NTR’s Chief Executive Officer, Dr. Rosheen McGuckian, highlights how Europe’s renewables market got off the ground and offers her thoughts on where it’s going:
The renewables industry has made tremendous strides since over the past decade, particularly in Europe where a robust market has developed for certain energy sources, such as wind and solar. The World Economic Forum, late last year, published data demonstrating that the cost of generating electricity from renewable sources has fallen to levels that are either at par with or below the cost of coal and natural gas. For many, this is believed to be the tipping point that will drive mainstream adoption of renewable energy. NTR Plc Chief Executive Officer, Dr. Rosheen McGuckian, in speaking with SuperReturn ahead of her panel, outlines the catalysts behind the development of the market and identifies where she sees the most compelling opportunities going forward. The following is an edited and condensed interview in which she shares her thoughts on the market and available technologies.
This past April, Germany announced that 85% of the country's electricity is now being produced by wind, solar, biomass and hydroelectric power – demonstrating how far renewables have come. Can you talk a bit from the European perspective about the catalysts driving the adoption of renewable energy?
There are a number of factors, but at the highest level, there has been a growing recognition across the political sphere that climate change is occurring and it’s starting to accelerate. Perhaps the lowest hanging fruit for policy makers to address greenhouse emissions is through renewable energy. That was one of the original objectives behind the European Union renewable energy directive, which established targets and goals for renewable consumption.
For instance, the EU had set a binding target of 20% for energy consumption from renewable sources by 2020. The 2030 goal, meanwhile, is aiming for a 27% share of renewable energy consumption. These kind of targets, helped motivate countries to act. At the same time, as the market has developed and technology costs have come down, there is also growing recognition that the economics of generating power through renewables just makes sense.
What are some of the most important takeaways and learnings from those countries, such as Germany, that have been so successful transitioning to a renewables-driven energy infrastructure?
I think the most important factor is that governments make it both attractive and feasible for investors. It’s not only about attracting capital through, for example, the subsidy regimes but it’s about providing the right environment where these investments can actually get built and thrive and help build a market, one that can sustain itself. The EU, for instance, started with regulated feed-in tariffs and has since transitioned to capacity-limited auctions. The most successful countries put the right enablers in place, from investments in grid networks and the right planning structures to community-involvement initiatives. But the key is to really commit to it.
Germany, for instance, made a decision to retire their coal plants and get out of nuclear energy. They realized that had to come up with a viable replacement. France is going through the same transition as we speak. They have an aging infrastructure built around nuclear energy, so they’re focused on the cleanest and most cost-effective way to transition that fleet. From an economic perspective, too, these initiatives create a number of new jobs – everything from manufacturing to installation. So there are a lot of different pieces that governments have to think about and help cultivate.
You’ve alluded to some of the secular trends that should benefit investors in the space, but can you flesh those out a bit? And what are some of the more distinct opportunities that are available for investors?
Well if you just consider the 2030 targets that the European Union put in place, the EU estimates that in order to reach those goals it will require north of €1 trillion of capital. That’s an undeniable investment case.
Within the different countries, though, each are approaching the adoption of renewables differently depending on the resources available. For instance, nations on the coast are using offshore wind to meet their targets. France, on the other hand, is emphasizing the use of onshore wind and solar. In the hotter climates, such as Italy, the focus had been based more around solar.
At NTR, we focus largely on wind and solar at present, because these technologies are the most competitive from a cost comparison.
I realize NTR is focused on sustainable infrastructure, and not early-stage ventures, but what are some of the more interesting technologies that could complement the alternatives that are commercially viable today?
There are quite a few interesting technologies that are at the pre-commercial stage right now. One thing that will fundamentally change the market is energy storage. All of the technologies that we’ve discussed are derived from intermittent energy sources. There are no guarantees when the wind blows or sun shines, so you need the ability to store the energy and then use it during peak demand. I think in the years ahead, as technology develops, we’ll continue to see firming of the grid as being a key requirement and energy storage will be a key enabler that fundamentally shifts the market.
I think you’ll also see technology that supports distributed generation start to grow too. By this I mean roof top solar, electric vehicles and other decentralized sources of power designed for domestic use. Ultimately, this will allow people to put power that they don’t use back into the grid. You’ll also start to see autonomous microgrids that are disconnected from larger centralized grids become more common, probably more in emerging markets than in Europe.
NTR acquires, constructs and manages sustainable infrastructure assets on behalf its investors. To date, NTR has constructed and operated over 1.9GW of wind and developed 600MW of solar.
Rosheen was appointed CEO of NTR in April 2013. Between 2008 and 2013, Rosheen held a number of leadership positions across the group in wind and solar development, energy storage and waste management. Under Rosheen’s stewardship, NTR successfully raised its first wind investment fund of €250 million in 2015 and is currently raising its second European renewables income fund. Prior to joining NTR plc, Rosheen was CEO of GE Money Ireland, the consumer finance division of General Electric. Prior to joining GE, Rosheen led the business transformation initiative for Irish utility ESB Power Generation. Rosheen is a director of the Strategic Banking Corporation of Ireland and the Social Innovation Fund of Ireland. She has recently been voted as one of the Top 25 in the Global Women’s Power list.
