The UN Intergovernmental Panel on Climate Change has concluded that technology has an essential role in decarbonising the world. It may be a driver of carbon emissions, yet technological change can provide multiple ways to reduce greenhouse gases.
Direct air capture; smart grids; enhanced battery storage; AI tools; and carbon capture and storage are possibilities. But many climate activists say they are unproven so it’s risky to bank on them.
Dr Paula Carroll of UCD Energy Institute, a specialist in the “clean energy transition”, says technology will play an important role inevitably, especially as we live in a connected world.
However, when talking about the “clean energy transition” there are five Ds that must be in the picture: digitalisation; decarbonisation; democratisation; decentralisation; and deregulation – “and all have to work together in the new system”, says Carroll.
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ICT is vital in running that system, she adds. Technology is needed at the centre but not to the extent that “technology is the solution”, which industry likes to claim.
Tech can be off-putting to some, such as older people, those who lack the money to acquire it and women, Carroll says. Therefore, solutions must be designed to be inclusive.
Climate technology is not where it needs to be – we missed 2020 emissions targets and may do so again in 2030. In Ireland we don’t have a large industrial base to make EVs or heat pumps; “but we can do the ICT side, the management of it”, she says. And that includes “the people side”; encouraging adoption of green technology.
With advanced technology, Ireland is making some progress with research capacity in heating technologies, while UCD is doing significant work on thermal storage. Longer-term, bigger-bet solutions also need to be pursued, especially in balancing supply (currently dominated by fossil fuels) and demand – ie, figuring out how to match demand with clean energy, says Carroll.
Plans and ambition are there, she says, but need a push and greater attention from Government, industry and other players. This is especially the case with offshore wind, given the country’s colossal wind resources. With nuclear decline in Europe, Ireland is the logical option in filling that energy gap. Some highlight the unreliability and variability of wind, yet offshore with large turbines “it’s always windy”, Carroll points out.
The Ireland Strategic Investment Fund (ISIF), part of the National Treasury Management Agency, is investing €68 million in two international decarbonisation funds – part of its €1 billion, five-year climate action investment programme. The move indicates intent in seeking large, innovative companies based in Ireland deploying the kind of technology necessary to ensure decarbonisation.
The development body’s funds are managed by Energy Impact Partners (EIP), a New York-headquartered investment firm with more than $3 billion in assets, focused on investing in the energy transition by bringing together more than “60 forward-thinking industrials and climate innovators to help decarbonise the global economy”. It plans to invest in emerging Ireland-based decarbonisation and energy technology companies.
When it was announced, ISIF said the move aligned with its strategy of developing partnerships with best-in-class investors and networks and enhancing access to opportunities to position Ireland to deliver on its climate action plan.
“It shows how we can leverage our investment capability to build a deeper, stronger network with climate investors from all over the world – and ultimately attract more international capital to Ireland while supporting emerging Irish businesses in this space,” ISIF head of climate Paul Saunders said.
ISIF is investing in a growth fund focused on €10 million-€25 million growth equity ie “late-stage” investments and a frontier fund backing “revolutionary early-stage companies”.
EIP Europe venture partner Arthur Pierse says the Irish ecosystem is still young. ISIF’s strategy is clear “but it’s going to take time to seed, for the trees to sprout”.
“We’re going to look at every deal,” adds Pierce. “But the reality of the market right now is that the vast majority of companies are at the pre-seed to seed stage.”
In terms of growth stage – EIP’s main focus – there is probably only a handful of companies to evaluate every year, he notes; there are about 150 companies in the climate space. “VCs [venture capitalists] invest in one out of every 50 companies that they look at, something like that,” says Pierce. “So you just need more and more companies in Ireland.”
EIP’s mission is to make energy transition happen, while realising that it differs from, for example, making fintech happen, explains Nazo Moosa, managing partner of EIP Europe.
“Just creating an app won’t get you there. It’s a material industry and you need to have access to all the infrastructure in the ground,” she adds. “This is a lot of industrial processes and infrastructure that you need to move.”
EIP staged Climate Innovators Ireland this year, bringing together more than 100 people – a mix of ISIF, Government bodies and corporates such as the ESB, Bord na Móna and EirGrid. Entrepreneurs came and pitched, “15 minutes followed 15 minutes of Q&A”, says Moosa.
“And through that, interaction already begins. And we don’t even have to invest in these companies. We just have to believe that they are good at what they do. They’re interesting to the energy transition,” she adds.
Big corporates can be hard to move towards adopting innovation. EIP’s business development specialists try to be a bridge between the two, such as an entrepreneur and an energy utility.
Pierse says they will be looking at larger companies that could benefit from its growth fund and start-ups suitable for its frontier fund, including those with moon shot-type technologies.
In that regard, he cites companies “doing great things” such as XOCEAN and SuperNode. XOCEAN has developed unmanned vessels to map the seabed and deliver ocean data, which is critical in assessing potential offshore wind sites. SuperNode, owned by founder Eddie O’Connor and Norwegian group AKER Horizons, is developing new superconductors for use in grid systems. Irish company Ecocem, which has reduced emissions from cement by 30 per cent, have shown what’s possible, Pierse adds.
Often such initiatives involve experienced second-time-round entrepreneurs or local champions, with moonshots potentially needing a lot of capital before they become commercial. With the growth fund the technology is mature, while the frontier fund invests in tech risk.
To those who say relying on possible climate tech comes with too much uncertainty, Moosa says “of course, you need everything”, and Bill Gates probably said it best: Half the technology’s there and the other half is not; you still need to create.
And a lot of scaling is needed, she adds. Ireland has very ambitious 2030 decarbonisation targets but is not yet on the right trajectory.
Pierse believes the pathway in certain industries is quite clear. “There’s a pathway in energy in Ireland, based off what we’re seeing. Wind and solar are proven technologies.
“But then if you look at other industries – if you look at Ireland’s carbon emissions sector-by-sector, what’s the biggest contributor? Food and Ag – 40 per cent of our emissions. And there is absolutely no way that we can bring down the emissions from that sector without technology.”
But it also means realising you can’t take things for granted, even with solar and wind, Moosa says, highlighting supply-chain disruptions including cost inflation as evidenced by the UK’s recent wind auction which had “zero winners”.
“One of our investment themes is ‘back to basics’,” says Moosa. “We’ve got to take a look at the grid, we’ve got to take a look at all these things [and decide] ‘that bit is going – and now let’s build on top of it’.”
There is a need for transparency and consistency of policy, she stresses. The UK has essentially had single-party government for many years but has been unable to provide consistency, which means capital goes elsewhere.
Moosa says she is not close enough to Irish energy policy to say if such consistency exists here. “What I can say is the general infrastructure that exists in Ireland for entrepreneurship is really boosting things. And in the entities that you have, whether it’s Enterprise Ireland or ISIF etc, their focus is really helping.”
