Wave power again

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Breda O’Brien argues that it is high time to gamble on wave power in today’s Irish Times.

She hails Danish wind power as an example. The Danes heavily invested in wind power for two decades before benefiting handsomely from German subsidies. The Danes were alone for a long time, while Irish wave power lags behind Scotland, the USA, and Portugal. And other renewables are far ahead of wave power. It is a gamble indeed.

O’Brien argues that wave power will bring a substantial amount of jobs in construction and manufacturing. That may be. Wave power devices have heavy and simple components that are best built close to the shore off which they are deployed. Wave power will be first commercialized in Ireland, if anywhere, because our waves are the best in the world. Those construction jobs will come to Ireland regardless of who invented the technology.

O’Brien picks a winner. That is best left to the market. We should prepare ourselves for a range of possible futures rather than pretend that we can accurately predict technological change and develop skills  to match our preferred forecast.

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98 Responses to “Wave power again”

  1. 2Pack Says:

    What prattle, she should stick to lifestyle columns.

    Wave is not ready for prime time. Any technology dropped into the atlantic must be ready for prime time otherwise it will be pounded to pieces in no time.

    While there is some promise…eg this device http://www.oceanenergy.ie/ …. we are some distance away from getting one of these to full size and even then we are 3 years away from it surviving a few atlantic storm seasons substantially intact and still generating.

    Once (if) it demonstrably scales and demonstrably survives at scale the market will take great interest I can assure you.

    By all means continue to aid research as we have done in the past decade but deployment on any meaningful scale will not occur in this decade. Post 2020 would be the earliest.

  2. Brian O' Hanlon Says:

    Richard says:

    O’Brien picks a winner. That is best left to the market. We should prepare ourselves for a range of possible futures rather than pretend that we can accurately predict technological change and develop skills to match our preferred forecast.

    How very true. BOH.

    http://www.stephenkinsella.net/2010/04/07/in-praise-of-anarchy-in-teaching-and-research/

  3. rubensni Says:

    Has the catholic church given its blessing to wave power then?

  4. bg Says:

    O’Brien argues that “we” should gamble billions on wave power. The main reason is the sure fact that energy prices are about to rocket.

    Even by Irish journalistic standards, O’Brien is pumping a rather stupid trade. If it is so certain that oil prices will outperform everything else, why should taxpayers take any risky bets? Just load up on oil futures instead. This generates free money apparently.

  5. Ger Says:

    Your Country Your Call is littered with wave energy proposals.

    I’m all in favour of modest supports -like temporary tax breaks to help get this technology off the ground. But pumping money wholesale into a project which may or may not be an effective power source, is plain silly.

    Incidentally, has anyone been scanning Your Country Your Call? There are some genuinely good ideas if you look hard enough (90% of it is fairytales).

  6. Holbrook Fields Says:

    @Richard

    You mention that “We should prepare ourselves for a range of possible futures”

    Do you have any guidance on what form this preparation should take?

  7. Brian O' Hanlon Says:

    @ Holbrook Fields, Richard,

    I have attended more than one demo by the major Irish wave energy company, and I can tell you, they are smart boys and girls. They know what they are about. However, my observation is, the value of that particular company is not simply their wave energy project (which is wonderful), but actually the process by which they developed it from sketch design stage up to half scale prototype, to where they are today, at pre-production stages. I think one of their chief engineers spent years with diamond mining companies, in charge of mega expensive equipment, which underwent collosal stresses in its day to day work, and every weak link was tested to its limits and beyond. Such is the environment any equipment will be exposed to on our Atlantic coast, and beyond as the company exports it design abroad. However, as I said, as specific as the company is to wave energy concept development – I would argue the same company could apply themselves to a whole number of other challenges. Because they understand the design process and its rigours so well, I would have exceptional confidence in them. I believe this is the way for Ireland to go, to have a ‘gamble’ on becoming a hub of design development, rather than our little tiny nation trying to load up on the risk of deploying any particular solution. I might diverge from the mainstream green party thinking in this regard, I am not sure. But the point is, the wave energy solution requires an economic model, a management model, a marketing model in addition to the engineering and idea protection model, where it has had success to date. I am sure of Ireland’s potential in the the latter given its success to date. But as for trusting ‘Ireland Inc.’ to deliver right across the board, on all expertise required for roll out I am skeptical at best. If we do anything in Ireland, we need to develop a school for innovation, which in turn will enable a lot more cross disciplinary conversation going forward. The school for innovation would cost us a lot less than expensive, once off bets and gambles. We gambled on property in the past big time, and how intelligent does that look now? ? ? BOH.

    http://designcomment.blogspot.com/2010/03/school-for-innovators.html

  8. Brian O' Hanlon Says:

    Quick blog entry, based on the above. BOH.

    http://designcomment.blogspot.com/2010/04/take-to-waves.html

  9. Michael Hennigan - Finfacts Says:

    Ireland can spend big sums on wave technology because nobody else has twigged to it yet!

    Remember Spirit of Ireland?

    Speaking to the Sunday Independent, chairman Graham O’Donnell said “we hope the project will help build a renewal of national confidence.”

    The newspaper reported, that at a meeting with Minister for Finance Brian Lenihan, it was believed a visibly enthusiastic Lenihan called the proposal “the Ardnacrusha of our time.” One impressed source said of the meeting that “Lenihan was amazing. He immediately grasped the minutiae of the proposal and started asking us complex engineering questions.” It was reported that the Finance Minister immediately contacted the Taoiseach Brian Cowen about the plan.

    UCD professor Ray Kinsella enthused in the Irish Times, in terms evoking De Valera: “It is, however, the proposed governance of the Spirit of Ireland initiative which truly sets it apart. The hubris that brought Ireland to its knees in the latter stages of the Celtic Tiger was characterised by societal fragmentation, driven by greed. We lost the run of ourselves and lost sight of our neighbour.
    Spirit of Ireland is the complete antithesis of this mindset. It proposes that the wealth – in the form of energy, and all of the other activities that will be animated by this energy – be held in trusteeship for the people of Ireland. The proposed legal framework envisages that the gifts of our natural resources are the legacy of this, and future, generations, and must remain so. The fruits of this initiative will not be privatised, or parcelled out for private or institutional interests. This far-sighted vision throws into sharp relief the extent to which our natural resources have, in the past, been sold out or sold cheaply.

    It’s like proposing putting mandarin on the curriculum.

    The problem about all these armchair proposals, is that there is no serous reality check; why bother doing necessary research to support a proposal?

    After all, the Innovation Taskforce produced a prospectus based on emulating the success of Silicon Valley, with its market of over 300 million people. We could created tens of thousands of jobs, funded from tax funds, and no detail provided on the market. In IT for example, the biggest customer is teh public sector.

  10. Hugh Sheehy Says:

    I wouldn’t worry so much if it didn’t appear to me as if she’s simply paraphrasing Wikipedia when mentioning Denmark and wind. Of course, I could be wrong, but if I’m not then the additional worry is that when I check the sources that WP has for the relevant statements, it points me at a 2004 article on a website for a Scandinavian shopping and magazine site.

    Now, she may well have read all the additional material that’s easily available (e.g. http://www.e-pages.dk/windpower/15/) but I have a horrible feeling that if she had she would have used some of the lovely headline data that’s in those additional links…like the level of employment in the Danish wind industry, the export value, etc.

    Again, maybe me just being too cynical. If so, then apologies for my suspicions. Either way, the success (with 40 years of hindsight) of Denmark’s wind gamble is not necessarily the best basis on which to make a completely different gamble.

  11. Brian O' Hanlon Says:

    @ Michael Hennigan,

    Yeah, I think your comments about the 300 million strong market in the US, vis-a-vis Silicon Valley, pretty much nails it. I thought of your comment recently, when I saw Bebo getting wound up, due to increasing competition in that space of internet enterprise. I also thought of your comment when listening to Michael Spence, or Paul Romer, one of the economists Stephen Kinsella linked to recently. That the US car industry got too seduced by its lucratrive domestic market. The opposite effect of it being a positive effect, the large domestic market had a negative impact on their car industry.

    You have to wonder about this new electric car initiative based on the fact our market is small here in Ireland. Will that be an advantage or a disadvantage?

    The points against Spirit of Ireland would include its scale, which might dominate renewable energy policy for a long time, in much the same way, it is argued the Poolbeg incinerator would affect markets in waste in Dublin and nationwide. That is the problem with the Spirit of Ireland view, the Ardnacrusha approach. Bearing in mind, the 3-5 MW wind turbines we already install on hillsides around Ireland already represent the more ‘hummer’ approach to on shore wind energy generation. Big is beautiful in eyes of many in wind industry.

    The points in favour of spirit of Ireland would be the security it would ensure to companies locating in Ireland, who do not only require ‘power’, they require power of a very, very high quality and robustness of supply. That we could deliver with Spirit of Ireland. The other major option being nuclear, but then, as SOI argue you are handing things back to a multi national such as Covanta in the waste industry, to compare the two again. SOI could be tried out with native, simple construction resources. There is no new technology in SOI, which we cannot handle ourselves.

    The Ecological Foundation has come up with a middle ground which is very interesting too. A grouping of much smaller SOI type of storage solutions, which would enable the renewable energy policy not be dictated solely by one ‘large’ element in the middle. On the other hand, SOI would argue, that the entire green innovation effort in Ireland could petter out to zero, if there isn’t something large and dynamic at the centre of it. I tend to see their point of view there. The green economy in Ireland is like the cooperative movement decades ago – full of little private enterprises, none of whom have the scale to drive the effort nationally. BOH.

  12. Brian O' Hanlon Says:

    @ All,

    Anyone who has access to Peter Schewe’s book, The Grid or wants to learn more, should check out his chapter on the big blackout that took out New York cities and much of the eastern region in the 1960s. One big monster of a power station, Big Ally, owned by Con Ed actually burned out its bearings, because the pump supplying the lubricant was without power (an expensive maintainence that turned out to be). But much more crucially, many of the products in chemical factories and so on in the eastern region had to dump months worth of work, which suddenly ground to a halt as processes shut down due to power outage. I mean, think of the silicon foundries and pharma plants, food plants etc we operate in Ireland, and you begin to get the picture. The black out in the 1960s was down to a single sub station somewhere in Buffalo or somewhere, which clapped out. I forget the detailed, but Peter Schewe’s story in his book is worth a read. BOH.

  13. Brian O' Hanlon Says:

    Professor David MacKay of Cambridge simply asks a much more mundane question than do Spirit of Ireland. MacKay asks, without more wind turbines or nuclear stations, what do people say, when they turn on the light switch some day and nothing happens. BOH.

    http://www.youtube.com/watch?v=oRQB2YXUxvY

  14. Richard Tol Says:

    @Holbrook
    Brian O’H got it right. Skills matter. Instead of promoting any particular technology, the government should promote excellence. Not excellence-in-the-flavour-of-the-month, not excellence-as-in-better-than-that-bloke-in-Cork, but excellence-as-in-second-to-none.

    @Hugh
    There are three elements to the Danish success. They started with a track record in mechanical engineering. They stayed the course for two decades. They hit gold when the Greens got into the German government and started showering them with subsidies.

  15. Brian O' Hanlon Says:

    @ Richard,

    Excellence in ‘flavour of the month’ and excellence in ‘better than that bloke’, are unfortunately the two lessons most impressed up undergraduates in colleges at the moment. It is a collosal waste of resources. I don’t think the Green party, or any party is wise to that fact yet. It is the same with the announcement by Ciaran Cuffe about what to do with NAMA ghost estates. What we will see is a couple of well in there design consultants who become the central captain Bilco’s of some solution. Rather than a more cross disciplinary, many voices approach.

    I had to go through that painful learning process myself as an architectural student. We were basically being trained at third level to do battle against each other. It is the faith of the designer/architect/ideas person to have to compete for a pathetically small pie in Ireland in terms of public or private commissions. Excellence is reduced down to ‘flavour of the month’ and ‘better than that bloke’.

    That is all there is, within the Irish culture at the present. My investigations into design and innovation culture, led me to study cases all over the world, in all different kinds of industries and ways to cooperate efficiently. If we could get the more advanced, systems engineering process flow to work across many disciplines, including existing design disciplines, then Ireland Inc. could begin to see greater returns on its investment in training young people in specialities to a high level.

    Hence, the curriculum I suggested in my blog entry, School for Innovation, whereby we could take the edge off of the tendency of third level educators in Ireland, to produce inward looking graduates, who know how to compete with each other as consultants or whatever, in the real world – and train them instead to become cooperative, across disciplinary boundaries. Where the real prices are. Being part of the narrow architectural design culture myself in Ireland for 15, going 20 years now, I know it is just a zero sum game.

    @ Michael Hennigan,

    Stephen Kinsella linked to this Joe Stiglitz lecture, I thought you might find it interesting. It is the same thing really, as deployment of human resource capital, I talked about above. The market, as it stands is woefully inefficient in its allocation of those resources. BOH.

    http://www.stephenkinsella.net/2010/04/17/stiglitz-on-whats-wrong-with-economics/

  16. Brian O' Hanlon Says:

    Garrett Fitzgerald was intelligent enough to understand most everything I have said, about working across disciplines, back as early as 1973, when he was minister for Foreign Affairs. BOH.

    When I became minister for foreign affairs in 1973, I felt it necessary, because of the collective responsibility of ministers for cabinet decisions, to study the whole range of cabinet memorandums in advance of each meeting, with a view to being able to contribute in a reasonably informed way.

    Civil servants in a minister’s department cannot be expected to provide an input on matters that lie outside the scope of their department’s responsibilities. So when, after a while, I found that, due to my frequent absences, I was falling behind in this part of my ministerial duties, I appointed an economist, Brendan Dowling, to study cabinet documentation to ensure I would be fully briefed.

    http://www.irishtimes.com/newspaper/opinion/2010/0417/1224268538559.html

  17. Brian Woods Says:

    @HF: ‘You mention that “We should prepare ourselves for a range of possible futures” Do you have any guidance on what form this preparation should take?’

    Yep! Farming would be good! That is, ye olde style – not the modern mechanized version (needs too much FF). Would absorb a lot of the ‘temporary’ un-employed. Give them some new, and much needed, skills. They ARE getting a State ‘salary’ – so they should work for the State: no? Well, perhaps not.

    Forget about wavepower. Nice idea, but would consume vast amounts of energy to build out, maintain and replace – (assuming its viable). I suppose you could drive your 30 tonne mobile crane to the site using electricity. Now that would be a sight to behold!

    Build a rail network around the coast of the island instead. You won’t have to worry about those pesky Atlantic breakers!

    I believe a lot of persons have yet to begin to engage in a meaningful intellectual manner with our the real energy predicament.

    B Peter

  18. Sporthog Says:

    @ BP Woods,

    Just on a aside note, you keep plugging “the Farm” in lots of your posts.
    I’m just curious what type of farming are you talking about and what size of farm? Dairy, tillage, dry cattle, forestry? No, I am not having a go at you. I believe farming to be a noble profession which should be valued and cherished. But I know of one farmer who has 50 acres dairy and no debts in the south east. But he is closing up shop, the farm is for sale because there is no money in it for him and his wife to live on. For himself and his wife they cannot break even.

  19. Holbrook Fields Says:

    @All

    I came across this article (hope the hyperlink works) article about Taiwan’s efforts to harness the ocean’s energy.

    It seems to me that there is a lot of interest in wave energy all around the world, and if we have the best waves in the world then we need to ensure we maximize whatever benefit we can from that resource. I haven’t read through all the comments above (yet), but isn’t the idea of centres of innovation a recipe for some public sector stifler of innovation? Would it better to subsidise private sector companies? I’m swimming in the dark about this topic as I know so little about it. Ocean Wave Energy Company out of Rhode Island, Pelamis Wave Power from Scotland, Wave Energy Ireland, Wave Bob, Carnegie Wave Energy Limited in Australia – these are all wave power companies. Will any of them make the big time? Are we trying to create an Irish version of the Danish wind company Vestas who have had some success with selling wind turbines? I find this a very interesting topic.

  20. Sarah Says:

    The market is discussed here as some sort of impartial mechanism that has the ability to choose the best renewable technology that suits our long-term interests, rather than the partial, short-term instrument that it really is.

    When was the last surge in innovation of renewable technologies? In the 1970s, during the oil crisis, when government pumped money into EVs, solar panels, etc. Why is wind so far ahead of wave, tidal etc? Because that’s where the money has been invested.

    To leave these things purely up the market is a common but quite illogical theme throughout most of Richard Tol’s posts. Partly for the reason I discuss above but also because quite frankly we don’t have any time to waste.

  21. Joseph Says:

    @Hugh – surely you are not suggesting that there are some journalists out there who might simply read Wiki as a source for their stories ;-)

    @All

    My take on this is that we need to be thinking ‘secure’ energy.

    If that’s wave then great if we happen to have the best waves in the world but we still have to consistently, day in, day out, turn them into energy.

    I say ‘secure’ because one day, the sh1t will hit the fan and if you can offer Globalcorp inc. a secure source of energy they will bite the hand off you….. assuming that they aren’t all running private armies by then and don’t just invade and take it anyway!

    God. Could you imagine Newscorp death squads or the Microsoft light infantry?

    I’ve been nominated for a Smedia award – ceremony is this Wednesday in the Mansion House. You would never guess from what’s written above that it’s in the ‘Film Script of the Year’ category. Wish me luck.

  22. Brian O' Hanlon Says:

    @ Sporthog,

    But I know of one farmer who has 50 acres dairy and no debts in the south east. But he is closing up shop, the farm is for sale because there is no money in it for him and his wife to live on. For himself and his wife they cannot break even.

    I grew up myself from childhood working and living all the time in the middle of such a rural society. Here are things I have observed down through the years. What kept all of those guys going for years, was a sense, I won’t be seen to be giving up – at all costs. Many men and women spent their entire lives, or the best part, simply living up to that rule. The thing that changed a lot in farming is that for food production, there are quite a lot of upgrades which need to be carried out. I.e. Capital has to be injected in order to get something out, and stay in business. It is simply not feasible anymore to pour good capital into such ventures. I honestly believe in the 1970s in agriculture, a lot of good capital was poured into the small farming units, more for emotive reasons than sound financial reasons. That capital investment has not returned dividend despite several decades being allowed to mature. Include in that also, the human capital of 40 odd years invested by many men/women, needed to have the farming unit to pass on to the next generation. The next generation as you rightly pointed out, has to decided whether it is logical and sensible to quit now, while things are at even scores, or wade further into problems in pursuit of hope. I look at the rural landscape today where I grew up, and I realise there was absolutely no economy of scale forseen in the investment pumped into agriculture by the 1970 or 80s generation. For a while, many small producers made a valient effort to keep each individual facility updated to newer EU and global standards for food production. Each individual small unit represents a huge amount of sunk costs, keeping records and maintaining facilities and waste disposal systems over several decades. A huge amount of human and financial capital. No, it was misguided. But as they say, hindsight is wonderful. The other side of the coin is, partnerships or shareholder type of arrangements do offer greater economies of scale, by centralising the facilities for several 50 acre holdings into one facility, which is updated to EU standards. It would represent a much better use of human labour also, as the shareholders could appoint a farm manager, who with modern technology and so on, could run the operation efficiently. We will see a lot of this, but it will not be easy either. It is doubtful if long time neighbours will un-learn a century’s worth of competitive instincts, to learn from scratch the cooperative instincts required. But lets hope anyhow. BOH.

  23. Brian O' Hanlon Says:

    @ Holbrook Fields,

    Would it better to subsidise private sector companies?

    Stephen Kinsella linked to a some podcast talks by Russell Roberts, Paul Romer and Michael Spence at his blog. In one of the podcasts (I forget which one exactly), the contributor spoke in favour of subsidies for graduate level, basic education. That is all that government should attempt to do. Once government begins to inject funding into post graduate, and incubation for specific projects or technologies things suddenly begin to revolve a lot around ‘lobby groups’. I.e. Whichever technology or project has the biggest lobby wins the day. The contributor in the podcast cited the example of Cuba, which was under central planning control for a long time. It had a very ambitious education program for its people, and afterwards set the graduates to work doing research and development into specific areas. Decades later and there is nothing to show for it. It turned out, the government was focussing peoples’ attention in areas which had no windfall, no viability. That is why I went to such lengths above to outline a quick history of farming and agriculture in Ireland, as I see it, having grown up in that environment myself. You can understand that in Ireland for much of the 20th century, farming was a huge lobby group. Much of the urban population in Ireland, which never received the same underpinning from the state have a right to be critical today. Not because government subsidy of agriculture in Ireland was unfair – but because government subsidy of agriculture in Ireland was unfair and has not matured as an investment for the state, as any large investment like that should. So that brings me back to low level undergraduate assistance from the state as the safest intervention, in terms of value for the investment. The sons and daughters of farmers benefitted a lot more from that. Fintan O’Toole spoke at a TASC conference a while ago, his 20 min. talk is available on Vimeo web site. We have witnessed two big ‘gambles’ in Ireland, and Morgan Kelly has identified them both as producing economically corrosive bubbles. The agricultural land boom of the 1970s and property boom of 2000s. I am less worried about wasting state money in form of subsidies for more gambles, and more worried about the overall imbalancing affect that large state interventions have on small economies such as Ireland. John Fitzgerald also wrote an good piece on October 4th 2009 for the Sunday Tribune entitled, Shock therapy needed sooner rather than later to spur recovery. BOH.

    http://www.stephenkinsella.net/2010/03/25/fantastic-podcast-on-trade/

  24. Brian O' Hanlon Says:

    @ Sarah,

    When was the last surge in innovation of renewable technologies? In the 1970s, during the oil crisis, when government pumped money into EVs, solar panels, etc. Why is wind so far ahead of wave, tidal etc? Because that’s where the money has been invested.

    Your point is well made, thanks. I believe, as I have outlined above at length (sorry folks for making too many words per minute) above, the subsidies in the 1970s in Ireland were given. But they were aimed at specific projects and the danger was they became subject to lobbying by the largest, most powerful interest, the population of small farmers in Ireland who had a society in mind, they wanted to create and so that is the way they went about their business. That is the danger with subsidisation of any kind, for projects or technologies by the government. At the moment, the green movement is trying to act and talk big, the same way as the farmers in Ireland in the 1970s behaved. Has the investment pumped in, during the 1970s and afterwards paid off?

    Your comment about the oil crisis and the 1970s is interesting nonetheless, and very useful. What springs to my mind automatically, is when the Germans captured Wernher von Braun and other scientists after the second world war and transferred them to the United States to work. But as von Braun found out, it was like being put into a deep freeze. The United States didn’t particularly want to pursue rocketry technology in the immediate post war period. In fact, the US didn’t want von Braun to do anything and he spent most of his time travelling around lonely outposts in the US, trying to sell his ideas. Apparently he used to swing a big ball at the end of a string, in front of audiences to try and explain orbits, planets etc with a view to doing space travel. It wasn’t until the Russians launched Sputnik, that the political environment changed to von Braun’s advantage again. Paul Dickson’s novel Sputnik, the shock of the century is an excellent reference. BOH.

    http://www.sputnikbook.net/home.php

  25. Alan Says:

    I work with a chap witha PhD in wave energy control. He says the power output from these wave devices is very “dirty” and no one really knows yet how they will tie in to the grid. They are not synchronous machines in the way coal, gas, or nuclear plants are. It could be 10-15 years before this problem is solved. The technology is wayyy behind where wind / solar / nuclear are now.

  26. Sporthog Says:

    @ Brian O’Hanlon,

    Many thanks for your detailed explanation. I think you have hit the nail on the head. Economies of scale.

    As you correctly pointed out it is hard for farmer to give up his holding as he / she would most likely have seen their father ploughing the land with the horse and plough when they were growing up. There is a sense of not leaving the sacrifices / efforts of your parents be in vain. An emotive issue. Not too sure what will happen to Irish farming. Consolidation I suppose, but only if the economics stack up.

    But even if this is the right way forward, I can’t help feeling “a bit moved” by it all. The end of a Era as they say.

  27. AntoinB Says:

    Wave Power is great when you don’t have access to onshore wind. When you do have access to onshore wind then the extra cost of wave power means that it is uneconomic. Yes, it does have greater predictability than wind and a better load factor, but the cost are too great to compete (in Ireland anyway).

    IN other countries such as the UK where you need about 50 permits to build a wind farm and the local parish council can scupper your application, wave power may be their only option. However jumping into wave power on the back of substantial state subsidies will mean that there will be a large increase in electricity prices.

  28. Brian O' Hanlon Says:

    @ Joseph,

    Well done! Check out Patrick Swayze in the 1984 movie, Red Dawn, some time. It is really 1980s kitsch, but not too bad on a conceptual level. You can search for it on IMDB dot com. BOH.

    http://www.oxygen.ie/smedias_shortlist_film_script_of_the_year.PAGE3166.html

  29. Brian O' Hanlon Says:

    @ Sporthog,

    Check out Fintan O’Toole’s 20 min talk at Vimeo. France, Germany, the UK and most European countries went through the modernist transformation after the second world war. Ireland didn’t, we tried to go from pre-modern to post modern, while skipping the bit in between. You will notice that France went through the urbanisation thing in the 1950s. It stopped being a rural population and became an urban one. That was the era of ‘champagne’ rugby too, and some say it was part of the emotive transformation to the society, as they looked back for a connection to their rural beginnings. BOH.

    http://vimeo.com/7147574

  30. Sarah Says:

    @Brian O’Hanlon:
    Show me a technology that has not in some way benefited from government support or subsidies. Look at the very internet and web that you are using – courtesy of DARP and CERN – government projects. Look at the incredible subsidies that fossil fuels enjoy today (no tax on airplane fuel, Corrib, etc) and that they enjoyed in the past.

    Are you opposed to government intervention of any kind, as you suggest by rejecting “subsidisation of any kind, for projects or technologies by the government”? Why on earth should we leave something as important and urgent as the replacement of fossil fuels with sustainable energy systems solely up to the market?? Please help me understand this position because for the life of me I cannot.

  31. Hugh Sheehy Says:

    @Sarah, when you mention that you believe that Richard Tol has often been “illogical” …

    The market is indeed highly imperfect at predicting prices or technology success into the distant future.

    However government has never proven any better and has often been worse.

    Both governments and private investors have invested in new business ventures that turned out to be long term disasters for the investors.

    Predicting the future simply isn’t easy. (see Yogi Berra’s quote)

    In the current context, many of the big imponderable energy drivers are actually the acts of governments, and the rest are probably technology unknowns. Will China keep using coal or go for other sources? Which way will Russia go in the next 10-20 years? How fast will the nuclear rollout be? Can solar efficiencies grow another x%? Can carbon sequestration be done on huge scales, somehow? The answer to these questions is unavailable to markets and to governments.

    Being what we are, a small island, the acts of our own government can harm or benefit our national economy but are unlikely to harm or benefit the planet or the global economy in any meaningful way. We really need to remember that, whether we count ourselves as altruistic idealists or not.

    Meantime, if you know of gurus in the Irish Civil Service who know where energy prices are going with any certainty – even in the long term – and who can explain how they know, then I’d like to introduce them to some people in London and NY. I would like to retire soon and such knowledge would greatly accelerate fulfillment of that goal.

  32. Joseph Says:

    @Brian O’Hanlon – “For a while, many small producers made a valient effort to keep each individual facility updated to newer EU and global standards for food production”

    It always struck me, that is how Globalcorp Inc. become global – they lobby to ensure that a business area either becomes way too expensive to enter and/or to stay in.

  33. Sarah Says:

    @Hugh Sheehy: The ‘Ireland is a little country and what we do doesn’t really matter in the larger scale of things’ doesn’t hold any water, IMO. We have the highest per capita emissions in Europe (bar Luxembourg-a statistical anomaly), serious issues around energy security and EU and international renewable energy obligations to consider. Moreover, if the developed world is going to convince the developing nations to follow a less carbon intensive development path, we will have to do a bit better than throwing our hands up in the air – like it or not, the moral imperative is important.

    Re: predictability of energy prices. What sort of certainty are you looking for? Fatih Birol, economist with the International Energy Agency estimates that world oil production will peak in 2020 – that’s 10 years away. We have increasing demand for fossil fuels from developing nations. And dare I mention climate change as a compelling factor?

    Ireland has extensive wind and marine energy resources that can be developed. There is far more to be gained from action than inaction. Of course it’s a risk – what isn’t? As Immanuel Kant said, the best way to predict the future is to invent it.

  34. Brian Woods Says:

    @ Sporthog: Thanks for the searching questions. Makes you reflect: that is, put your muscle where your mouth is.

    I plug farming, not from any ideological p-o-v (I do have acces to a 5 Ha farm set in forestry), but I regard a reliable supply of readily accessible food as an essential. The current BAU economic model relies too heavily on fossil fuels for transport and fertilizers: this is not sustainable – nor is it in the interest of all the people on this island.

    Your mention of the unfortunate farmer who will abandon his land – because he has insufficient income. This is catastrophic for society. Years ago the late John Healy “shouted STOP!” as he observed the flight of people away from the land. Well, I am shouting STOP! now. The idea that we would, of necessity, have to pass our inheritance of a life-sustaining resource over to a small group of elite, or a large multinational, or a Hedge Fund is so obscene that I am at a complete loss of words to decribe my outrage.

    I keep wittering on about an economic Model-in-Use. Not a single blogger on this site has actually remarked on this. Why? I Have no idea – but I can surmise (please put a wry-smiley in here for me).

    Farming: Timber as much as possible (broadleaves) in all areas, but principally in slightly upland areas. See if the current up-land bog areas can be re-claimed for forestry. Forget about the conservationists: people need food for fuel and to build shelter. A roperly managed forest may also provide areas for growing food: any tree that will bear an edible fruit.

    Beef and Dairy: Elimate 80% of the beef herd: it consumes far too much fossil-fuel and sterilizes too much arable acerage. The dairy herd should be controlled to the point that it supplies all our domestic needs – without having to import anything. Ditto for all other foodstuffs. No imports (and I mean none) of any food stuff (outside of an emergency) that can be grown on this island. Radical? Very definetly. Increased cost to consumer: yes – but the surplus stays within the local community. You are a very foolish person indeed who has a 100% reliance on imported food, or has to drive some distance to a super-market. Dopey stuff.

    I am very mindful about the export surplus of our dairy products: but I am also mindful of the obscene subsidies that are given (loss to taxpayer!).

    Tillage: This needs very careful analysis: Biofuel crops (oil to run farm vehicles only) is crucial. Potatoes are essential. I have got no further on this aspect.

    There is also the very vexing question of the dreadful imbalance of population: concentrated along east coast. This has to be dealt with. Very contentious. But when liquid transport fuel becomes scarce (and rationed) providing the daily food and fresh water supply to a large metropolis will become very difficult. Hence my idea about a rail network around the coastline. Fish (if there is any left in the sea) is an excellent food, as are freshwater species (if mechanized farming has not irreversibly polluted all the inland rivers and lakes).

    Again, I am deeply upset to hear of your farming friend. And many thanks for you reflective questions.

    B Peter

  35. Sporthog Says:

    @ BP Woods,

    Many thanks for your detailed overview of where you see things going and going wrong. You raise a lot of very hard questions in your post. I did not mean to put you on the spot, but since hearing of my friend I had a burning question.

    I am no expert in agriculture, Brian O’Hanlon has a much better grip of the situation than I have as I am sure several other commentators / readers have as well.

    There has been in a lot of attention focused energy security for Ireland. Just how am I going to catch the flight to London if fuel is scarce, how can I get to Cork if the trains cannot run etc.

    All these problems pale in comparison if we cannot feed ourselves. No fuel for the combine harvester means no crunchy bran flakes in my bowl for breakfast. So what do I eat instead? Will we return to the pail of milk being delivered by the cart and donkey? If so, how many donkeys are available in Ireland?

    I remember watching a program on TV some years ago, lettuce grown in the south of England was flown to South Africa for washing and cleaning. It was then flown back to the UK for sale. That may be the economical thing to do, but there are serious downsides, not just environmentally.

    I am still in a small state of shock, that 50 acres dairy for husband and wife is not worth the effort. Their quality of life will be higher selling up, retiring and or living on social welfare payments. Shocking!!

    @ Moderators,

    Apologies for digressing the blog slightly off track. Perhaps a thread on Irish agriculture and its future in a economic landscape of expensive fuel prices might be worthwhile exploring.

  36. Hugh Sheehy Says:

    @Sarah.
    Try reading what I wrote, not what you think I wrote.

    Oh, and please refrain from quoting me saying things I never said. It’s bad manners, to say the least.

  37. Brian Woods Says:

    @ Sortohog: I concur.

    @ Moderators, Apologies for digressing the blog slightly off track. Perhaps a thread on Irish agriculture and its future in a economic landscape of expensive fuel prices might be worthwhile exploring.

    B Peter.

  38. Joseph Says:

    @Sarah – “We have the highest per capita emissions in Europe (bar Luxembourg-a statistical anomaly), ”

    That’s funny. Luxembourg also consumes the highest amount of booze per capita in Europe and that was described as a ‘statistical anomoly’ too. I wonder if the two are related? I think we should be told.

    “the best way to predict the future is to invent it.” – I never knew that it was Kant who said that. You learn something new every day. One cannot conceive anything so strange and so implausible that it has not already been said by one philosopher or another (but that was Descartes talking, not me).

    Remind me, when are we going to storm the barricades together in Merrion Square. My diary is getting a bit chocker at the moment.

    @Brian Woods – “the very vexing question of the dreadful imbalance of population: concentrated along east coast”

    Surely if travel/fuel/energy is going to become a big issue, populations would need to concentrate and be closer to each other (the rest of the land could be given over to agriculture then and we could have the wave energy gizmos close by too). I kind of get where you are coming from though in your general postings but it does all sound a bit ‘post doomsday scenario’. While I’m in a philisophical mood, I think it was Plato who said, “Necessity, who is the mother of invention.” If peak oil and doomsday etc. loom do we have enough faith in the werewithal of the human race that we will overcome those problems – assuming we don’t all kill each other first.

    As for the fishing in the sea around Ireland – the year before last was dire and last year was even worse. I don’t get the rods and the sea kayay out until I see the first swallow of the year (had kind of expected to see them by now – perhaps it’s all that volcanic ash) but will keep you posted. I’m going to try fly-fishing off the kayak in deep water this year and see where that gets me… though I have a horrible feeling it might attract the odd shark/tope which might not be too comfortable in a sit-on-top kayak… but the Sri Lankans seem to cope with that OK. They don’t have any wave power though – just a thick deposit of fuel oil on the surface around the coast where passing ships have cleaned out their insides. It’s sad to see.

  39. Brian O' Hanlon Says:

    @ Sarah,

    I only recently became wise to the many aspects of design, lifestyles and systems which contribute in many ways to further carbon emissions in the globe. Keep up the effort to inform people, and draw their attention to this crucial aspect of policy maker going forward. What you refer to, really was sadly provided for by normal market mechanisms in this country. People who should have held responsibilities for environmental impact, in every sense, generally could have cared less. One of the few sliver linings in the current economic downturn for me, has been the window of opportunity it now presents to refocus and reorientate industry in Ireland in a different direction, in many different directions. The environmental impact assessment of policy and state spending being highest on the list.

    What I am trying to argue, is that in Ireland we have seen two major economic efforts – the first in agriculture (a form of property) and more recently commercial and residential property bubbles – both of which have diverted resources away from other worthy sectors of the Irish economy, and into one area. I am not trying to suggest for a second, that Ireland should not divert the maximum amount possible of its resources – human, financial, environmental and otherwise – into the areas you describe so well in your comments. But what I do suggest, that at least once in the history of this 90 year old pre-modern state of the Irish ‘republic’, that we try to ‘balance’ the economy. I mean, not to have it dependent on one thing, and one thing only, which can go belly up and our economic prosperity along with it. I am not suggesting for one minute, Ireland should aim to become a world leader in some focussed area and develop new strengths. That is what the nation needs right now, more than anything.

    Please do visit my Designcomment blog to read the most recent few entries, such as Why Ireland is more like Cuba. I wrote another blog entry, I called it Green jobs, to discuss the idea of the green economy in Ireland. I am gradually trying to explore these issues and get a full overview of them. I think the pertinent question to ask is this. Have any of the green activists and green advocats and green extremists got any experience in running any business of significant scale? Have any of the same any experience working in large scale energy industries, the older fossil fuel or mining industries for instance, or offshore refinement. From which they could bring the kinds of ambitious engineering, project management and business management skills which Ireland needs, to really make the best of its green opportunities? If not, then I humbly suggest it is irresponsible to go chasing pipe dreams based on hunches, and gambles, where a lot of scarse capital is involved. But certainly, there is no doubting the green economy is the best ‘plan’ in any one’s brief case at the moment. What is in doubt is the green movement’s awareness of the Irish economy and economics in general (I think Feasta dot org have a reasonable grasp, to give one example, but require more assistance – the right kind of assistance, and support). The green economy could fail for much the same reasons as property and agriculture failed, there is no doubt about that. BOH.

  40. Brian O' Hanlon Says:

    @ Sarah,

    But what I do suggest, that at least once in the history of this 90 year old pre-modern state of the Irish ‘republic’, that we try to ‘balance’ the economy. I mean, not to have it dependent on one thing, and one thing only, which can go belly up and our economic prosperity along with it.

    One small elaboration on that if I may. I know for a fact, having worked/studied in the design, research and development field for 15-20 years now, that an environment where extreme pressure exists, is not at all conducive to producing the best results. I noticed this in particular as I worked for various employers during the property bubble. What I mean is, sometimes the people with the best insights into the problem and the best ideas as to solutions, are often shy people. They may not be blessed with the social graces. You do need a certain kind of environment to draw these people out, and allow them mature some, so that they can learn to coordinate and cooperate as part of a larger group. It is a non-trivial matter. I came across an excellent book, by Tom Kelley, called Ten faces of innovation. I would recommend that book especially, to understand how to manage a group of people who are all very different and possess different characters. The most successful architects I know have a front man. Who can talk better than any professional politician, but arent’ always the ones who generate the solutions, which the client buys into. The series on RTE television, Mad Men, was very revealing in that regard – how people work together and generate ideas etc. Breaking through social boundaries, re-inventing ways to look at the world. Albeit for the advertising industry.

    The thing is, everything in the economy during the later part of the Celtic Tiger had all their eggs in the one basket of property. I believe that is why we have ghost estates and other weird aberrations of the ‘mad’ economics of the times, as symbols today of the mad-ness. I read a paper by economist K. Vela Velupillai, recently called Anarchy in Research. I wrote a quick blog entry of the same name, to gather some of my thoughts together. I am still thinking of Velupillai’s paper, and what he said, that you cannot ‘pick winners’. I can assure you, having attended deign school myself for the best part of ten years, that is what happens most often. They ‘pick winners’. It results in people who believe they have the supreme and correct solution, which no one else can challenge or utter any comments about. What does that sound like? Worse than that, having ‘picked the winners’ we tend to enshrine them in positions of key responsibility and even underpin them with legislation. Velupillai on the other hand suggest a different approach. Some of the most valuable research breakthroughs for human kind, have not come out of a dictatorial, dogmatic, top down managed environment. The initial idea to pump huge government resources into green projects is great – as long as the same projects aren’t killed outright by the state bureaucrats who will most like manage them. BOH.

    http://designcomment.blogspot.com/2010/04/anarchy-in-research.html

  41. Brian O' Hanlon Says:

    Tom Kelley has a website here, where readers could ‘share their story’ based on reading of the book, Ten faces of Innovation. I am sure it would be interesting to read some. BOH.

    http://www.tenfacesofinnovation.com/stories/index.htm

  42. denis Says:

    If you believe in a ” god “, you will believe in anything—–including wave power.
    Moving part Victorian engineering coupled with seawater is going to give a lot of trouble but not a net gain in energy—-just consider the huge amount of embodied energy in the steel required, never mind the fossil fueled service, repair and replacment required to keep these dinasaurs running
    Dream on.

  43. denis Says:

    @ BOH
    A ” green ” economy may well enable us to survive in Ireland, but we are not going to be able to drive cars, have instant electricity, supermarkets, soft drinks, or any of the rest of the perks of our comfortable consumer world.
    In the future, a bicycle handed down from your father, will be a coveted and much cherished item.
    People have no idea what lies ahead when the fossil fuel runs out.
    We should take this opportunity and stop all air transport now—it would extend our supplies of oil by a few more years, and start a program of education on the real values of being alive.

  44. Pope Epopt Says:

    Agreed Sarah – especially the quote about

    What I can’t get my head around in the market-fundamentalist approach to infrastructure development and energy security epitomised by Richard Tol for the long-term future is the following:

    How can short-term market signals equip us for future needs, while we still have access to fossil fuels to build that infrastructure relatively cheaply, in energy and monetary terms?

    They never answer the question or just repeat the mantra ‘Let the market decide’.

    I’m not sure about wave power and I’m not familiar with the engineering. The sea is a very unforgiving environment for machines. I vaguely remember a tube pressure system where the moving parts were kept out of the water.

  45. Pope Epopt Says:

    Sorry – meant to celebrate the quote from Kant. That submit button is unforgiving.

  46. Brian O' Hanlon Says:

    @ All,

    Plenty of interesting responses above, to send me off thinking in different directions. I much appreciate the effort. Thanks all. BOH.

  47. Sarah Says:

    @Hugh – Please point out where I was wrong in my understanding of your post, rather than being so lazy with your response. It’s bad manners, to say the very least.

    @Brian – you’ve given me food for thought! I shall definitely look up your website and other references. Thanks.

  48. De Roiste Says:

    Isn’t doing nothing more of a risk than being proactive about our future energy problems. I agree that how we go about being proactive has to be very carefully thought out so that we get the maximum for the amount of money invested.

    Ireland is one of the most energy dependent countries in the EU, oil is rising above $80 a barrel eventhough the only countries with growth are the BRIC countries, estimates of reserves in OPEC are expected to be a lot lower than announced, volatility in producer countries……the list goes on as to why we should invest in our energy sector to bresak our oil addiction. Also the pessimistic studies say peak oil was reached in 2004 and the markets don’t have the full information to factor this in yet. What happens if this is right and they do??? the markets will work but your average Joe will be priced out of this market with no alternative for many years!

  49. Hugh Sheehy Says:

    @Sarah.

    If you can’t take the time to read the posts yourself, here’s what you quoted me as saying, and which you then proceeded to disagree with.

    “Ireland is a little country and what we do doesn’t really matter in the larger scale of things”.

    Then you went on about Ireland’s national energy security, Ireland’s national treaty obligations, etc.

    Here’s what I actually said.

    “Being what we are, a small island, the acts of our own government can harm or benefit our national economy but are unlikely to harm or benefit the planet or the global economy in any meaningful way. We really need to remember that, whether we count ourselves as altruistic idealists or not.”

    You see, they’re different. Generally, don’t put things in quotes if other people didn’t actually say them.

    If you don’t understand what I wrote, then I’d be happy to clarify, but if you’re going to disagree with people at least have the common sense to disagree with things they actually said.

    If nothing else, Ireland’s energy security is a national problem, not a planetary or global economic issue. People in the UK, for instance, might be watching East Enders and the lights might be out in Dublin.

  50. denis Says:

    this is a test before, I lose my next comment in transmission

  51. toby Says:

    If Denmark gambled on wind energy in the 1970′s and (say) it took 25 years to begin payback, that means we could expect payback in 2035. Assuming that means a mature technology, 2035 is way too late to make an impact on emissions, which we need to reduce significantly by 2020.

    In another sense, we have already gambled on carbon, and lost. Not to mention our punt on the property market and what it did to our economy. Another gamble is one too many. We need to be prudential, not daring, or reckless. The consequences of failure are too great.

    There are already alternative energy solutions available – solar, wind etc, for which the technology is mature. For example, the DESERTEC consortium envisages a supergrid integrating alternative energy sources in Europe, the Middle East and North Africa. Energy autarky is unattainable, so we must seek in integrate our needs with other states.

    http://www.desertec.org/en/concept/

    By all means, support research into tidal energy. It may form an important of our energy supply. But I tend to agree with Richard that we need to be hard-nosed and prudential about its chances (but maybe my reasons are different from his). If we need to deploy alternative energy solutions soon, then it is too late for tidal at this stage. For God’s sake, don’t bet the farm.

  52. Sarah Says:

    @Hugh -your attitude is extremely confrontational and not conducive to a meaningful debate. Just saying “you see, they’re different” is not particularly helpful as you really have not explained how what I wrote is irrelevant to your post. Meh, I’ll save my efforts for other posters.

  53. Hugh Sheehy Says:

    @Sarah.
    If I misquote you, how would you react?

  54. toby Says:

    I meant to add to the previous post that my opinion is the same about the Spirit of Ireland project. It has an air of Aswan Dam about it – a massive project to boost the national ego. Dangerous territory.

    But if it makes economic sense (as a contributor to something like DESERTEC), then by all means ….

  55. Richard Tol Says:

    @toby
    The economic impact of the High Aswan Dam is actually quite positive:
    http://ideas.repec.org/p/sgc/wpaper/111.html

  56. Garry Says:

    Alternative energy solutions …

    I’m reminded of a great retort from a doctor when asked by an interviewer why the medical profession was so against “alternative medicine”..

    The reply was along the lines of …. “Theres no such thing as alternative medicine; theres medicine that works or doesn’t work. When it is shown to work, it is no longer regarded as alternative by any serious medical practitioner.”

  57. Sporthog Says:

    In relation to Irelands future energy supply.

    I think we need to be realistic here. The solution to Irelands energy needs will come from a combination of technologies, not just one technology alone.

    Suggesting Wind alone will save us is daft. But a combination of wind, tidal, solar PV, Solar heating, ensuring houses are properly insulated, catching rain water and using it to flush lavatorys, geothermal energy (heat pumps), using efficient technologies like LED lighting will all start to add up as they are implemented across the nation.

    Commercial buildings need to be looked at to reduced air conditioning load, if this means redesigning / modification then that is what will have to happen. We have already seen a small start to this with the BER cert and the rental market.

    I would see this as the first level. To progress to second level of energy use might involve more redical proposals which could involve serious alterations to our way of life, way of doing things etc.

    In relation to the wind generator, what we have witnessed is the first generation model. Remember the IBM Personal Computer? This machine set the standard which all modern PC’s are still based upon today. But IBM no longer control this market, in fact they lost control of it over a decade ago. Sometimes being first does not mean you stay king of the castle forever.

    Yes the Danes have progressed with the Wind generator and they look to be world leaders etc etc. But the US Navy has being developing Superconductivity technology for motors. Its called High Temerature Superconductivity. There are developments taking place to marry the two designs, the Wind generator and HTS.

    The resulting final design is a Wind generator which is much more efficient, lighter, less components, and so on. Call it the mark two model.

    For wind generation It will be interesting to see who is the Leader in 15 years time? But one thing is for certain there are no guarantees.

    While economics of a design will play a important part in its implementation, we should also be asking ourselves “What is the right thing to do?”

  58. The Alchemist Says:

    @Sporthog

    I remember Teagasc giving some figures on a 50 acre holding with 40 sucklers in and around the mid-90s. The annual income (including premia under CAP and sale of weanlings) was calculated at £14,000 max. Certainly incomes have not improved in the cattle sector since. There is no doubt that dairying and cereals were gravy trains in the early to mid 90s. Profit on a gallon of milk was around 56p and cereals, especially linseed, could return over £200 per acre after costs. Dairying could return up to £600 per acre (and more). Given that agri land in the same period was between £2000 and £3000 per acre, the profits could meet loan repayments. A pretty good business model all around. But as interest rates fell, land prices moved beyond the point of economic return. And we all know the rest.

    @Richard Tol
    Your point about fostering excellence is well-taken but we need to face a few awkward facts when we talk about innovation. For instance, how realistic is it to moon over The Spirit of Ireland when standards in road construction and maintenance are often poor. Or the country-wide gaps in copper-carried broadband. The ‘ah sure it will do’ attitude predominates, perhaps in more refined clothing. Too many bad habits and shoddy standards in public and professional life take their toll on efforts to ground excellence in a culture.

    The idea that one creates ‘embassies’ of excellence or ‘consulates’ of innovation to drive industrial development typifies a credibility gap that Michael Hennigan describes above as “the problem about all these armchair proposals, is that there is no serous reality check; why bother doing necessary research to support a proposal?”

    @BOH
    “Once government begins to inject funding into post graduate, and incubation for specific projects or technologies things suddenly begin to revolve a lot around ‘lobby groups’. I.e. Whichever technology or project has the biggest lobby wins the day.” Yes indeed. In this scenario the multinationals who lend ‘weight’ to funding proposals skew funding and largely get a free ride. Look at the recent injection of €56 million in university based ‘Competence Centres’. Why is the taxpayer again picking up the bill for items of pressing relevance to the multinational sector, if the rhetoric is believed? Reports on the Smart Economy, Innovation, and so on, are exercises in tailoring suits for the emperor. Politically they give a semblance of cover to governments and that’s there main official appeal.

  59. toby Says:

    @Richard,

    I’ll take your word for it on the Aswan Dam. My previous understanding had been that introduction of water-borne diseases like bilharziasis made the dam a mixed blessing.

    However, I hope my meaning was plain. Clear thinking at times of national crisis is essential. After making big losses, the worst thing to do is to try to recoup your losses with another gamble.

    Kipling talks about:

    If you can make one heap of all your winnings
    And risk it on one turn of pitch-and-toss,
    And lose, and start again at your beginnings
    And never breathe a word about your loss;

    Having lost, we need to get back to basics.

  60. Sporthog Says:

    The Alchemist,

    Thanks for your input, interesting light you have shed on the figures for this size / type of farm.

    But farming is hard work. Having to go out in all sorts of weather, unsocial hours during calving etc. In addition there is the inflexible commitment of milking the cows twice a day not to mention the paperwork and quality assurance routines which must be carried out. A bit like being institutionalised into a timetable. Furthermore the work does not get easier as one gets older, unless you have a son / daughter who will help out and eventually take over.

    But even if you were clearing E600 / per acre per year, that still leaves you with 30K annual income for 50 acres. That is poor money for a 365 day commitment. I’ve heard of the French peasant farmer, but I am sorry to see the same happening to the Irish.

  61. bg Says:

    Nice thread. Congratulations to Hugh Sheehy and Brian O’Hanlon on some fine posts.

    Just to put things in perspective, Ireland will spend more on wind turbines in the next decade than the entire global budget on fusion energy research through magnetic confinement (China, the European Union, India, Japan, Korea, Russia and the United States).

    This puts us deep in la-la land already. Just how many additional billions of public money do “renewable” energy activists want to gamble with?

  62. toby Says:

    @bg

    Wind turbines are a mature technology and comparison with nuclear fusion research is totally inappropriate. It is like comparing Intel’s latest generation of processors with quantum computing.

  63. Brian O' Hanlon Says:

    @ toby,

    But even on a more down to earth level, look at the difference between onshore and offshore wind. While the onshore ‘Danish’ design of wind turbine has been translated into much larger individual units to place in offshore locations (higher capital costs of working offshore, are partially offset by using much bigger machinery) – there is no evidence to suggest, this is logical. There is debate as to whether the ‘Danish’ wind turbine design is appropriate to an offshore application. I think it seems pretty obvious that offshore wind requires a top-down re-think of the design, a questioning of the deep fundamentals of what a wind turbine should be. Obviously, to follow on from the point made about IBM and personal computers, there is no evidence to suggest that Denmark and Germany will have nearly as much control over the next generation, offshore wind turbine model, as they did with the onshore design. Hence, why it is in the best interests of incumbent wind turbine producers to convince the marketplace, that simply scaling up onshore designs, is the appropriate course of action to take for offshore sites. That is the whole messy politics in the undercurrents.

    To compare this with analogous things happening in the computing field, here it goes (this might serve to extend the point I made about lobby groups and as someone above suggested, multinationals looking for a ‘free ride’ are often the biggest lobby. Software was really developing hell for leather, with academics (from an un-imagineable array of different disciplines) sitting around on bean bags in laboratories and having great debates about the future of computing. The thing was, they had no intention or no interest in turning any of that debate into commercialised products. Sure, they produces a few commercial applications, but not at the pace that a multinational would do. Along came a company called Intel, with a design for a ‘computer on a chip’ to insert into a calculator, or if needs be, into a lamp post. A design which could be mass produced and leave the company with a growing market with good profit margins. Previously, Intel had been a company that mass produced memory. But the computer memory business had become commoditized by Asian competition, and low wages. The US could simply not compete. Intel needed something else to move onto, and the ‘computer on a chip’ turned out to be the company’s saviour, as it became more attractive to a wider customer base as Intel’s technological sophistication grew better.

    But here is the thing, if you talk to anyone who sat on those bean bags and had discussions about the ‘personal computer’ in the 1970s, they never had intended a proprietary microchip manufactured by a gigantic company to dictate the constraints placed upon software development for the next few decades. Even though, that is what happened. Intel as a company chose the software architecture that was available in the 1970s, and froze it into the architecture of their microchip. What we have today inside all of our computing appliances is not something state-of-the-art at all. But rather, something designed for lamp posts and calculators in the 1970s, which has been scaled up many times over successive generations. In a way, the strategy of the wind turbine companies is the same. In a way, we have to view the race for wave energy in the same light. We can become like the computer software architects who sat in those bean bags in the 1970s and tried to invent the future. But the fact is, the way business works, designs get frozen in time, become proprietary and then it is all about shareholder value etc. Business takes over. A standard becomes incumbent, and it is difficult to know how to move things on, after that happens. BOH.

  64. Brian O' Hanlon Says:

    @ All,

    What I am saying is, we talk about this technology or that technology for producing renewable energy. We talk about mature technology, Victorian technology and what not. Whichever technology one chooses, one can make an argument it is inferior or illogical to use, or invest in it. However, the thing is, if one studies technology in depth (that is key, one has to do actual detailed analysis of technological history – a few boffins like myself only ever do that) one will find in many, many industries technology which is hopelessly inferior and hopelessly underdeveloped. Yet, those same technologies have companies attached to them, which possess huge shareholder value (much bigger than any Irish banks). I cannot remember where I wrote recently, a blog perhaps, about Digital Equipment Corporation. It had a project called the ‘Alpha microprocess’, which at the time made Intel’s offerings look like crud. The funniest part was, DEC ended up being bought in part by Intel and by Compaq. Compaq only knew how to mass produce personal computers. They were not an microprocessor engineering company, but they got all the DEC Alpha engineers when they bought it. This is why we need to distinguish in any discussion about technology (wave energy, and other green technologies) between shareholder value, technological development and inventing the future. It could be said, the best way to predict the future is to invent it. On the other hand, real life experience would indicate, the way to predict the future, is look at shareholder values and you can easily tell who is going to buy out whom. BOH.

  65. Hugh Sheehy Says:

    While I’d love to see wave power becoming a success and I remember my surprise and delight at first seeing the Pelamis and its “along the wave” energy extraction method, wave still has one primary problem….it’s in the sea. Not on it or near it, but in it. The engineering requirements that imposes are huge. I’ve spent some fair time working on marine projects so I know a little about this.

    Anyway, consider two potential investments in renewable energy. One is a 2.5 MW wind turbine you buy from GE. If it breaks you drive over to it and change a part. You roll its power cable off the back of a truck. You kick it and curse and then go for a cup of tea a home. http://www.gepower.com/prod_serv/products/wind_turbines/en/2xmw/index.htm .

    GE and their competitors have made tens of thousands of these units. They work. They’re very visible and many people think they’re ugly, but they work.

    The other potential investment is a 750kw Pelamis unit, or a Wavebob. (production units might be higher rated, http://www.pelamiswave.com/content.php?id=146 , http://www.wavebob.com/how_wavebob_works/). You need seagoing tugs to install it, and to maintain it. You need to install seabed anchors, seabed cables, etc. You need harbours, docks or beaches, etc.,etc.,etc. It’s huge, and expensive to build and deploy.

    On such an admittedly superficial view, I confess that I’d bet on wind.

    Wave power has been around a long time and it’s still difficult. It may never be easy. Wind is pretty well established, and its warts are reasonably well understood. If wave can compete I’ll be a little surprised, and more than a little pleased.

    They key point is that hope is not a strategy, but that’s what Breda O’Brien’s article seems to be based on….a hope that wave will work combined with the usual anxiety that the government “Do something”.

    If we do make a bet on wave, it should be a calculated bet that’s part of an overall strategy, not a punt and pray.

  66. Mokabaybob Says:

    Nuclear power generation is the only safe, reliable, sure-fired, shareholder friendly, cheap, clean, green, small-footprint, scalable, available, source of energy that we can source. The rest is none of the above or only one or two of the above. So why are we incapable of just grasping this thing and saving ourselves?

  67. toby Says:

    @Brian,

    You post speaks directly to me because I worked for many years for Digital Equipment Corporation (DEC as we affectionately called it). I remember well the Alpha chip, and when it was the hope of the company.

    However, DEC did not disappear because Compaq and Intel had more cash. It made a series of extraordinarily bad management decisions in the early 1990s – it lost out in the “new wave” of desktop workstations, and it sold its Networks business to Cabletron, who proceeded to run it into the ground. DEC was a company which invented Ethernet, or as good as!

    Intel and Compaq gained, of course, but it was two new companies who took the space that Digital might have filled – Sun in workstations, and Cisco in networking.

    The time to buy new technologies is when they are at the garage stage, or just out of it. DEC at one time considered buying Cisco, when it was tiny enough for a large company to make it an offer it could not refuse.

    So I am not sure where “shareholder value” comes in here. No one can stop companies and Governments from making occasional bad decisions. Such decisions bring their own punishment, as we have seen with our own economy. DEC thought it was delivering shareholder value when it concentrated on larger computers instead of desktops.

    I think a punt on tidal power would be a bad bet for Ireland Inc. Breda O’Brien seems to be proposing to nationalise it and pour resources into its development. I would rather that an energy corporation took it over, took the risks, and then sold us back the power, if it was a success. There might be government assistance along the way – the usual grants if manufacturing was set up here etc.

  68. toby Says:

    @Hugh Sheehy,

    I think you expressed my concerns better than I have.

    “Time to market” is a driver of new technology. If a technology does not “catch the wave” (pardon the pun!) then it may not even matter how good it is. Another DEC story – the company brought out a PC to rival the IBM PC, but much too late. I remember a memo going around the company documenting how a comparative “teardown” showed how much better our PC was.

    It did not matter a damn to consumers who were already buying IBM PCs in droves, and for which a multitude of software applications were already available. Long term, it may not have helped IBM much (the big value add was in the software, so it was Bill Gates who profited).

    However, a long study could be made about technologies which flowered briefly but failed. Not just two-track stereos, but others like the Stanley Steamer (a competitor with the internal combustion engine) and the airship.

    The country cannot afford to invest what’s left of its resources and self-respect into another Stanley Steamer or Graf Zeppelin.

    http://en.wikipedia.org/wiki/Stanley_Motor_Carriage_Company

  69. Richard Tol Says:

    @toby, hugh
    My point exactly. At the moment, advanced biofuel and solar hold more promise than wave and tidal. But what do I know? The government should not bet on any technology. Rather, it should subsidise all low-carbon energy (or better still, tax high-carbon energy) and let the various options compete to deliver the best service for the lowest price.

  70. Brian O' Hanlon Says:

    @ toby,

    Intel and Compaq gained, of course, but it was two new companies who took the space that Digital might have filled – Sun in workstations, and Cisco in networking.

    I hadn’t ever looked at it that way before. Very good insight.

    The trouble I suppose with state control of wave power technology, is that you don’t get the guys in the garage working on it then. The guys in the garage don’t get an opportunity to go anywhere near the technology. I talked to someone recently in Ireland tasked with driving innovation in Ireland. There background was in accountancy. I notice that about Ireland. Only people with financial knowledge are allowed to run anything. So far, they haven’t seemed to do so well.

    I wrote in a blog a while back, about how DunLaoghaire Rathdown County Council objected to Dell establishing a base in Cherrywood Science and Technology Park. My ex. employer, Dunloe Ewart was at the end of their tether when DLR coco objected to Dell as a tenant. DLR coco had bought into a joint venture partnership with Dunloe Ewart developers, which my boss Liam Carroll inherited. He recently settled up with DLR and now they own development land in Cherrywood and have effectively become developers. I noted that John Gormley recently objected to an expansion of Carrickmines retail park, which is a stone’s throw away from Cherrywood LUAS terminus stop. The idea of ministers Gormley and Cuffe was to keep the critical mass near to the LUAS infrastructure. Minister Gormley and minister Cuffe had to challenge local government on that.

    My knowledge of the situation is, DLR coco were happy to allow the bank controlled developer to build carpet housing on the science and technology park. While the retail centre, happened across the motorway on the side of a hill. I wrote a business plan early last summer, about Cherrywood. It is amazing though how disfunctional and open to all sorts of abuse, state controlled projects really are. Check out Vimeo website for Fintan O’Toole’s 20 minute speech at TASC conference. He mentions the IT projects which the state has undertaken. Not good, not good. BOH.

    http://designcomment.blogspot.com/2010/01/duopoly-two-headed-monster.html

  71. Brian O' Hanlon Says:

    @ toby,

    I wonder how long it would take DEC to whip together a prototype of a virtual PC product? A couple of hours I would imagine, they would have it brainstormed and figured out. Pity there is no large vertical company like DEC around these days to go an do it. IBM announced those ‘smart city’ jobs a while ago for Mulhuddart, but I don’t know if anyone is offering something as basic, as the virtual office/pc cloud application I suggested in a blog entry, In the clouds. Clayton Christensen talks about the danger of setting the bar too high. RCA radio company for instance, were developing transistors in their labs for a long, long time to replace vaccum tubes in their top end radio and TV products. But Christensen suggested, a simple application such as the hearing aid was a much better application of the early transistor technology. Because it offered huge benefit in terms of light weight to consumers of existing hearing aid products. The users were not as demanding of perfection as consumers of radios either. So it was a much lower bar, a much easier technological problem to solve.

    The cloud PC idea I have in mind is something Ireland could do easily. We could build a utlility computing centre somewhere like Cherrywood. It is mostly product design, as all the technology required to build a virtual PC already exists. It is only a matter of pulling it all together in a vertial product. Challenges such as that, are a lot easier to manage that salt water environment, energy generation from waves. The cloud is a lower bar in terms of challenge, than the wave. Notwithststanding the lack of success the state in Ireland has had with IT projects, I would rather see it invest in the cloud, than in the wave. We might see some actual return for the investment. As Clayton Christensen would say, be impatient for profits and patient for growth. BOH.

    http://designcomment.blogspot.com/2010/04/in-clouds.html

  72. BigEnd Says:

    This whole discussion reminds me of an episode of the West Wing in which the President’s advisors were jetting around the country looking at renewable technologies and trying to decide which one would win government support. In the end, after listening to all the arguements, Bartlett decided not to support any of them but simply said that the one (or ones) that would be successful would be decided by economics.

  73. BigEnd Says:

    PS – that’s economics, not necessarily economists!!

  74. toby Says:

    @Brian,

    DEC were an excellent in their own way, in the end probably too engineering oriented than market oriented for its own good. Too many smart engineering solutions at the one time!

    I’ve read FOT’s denigration of Irish IT, but he may not realise it is government-funded, trendy IT “showcases” he is talking about, like (what was it?) the European Media Lab set up with MIT that became almost a joke. Lots of guys I knew left DEC and set up their own companies, which flourished. Parthus was one “star” for a while, ultimately taken over, but not a failure. There are other companies which were smaller but under the radar. No Irish Nokia, unfortunately.

    Smart grids, new batteries & photovoltaics are area that Ireland might look at. Since the electronics/ IT sector has declined, we should be looking at what we can leverage out of it into the new energy sector.

  75. bg Says:

    @toby

    “Wind turbines are a mature technology and comparison with nuclear fusion research is totally inappropriate. ”

    It is fully appropriate to put the massive scale of expenditure on wind turbines in Ireland in some kind of global context. In my view it does not matter that the technology is mature (it is mature, so is donkey-and-trap technology).

    “I think a punt on tidal power would be a bad bet for Ireland Inc. Breda O’Brien seems to be proposing to nationalise it and pour resources into its development. ”

    Wave and tidal are two very different things. O’Brien is backing wave for some reason. Personally I think the prospects for tidal are much better. Scalability, for starters.

  76. toby Says:

    @bg,

    See Hugh Sheehy’s excellent post above.

    Quote:

    “GE and their competitors have made tens of thousands of these [wind turbine] ]units. They work. They’re very visible and many people think they’re ugly, but they work.”

    I am not sure what you mean by “massive expenditure” on wind turbines. Relative to what? Not nuclear fusion; the estimate is 2020 for first ignition, and 2040 at least before a Watt of fusion power is delivered commercially. You should be comparing wave power to the full cost of carbon, including the environmental damage it causes.

    You are right about wind and tidal. Poor choice of words.

  77. toby Says:

    @bg,

    Aaarg, gremlins! I meant “wave & tidal” in last para. Spirit of Ireland is essentially tidal – a form of hydro power. My feelings about SOI is much the same as I feel about wave power. Let a commercial company look for investors to bring the energy to market – I would not nationalise it.

    The government should be (maybe they are) formulating a policy for national energy supply into the medium and long term.

  78. Brian O' Hanlon Says:

    @ All,

    I find it is always an enjoyable experience to read anything that the author Michael Lewis publishes, including his biographical novel about serial entrepreneur Jim Clark, which he entitled, The New New Thing. There is one section of that book in which Lewis describes the educational filtration process in India, whereby students identified with particular tendancy to excel in mathematics are cherry picked from a young age, and supported in their education. Many ended up working in Silicon Valley for the first company that Jim Clark founded, which was Silicon Graphics. Also in the book by Lewis, is an entertaining account of the boat that Jim Clark built. I think it is funny to read these accounts of high technology which has to exist in the salt water environment. For another interesting account of the education system in India, it is worth reading Tom Friedman’s modern classic, The world is flat. The thing we have to be aware of in Ireland is as follows. I became aware of it during the property and building boom. It is darned hard to get large volumes of good human resources on this island. I always remember the undergraduate I hired for summer months, not so long ago, who phoned me on the second day of his employment, and demanded better hours and better pay. He was set to earn €550-00 after tax per week. The point is, a top company trying to hire in Ireland always has to put up with that, whenever the economy gets organised around any effort, any ‘gamble’, be it green energy or property speculation. It will be so much easier to develop a new green technology in a place such as India or China, where you have a large domestic market, a growing economy, and a huge pool of highly trained and motivated human resources. The likes of which we cannot compete with in Ireland. Friedman in his classic book noted how India alone produces 100k business school graduates per annum. Try that out for size. Ireland has a working population of 2 million at best, all included, and even that is shrinking fast.

    Toby above mentioned the company, Sun Microsystems which did manage to fill a gap in the market created by the demise of DEC. It is hard to believe many engineers were using Sun Sparc systems, rather than Alpha’s until quite recently, before Opteron etc came along. A podcast worth listening to, is of the former CTO at Sun, Bill Joy. I have included the link below, in which Joy talks about building a book also, to be powered using renewable technologies. Joy talks a lot about designing his boat to change its power generation technology, at the point at which it becomes feasible. In other words, he is tracking both economics and technological development. It is simply at pet project for Bill Joy, a man who developed an entire operating system for Sun, and now works in the venture capital field, alongside the original investors in Google. I was delighted to see that minister Eamon Ryan in his Dail debate this evening, could make the connection between cloud computing and the requirement for better electricity support infrastructure. I have been circulating my ideas about this for a little while now, amongst energy companies and elsewhere. I wrote a blog recently, The wall of sweat, about my days as a line worker in Dell’s production facility in Raheen in Limerick. It occurs to me, that with the right energy generation facility, and grid infrastructure, Ireland would not need to export physical computer systems anymore, but could export virtual ones to a huge global IT market. Who needs Michael Dell’s 1.0 million boxes per quarter then eh?

    Finally, I spoke to some of the guys involved in Airtricity in the early days. They tell me that China does supply a lot of human resources to electrical engineering departments in Ireland at the moment. But that universities are struggling to keep open faculties in these areas. The bright boys and girls in Ireland are simply too busy getting law and accountancy qualifications. Still though, Ireland seems to attract students from around the globe to come here and study engineering. Only the other day, I met a fellow from Iran who works in the nuclear industry and is doing his Phd thesis in Ireland. How about that. Our Irish chaps won’t even touch engineering Phd’s with a barge pole, and we have people who come from as far away as Iran. I will point you all to my blog entry, School for Innovation I wrote a while back. The idea was to disseminate some awareness of industry and innovation amongst young graduates in Ireland. I know in Ireland we are in the business of over-production of professionals, who then need to emigrate to find work. Some other economy gets the huge benefit of our investment in human resource development. That has been going on for years, but I am interested in ways to try and alter that fundamental behaviour. I am delighted if I have added some useful points to the debate. BOH.

    http://www.pbs.org/cringely/nerdtv/shows/

  79. Brian O' Hanlon Says:

    @ All,

    Then consider the seminal thesis presented by Frederick P. Brooks, in The Mythical Man Month. Brooks project managed the IBM 360 operating system, which integrated the entire product line of IBM computers back in the 1960s. The project ended up costing the same as the Manhattan project, which developed the atom bomb at the end of WWII. IBM almost went bust with the IBM 360 OS, and Brooks once said:

    It is a very humbling experience to make a multi-million-dollar mistake, but it is also very memorable.

    I worked with many employees at Zoe developments who had the experience of making those mistakes. You probably will not find those people in the ranks of our best consultant designers, because they aren’t on the front end, of putting their own money on the line. One of Zoe’s most spectacular mistakes of course was the headquarters buildings for Anglo Irish bank. I have wrote and speculated about the project at length at my blog site. I had discussions not too long ago with Frederick P. Brooks, about the program management applied by Dublin Airport Authority and how techniques in construction management and software project management can be transferred. I am particular interested in the success stories in software PM. I do agree with a lot of aims of Dublin Docklands Development Authority and their efforts to introduce biodiversity into the middle of the hard urban environment. DDDA got the best landscape consultant in the world, West 8, to advise them. Indeed, it was that same attempt to push the biodiversity agenda which was at the root of the disaster at North Wall Quay, Anglo Irish headquarters. So I have had first hand experience, of at least one highly ambitious and expensive green agenda gamble going belly up. The West 8 projects have been a huge success and regenerated many urban landscapes all over the world. Yet in Ireland it came un-stuck in a major way, and I had a front row seat.

    Fred Brooks had an insight into project management, that certain individuals may be 10x more productive than another. It is important to realise that. If you work out the ratios, I understand there are four Einstein type brains somewhere in the world. I believe there are sixteen Leonardo da Vinci’s. Most of whom are stuck somewhere in India or in China, if you look at it from a statistical point of view. The United States will be lucky to have one or two Leonardos, and will more than likely import a couple more. Like they did back in the days of Werhner von Braun and the idea of space travel. Just some more thougths, on the issue of management of the green economy in Ireland. BOH.

  80. 2Pack Says:

    Wave and tidal are two different things.

    We have no tides of note. Suggesting tidal would have been lunacy of the highest order. My comments referred to wave which is many years away from large scale deployment.

  81. toby Says:

    @Brian,

    It is off-topic, but he have moved to the consequences of falure, and how to acquire the talent required to get us out of the slough of despond in which we find ourselves.

    I do not read business books (except ones like Freakonomics), but I do read military history. A major study on military failures find the following contributors: Failure to Learn, Failure to Anticipate & Failure to Adapt. When you get two together, you have Aggregate Failure. All three lead to Catastrophic Failure – France, 1940, for example. We have suffered a catastrophic failure that has cost us a large portion of our national independence, and means a period of being a colonial cash cow for bond holders and overseas bankers.

    No point in beating that one to death. However, we have also taken a major hit in the failure to modernise our educational system. Because many school leavers were tempted by easy-money in lower-skill jobs, and because other school leavers believed (understandably) that law and business courses were the road to monetary success, we now lack the people with technical skills to invent and develop “stuff” that will bring back commerce and jobs.

    It is sad, frustrating and challenging. I do not think the way forward is clear, as yet.

  82. Solar Minimum 2009, Global Cooling and the Record Breaking Winter - Page 70 Says:

    [...] and tax breaks it can, but not be the main risk-taker, which we just cannot afford right now. The Irish Economy Blog Archive Wave power again The Government should be setting the guidelines for energy supply – how much local/ international [...]

  83. Sporthog Says:

    @ Toby,

    Interesting 2nd last paragraph in your post above. Most of which I understand and agree with. But I am perplexed with your comment “failure to modernise our educational system”.
    What do you mean by that?

  84. toby Says:

    @Sporthog,

    The more I think about, possibly the education failure was just part of the wider failure …. what the Americans call very expressively a clusterf**k.

    I think there was failure at second level to change the points system in some way. We have known for 20 years we are short of young people taking Higher Mathematics and Science, yet it seems that only now it is being addressed. I know lecturers in Electronic Engineering who lectured to packed rooms in the 90s. Now they have few Irish students, and spend most of their teaching time on the ‘net lecuring to Chinese students. Brian above noted the lack of Irish engineering postgraduates, and on the postgraduate course I attend, Irish postgrads and postdocs are a minority.
    I know Indians, Italians, Germans, Turks, and Chinese who are doing postgraduate courses here.

    We have never had a critical mass of technical companies to take up our PhDs but it is a chicken-and-egg situation. If our postgrads can acquire experience overseas, perhaps they can come back and add value here.

    Hope that answers it. I cannot pretend to be infallible on this matter.

  85. bg Says:

    @2pack

    “We have no tides of note. Suggesting tidal would have been lunacy of the highest order. ”

    There are two distinct tidal technologies, tidal stream and tidal range. The latter is interesting in an Irish sea context.

    Lunatics may be interested in this report from SDC in UK

    http://www.sd-commission.org.uk/publications/downloads/Tidal_Power_in_the_UK_Oct07.pdf

  86. Brian O' Hanlon Says:

    @ Toby,

    The military failure states you mention are very useful, and do help to put the current situation into some kind of perspective – learn, anticipate and adapt. Certainly when discussing a subject as broad as renewable energy policy, it does help to have a framework to base analysis upon. Some more thoughts in rounding up the debate. The part that I cannot understand for the life of me is, when so many students in Ireland opted for financial, business and legal qualifications, why we made such a mess in precisely those areas. I noticed a story by Mary Carolan in today’s Irish Times newspaper, Anglo fails to obtain orders for €84.4m. It described a situation where a Limerick property developer has argued in court, that Anglo were throwing money at him, and setting out conditions that a personal guarantee would never be called upon. Yet, here we are, in 2010 and new management at Anglo Irish bank is calling upon the same guarantee. The total loan amount oustanding to the Limerick property group is €165 million.

    Here is the way I see it (I am not sure how many at Irish Economy have or are buying into my way of thinking). Have a read of Roger Lowenstein’s When Genius Failed. That is where I am coming from. The problem with Long Term Capital Management for instance, is they received so much funding, they ran out of ideas for where to invest the moment. Anglo Irish bank seemed to be in that same position in the 2000s. They had gained a reputation for doing alchemy with their funding, and suddenly they could not turn the money away. Refer also to Ciaran O’Hagan’s pieces in SBP dated April 4th 2010, Markets respond well to government bank package. We are in a situation now, where traders are looking for worthwhile yields, and as O’Hagan says, Irish bonds seem to be the new fetish. Of course, the early history of Anglo Irish bank was marked by a series of successful coordinations with IDA funded enterprise in Ireland, with the provision of office and factory space. It was that, which made Anglo’s reputation solid in the early days. Refer to Simon Kelly’s article for the Sunday Tribune on April 4th 2010, Thank you, Anglo, for being there for business.

    My biggest suspicion is that Irish state pensions waded big time into bonds in Irish banks, specifically Anglo Irish bank, post the reforms of the pension industry by minister McCreevy (Seanie’s old pal). It is worth reading Sarah Carey’s column in the today’s IT, Imagine we all got the same pension on retirement? Now if we could have tapered off this expenditure in property development, and ramped up renewable energy investment, there might have been a chance. That is the strange thing about financing of projects I suppose. That is why I was so encouraged by minister Eamon Ryan in his Dail debate last night, where he talked about a new electrical grid infrastructure required to bring jobs into parts of Ireland – as much as sending the renewable energy out, of those same parts. If you can get all of the moving parts right, there is indeed a window of opportunity, and it could all be financed properly. If I am right and Irish pension funds were used to buy debt from Anglo, it would explain a whole lot of things. Peter Schiff in his Crash Proof 2.0 book, notes the United States by selling debts, were exporting inflation and buying other peoples’ goods in the pre-2008 days. Now they are buying their own debt back, and thereby keeping inflation at home, while not buying goods from abroad. There is a whole balancing act there also, which the green economy in Ireland will have to deal with, from the financing point of view. I am not sure how it will pan out. BOH.

    http://www.irishtimes.com/newspaper/finance/2010/0421/1224268775290.html

  87. bg Says:

    “Some more thoughts in rounding up the debate. ”

    I would like to offer slightly simpler roundup compared to Brian O’Hanlon’s above.

    Most reasonable people are revolted by the idea that government should be in the business of picking technological winners in the green economy or anywhere else. Gambling my money on some pet speculative project without a credible business plan? No thanks. No more state-sponsored speculative bubbles please.

    I differ from most people in that I think that this speculative gamble is already occurring with wind. Wind is capital intensive. Our ongoing massive investment produces profits and jobs in Denmark, but few in Ireland. The financing produces yet more profits in Germany. A handful of Irish accountants and lawyers have also become very rich. Under REFIT, all of this is underwritten by consumers. We think this is really smart, but it may not be.

    Wind is “mature”. Wind “works”. Donkey-and-cart is also a mature technology which works, but it is not the future of transport. These phrases conceal the fact that wind has not and will never meet future energy needs. It is not possible to design away newtonian physics as Brian O’Hanlon seems to think. The velocity-cubed law isn’t going away. Wind is the most variable form of renewable energy with the largest land take. Proposals such as the Spirit of Ireland scheme claim to “solve” the variability problem. They do no such thing. They merely filter some of the high frequency variability from the wind power spectrum at staggering cost.

    Minister Ryan, on the other hand, thinks that the variability problem will be addressed by electric cars and smart grids. Admittedly, this is a much more plausible proposal than giant salt-lake low-pass filters. But we still don’t know that EVs are the technology of the future.

    I want my tax money spent on health-care for my parents and education for my kids. Not gambled on someone else’s techno-fetish.

  88. Brian O' Hanlon Says:

    @ bg,

    Very, very sensible utterings above, thanks. But I think you are trying to avoid the main issues. They can only be defined in terms of social science. It cannot all be encapsulated in physical scientific terms. I would argue the same of the banking crisis. If we try to define it in terms of classical economics alone, we will deny ourselves a complete overview of the challenges we face. I learned one key lesson in my studies at Architecture school, if nothing else. Architecture always exists in a social context. Many of the solutions we witness today in our built environment do not make sense, if divorced from the social context. Think of books like Jared Diamond’s Collapse: How Societies Choose to Fail or Succeed. If you refer back to the 1960s for instance, the experts all thought the population of the world was growing too fast, and many of the big thinkers of the day spent their time wondering how to build cities to accomodate the teaming populations, the globe would have to sustain somehow. The back to the land movement of the 1960s may seem pretty stupid today, but we are divorcing it from its time in history. Isaiah Berlin’s book, The Crooked Timber of Humanity, was one of the many references on my reading list in architecture school. I have only read part of it, but Berlin is one of the key intellects in this discussion. In recent times, there seems to have been a revival of that ‘large scale’ sort of thinking in recent years. The green party politics and green movement in general, simply happens to be a place in which folks are free to allow their imaginations and defintion of the problem to roam free, to the scale they want to use.

    The vision of the large scale solution went out of fashion for a while, but it is back again in force. I don’t know if that is a bad or a good thing, and if we have the morals required to finance such undertakings in today’s society. As you rightly point out, there is considerable risk, that many citizens will have to pay for some sort of techno fetish. Japan had some of the leading theorists in that ‘large scale’ project thinking back in the 1960s. But maybe that kind of thinking was appropriate to Japan’s society and Japan’s challenges of that day. I am not sure, it would deserve deeper investigation. In the United States in the 1960s and 70s, all of those biosphere projects built by private millionaires for themselves, were a result of the concerns of the 1960s. Just as many had built nuclear fall out shelters and so on, in the 1950s. You are correct of course in being concerned, that state funds would end up in another panic attempt to combat some perceived threat or risk. As I mentioned above, the off-grid movement was also part of that 1960s idea, of some cataclysmic event that would happen. The idea of being totally independent came out of that. The wealthy built their own biodomes, the less wealthy simply tried to power their family’s needs on solar panels. For a percentage of the population at any one point in time, these responses may seem entirely rational. I read somewhere recently, that women in the welfare state do make a rational decision to become married to the state rather than to a male companion. I mean, if you weigh up the two alternatives, given job instability in the modern society, the state provides most of what men did in the past, with a bit more stability. What is so different between that decision making rational, and someone who thinks we need to marry our energy security to wind resources rather than oil? Not every woman will choose to be married to the state. Not every person will choose to become wedded to oil and gas either. I recommend for further and deeper exploration of the subject than I can offer here, a reading of Henrik Lund’s book, Renewable Energy Systems: The Choice and Modeling of 100% Renewable Solutions. It is an example of the modern revival of large scale systems thinking to try and solve the problems faced by society today. I haven’t studies the book myself, but I have heard the author describe his ideas, and they do deserve attention. BOH.

  89. toby Says:

    @bg

    No ones wants to drive wind power down your throat, no more than anyone wants to do with wave power.

    Denmark’s derives 21% of its energy requirements from wind power. I do not have figures on comparable costs per kW-h with coal, but at the true cost of coal to the environment, I would wager it is cheaper. If you believe CO2 is the threat that many feel it is (as I do) then it is probably cheaper still.

    Of course there is a risk of a “bubble”. The world endured railway bubbles and telecom bubbles, but we did not kick out trains and the internet afterwards, nor did anyone regret their invention.

    If wind power is economically viable and wins the race into the market, then it will deserve its place. At the moment, we live in the world of the Chinese curse “May you live in interesting times”, when no one really knows what will happen. We will just have to use our collective national wisdom, such as it is.

    PS There are two types of people in the world: those who hate, fear and despise Al Gore, and those do not, or who rather admire him. If you are not in the first camp, you might find his book “Our Choice”, published by Bloomsbury in an attractive colorful format, but a paperback and cheap at Eur18.99 in an Easons special offer. Gore goes over the renewable energy alternatives. Oddly, he does not mention wave, which is probably a weakness of the book, or an indication of international opinion on wave power.

  90. Brian O' Hanlon Says:

    @ All,

    To build a little bit more on my point about social values informing behaviour, investment and economics, as much as scientific principles do, consider this. Where did the utility scale renewable energy business model come out of in the first place. It wasn’t always there, it had to be invented. We have made some discussion above about the fact the Danish and Germans did play a considerable role in its development and made a new industry. But there is one way to look at this from an economic point of view, if you input the social behavioural point I mention. That is, if you look at the fact that many people independently began to mount wind mills, solar panels and so forth on their roofs. Of course, with some very flawed results. The tiny wind turbines that you buy and install yourself, probably take more energy to make and effort to install than they produce. I understand progress has been made at that micro scale. But if anyone reads analysis done of solar PV installations, the findings are often shocking. You can find the solar PV array half mal-functioning, or operating way below expected efficiency because of the way it is installed and so forth. I acknowledge, a lot of improvements have occured in that area also. But really, if one was to point to one significant factor, that was behind the development of utility scale renewables technology (apparent from the big factors such as climate change policy, energy security and so on), I think someone must have looked at the micro scale renewable generation efforts, and said, we can do better if we add some scale and manage the investment and technology a lot better. That is the key thing to understand, if you take my point about social behaviour on board. People are going to insist on wasting vast sums of capital (in national aggregate terms) embarking on all sorts of schemes to generate their own power. The weight of administration alone, of so much repetition of failed micro generation projects would be huge. But you cannot stop society wanting to divorce itself from fossil fuels. It is going to make that choice anyhow, and moreso going forward. What we can do, is to try and manage the investment better, and to subsidise technology and industries which may deliver back to society, the value of that investment in years to come. I don’t believe at this stage it is a choice between either doing renewable generation or not doing it. That choice doesn’t exist anymore. But what we can try to do, is be kind to ourselves through better planning and management. BOH.

  91. Brian O' Hanlon Says:

    @ All,

    I mean, imagine requiring a government bail out for failed investment, made by hundreds of thousands of citizens who thought micro-generation in one’s own backyard was a sure money spinner. This is a great danger. If there was an oil shock in the morning, it would precipitate a huge boom in energy investment. Which may or may not result in investments that are prudent. We could easily have another Anglo Irish bank who catered to the needs of greedy individual investors, who put forward ‘personal guarantees’. BOH.

  92. Brian O' Hanlon Says:

    Paul Krugman in his 8th June 2009 address to the London School of economics, entitled The sum of all fears, went into his analysis of the financial crisis. In the context of this discussion on renewable energy as an investment, I felt that Krugman’s point about ‘the paradox of thrift’ was a good one. Namely, that if too many people decide to save at the same time, it takes away from investment and thereby, the savings in aggregate of society for the future are depleted, due to lack of investment. I occurs to me, that in Ireland at the moment, we are in that position. BOH.

  93. Brian O' Hanlon Says:

    Sorry, London School of Economics podcast:

    http://cep.lse.ac.uk/_new/interviews/default.asp

  94. Neil S Says:

    The article below from US commentator Ronald Bailey reflects on a major previous attempt by their govt to predict future energy consumption patterns and how we should best plan for it.

    There are many interesting points raised such as

    1. US energy consumption would rise from 80 quads (in 1980) to 130. In 2008 it was 98 quads. This was mostly down to market driven increases in energy efficiency

    2. Petroleum supplies were predicted to be severely strained in the near term with real prices to double and consumption to be at 16 quads by 2010. In 2009 the real price of oil was $43 approx and in 1975 it was $48. Consumption is a 27 quads.

    3. Nuclear and Solar were to account for 41 and 11 quads respectively. In 2008 it was 8 and 1.5 (for all renewables).

    4. Jimmy Carter called for Solar power to account for 20 of all energy by 2000 at a predicted cost of $3trillion ($7.7 tr today). To put this in perspective, the current (2008) total value of all shareholder-owned electric utilities is $652 bn.

    The article is overall, critical of most govt intervention into the energy market. Quoting Horn and Krupp (2008) the final line is ‘Mandates presume the govt already knows the best way to proceed on energy. But the govt doesn’t know any better than anyone else.

    http://www.reason.com/news/show/135213.html

  95. Brian O' Hanlon Says:

    Excellent link Neil, I must investigate it with much interest. Thanks. BOH.

  96. Holbrook Fields Says:

    In an effort to grasp what Ireland’s position is with wave power I did some basic research that I present here for some context:

    The Marine Institute and SEAI prepared a National Strategy for Ocean Energy.
    The Government has committed €26 million to create an Ocean Energy Development Unit. There is a target to create 75MW from Ocean Energy (OE) by 2012 and 500MW by 2020. This money will go towards creating wave and tidal test facilities, purchasing wave power, support for industry research, a national wave tank facility (not sure what this is). The Ocean Energy Strategy Report (2005) estimates the domestic OE market to be €176million by 2020 and €784m by 2025. The government has invested €4.3million in ten OE companies.

    Are the government throwing money down the drain? Or is the money invested likely to make a return to Ireland’s economy?

  97. Holbrook Fields Says:

    To be cleat the €26 million referenced above is not solely for the creation of the OE development unit but as I understand it covers the cost of the unit, test bed facilities, support for industry etc. From my little bit of research I think the total investment by the Irish government is €26 million. I suppose the key question is whether this is a good investment.

  98. Occo Says:

    Is this just typical Irish people turning their noses up in the air again. At least the the point is being made that banking on oil is not sustainable. Talking about 26million being wasted down the drain is madness we are currently pumping 80 billion into banks that will do us over once they get the chance to again.

    I would not agree with all that was said about gambling everything on this unknown source of energy but in all fairness we pump millions and millions of euro every year into fair less feasible ideas.

    Bottom line is oil and gas will not last for ever and unless we find a way to turn our oceans into oil for us to burn and sell they will last. So whats wrong with doing the investigation and prove that the country can produce capable engineers rather than just being know as greedy property developers.

    Its easy to critise try and write something positive and I would say 90% of the respondents would never post another comment

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