Business Irish

Friday 22 September 2017

Brendan McGrath: Creating jobs a breeze if we used natural resource

We have the opportunity to create 35,000 jobs from wind power, suggests Gaelectric boss

ESB wind energy arm turned a €1.45m loss
ESB wind energy arm turned a €1.45m loss

Brendan McGrath

Jonathan Swift wrote "that whoever could make two ears of corn or two blades of grass to grow upon a spot of ground where only one grew before would deserve better of mankind, and do more essential service to this country, than the whole race of politicians put together".

There are three major wealth creators in society: the makers, the miners and the farmers. And of these, only the farmers in Ireland have managed to create a fully integrated, functioning indigenous food industry that is on a world scale. Our mining and manufacturing have lacked its critical mass. Our mining has made progress in recent decades but the deposits mined have been limited. Manufacturing has been largely underpinned by foreign direct investment and, with a few notable exceptions, indigenous manufacturing has never scaled to an international level.

What confounds me is that it has taken so long for our Government and policy-makers to understand the great opportunity this island has to harvest the energy that flows across our island in abundant quantities and to export it to an energy-dependant Europe. Despite having the best wind resources in Europe, despite having four semi-state companies operating in the energy sector, despite a plethora of development agencies (some of which are best in class for inward investment), we have failed to take this indigenous resource and make it our own.

In particular, we have trailed behind Denmark and Germany who have shown what can be done when people with foresight and insight take a leadership position, and drive an industry with conviction and passion.

Ireland's resource in onshore, near-shore and offshore wind energy realisable in the coming decades has been calculated at 1,990GW. This is enormous when compared with the 5- to 7GW of renewable power requirement for Ireland's domestic use and extraordinary in international terms. For example, the total US and Europe electricity generation capacity in 2010 was 1,971GW.

The challenge for Ireland is to capture this capacity and export it to a Europe that will struggle to meet its future self-sufficiency and energy security targets.

Bringing Irish wind to neighbouring markets is now both relevant and timely for the following reasons:

* Wind turbines in Ireland produce more energy than on similar sites in most other countries.

* Irish onshore and offshore projects are nearer to the UK shoreline than a lot of their offshore projects and cheaper to build as a result.

* We have an excellent wind resource with low population density in contrast to many parts of the UK.

* The UK needs to deliver 18GW of wind energy before 2020.

The potential for job creation in the wind industry has been clearly outlined in the Irish Wind Energy Association's Export Policy – a renewables development policy framework for Ireland published in October 2012. The reliability of these figures has been underpinned by the recent memorandum of understanding entered into by the Irish and UK governments that will allow Ireland export its excess renewable energy to the UK and receive UK pricing support for renewable power. This proposes that Ireland should target to export 3,000MW of onshore and 3,000MW of offshore wind by 2020. Together with our 4,000MW of domestic ROI requirement and 1,500MW in NI requirement creates a market of up to 12,000MW of wind energy development on the island by 2020. Further targets beyond this timeframe are to commission 6,000MW of onshore wind, 9,000MW of offshore wind and 2,500MW of marine wind in the 2020 to 2030 period.

The opportunity is to capture the critical mass created by this pipeline of wind energy projects opening up before us through exports of renewable energy. Scale has always been the limiting factor in attracting any form of manufacturing to Ireland. For the first time we can show a realistic opportunity in wind energy for the full range of onshore, near-shore and offshore projects of scale to support an indigenous manufacturing base here.

The European Wind Energy Association has determined the job creation in wind in a variety of categories: these EWEA figures show that for each MW of wind installed, 7.5 direct and 5 indirect manufacturing jobs are created in the wind sector. The larger heavier components that are difficult to transport, such as turbine blades and towers, should be the initial target. The minimum target in this area should be 1.5 direct jobs (in installation and maintenance) and 0.5 indirect jobs per MW. With the creation of the right environment for investment, Ireland can deliver the targets identified for 2020, and the further targets for the 2020 to 2030 timeframe. The jobs arising would be 18,400 by 2020 and 36,800 by 2030.

If was the limit of our ambition, these jobs would make a significant contribution to the strength of our economy. However, I believe that if our State resources are properly energised we could claim a far greater share of the 7.5 direct and 5 indirect jobs in wind turbine manufacturing and its supply chain. As the Minister for Energy Pat Rabbitte said recently in this context: "We don't want to be left making the sandwiches." Targeting 1.5 jobs per MW in direct manufacture of the heavier components in turbine manufacture, and 0.5 jobs per MW in indirect manufacturing, would generate an additional 12,000 jobs in the period to 2020, and 35,000 jobs in the period to 2030.

The jobs potential of the Irish wind resource, for our domestic market and export, adds up to 30,400 by 2020 and 71,800 in the period to 2030 as the potential of the offshore wind resource is realised.

Ireland's share of these jobs will be maximised if we do the following:

* Develop a clear, unambiguous government strategy to facilitate renewable energy growth targets for onshore and offshore by 2020 and 2030.

* Urgently establish a government/industry implementation group to maximise the opportunities for Ireland in exporting renewable energy which brings together private and public stakeholders in delivering the goals and leading the implementation of this strategy.

Jeff Immelt, the CEO of General Electric, says ". . . rather than trying to time strategic actions precisely, bet on mega future trends. Sometimes you have to trust your gut. Great strategists are partly great futurists. They pay attention to future trends and bet big on these". I concur with Jeff and would add that Ireland, having missed the industrial revolution, should not miss the green revolution.

Brendan McGrath is CEO of Gaelectric Holdings plc

Irish Independent

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