Reprinted with permission from Construct Ireland magazine.
A former Teachta DÃ¡la, Member of the European Parliament, and a veteran of the Irish Labour Party, Brendan Halligan is now one of the leading thinkers in Irish energy policy, serving as chairman of both SEAI and the Institute of International and European Affairs (IIEA), and as a director of Mainstream Renewable Power. Construct Ireland met him in his Baggot Street office to discuss the “appalling” state of the country’s building stock, and how Ireland can become a world leader in wind energy.
Q.The IIEA’s second annual retrofit conference is coming up in Dublin on 23 September. Why has a think tank taken such a big interest in retrofit?
Halligan: We set up a project group on climate change about five years ago, and it produced what was really the first serious report in Ireland on climate change. That spawned off a whole series of sub projects. One of the big issues was the built environment — particularly in Ireland you had an appalling legacy. It’s one of the worst examples of the inefficiency of the Irish system, and also of that very dangerous interrelationship between politics and business, which clearly had an influence on [building] standards. So we’ve got to clean up that act. We’ve got to do two things — address the [existing] built environment and make sure the new built environment is to the highest standards.
There was a desire to create a communality of view among the community that was addressing [the building stock]. It was very much at the back of our minds that we didn’t want people to feel isolated and intimidated by the scale of the problem. You bring them all together and suddenly it seems less of a problem. On the day [of the first IIEA retrofit conference last year] there was a huge buzz, an astonishing buzz about the place. I think people felt, pardon the pun, very energized.
The big problem for us in retrofit ultimately is to devise industrial solutions. We’ve got to go beyond cottage industry. If I come in and I do your house, that’s a cottage industry. If I come in and I do a whole estate [subdivision], that’s an industrial solution. The building industry was in no way set up to do this. Not only did it not have the skills in terms of the craftsmen, but more importantly it didn’t have the managerial skills.
The building industry was all designed for new build, and new build is very different to coming into somebody’s house and retrofitting. It means things like you dress differently, you speak differently, and you behave differently on site. And these are huge cultural problems that they hadn’t come to terms with. Even in terms of pricing, even in terms of scheduling, they certainly hadn’t come to terms with it. At one point I had something like 20 people working on my house. They weren’t being managed properly, and you were getting all sorts of mis-scheduling. I’ve been arguing with the senior management of the construction industry, and I’ve said basically you have to reinvent yourselves and relearn what it is you’re doing.
Q. Is there a genuine potential for retrofitting our building stock to contribute to our economic recovery?
Halligan: Absolutely; it’s a no-brainer. If you have the financial model in place [to fund retrofit], it’s extraordinarily labor-intensive. And if you get your supply chain right you’ve got this huge multiplier effect. At the moment the supply chain is not being organized properly and most of the building materials are being imported. So we’ve got to exploit this opportunity. There’s a big logistical component to the employment too. Very rapidly you’re moving towards the smart home. What’s the point of doing all this if you don’t begin to control the behavioral side of the house and control the demand at source? And how do you aggregate control of demand in such a way that it links with the grid itself? Then you’re into real time management, and that throws up huge possibilities. So we’re trying to encourage companies to think on these terms.
If you take it that we have 1.1 or 1.2 million habitable units, and all of that has to be retrofitted and we have to do it within 20 years, then you’re talking about a large number of man hours. In addition to which you’ve got the reduction in the import of hydrocarbons, which itself then feeds back into the economy as a stimulus.
Q. But do you think we’re moving fast enough with retrofit?
Halligan: I think we’re moving about as fast as human beings can move. This is a very big ship, and we’re turning it around 180 degrees. I wouldn’t be too demanding or impatient of the rate of change. Look, it’s happening, and I think by and large at just about the sort of [speed] you’d expect from intelligent people. A number of leaders have come out now, and they’re setting the example, and what happens is that other people are sucked in by way of example and then they begin to do it.
Q. The passive house standard is growing in popularity quite quickly. What role — if any — do you think it has to play in formal building regulations?
Halligan: It’s not an add-on, and it’s not an exception. It’s not an exemplary standard that others can aspire to, but not meet. It’s got to be — literally — the standard. All new build has got to be carbon neutral. And also in terms of existing build, we’ve got to retrofit to a standard of being energy neutral and ideally being energy positive.
Q. When SEAI launched its Better Energy grants for retrofit and renewable energy earlier this summer, some were withdrawn and many were reduced compared to last year’s schemes. Do you think that could potentially have a negative impact on the number of people taking up energy upgrades?
Halligan: I’m not so sure; I can’t answer that directly. Given where our society is, given the state of the public finances for which nobody in government right now is responsible, this sort of thing is inevitable. Unfortunately we’ve had to cut back right across the board on everything, and all sorts of advances that we had made there is now retreat. The responsibility here belongs a couple of yards down the road here to my left and a couple of yards down the road to my right — Anglo Irish Bank down here, and Bank of Ireland up there.
The very big ambitions that somebody like Eamon Ryan had for SEAI have had to be cut back. We’ve been subjected to the same cutbacks as everybody else in terms of staffing, and we’ve had to make agonising choices. To say that I’m mad about this is the understatement of the year, it’s just appalling. Think where we could be. Given the income per head level we have, the GDP per head, given the state finances at their best, we could have been doing exemplary things here. And now instead we’re going to the back of the class.
Q. You referred earlier to financial models for funding energy upgrade work on a large scale. Are there any in particular that you think will work?
Halligan: First of all the answer to the question — at very high level of abstraction — is yes. The unfortunate thing is as we sit here and we don’t actually have a model that would seem to work. One of the problems is cultural at the moment — people do not want to spend money if it means borrowing. But they will spend money out of their own savings. So we’ve done qualitative research, and what we know is that people will spend up to about â‚¬3,000 [$3,942], but that’s for a shallow refit. That will be out of their own savings. To get them to the next step — which is to step up to about ten grand [$13,140], where you are borrowing six or seven grand — is very difficult. The key variable here is the so-called payback. The price point seems to be that the package you’re offering should not cost more than ten grand, and the payback period should be five years or less. Why should it be ten grand and why should it be five years? These are the way people’s minds are working and there’s nothing we can do about it.
There is good will on the part of the banks and credit unions to bring this about. There is a high degree of good will on the part of the ESB and Bord GÃ¡is to produce a pay as you save scheme. The ESB and Bord GÃ¡is have huge brand credit. There is a tradition on the side of the ESB in supplying goods and services to their customers, and of having it integrated into the bill. The costumer doesn’t feel it’s that great an extra imposition and they just see it as part of their ESB bill anyway. There’s work to be done integrating this either into the utilities bill, or in creating an instrument that is an add-on to a mortgage, which then we need the mortgage industry to be on board with. We’re pretty convinced that the amount of thinking we’re doing on this here is as advanced as anywhere else. We would hope that we’re sort of within six months of a big serious proposition.
The GAA want to create jobs in the green economy, using the GAA network as the basis on which these jobs will be created. We’re running one pilot scheme with the GAA at the moment in Clonakilty. Effectively you have to put one or two people in on the ground that organize the community and sell the whole proposition. This is how we’re going to develop it, from the bottom up. You can begin to see on the ground that there’s a huge potential. â€¨
We’re looking as well at the new National Internship Scheme. We’re going to try and recruit young graduates through the scheme and put them in on the ground as the organizers and social mobilizers. This thing has got to be community driven, and people have got to feel that they’re all part of it and that nobody is pulling the wool over their eyes. And that’s why we have to very heavily invest in brands that have great credibility — the GAA, for example, ESB and Bord GÃ¡is are the three big brands that will make this work. Certainly not the banks.
Q. In April you said that Ireland was 30 years behind Denmark in developing wind energy. How do you think we’re doing when it comes to large scale renewables?
Halligan: I still think we have intellectual problems about this. You can do what you’re required to do under the various pieces of EU legislation, and be a good EU partner — not seen to be foot dragging, not being at the back of the pack. You’re in the middle. I think intellectually and culturally that’s more or less where we are.
But to be out at the front — to give leadership and to show what could be done, calls for a different mind-set, and we haven’t yet demonstrated that. Really what we need is what I call a Whitaker two. Ken Whitaker in 1958 totally astounded the Irish body politic with his gray paper, in which he said that we had to take this quantum leap from mediocrity and failure into leadership and success.
You do that by using what all economists would recognize as the foundation of economic development, which is your comparative advantage in something or other. In this case Whitaker said it happens to be grass, which means food. So we need to find the analogues of that, and I’ve said the analogue is wind — wind is the new grass. The scale of the potential is so great that people react with incredulity to it, and this is a problem. You’ve got to present something that’s credible — that’s stretching, but nonetheless is credible and practical.
With offshore wind you make three heroic assumptions — one is that there will be an internal [European] market for electricity, the second is that the existing member states will not be able to supply the demand from their own resources, and the third is that the technology will exist for [Ireland] to generate offshore, and supply the deficit.
They’re not heroic assumptions anymore, because all three are happening. We have the internal electricity market being constructed as part of European Council decisions. We have also got the floating turbine technology coming down the shoot now at a much faster pace than anybody ever thought possible. The one that I like the most is Hywind, which is the Statoil and Siemens technology, which is so simple that it beggars belief. You can certainly expect that this will be commercially viable inside five years if there’s a push put behind it.
We have the generation, we have the distribution, we’ve got high voltage direct current and we have the internal market being created.
Q. Do you think Europe still needs nuclear power?
Halligan: Did Europe ever need nuclear power? I can see why the French went for nuclear power when they went for nuclear power. It was thinking of itself as a detached world power that would continue to play the role it had in the late 19th century and the early part of the 20th century. I think nuclear has always been a problem in two respects. First of all the technology itself. I think all engineers ultimately accept the power of Murphy’s Law, that if it can go wrong it will go wrong. You can’t even gamble with nuclear in terms of a one in a million possibility.
What’s worse with Fukushima is that we saw the engineers build the plant in exactly the wrong place, and they did not build in in the physical safeguards that would have prevented an even bigger catastrophe from happening. It leads you to the conclusion, no matter how brutal it may appear to be, which is that you can’t trust the engineers to take the right engineering decisions. Really what you can’t trust are human beings to take the right decisions.
The other issue is the waste, and there’s huge denial about the problem. You’re bequeathing to subsequent generations a problem which you have not solved yourself, and which can do absolutely enormous damage to the whole ecosphere. What are you going to do, bury the stuff in the sea as the Japanese wanted to do? Shoot it out into outer space? Bury it deep in salt mines or whatever? All of this is crap. Nuclear, I think, has been – pardon the dramatic expression – a Faustian pact. The thing about Faust is he comes back and says, ‘Give me your soul; your time is up.’ I think Fukushima has been a great wake-up call.
Lenny Antonelli is the deputy editor of Construct Ireland.