| 11.8°C Dublin

Going to waste: Low take-up of €70m fund to slash Irish firms' energy bills


Moneypoint in Co Clare is Ireland’s largest electricity generation station

Moneypoint in Co Clare is Ireland’s largest electricity generation station

Moneypoint in Co Clare is Ireland’s largest electricity generation station

Irish companies are failing to tap into a €70m fund designed to pay for energy upgrades in the public and private sectors.

Only a "handful" of projects have been financed from the Energy Efficiency Fund which is co-funded by the Government and announced in May last year.

The State provided a commitment of €17.2m, with private sector capital from London & Regional Properties (€12.8m) and the Glen Dimplex Group (€5m). Additional funding up to €70m was expected over time.

One of the few beneficiaries is Tesco Ireland which has drawn down €2m to upgrade lighting at seven of its stores, resulting in annual savings of €540,000.

The Department of Communications, Energy and Natural Resources directed queries to UK-based fund administrators Sustainable Development Capital LLP (SDCL), which did not respond. But sources said only a very small number of projects have been approved, despite clear savings on power bills.

Projects eligible for funding include insulation, more efficient heating systems, lighting upgrades and urban infrastructure such as street lighting.

Ireland is required to cut energy consumption across the public and private sector by 33pc by 2020 to meet EU targets.

The latest data shows that some 3,100 fewer tonnes of carbon was emitted across the economy in 2012. This must increase to 7,250 tonnes by 2020.

Reductions will not only prevent dangerous climate change, but will also help the State reduce the €6bn annual spend importing fossil fuels. Payback for most projects is typically between three and five years.

The Institute of International and European Affairs said there was a "bias" in government spending for "shovel-ready" construction projects, despite efficiency programmes generating greater returns.

"Energy efficiency investment can beat traditional government investment projects many times over in terms of their cost-benefit profile, and in terms of their impact on exchequer returns," senior research fellow Joseph Curtin said.

"Policy could seek to underwrite the risk for private sector investments or providing commercial loans through a green fund."

Other sources of financing are available, a UK-based financier told the Irish Independent.

Business Newsletter

Read the leading stories from the world of business.

This field is required

"Clearly there is a benefit for organisations, whether private or public sector," the managing director of Capitas Funding, Jeremy Hartill, said.

"It's not rocket science. If there's technologies to generate these savings, and there's proof of concept, there's no reason for the commercial or public sector not to do this. There are a portfolio of Tier 1 funding banks willing to support these investments."

They included Santander, Close Brothers, Bank of London and Middle East and Investec, he said. He has arranged finance for Irish projects.

The Department of Finance said the new strategic investment fund could be used for similar projects, if they demonstrated a commercial return.

Businessman Norman Crowley, from Carbon Crowley, was critical of the low take-up of the Energy Efficiency Fund.

"It's been two years since they talked about that fund. No money has been spent, why not?" he said.

"This is about reducing carbon but there's a fringe benefit including student graduates who are producing to the Irish economy and paying their taxes.

"If we were to do this here it could inspire Europe because we could do it faster. This is a disgrace."

Most Watched