government decides to do so at its whim. The assumption to be made is that either you or those that you invite onto your agreement might be liable entities under that rules and impact your outcomes.

If we are attempting to bridge the needs of Energy as strategic, tactical and operational, and we describe this as Energy Management, Transition Strategies, and Savings – the need for individual assessment is more important than ever before. Yet, most competitive services are tending to be web based and call centres. This is hardly adequate when you desire to be an energy efficiency centre.  That sort of work requires a fuller understanding of the needs, other than a checklist and dubious interpretation of guidelines according to the level of training or programing of the robot. As a sustainable approach it is likely changes to the energy needs over the life of the agreement is being sought, and that is more than price.  Another way of looking at that point is in medical practice the prognosis will be accessed as preventative (price gained now) or diagnostic (what is the best course of action). A good example can be taken as: You want to introduce solar technology, and you need to know what penalties are written in the contract and will a standard form contract be sufficient to cover this off sufficiently well. LED is another very interesting technology as it can negate the need for conventional building management systems entirely, and that could have long-term upstream effects on current contracts and relationships for tenants and landlords and building managers.

We must take into consideration the balance in terms of energy supply and demand, and the responses must relate to multiples of price, network and security, and even emergency responses. The later because increasing in frequency is disaster.

 

 

 

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Australia – so little support for idea leaders

It started with one line: Without a culture that makes big, bold bets on new ideas, its difficult to see how Australia can move from being an idea cemetery to an idea launcher -Source Ben McNeil.

All this came from a story in the Australian 28 August 2013. The story called “Big Ideas Buried in Innovation Graveyard”. It touched a nerve because as is the case of so much excellent ideas we generate in Australia, there is so little support for the commercialisation of the ideas. But, wait there is more! – We do not care about the innovation.  What you say, don’t care.  It is true – think about this line: Commercialisation Australia doesn’t support the company but the Commercialisation of the technology. Where does this leave the innovator? Up the creek without a paddle – your ideas can be superb, you business case well founded: But the graveyard – the valley of death for your invention is that place you go to because you cannot find support in our country, the country an with excellence for invention and a fail for innovation efficiency. In short we force our good ideas offshore if we want success as a company. The idea leaders cannot be rewarded for helping our industry to be part of our country.

If you doubt this, then this is what Ian Chubb, Australian Chief Scientist, said in the 28 August article: “Australia ranks 107th out of 141 nations in innovation efficiency”

In a ‘real’ world example: You ask please help me protect my IP, I need help because I have a lot of interest in my product after considerable R&D. What I do not have is the confidence of my buyers to outlay the dollars to place an order. When I place an application for help to move on my trade secrets, I am then faced with a number of questions that directly relate to my IP. Then the ridiculous come to light – the question: Why don’t you fund your own IP Protection? The answer creates a circular argument along the lines of a song from Harry Bellefonte some years ago: There is a hole in my bucket and it goes on rhyme well fix it to the point where to fix it requires the bucket to carry water – but there is a hole in my bucket. Unfortunately that pretty well sums up the Australia attitude of support for our ideas.

If it were to change would the Small man with big ideas be treated better?   Actually, in another perverse twist it is a tendency of this country to promote institutions with generous awards of cash and incentives. We can only suspect that is because it is a highly visible way to make big numbers look ‘real’ big deals. The short-term photo opportunity is seen a tick in the outcome box, yet often proves a less than optimum result.

The risk of failure will still be a major problem for the small innovator, even if they have the big bold new ideas that could drive our nation into prosperity and diversity of our GDP collection points. Because your ideas could not be protected while you seek markets, you fail you cannot protect your secrets – your ideas are ‘stolen’ and you will not attract investment.

CO2Land org noted that recently the Prime Minister announced the think small concept – what did he really mean?

Energy Utilities changing Models – A Battery of Choice

As one would normally do, chat about renewables and impacts on the utilities business model while relaxing with friends. It was a case of too much uncertainty over how the consumer would be treated because of change. Central to the discussion was that a provider to the electrical distribution system could threaten the current regulatory and centralized generation models of ‘essential services’.

What does this mean?  The business as usual model is failing where supply centric economics demanded you build additional load capacity and transport the capacity to the place of need. This model also meant the assets, including the customer, was owned by the utility. If you think of it this way, Governments tend to discourage demand side solutions. Demand Management was tended to be more of a series of incentive programs for utilities to duplicate infrastructure to transport to the demand source.

So, what happened to change the balance? The obvious: Technologies improved, carbon became issues for society and clean energy and renewables were being shown as a better way to address the logistics of meeting demand where it was needed. As a result some of the conventional infrastructure was at risk of being a stranded asset and the need to build conventional infrastructure required incentives from Government to reduce the financial risk. For example, the Demand Side Incentive scheme (DIS) formulated at about 2004 is dramatically underspent but is comforting for utilities in being a facility to reduce the financial risk.

If we note the changes in the needs of society as a driver for change: Governments and their policies encouraged that traditional public ownership be phased out to pass the needs to private investment. Government was happy for this ‘fix’ as they see it as the asset is sold for a value and ongoing regulated charges and fees and taxes are being paid to treasury, and that is a public benefit. The perfect storm in Australia is this action is also one of the drivers for electricity tariff increases in Australia. Recently the state of Queensland announced a 21% increase to its general tariff.  A source, CO2Land identifies as SF said: “Therefore those consumers with solar PV are subsidising those consumers that don’t have solar PV”.

From that last statement we can assume government policy (Federal and State) is very much the catalyst that resulted in the model change. Whether the change was necessary was more of a political move in this instance. It followed that technology and innovation evolved and the model change was inevitable. If you follow the beliefs of the 5th Column existing, this was done by infiltration of the policy areas by a particular group. It follows, in contemporary Australia, Government policy is more reactive than before, and since the 1970’s the rule of law was modeled as to be reactive to the needs of the dominate influence. Below is an explanation of this view as posted by CO@Land.org on 3 April 2013. Where:

Co2Land org now asks: If we consider the four primary schools of thought in general jurisprudence :

  •   Natural law is the idea that there are rational objective limits to the power of legislative rulers.
  •  Legal positivism, by contrast to natural law, holds that there is no necessary connection between law and morality and that the force of law comes from some basic social facts although positivists differ on what those facts are.
  •  Legal realism is a third theory of jurisprudence which argues that the real world practice of law is what determines what law is; the law has the force that it does because of what legislators, judges, and executives do with it. Similar approaches have been developed in many different ways in sociology of law.
  • Critical legal studies is a younger theory of jurisprudence that has developed since the 1970s which is primarily a negative thesis that the law is largely contradictory and can be best analyzed as an expression of the policy goals of the dominant social group.

If you think of the debate of tariff increases. Then you should consider it may have been ‘an expression of the policy goals of the dominant social group’, as critical to that issue. We should then think about the set of claims that the “Renewable Energy Targets” (RET’s) had undesirable consequences, and how governments (Federal and State) now realise that the larger than expected number of early adopters who signed up for the long term contracts are now having a negative impact on state & federal budgets, and this is one of the dominate drivers for electricity tariff increases in Australia. For those needing an introduction to the scheme, the RET’s are a federal government initiative commencing during year 2001, and from those bills and legislation various states and territories introduced those targets as various incentive schemes for customers to invest in solar PV with generous feed in tariffs. This incentive had the effect of distorting the demand supply balance, and the popularity embarrassed and alarmed treasury. If we use SF as the source again; “Queensland Govt initially offered 44cents per kWh this has now been reduced to 8cents. That said the response from the customer was rapid with Australia now having 2500MW of solar PV with and average capacity of 3.5kW.”

CO2Land org chose to give an example of Queensland for convenience, as this states geography and population patterns influence the custom that those consumers with a service, are asked to provide subsidies to those that do not.  In the case of electricity you could argue the subsidy required is determined by the length of the extension cords needed. You might understand why that state found it Initially appealing that solar PV was a localized delivery point. However, managing the asset is a different matter.

We are seeing similar issues being evident from around the world – business as usual is failing as the utility model. The danger is stranded assets and less control being possible. A story titled The Clean, Simple Solar and Storage Solution to US Utility Business Model Woes .

http://www.renewableenergyworld.com/rea/blog/post/2013/07/the-clean-simple-solar-and-storage-solution-to-us-utility-business-model-woes?cmpid=SolarNL-Thursday-July4-2013&goback=%2Egde_67258_member_256399748

Tells of an interview with former United States Secretary of Energy Stephen Chu on utility business models.  While the gist of what he said wasn’t new to me, the clean and elegant way he laid out what he sees as the future of utilities and solar power is worth sharing.

Similar to how in the past telephone companies – he specifically named AT&T – used to own the entire telephone system from the overhead telephone lines up to and including the phone in your house, Chu feels that utilities ought to own solar panels and energy storage systems that they put on their customers’ roofs and in their garages. He said if utilities could outfit homeowners with solar panels and a 5-kW battery system, they could continue selling that customer power just as they do now. The utility would own the system, maintain the system and the customer would have no out-of-pocket expenses for it other than continuing to buy power at the same rate or at perhaps an even lower rate.

 In the three-minute interview, Chu didn’t explain another huge reason that utilities should consider this option: distributed generation used in this way counteracts the need to build additional generation as the load capacity needs increase.  And lastly and most important, the utility gets to keep its customer.

Utilities should probably get clear on their approach soon. When it’s just a quarter or a half of one percent of a utility’s customers that have their own PV and are selling their solar power to the grid at the retail rate, the utility doesn’t care. But energy storage and PV panel costs are dropping, and once that percentage of utility customers’  that are zeroing out their bill goes to 5, 10 or 15 percent then “it’s a big deal” said Chu.

Chu said he told utilities that PV and energy storage is going to come and they should “form a new business model” NOW so that what today is a potential revenue loss, could become an area of growth for them in the future.  Plus, he said this model would eventually lead to a more stable grid for us all. “

CO2Land org is finding it difficult to solely blame the RET Scheme as the problem. The evidence is the splitting of the RET’s scheme into a ‘small scale’ offering for predominately solar PV is the problem. It is appropriate to say any change to the utility models would and did have a cause and effect disruption on the industry, and cause and effect type of disruption suggests any intervention will introduce more shocks in the industry, and we can expect that ideologies will continue to influence the Governments policy advisors who are without a full understanding the implications. It also follows that a large dependence on small scale or residential solar PV services implies a need for significant workforce skills shifts to cater for the growth and scope of the model change for utilities to take control of the assets at a domestic level to be to be effective. That is a significant cost driver, and it is reasonable to ask why should the utility be the provider of choice for these services where it would serve to drive up prices?

In defence of RET’s large scale systems, it follows that large systems do not directly affect the utilities mechanism to preserve the current regulatory model, but they shift the balance so that the model needs to be reviewed of the purpose and objectives in the delivery of the product. It follows that centralised generation models are what utilities do very well, and large scale transportation and distribution are well established capabilities of the industry. Expanding that capability to large commercial rooftops and installations might be a good idea. However, it too is not without the need for change. Albeit less dramatic than small scale.

CO2Land org is not proposing we should concentrate on picking winners for the model change.  However, ‘the battery concept’ leads to deeper thinking. The demand initiative needs to be expanded and a battery concept is not just a means of storage of an electron! It can mean tools and equipment that is readily available to balance the total load needs, and not just peak demand requirements. We know solar’s great weakness is peak availability profile and traditional batteries concepts take up rare earth minerals to manufacture. Are they already defunct? A far more sensible battery concept is something that can utilise what we have already consumed and discarded to be returned to there natural elements while producing energy and balancing the supply needs.  If you prefer think of it as a provider it can be an insurance tool for a supply imbalance, So can what they do be a source of energy rationing and balancing that fits neatly into the traditional delivery mechanism.

One such battery concept is the waste to energy gasifiers and their products including pyrolysis retorts. These can easily be written into the current infrastructure and be part of any new regulatory mix – even provide a result for policy without implications – it is not creating anything new – just making something old new again!

For the future, CO2Land org can see a lot more independent renewable sources becoming the norm, and utilities will be using energy exchanges to sell power to customers. This differs from ownership of customers in that bidding could be managed power purchasing agreement with give and take provisions in the price. What regulators will have to deal with is that nationwide and globally installing microgrids for Businesses and Communities will need to fit into economic as well as technical delivery models. A real power of choice if you prefer to think that way.

Think eco profit management

Think eco profit management and it means reducing energy options to affordable solutions that improve the organizational bottom line, enhance brand image and accommodate operational expansion. It is showing clients how to implement energy and carbon management systems with confidence. A piece of cake – easy to understand.

Winton Evers the MD of www.EcoProfitManagement.com.au practices sustainability management . Formerly a Chartered Accountant, Winton came across the GHG Accounting Standard and realised how much organisations could improve their financial and environmental performance by managing their carbon emission sources. So why the frustration Winton, asks CO2Land org? The answers could be obvious, it is the obtuse that form opinions in our ‘smartphone’ world at the expense of ‘real’ experiences.

Then we read of another sustainability professional, Mary C. Alford, PE, in another part of the world saying the facts are “The largest companies have embraced sustainability – why? Because it has been shown to save hard dollars – and it has the side advantage of positive spin to customers and even employees (and many other advantages that we know, but let’s pick our battles). But when the corporation is ultimately answering to stockholders, the interest is only in one pillar of the triple bottom line: profit”

Mary continues to ask us to think of the following “What is the carbon footprint of inefficiency? What is the carbon footprint of a failed project? What is the carbon footprint of meaningless travel or pointless meetings? I believe that the selling of sustainability starts with the selling of ‘lean’ business practices. They go hand in hand. Sustainability needs to be rebranded away from granola and polar bears and recycling for corporate boardrooms and rebranded for profitability. (And just for the record – I like granola and polar bears and I recycle everyday – but when I bought a Prius, I only pointed out, to my corporate clients that asked, how much money I saved).

Co2Land org has also noted the increasing use of the connotation of sustainable and the inferences of deniers of change that one that practices sustainable is part of the ‘green’ or ‘granola’ sect. It is possible but, increasingly as Winton and Mary are saying it is about the need to balance the economy, for profit of longer than the short term and CO2Land org advocates if we evaluate and cost benefit is part of the equation it would seem mother nature is fighting back and cost of doing nothing has no benefit. We are clearly saying Climate Change is real, and it does not matter if it is man made or other cause, we have the technology, but do we have the will to innovate?

On a lighter note Urban Dictionary enlightened us with the following definition and antidotes:

Definition 1 granola

Thumbs 475 up, 233 down

 

 

 
  A person who dresses like a hippy, eats natural foods (granola), and is usually a Liberal, but in all other ways is a typical middle class white person, and is likely to revert back to being straight when they finish college.

Did you see that granola chick at the farmer’s market buying bean sprouts?

Yeah, her new Volvo was parked next to me.

Definition 2 granola

Thumbs 278 up, 126 down

 

 

 
  A tree hugging, free spirited hippie minus all the drugs.

Melissa is a granola.

Definition 3 granola

Thumbs 753 up, 189 down

 

 

 
  An adjective used to describe people who are environmentally aware (flower child, tree-hugger), open-minded, left-winged, socially aware and active, queer or queer-positive, anti-oppressive/discriminatory (racial, sexual, gender, class, age, etc.) with an organic and natural emphasis on living, who will usually refrain from consuming or using anything containing animals and animal by-products (for health and/or environmental reasons), as well as limit consumption of what he or she does consume, as granola people are usually concerned about wasting resources. Usually buy only fair-trade goods and refrain from buying from large corporations, as most exploit the environment as well as their workers, which goes against granola core values. The choice of not removing body hair (see amazon) and drug use are not characteristics that define granola people, and people, regardless of granola status, may or may not partake in said activities. This definition is sometimes confused with hippy.

Jack: My best friend is vegan and only buys produce that is organically grown from local farmers. Her and her feminist, vegan boyfriend are both in Greenpeace and advocate for queer rights. She waxes her legs but she’s still granola.

Jill: So that means she’s not a dyke? And she grows her own reefer?

Jack: Just because she’s granola, doesn’t mean she does drugs. Also, granola status has nothing to do with sexual preference.

Jill: Well maybe she’ll know where to buy hemp and how to tie-dye?

Jack: She’s granola, not a hippy. Some granola people are hippy and vice-versa, but they’re not the same thing.

 

Maybe the real medicine is: if we have a bit of a laugh and settle down we can work an understanding – a sustainable one!

Farm related posts – Production, Landcare, Investments

Farmers make up less than 1% of the Australian population today and feeds 600 people – in 1950, an Australian farmer fed 20 people – in 1970, the farmer fed 200 people. Source: Lynne Strong, Bega ABARES Regional Outlook Conference 30 Aug 2012.

Artificial fertilizer costs too much and the dairy industry is returning to the use of nitrogen fixing perennial clovers in its pasture mix to reduce its greenhouse gas footprint. Source: Joanne Bills, Bega ABARES Regional Outlook Conference 30 Aug 2012.

The global dairy trade is increasing every year by between 9-10 billion litres of milk – equivalent to the size of the entire Australian industry each year. Source: BRW 12 July 2012.

A Tasmanian dairy farm has Australia’s first rotation platform that milks 24 cows without human involvement – separate robots prepare and clean the teats, attach the suction cups and disinfect the teats after milking. Source: BRW 12 July 2012.

Warrnambool Cheese & Butter operates the largest and most efficient dairy processing site in Australia – Bega Cheese owns 17% of the company. Source: AFR 03 Nov 2012.

Research in the UK has found that organic farms are less energy intensive than conventional farming – but they are also less productive – that means organic livestock have higher greenhouse gas emissions per unit of milk or meat. Source: NRM on Farms 04 Sept 2012. 

Dr Carole Hungerford of Bathurst links the health of the population to the health of its food – she says that you can’t get healthy animals from unhealthy land – she relates disease and illness to deficiencies in soils – in turn creating deficiencies in foods – she notes that 1 Australian dies every 2 hours from bowel cancer. Source: National Landcare 04 Sept 2012.

Asa Walquist, writer on rural affairs, says that animal products supply one third of the world’s protein – if livestock were eliminated, half as much again of vegetable protein crops would have to be produced to replace meat – but the shift from pasture to cropping would lead to a reduction in soil carbon – increasing soil carbon will be critical to Australia’s future carbon balance – Walquist says that the most effective way to increase carbon levels in soil used for agriculture is to return some crop land to well-managed pasture, preferably native pasture. Source: NRM on Farms 04 Sept 2012.

In the Western Sydney Parklands of over 5,000 hectares, 500 hectares have been reserved for urban farming – small plots are being leased to farmers to keep a food basin close to the capital city. Source: SMH 27 Oct 2012.

Financial losses from events related to weather in Australia have risen 4 fold over the past 30 years according to reinsurance corporation Munich. Source: SMH 27 Oct 2012.

60% of Australia’s researchers work in universities – the highest percentage of any modern economy. Source: AFR 03 Nov 2012.

The driver of the growth will come from improvements in productivity – labour productivity per person in China is only 20% of that of the US – in India and Indonesia it is about 10%. Source: AFR 29 Oct 2012.

Over the next 20 years almost 9 out of 10 new middle-class consumers worldwide will emerge in the Asian region. Source: AFR 29 Oct 2012.

Asia will be home to 4 of the 10 biggest economies within 13 years according to the Asian Century White Paper – China, India, Japan and Indonesia. Source: AFR 29 Oct 2012.

Between 2005 and 2011, US-based corporations invested $550 billion in Australia compared with $20 billion from China-based companies. Source: The Australian 16 Aug 2012.

Chinese consumers have developed a liking for Starbucks, pizza, Haagen-Dazseven and even Santa – they prefer western brands to domestic competitors. Source: The Deal Aug 2012.

95% of Chinese investment in Australia over the past 6 years was made by state-owned enterprises – nearly $50 billion over the last 5 years and mainly in mining and energy. Source: SMH 25 Aug 2012.

Chinese investment in Australia dropped by 51% last year to $19 billion – Australian investment in China grew by 278% to $17 billion. Source: The Australian 26 Oct 2012.

Unilever’s CEO, Paul Polman, thinks that for the next few years the US will be more internally focused – and that China and India won’t be willing to step up and assume the responsibility that comes with size – he believes that this creates a major opportunity for responsible companies to step up to be a force for good. Source: AFR Boss July 2012.

Unilever’s targets for 2020 are: to help more than 1 billion people improve their hygiene habits and bring safe drinking water to 500 million people – and halve the greenhouse gas impact of the company’s products across their lifecycle, from sourcing to consumer use and disposal – also to halve the water consumption associated with the consumer, particularly in countries that are populous and water-scarce – plus halve the waste associated with the disposal of products. Source: AFR Boss July 2012.

Unilever currently sources 10% of agricultural raw materials sustainably – by the end of this year it aims to source 30% – by 2015 50% – and by 2020 100% – by 2020 it also aims to link 500,000 smallholder farmers and small-scale distributors into its supply chain. Source: AFR Boss July 2012.

The Indigenous Land Corporation has gained approval under the Carbon Farming Initiative to earn up to $500,000 a year by selling carbon credits from projects combating savannah wildfires on its Fish River property south of Darwin. Source: The Age 02 Nov 2012.

  • CO2Land org queries the Fish River story and asks where this number comes from as it is unlikely in free trade the price will be higher than $AU10 for some time, and the Government itself in a media release said the number of credits generated from the exercise is 20,000 per annum – simple arithmetic = $200,000. It is most likely the number of $500,000 is a Carbon Tax transitional number and not a continuing expectation.  You might notice we posted Unfinished business, The EU ETS continues (Posted on July 17, 2012 by co2land). The story is about the need of the managers to artificially prop up the price after falling values. “To counter this the European Commission proposes to withhold permits and boost prices by “backloading” auctioning. That is delaying sales due next year until later in the 2013-2020 trading phase. This strategy is designed to maintain the EU carbon prices at no lower than €8.” It follows that Australia has elected to follow the EU ETS and make a transition from the Carbon Price (Carbon Tax) to the market.

Co2Land org thanks Garry Reynolds Caring for our Country National Coordinator, Business and Industry – for the inputs.

EOI – the label of convenience at risk

Calling for an Expression of Interest (EOI) gives the impression of progressive policy, but ‘paused development’ is often the result. A high risk for innovation and innovators to participate is the loss of Intellectual Property (IP). In more recent times it is common for government to test reactions to hard issues that are deemed to be important, and there is a belief finding acceptance of ‘real’ truth of the purpose – the use of EOI to assign work to institutions that have been otherwise denied funding at the expense of genuine innovation. Legally this is acceptable, but the morals are questionable when you consider that the ideas come from innovation and the innovators and they are at risk of loss of IP. Before participating in EOI invitations, the best defence could be to better understand Intellectual Property Law – starting with 101.

CO2Land org can give numerous examples of brilliant ideas. Many of these fail to be taken up because the main need was not correctly evaluated. In short a market was either not ready or the opportunity for the market to mature was outside the timeframe to sustain a reasonable return to run a business.  The carbon market is a very good example of brilliant ideas and correct intentions and misreading the timeframes. It follows that the space is a long way from being mature and it is complex as we have green markets, carbon markets and clean markets and a lot of individuals and entities wanting to be in the place where it is seen to be happening.

When we have a commodity we are well protected by our reputation and brand and the profile of what is offered carries warnings on ethical behaviours and legislation for protection. It is acceptable for the society to do this especially where the standards are deficient or omit adequate definition of the goods or services. Despite all this, as an innovator, it is very difficult to protect yourself and your intellectual property. Why? Because most participants establish their trademark/logo believing it is not necessary to establish reputation in the right of the mark. If someone comes along and does a better job of using the trademark or borrowed a look of your trademark to show a better use of it – they have the reputation not you. Also it is important to consider a reputation is not a single dimension it can be words with the addition of pictures, sounds, smells, colours and shapes.  Another question related to trade marks is different entities in different classes of specific goods and services need to be named in the specific classes. It would be prudent to check this matter out if you are moving from one market opportunity to another!

Starting up 101 – Intellectual Property (IP) is just a label of convenience! IP is a number of things that range from subject matter to rights. IP falls into categories in order to get rights and longevity over those rights. The significance of the difference makes the difference in the context of enforcing rights. Conversely you cannot enforce rights you do not have.

In relation to EOI – it could be argued you are permitting others to use or exploit your IP. Before participating you should take the matter up with a specialist IP Lawyer.

Background of what is IP in practice (Australia):

IP Matter Process to approve IP Type Definite Time
Innovation/Inventions yes Patents Yes
Genuine confidential and trade secrets no Trade Secrets and confidential information (not trivial) no – but you must maintain secrecy/confidentiality
Plant varieties yes Plant breeders rights yes
Visual features of a product yes Registered design yes
Signs distinguishing goods or services provided yes Registered trade mark Rollover by renewal fees paid
Original works and aligned subject matter (written down ideas) no Copyrights yes
Original layouts of semiconductor circuits no Circuit layout rights yes

Human Creativity – ideas and innovation

I long for where Human creativity meant ideas and opportunity will be captured and questioned and then crafted into a business. While lamenting, along came a story that human creativity has not changed, and the problem is we might be running out of big NEW companies. This leads to looking deeper into why this could happen.

A story from Alyson Shontell, 23 August 2012, (http://www.businessinsider.com/startups-have-gotten-very-boring-2012-8#ixzz24PkQEhSJ ) in essence says the space is too crowded and starting a company used to be more difficult.

CO2Land org does agree starting a company is more easy, however funding is getting more difficult, banks have tighter lending rules, old (family) money has all but dried up or is invested in the minerals boom (particularly since 2007-08) and we are back to the time when only people with boatloads of money could afford to launch one (a start-up company) and see it to maturity. However, the difference to how it was before is marketing, this is more important and in particular we need to know how to use the changed practices in marketing to your advantage and this is more critical than being a engineering genius. That said we have to point out the improved technology, and social media can create something for a condition to start-up a company that is neither being novel or necessary. The condition for this is because – “Founders can scale consumer products relatively quickly too. Angel investor Chris Dixon called 10 million users the new one million.

CO2Land org then ponders: Is innovation of this type going to reach a ‘peak oil’ type of scenario and when, and what drives us to start-up a new company that is different especially where we might have products that are familiar, can use and understand, and have been around for the years. A good example might be how a director of an affiliate company said my PC was fine until Microsoft made it more complicated, so I changed to Apple and had to learn all over again! This is a very good example of how we did not want to change until it was forced on us, and the moral of the story is do it before it is done unto you! By that is meant things will change through human creativity and that creativity can at least be influenced by our ideas if we participate (is this not the correct way of a human touch?).

Back to the Alyson Shontell story: “The interesting innovation now is happening in [business-to-business] and infrastructure, which doesn’t seem as intellectually interesting but can have a large impact,” an investor told us. “[Business-to-consumer] might just be tapped out for the moment after a good 5+ year run.” It would seem the Alyson Shontell claim is an indicator of the shift in how we do business, and CO2Land org recently published a story on how branding perceptions has changed (Time for a real review). Both support the view the intellectual is less interesting and more important is systems based on hardware, enterprise software, infrastructure and bio-whatever.

CO2Land org does fully agrees those in this B2B space are different and have their thoughts arranged in a way different to B2C and may have an easier time in start-up as they can be better, more predictable bets for investors.

Watch this space for more affiliate action – soon! And, Twitter, is becoming more and more important in watching this space.

Did not use your networks – why your bid failed!

One of the biggest letdowns is putting in a bid where you know you have a special rapport with the group calling the tender, a very competitive product and good reason to believe your price is well structured – then along comes the news – you are not successful.  What went wrong – you are told, nothing went wrong you did not meet the criteria!

So what is meeting the criteria? Short answer – depends on what drives the business activity being called for in the tender. So is a sound understanding of the required activity enough? Short answer – it depends on whether the activity is public or private. So is it the money? – Well it depends – so lets look at projects of government (Federal and or State) and about 30% found price the reason, 37% possibly, 33% not very likely. So is it the economic conditions? About 58% say yes, 37% very possible, 5% No reason to think this is the reason.

Compare this to carbon intervention programs: Initiatives based on economic drivers (47%), based on accounting functions (53%). It is therefore very possible when putting in a bid you could underestimate the impact of factors other than price (in other words external factors) by 11% (58% – 47%).

How can you factor in an 11% margin for the effect of external matters? Co2Land org is not going to try to answer that question. However, polling your networks might be very useful to narrow this margin. If you research through professional and social media you can quickly profile and assign a probability of the likelihood it will impact on your bid assessment. Think about it – how often do you find yourself thinking something should be done about that and next day it is news?   This is even more important when the assessment is weighted score (This is when each criteria is not equal in the marking).

 

Pure Gold Standard

On 28 June 2012, it was reported by the Australian Government, it “introduced the National Carbon Offset Standard (NCOS) on 1 July 2010 to provide national consistency and consumer confidence in the voluntary carbon market. The Government called for submissions into the standard, and received 34 submissions for the draft review of the standard.”

It is worth noting that NCOS serves two primary functions:

  • Provides guidance on what is a genuine voluntary offset, and
  • Sets minimum requirements for calculating, auditing and offsetting the carbon footprint of an organisation, product or event to achieve ‘carbon neutrality’.

Then on 25 July 2012, Choice www.choice.com.au said several of its members were put off because of a perceived lack of accountability and oversight in the industry, and needed more assurance before they considered offsetting their carbon emissions.

CO2Land org is now interested in what makes this such an issue especially when NCOS is set up to provide a means of ensuring the environmental integrity of the carbon offsets and carbon neutral products available in the Australian voluntary market. It is meant for consumers and businesses alike to make informed choices and be able to interpret carbon neutral claims. Business should find comfort in being able to determine their carbon footprint in line with consumer expectations etc.

Maybe a little Carbon standards 101 at this point:

The Verified Carbon Standard (VCS) is an international standard that ensures carbon reductions meet quality standards and are independently verified, numbered and listed in a central database.

The Gold Standard (GS), established by the World Wildlife Fund (WWF), certifies offset projects that demonstrate greenhouse gas reductions and positively impact the economy, health, welfare and/or environment of the community where the project is located.

The Carbon Farming Initiative (CFI) is a voluntary Australian Government carbon offsets scheme that enables farmers and land managers to generate carbon credits by reducing agricultural emissions, such as nitrous oxide and methane, and sequestering carbon in vegetation and soils. These credits can then be sold to individuals and businesses wishing to offset their own greenhouse gas emissions.

The Government’s National Carbon Offset Standard (NCOS) verifies claims of carbon neutrality in Australia. To verify carbon neutral claims, the NCOS specifies that organisations must buy their offsets from projects verified under eligible schemes. These include credits issued under the CFI, VCS and GS, among others.

Now for a little more on the comfort factor:

CO2Land org on 16 August  2012 was told it still all feels good and Gold Standard (GS) is a rigorous standard with considerable credibility, there is a problem – nothing to do with creditability, but how and who is going to run the GS market in Australia. The issue today is NCOS clearly give GS the big tick and that is why we have watch this space and note that concerns over efficacy are being addressed through such a rigorous process for the regulation of the programs will ensure the money goes where it should. However, 2 years and counting is getting a little uncomfortable when you want to participate in the standards with confidence.

Farm Post program.

Australia Post’s launched a pilot ‘paddock to plate’ venture is called Farmhouse Direct and combines things successfully with the other AusPost delivery network. The promise of the service is to connect “you directly to the best local produce” and make local farmers markets and “artisan” produce an everyday experience.

The pilot program is reported to have started out as a collaboration with the Victorian Farmers’ Markets Association and was successful enough to lead to a national roll-out involving 70 producers and 680 products. There is sufficient confidence that it will continue to grow and that confidence is shown by Australia Post having set up a website – at farmhousedirect.com.au – where farmers set up shop for free and set their own prices. Quoted is that “Users can explore the website by region, product, produce and even by local farmers markets like the Flemington Farmers Market to order online. Farmers prepare the shipments, which are either picked up by Australia Post from the farmer or handed in to a depot, and Australia Post looks after the delivery.”

CO2Land org accepts that this is an interesting project that has the hallmarks of being a success. Not just a number improvement, but a innovation with a low risk and excellent opportunity for farmers to be better off in the market space. It is a genuine attempt to move with the times – without a huge price tag in setup costs. Keep you eye out for the official launch of the program not to far off, and expected sometime in 2012.