The forces of change have coalesced within a few months to set the course of energy over the next century as the world desperately attempts to tackle climate disruption. The golden age of fossil fuels – and associated wealth – is ending; it’s just a matter of when.
It is staring Big Oil in the face. Superpowers such as China, South Korea, Japan, the European Union and, most recently, the United States are on board the train for destination net-zero carbon emissions. The long war on climate science denialism has been seen off.
In tandem, an attempt will be made this year to shift up gears on global climate action. US president Joe Biden has declared the climate threat "a national security issue" and plans to spend $5 trillion under the climate/environment heading – his climate envoy John Kerry has set the agenda for the UN COP26 talks in Glasgow, describing it as the world's "last best chance" to avert climate catastrophe.
For Irish renewable energy developer Eddie O’Connor it coincides with his company Mainstream Renewable Power becoming a global player as a decarbonisation crusade rolls out across the planet. As he surveys that upheaval, his faith in the maxim “the truth will out” has come good.
Asked if he feels sorry for oil companies, the response is a guffaw. If oil and gas companies want to get into renewables he is willing to talk to them – as some have done. The salt in their wounds is in the price of solar and wind. “We are so cheap now, it’s literally unbelievable how coal/oil/gas don’t stand a prayer in trying to compete.”
“They are all making the transition. Do I feel sorry for them? Not in the slightest . . . I think most of them won’t be able to survive in this new space. It requires a head graft.”
They have become used to the comfort of knowing an oil well was “a cash pump”, good for up to 50 years – low risk in contrast to logistic demands of solar and wind.
In 2017, he declared: “Fossil fuels have lost . . . The rest of the world just doesn’t know it yet.” It certainly knows now, he asserts, pointing to BP, Danish Oil and Natural Gas and Statoil among others trying to reposition, divesting from fossil fuels and “investing in offshore wind all over the place” – not forgetting their ploy of changing names.
“They’re trying to cope with the transition. What’s really sickening the oil companies is they see no growth in their core business”, given capitalism is based on growth, ie “if you don’t see growth you shouldn’t be there”, O’Connor adds, unless you’re a consolidator stripping companies.
He has little mercy for “the laggards” – Chevron, Exxon Mobile, the Koch brothers and others – who spent $3 billion lobbying the US Congress in an attempt to stifle green development. “They [now] see the future; this is the way we need to go, but they don’t have the skill sets to do it.” As a consequence, there will be a lot of amalgamations, he predicts.
Joy following the departure of "ignoramus" Donald Trump, who indulged them, is palpable. O'Connor quietly celebrated in November at home with his wife by drinking the best bottle of wine he had in the house. "It was such a liberating thing."
With the world pivoting away from fossil fuels, O’Connor agrees there is a sense of vindication. He made that leap 30 years ago. He recalls that in 1989 when, as Bord na Móna chief executive, board member Eoin O’Neill came up to him and said: “You know Eddie, this CO2 stuff, this is dangerous. This actually is heating the world.”
“I said: ‘Really? But that’s the only way we make electricity’, and I was the leading polluter at the time in Ireland”, responsible for 10 million tonnes of CO2 from peat used in power generation. “From then on, I decided this [renewable energy] was going to be the mission.”
They built Ireland’s first commercial wind farm in Bellacorick, Co Mayo, but encountered roadblocks when trying to compete on public procurement, so “nothing got built”. On establishing Airtricity in 1996 and an association with NTR in 1999 a new front opened up – they were rewarded with first-mover advantage.
“The logic was always there . . . the damage from fossil fuels was mounting.” It became starker. He describes encountering smoke during a visit to Santiago, Chile, which had travelled all the way from New South Wales, “the burning of California” and human devastation in sub-Saharan Africa as “the Sahara marches southward”.
How he applied that logic is seen in his stone-stepping strategy. O’Connor rose to become ESB purchasing manager as a bright young chemical engineer, becoming Bord na Móna chief in 1987 and radically overhauling its strategic focus over nine years – only to leave amid acrimony after its board concluded his remuneration package breached government guidelines.
This prompted his move into wind energy when it was considered cumbersome, impossible at scale because of “variation” – wind doesn’t always blow – and yielding expensive electricity.
First came Airtricity in 1997, which was sold for €2 billion a decade later, then Mainstream Renewable Power in 2008 (helped by most of his Airtricity cheque, estimated at €40 million), and earlier this year an alliance with one of Norway’s biggest companies, Aker Horizons, “a planet-positive investment company”.
Each leap added financial firepower, enabling greater rollout of renewable enterprise throughout the world. The largest publicly-traded oil and gas companies are referred to as “supermajors”; Mainstream-Aker has become a “supermajor” in renewables.
A rapid transition to sustainability has to happen, O’Connor stresses, but two large jigsaw pieces are missing at a time when planet Earth is in a precarious condition. First is an urgent need to get global policy right by quickly agreeing “what we can do to strengthen the Paris agreement” backed by mandatory measures.
The Dublin Climate Dialogues initiative, which O’Connor is leading and is in “building momentum phase”, is an international pre-COP26 conference to be held in May, which aims to be the catalyst for a much more meaningful outcome in November. It’s about “occupying a position of thought leadership in the world”, he explains, as “this COP has to succeed or we are all fried”.
The second is enhancing technology associated with solar, wind, and battery storage, the fastest-responding source of power on grids, which is deployed to stabilise them. In our part of the world, the single biggest enabler, he believes, will be a pan-European smart grid for renewable energy.
You can’t rely on wind “because you don’t know when it will blow”, in contrast to constancy of electricity demand. O’Connor, however, has come to realise “wind is always blowing somewhere” – this is where his big idea, SuperNode, comes in. It embraces superconductivity, which allows gigantic amounts of electricity to be transmitted without losses.
He describes how an Atlantic storm peaks in Ireland and shifts to the UK and beyond. So having a supergrid stretching from the west of Ireland to Finland could steadily harness that power.
“Right now, it’s far more relevant” as Europe plans to develop 900,000 megawatts (MW) of offshore wind as “onshore has come crashing to a halt”. That’s probably enough to power most of the EU at present, though demand is predicted to escalate over coming decades. In the case of Ireland, 30,000MW is planned over coming decades, concentrated off the west coast – six times the electricity currently consumed in Ireland.
Ireland’s transition is happening, he says. The IDA has at last got interested, having set up a new sustainability division, but he has grave reservations about the State’s capacity to effect the kind of change required. “They had it so easy for so long. They didn’t have to do anything. American multinationals rolled into here because we were in Europe.” The 12.5 per cent corporate tax, a participation exemption on capital gains tax and political stability all played a part.
In 2018, O’Connor sold the Neart Na Gaoithe wind farm development off the Scottish coast to Électricité de France for €665 million. He benefitted too from that tax regime, he readily admits. Having spent €50 million on the project, it became embroiled in legal proceedings brought by the Scottish arm of the Royal Society for the Protection of Birds before securing go-ahead.
Again, payback facilitated another big move; Mainstream went on to clinch a 1,300MW contract in Chile, achieving with help from others a remarkably low price of 4.1 cents ($) per kilowatt hour.
The sale of a 75 per cent stake to Aker values the Irish company at more than €1 billion. While not one for adulation, he points with some satisfaction to pride among Irish people when the deal was announced – though he made twice as much from the Airtricity sale.
Nor does he crave personal wealth: “Money never motivated me.” He has been living in the same “small house” since 1988. “I’m very rich now and I have to manage that,” he says. He accrued at least €500 million from the Aker deal, “a serious bit of loot at the ripe old age of 73”. But, clearly, SuperNode requires serious financing.
Aker is owned by Kjell Inge Røkke, one of Norway’s richest men, who is dyslexic and left school at 17, having been told he would be a failure. He took up fishing in the Pacific, eventually acquiring a fleet of factory ships, including one processing live krill in Antarctica making omega-3 oil. Last year, he was advised to go into renewables. Aker came late to the sale process, O’Connor says, and asked a far fewer questions but with strategic focus – and the deal was done.
Aker insisted Mainstream continue in existence with O’Connor as chairman, though it will be floated. The two are “getting on great”, sharing the trait of impatience in trying to get things done. Already they are embarking on a green hydrogen project by “cracking water” to generate the fuel and ammonia to power ships. It is usually made using natural gas and generates a lot of carbon.
While hydrogen is being touted in Europe tied into offshore wind production, he doesn’t believe it will be viable on cost grounds, whereas production in deserts and particularly in Chile with its uniquely cheap solar and wind (availing of catabatic and anabatic winds from the Andes) is compelling. With others Mainstream has forced down the price of solar to one cent ($) per kilowatt hour and wind to two cents in Chile. “That is why we think we’re going to dominate this space with cheap energy.”
For Ireland to exploit such opportunities it has to face up to the reality that its industrial tradition is limited. “We got extraordinarily lucky that Europe came along.” Yes, he concedes, we took some really big decisions going back to the Whitaker era, all culminating in up to 95 per cent of US FDI coming to Ireland. As he sees it, the IDA could make the same presentation – while Intel and others came and told their pals, including the Googles and the Facebooks, that this is place to go.
“But now we have to make this transition and we haven’t got the tools to do that. We haven’t got the capacity either at political or bureaucratic level.”
Ironically, the Intels, Facebooks and Googles are now demanding green energy. Ominously, vital contracts were lost recently, he adds, “because of lack of capacity at Civil Service level to process the stuff”.
To deliver 30,000MW requires a whole-of-government response, he says, while electricity must be opened up to competition. Europe is not there yet; the US is, while China is talking about building a global supergrid. If Europe wants 900,000MW built offshore, it has to have one too.
Aker liked their “ability to see the future, to plan for that and to invest in the technology that will underpin it”. It comes with ability to raise money, and for O’Connor that means making SuperNode a reality.
“Our wealth was built quite independent of the green revolution . . . unlike other countries, particularly the Brits, who see the creation of their wealth in future being all linked up with the green revolution, as the Norwegians do.” The UK will get more than 10 per cent of its electricity from offshore this year.
SuperNode can help bring Ireland into that space, he contends. Using extremely thin, superconductive metals cooled with liquid nitrogen – as opposed to thick, reinforced copper wire power cables – the plan is to have a fully operational commercial product by 2030.
To those who suggest superconductivity (the most studied part of physics) is like the quantum computer, “a game-changer but not quite there yet”, he points to 1km lines being built in Seoul and Germany. SuperNode intends scaling up to 100km, “preferably in Ireland”, using a cooling system based on creating a vacuum and using new materials deployable in harsh sea conditions. “Pumping nitrogen is not a problem . . . it’s really a cooling issue,” he explains.
"Kjell said to me: 'Jaysus Eddie, there's Elon Musk and he's going to put people on Mars. How f***ing difficult can it be to create a vacuum and stop heat getting into something?' And he has got €4.5 billion to help do that."
“He’s a soul brother. We would think very, very similarly”; especially in not doing anything by half measures, he points out.
Europe, however, is not in the right place due to structural deficiencies, O’Connor says. Its transmission system is made up of 40 operators like EirGrid whose only brief is “keep the lights on”. They are invariably state-owned monopolies with a “please don’t talk to me about innovation, it’s risky” attitude.
Decarbonising Europe is a continental problem, he underlines. It’s no longer about overcoming intermittency (when the wind doesn’t blow and the sun doesn’t shine), it’s about getting vast amounts of cheap offshore energy in northwestern Europe and solar around the Mediterranean to where there is most demand in the centre.
Yet politicians and bureaucrats continue to dodge that reality and make poor choices, he says, citing their backing in the 1990s of carbon capture and storage, prompted by oil companies in the mistaken belief that heavy industry using fossil fuels and coal-fired power stations could continue to operate if their CO2 is used to enhance oil recovery by pumping it into wells.
“It’s still rubbish, but they’re doing it. Just leave fossil fuels in the ground. Stop trying to turn them into something else, because you don’t have to any more . . . they have no role to play, never mind the environmental arguments, which are profound.”
Renewables are going in only one direction. There has been a 90 per cent decline in the cost of solar PV and new molecules are emerging such as perovskite, a better absorber of energy, that will drive them down further, he says. The same is happening with wind and storage, he stresses, while new batteries promise to outdo and out-green lithium batteries.
At Bord na Móna, he learned management and fashioned a set of values that have stood to him. They encompass: “Respect – this is good, in contrast to tooth-and-claw capitalism. We listen. We’re green, entrepreneurial . . . innovation is at our core . . . we change rules of engagement to carve out niches.” And teamwork matters because you cannot have centres of excellence everywhere, while safety is the over-riding consideration.
It helped Bord na Móna pursue new environmental products, while his time there earned €2 billion for the government which, he adds, is rarely acknowledged. That said, he believes it has regressed since and its conversion “from brown to green” has been slow given peat’s notorious role in carbon pollution. This should not be surprising, O’Connor declares, because Sate companies have a different set of non-commercial purposes and are noted for lack of innovation, while “capital markets exist for this stuff”.
Rather than being instilled with “a renewable gene”, O’Connor says he was just your average guy doing business, learning the fundamentals of motivating people and interested in strategy. “There’s no gene there. This was just, if you like, logic.” Doing a master’s in engineering degree in the mid-1970s brought the realisation: “So that’s what it’s about: strategy – it’s what you do.”
The logic was: “This is destroying the planet and the atmosphere in which we live. It might not be appreciated by the general body of humanity right now.” Assuming what Irish scientist John Tyndall demonstrated in 1861 – the greenhouse effect – was true, “then this is the mother and father of all business strategy”.
“At the time, it was just a piece of thinking.” In business there was “small green” and enthusiasm; “big green” underpinned by sound strategy had yet to happen.
He always remembers asking his father Bob when aged 14: “How do you think?” A little surprised, his father laughed and responded: “You just study it, and study it some more . . . and then that’s thinking.”
In addition to immersing himself in study and reading, he learned the value of allowing his subconscious help: “You have to walk away from the problem.” So overnight pauses when trying to resolve seemingly impossible maintenance issues at Ringsend power station did the trick.
He adds: “It’s our slave – it works all the time with us. It never sleeps; it’s an internal dialogue.” The conscious mind – which can read, write and hear – frames the problem; “the subconscious goes off and helps you solve it”.
That combined with a “tell the truth, facts are facts, always deal with the content, never mind the form” approach have held good.
Asked if the Government is on the correct strategic footing in pursuing sustainability, the firm answer is “Yes”. But given its commitment to build 30,000MW offshore he says the question has to be asked: “How can they do that, when they’ve never tried it before, when we’re a non-industrialised economy?”
We can “masquerade around the world as a hugely industrial economy – and probably the richest” given the economy kept growing even when Europe stagnated but “we never had to build the capacity at Civil Service and political level to allow such a project”.
A new industry to rival pharma and tech, which underpins Irish manufacturing with renewable energy and enhances energy security – Ireland relies heavily on gas imports – is realisable but there are too many unknowns, he warns. And the “pace of change is inadequate to allow Ireland build, competitively, 30,000MW using floating technology”.
Citing 14 different departments and agencies involved in “the floating offshore venture”, he wonders which one will drive it? “We need to know the rules of the game.”
Legislation is urgently required to unlock routes to market. Scaled-up research and development is required at a level “we have not had to undertake to arrive at our present state of wealth”, to answer many questions – where will wind farms be located, what type of floating platform will be used for intense weather off the west coast, how is power to be transferred to European customers?
Lack of grid capacity is also “a key constraint”. Dublin is so severely constrained – “a bottleneck of transmission” – it won’t have any more data centres any time soon, yet it’s an ideal place for a superconducting cable which would have “a tiny footprint” on the city.
There is “a massive capability gap” in government, but O’Connor is quick to add: “I’m not going to criticise because I understand why things are the way they are.” But to see neophyte countries doing offshore such as Estonia, Poland and Finland, forging ahead with considerably less wind resources and government backing irks him. “We are not there, and we have to get there.”
On emerging technologies, he says keeping on top of solar, wind, storage and grids is “a big full-time job”.
He has keen interest in restoring devastated teak forests in tropical Columbia. Teak, besides being used “in the decks of classy yachts”, mops up a lot carbon and lasts forever.
As a chemical engineer he remains fascinated by the nerdy end of chemistry in the form of new catalysts and molecules, especially those with superconductivity potential.
As for action on other fronts, O’Connor once declared he would like to electrify Africa and called for a Marshall plan to do so but finally concluded “if Barack Obama and Tony Blair couldn’t do Africa, what use is Eddie O’Connor?”
Electricity was not high on country agendas. Fundamentally, he believes it’s an “anthropological issue” where tribal societies dominate – “It hasn’t even got to feudalism”. Sometimes there is too much corruption, if not kleptocracy. He was once told he was talking about electricity for microwaves, X-rays and heating, when they simply wanted it for light – though, he says, they do want it to communicate and charge iPhones.
Yet solar and wind has immense potential for the continent, especially around the Sahara. There is a push for coal, none the less, but it won’t progress in spite of palms being greased, he feels. It’s back to truth in price indicators. “We don’t do brown-paper bags,” he underlines.
The EU, he suggests, should give adjunct membership to some countries where corruption is minimal – “There’s a little bit everywhere; give people power and they start cheating”. This would provide know-how and market access and remove uncertainties.
His forthcoming book is not a dry treatise on business practice, rather a reflection on his life and times with a little strategy thrown in, notably lessons learned from his hero Hannibal Barca, the brilliant military strategist whose tactics were deployed for hundreds of years before the advent of modern warfare, and who pulled off “the equivalent of Canada invading the US” with an army of volunteers.
Like his business milestones, he hopes it will be a precursor to another; on the pursuit of a European supergrid, with SuperNode playing a lead role dispersing electricity at speed with no electrical resistance. O’Connor believes it’s critical to Europe achieving net-zero emissions.
Reducing political resistance is work in progress, though a tectonic shift in global energy is under way. O’Connor through his latest alliance with Aker is better positioned than most to thrive within that new world order where the size of a state’s arsenal of renewables will soon be a telling indicator of both political and financial might.
A Dangerous Visionary by Eddie O'Connor is available for pre-order from currachbooks.com and from bookshops