Value of ESB's €200m alternative energy fund 'peanuts'
Published 12/10/2010 | 05:00
THE ESB's investment fund said yesterday that the €200m value of the state-owned utility's alternative investment fund is "peanuts".
The fund is called Novusmodus and it invests in alternative energy. It wants to invest one-third in Ireland and the rest overseas.
Managing partner Richard Nourse said Britain's targets for renewable energy were too ambitious because power utilities were the only companies that could build alternative energy power stations but utilities were conservative when it came to new energy sources.
"A €200m fund is peanuts. Only utilities will deliver this, but they are not well placed to take this kind of risk. I would really think about treading more gently," the former Bank of America-Merrill Lynch banker told the Reuters Global Climate and Alternative Energy Summit in London.
"I worry that [British] government policy is at risk in the rush to deliver a target probably three to four years earlier than it is economically optimal to do it," Mr Nourse said. "The government is telling them to build a technology which is unproven and hasn't happened anywhere else in the world -- in the middle of the sea. They don't know what it costs to put it there or keep it there."
The ESB did not return calls yesterday when asked whether the fund believed the Irish Government was also making mistakes.
Novusmodus is focusing instead on investments that have quicker returns, such as Irish company Nualight, which makes lights for supermarket freezer cabinets.
The project does not require subsidies and the lights should pay for themselves in 18 months because they do not emit unwanted heat.
"That is a near perfect investment as it doesn't rely on anything but the price of electricity to be financially viable," Mr Nourse said.
The fund manger added that he paid little attention to the United Nations' attempts to forge a global climate pact because the discussions were too drawn out and uncertain.
The latest round of talks in China ended on Saturday, failing to dispel fears the process could end in deadlock.