IRELAND'S GREEN FIRMS:Green goods and services have never been more popular and Irish companies are acting fast to lead the way in environmentally friendly business initiatives
AMID THE gloom of global recession, one sector stands out as offering huge potential for expansion in the years ahead. As former US president Bill Clinton has suggested, it has the potential to be the driver of the next world economic revolution.
Globally, the environmental goods sector is growing strongly, with the market estimated to be heading towards $700 billion (€512 billion) by the end of 2009. A recent Forfás study estimated the Irish market to be worth €2.8 billion, with an additional £624 million (€698 million) market in Northern Ireland. The Irish figure, if anything, underestimates the size of the market here, as it does not include the significant value in developing environmental goods and services in the construction sector.
A number of sub-sectors with potential environmental goods and services opportunities have been identified from the Forfás research. The sub-sectors with the greatest potential in Ireland are renewable energies; efficient energy use and management (including eco-construction); waste management, recovery and recycling; water and wastewater treatment; and environmental consultancy and services.
According to Donal Buckley of Ibec, there are three aspects of the green market in Ireland. "The story is a mixture of foreign direct investment, the export of goods and services and the greening of the domestic economy."
Buckley says the sector, with a few notable exceptions, is generally characterised by Small and medium-sized firms (SMEs). He lists access to capital for expansion and the need for higher levels of R&D activity as the key issues for the sector at the moment. Nonetheless, he says some of the SMEs in this sector had developed promising businesses and were well-positioned to take advantage of the opportunities.
Bartley O'Connor of PricewaterhouseCooper's sustainability practice agrees. Foreign direct investment will be a key driver of the sector, he says. "We have many of the key ingredients in place already, including natural assets and infrastructure such as education facilities and relevant agencies. The challenge is to pull it all together," he adds.
There are huge opportunities for indigenous business if they move now, he says. "Firms need to act now, to get first- or early-mover advantage, which will provide an uplift in their brands with their customers. If they delay, they will not only lose this competitive advantage but they risk losing existing business if they no longer comply with customer or regulatory requirements in this area."
Trends in Ireland mirror those happening globally, with the greening of the corporate world driven by rising costs of energy and raw materials, tougher regulation and increased consumer awareness of environmental issues. However, companies need to be wary about tokenism and the backlash it can bring. Organisations perceived to have spent more resources on green PR and advertising than on actual environmental initiatives have been accused of "greenwashing".
The internet is increasingly being used to "out" cynical practices. One of the best-known sites in this respect is the Greenwashing Index (greenwashingindex.com) where users submit ads and rate them on a scale of one to five for green authenticity. One is considered "authentic" while a score of five is rated "bogus". Ford and EasyJet are among the companies singled out for criticism on the site.
In this article, we identify some of Ireland's green leaders, companies that have embraced green opportunities to the benefit of the environment and their incomes.
IRELAND'S GREEN LEADERS:GLEN DIMPLEX is best-known for its heating units. The 35-year-old firm has turnover of €1.5 billion, employs 8,500 people and has operations in 35 countries.
In recent years it has focused on renewables and this area now accounts for 10 per cent of its business. One of its key product lines is heat pumps, which it says can save over 70 per cent on domestic heating costs by capturing heating from the surrounding environment - air, ground or water.
Heat pumps are now widely used in new-build developments with underfloor heating, and they can be used with existing radiators and plumbing systems in renovation projects. Ground-source heat pumps can also be used for district heating solutions for apartment blocks or clusters of houses.
According to Peter Murphy, manager for new technologies and renewables at the company, Glen Dimplex now has 10 per cent of the European market for heat pumps with major markets including Germany, Switzerland and Austria. The firm has also developed major European markets in solar thermal power and heat recovery ventilation units, he says.
The market for these green systems is growing strongly, says Murphy, led by a combination of building regulations, energy-saving needs and a demand from consumers for more environmentally friendly solutions. "The market would be stronger again if the new-build construction sector had not gone into decline recently," he adds.
Electric heating systems offer the cleanest and most efficient way of meeting consumers' heating needs but they had a bad name because of the high carbon emissions from the fuels traditionally used for power generation, according to Murphy. The combination of newer, cleaner electricity generation with more energy-efficient domestic appliances offered a new way to optimise energy solutions. Specific examples, he says, include smart appliances that heat objects rather than heating air and sensor-based heaters that switch off when people leave the room.
In support of its development in these areas, Glen Dimplex has recently invested €2.5 million in the development of a global energy centre at its R&D facility in Dunleer, Co Louth.
Cementing Ireland's Green Credentials
CONSTRUCTION:THE CEMENT industry, with its massive CO2 emissions, is not noted for its environmentally friendly credentials. An Irish company, Ecocem, is helping change that reputation.
"The cement industry is committed to using a high-carbon production technology, and cement manufacture is the second largest industrial source of CO2 emissions in the world - over two billion tonnes of CO2 each year," says Ecocem's Conor O'Riain.
In 2000, Ecocem spotted an opportunity to use green technology in cement production and set out to pioneer this market in Europe.
Ecocem's green cement is made by processing a by-product of the steel industry, known as ground granulated blast furnace slag. According to O'Riain, this improves the technical performance of the concrete, giving it better strength and durability. Unlike ordinary cement, this form of cement has zero emissions of SO2 (acid rain) or NOX (low-level ozone), and does not damage the environment through quarrying, blasting or digging for limestone or shale, he says.
Ecocem has already invested €25 million in two production plants, one in Ireland and the other in Holland, and recently announced a joint venture with a French company ArcelorMittal, one of the world's largest steel producers.
Ecocem France, in which the Irish firm has a 70 per cent stake, is set to invest €27 million at Fos-sur-Mer in the south of France in a plant with capacity to produce 700,000 tonnes of "green" cement. The new plant will be located on an ArcelorMittal site and will supply the French and other Mediterranean markets.
"This development, coupled with our operations in the Irish and the Benelux markets, will give us the capacity to reduce CO2 emissions of the European cement industry by over a million tonnes per annum," says O'Riain.
The company has a subsidiary operation called Emission Zero that aims to help companies and individuals reduce their carbon footprint. Emissionzero.ie allows users to measure their carbon footprint, gives advice on how to reduce it and also allows users to neutralise unavoidable emissions through the purchase of carbon offsets.
Winds of Change
WIND POWER:AIRTRICITY IS one of Ireland's best-known green companies and has made serious money for its founder, Eddie O'Connor, and his fellow shareholders, including NTR, which last February sold the firm to Scottish and Southern Energy (SSE) in a deal worth €1.8 billion.
Airtricity has been a pioneer in wind energy since the mid-1990s, with onshore and offshore wind farms in Ireland, the UK, Europe and Asia. The company is currently developing two of the world's larger wind farms, a 504MW offshore wind farm, Greater Gabbard, off the Suffolk coast of England, and a 456MW onshore wind farm, Clyde which is in the Upper Clyde Valley in Scotland.
The combined Airtricity/SSE group has developed 40 wind farms across Europe and North America resulting in over 1,500MW of electricity, making it a leading wind-farm developer. The company says its goal is "to protect the future of our planet by delivering renewable energy with passion, innovation and integrity".
Airtricity currently has wind farms in operation and under construction throughout the island of Ireland and Scotland. The company is also developing wind-farm activity in three new markets - Portugal, Italy and Sweden.
The company's aim is to generate 4,600MW in UK and Ireland by 2013 and to get half a million customers over the next five years. It also plans to enter the gas market.
Small Irish firm makes big waves
WAVE ENERGY:A small Irish company, in business for fewer than 10 years, now has big ambitions to rule the international waves. Wavebob, established by physicist William Dick in 1999, is developing a patented wave energy convertor that harnesses the power of the ocean to produce clean, renewable energy.
Wavebob has developed a floating buoy device that automatically adjusts its response to suit the prevailing wave climate and so maximises the amount of useful power delivered to the electricity grid onshore. According to the company, each wavebob has the capacity to generate a megawatt of energy, enough to power 700 homes.
Wavebob says its mission is to be "the leading global wave-power technology company, providing a reliable, highly efficient, tunable and cost-effective means of producing useful power from ocean waves". It plans to work through a number of partners and to manufacture under licence, marketing to wave-farm developers worldwide.
Wavebob is certainly boxing above its weight. It has invested significantly in R&D and has collaborated with third-level institutions, Enterprise Ireland and with major international companies including leading energy companies Chevron and Swedish electricity generator, Vattenfall.
Now, the firm has signed a joint venture agreement with Vattenfall to build a 250MW wave farm off the west coast of Ireland and it has longer-term ambitions to develop sites globally. Wavebob's global ambitions were highlighted by its recent opening of a US office in Maryland.
More power to all electric vehicles
LITHIUM BATTERIES:'EUROPE IS now a hotbed of electrical vehicle development and we aim to capture a slice of that market," says Mark Donaghy of Valence, a US-owned company whose European operations are based in Mallusk, Co Antrim. Valence makes large-format lithium batteries that are used in cars, buses, trucks etc. Its goal is to replace the lead acid battery market with a lighter, smaller, more efficient, maintenance-free and environmentally friendly alternative.
Commercial vehicles have been among the early adopters of electric transport. Supermarkets are using these vehicles for home shopping deliveries, while firms such as TNT, DHL and UPS use them for courier services. Fully charged, electric vehicles are capable of driving up to 60 miles per day and can then be recharged overnight. Benefits include lower running costs than fossil fuels and zero emissions.
Toyota has been one of the key innovators in this area with its Prius model (above) but European carmakers are hard on its heels. The company has a major contract with Smith Electrical Vehicles, and in December Valence made a significant breakthrough when it signed an agreement with PVI, a French company that is designing new electric vehicles for Renault.
Valence manufactures complete solutions from cathode materials, cells, modules and custom trays and has a global team of application engineers who provide support and tailormade services. Its key focus has been on the transport sector but the product has a range of other applications, including one for utility companies such as wind-power generators.
