Wednesday 16 October 2019

Hitting energy target will cost €10bn, says Greencoat

Field position: Greencoat Capital has been snapping up wind farms here since its IPO in 2017. Stock image
Field position: Greencoat Capital has been snapping up wind farms here since its IPO in 2017. Stock image
Gavin McLoughlin

Gavin McLoughlin

Meeting a industry target to have 70pc of electricity coming from renewables by 2030 will require as much as €10bn of capital, according to Irish-focused wind farm investor Greencoat Renewables.

Greencoat asset manager Patrick Maguire said meeting the target will require another 5,000 megawatts of renewable assets, which he said "equates to €8bn-€10bn of investment". He said pension fund money will be an important source of capital for the transformation.

"In order to deliver that cheaply and at a low cost to the consumer it's important that the right capital is used for that and the right money funds it. I think pension funds are a good fit for renewable-energy assets. Pension funds like long-term investments, they like to make relatively large investments, they like sustainable investments," Mr Maguire said.

Greencoat Renewables is a listed entity managed by Greencoat Capital - a UK-based business with a number of funds operating in the renewables sector.

It's been hoovering up wind farms here since its IPO in the summer of 2017.

"While [switching to renewables] is something that we need to do, it's also going to create a huge business opportunity," Mr Maguire said.

He said that until now the Irish-focused arm has been buying completed wind farms from developers, but that this might have to change as the model by which electricity is purchased for the grid changes.

A new auction system that will pit electricity generators against each other is coming into being, and in addition the industry is expecting so-called corporate power-purchase arrangements could emerge. That's where a company would buy electricity directly from an electricity generator, rather than taking it from a utility company.

This might mean Greencoat has to get involved in projects at an earlier stage, as competitive auctions might make it more difficult and therefore more financially risky for developers to get power on the grid. Mr Maguire said Greencoat would work with developers "to try and model in the most efficient way to build and own assets".

Irish Independent

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