€40b needed for energy transition but who will pay?

A total of €40 billion is needed in Ireland to fund the clean energy transition, but where will this money come from?

William Carmody, head of financial services at Mason Hayes & Curran says €40 billion may sound like a huge figure and an insurmountable task but in the context of the amount of capital that is available from investors in energy and infrastructure projects globally, it isn’t.

“All of the large investment banks have established renewable energy investment funds and the large private equity infrastructure funds have massive funds available to deploy, so while that €40 billion sounds like a lot, and it is a lot in the context of a market and economy the size of Ireland, in a global sense it is not a lot as these funds are transnational.

“Far eastern investors are prepared to invest in these projects in Ireland and the laws of physics apply in Ireland the same way they do anywhere else in the globe. These investors will come from all over the world. We are a bit of the way there but it’s about scale now and ramping it up.”

Gas is the main fuel that runs our electricity system and we are at the end of a very large pipeline that can be turned off at any time if the suppliers so desired

Two large scale investors who are already on this island are Brookfield, a very large Canadian investment company that bought the Bord Gais renewable energy assets and are based in Cork. Investors from China include China General Nuclear (CGN) who invested in Gaelectric, they bought a number of its assets and we also have investors from Europe and the UK.

Not only must Ireland “crack this” in order to meet its targets, but the development of new technology, particularly the offshore piece, will mean energy independence for Ireland, Carmody says.

“Gas is the main fuel that runs our electricity system and we are at the end of a very large pipeline that can be turned off at any time if the suppliers so desired and that puts us in a risky situation from an energy point of view. This is a natural resource that is ours to exploit and increase our self -reliance and we must do that.”