Offshore wind, energy security and investment

Adam Sroka (00:00)
Hello and welcome back to the Hypercube podcast. I’m joined today here in sunny Glasgow by Gary Connolly, is Head of UK Offshore Wind Development for ESB Energy. Gary, thank you for joining us here. I hope the train’s over from Edinburgh this morning weren’t too bad. If you could do us the pleasure of introducing yourself, ESB and what you’ve been up to.

Gary Connolly (01:15)
Okay, as as you say, Adam, my name’s Gary Connolly. My responsibility is looking after our offshore wind activities in the UK. we’re an Irish utility company. We’re the biggest utility that exists in Ireland. We’re well known in Ireland, we’re less well known elsewhere. so we were and when we still are government owned, we’re s we’re a semi-state company, which is relatively unusual. and up until deregulation.

we basically owned the network, all the generation, and all the customer supply. So it was the traditional monopoly. And then that changed obviously in the nineties. and so now we’re restricted from a regulation point of view in the context of how much electricity we can generate in Ireland, how much we can supply. We still we still own all the wires, but it’s a ring fenced company that exists outside the kind of the broader

ESB grip, if you want to call it that.

Adam Sroka (02:05)
What’s the old-timers like the verdict or is it better or worse like internally much nicer to be a monopoly or?

Gary Connolly (02:12)
So so I’ve only ever known it as as effectively a commercial company. and it and there’s still people retiring who would have known it as as being you know, as a as old traditional monopoly and they’ll have a you know, they’ll have the old tear in their eyes and say things are better than they get than they get in the old days. But but I think in practical terms it means as an organization, we’re just much sharper and better at what we do, I think. because you know, that’s what happens when you have competition.

Adam Sroka (02:38)
So you personally, think when we last spoke, you’ve got an agricultural engineering background. What brought you from sort of energy and like from agriculture, farmland through to the energy sector and that journey?

Gary Connolly (02:52)
That’s a really good question. so I I worked for an organization called CAFRE, College of Agriculture, Food and Rural Enterprise, in Northern Ireland. And it’s it’s kind of the equivalent of the Scottish Agriculture Colleges or some of the other organizations that exist in the UK. And our responsibility as an entity was around providing education but also technical advice to farmers and certainly

technology transfer to farmers. from my point of view in the engineering space, you know, we we we did all sorts of weird and wonderful things like precision agriculture and guidance systems and all the stuff that’s actually come to the fore now, you know, planted plus years later. but the the thing that was really coming to the fore in my time in the Department of Agriculture was on farm energy production. So I was involved in onshore wind, you know, small scale farm.

biodiesel, biomass heating systems, a wee bit of hydro, so all that kind of stuff farmers were interested in. So there was a a reasonably long and natural progression from being involved in what you might call traditional agricultural engineering into energy engineering with an agricultural bent. And and that’s how then ultimately there was a shift from working for the Department of Agriculture as I were to

What does ESP know?

Adam Sroka (04:08)
It reminds me, it makes me think years ago that I was talking to someone who was in the hydrogen fuel cell space and they tried to make the point that actually like energy usage on a farm is one of the stickiest, hardest to unpick domains because it’s underutilised over the year, but it’s very spiky and

like when you need it you need a lot of the energy for a certain thing. They’ve been talking about like replacing diesel tractors will just take like forever and it’s almost nigh on impossible and things and that was always like I didn’t lean too far into the hydrogen fuel cell space but that was their thing was like this could be the only real hope for that as an industry. Do you still follow that space

Gary Connolly (04:50)
So so yes is the answer, but the the ironically, you know, everything goes in cycles. And like I so because of my background, I have an interest in in all things that are that are old and vintage and classical social agriculture. one of the earliest tractors in productions in the nineteen thirties was actually based on a hydrogen fuel cell. Really? Alice Chambers tractor. so you know, we we think that hydr hydrogen is cutting age and all of that stuff, but

I didn’t know that. That’s great. Yeah. So it ⁓ it just shows you how things because you know the technology itself is not perfectly complex. The problem is it’s really expensive.

Adam Sroka (05:25)
Yeah, but farmers don’t mind that.

So Northern Ireland is an interesting edge case in the energy sector because of the complexities around all the politics and the fact that it’s an island and all this. I guess that puts you in a really interesting position from a regulatory grid, like the grid doesn’t care almost. Talk us through a little bit of that experience and how

Like when you talk to counterparts in other geographies or legislations, like what’s different about your world and what do you think is easier and harder?

Gary Connolly (05:59)
Well, I suppose like like I started my career from an ESB point of view in Northern Ireland and and have moved obviously much broader at this stage. But back for the first seven or eight years, that’s exactly what I did was worked in the Northern Ireland space. And I and I I kinda like to describe it to people as being a Venn diagram because from a policy point of view and you know the the kind of the drivers for support schemes and all of that, that’s all it all originates.

even though it’s a devolved nation that originates in Westminster. so, you know, everybody’s got one eye in what’s happening in London. but then uniquely, Northern Ireland’s also part of what’s called a single electricity market. So the island is treated as one market for electricity. and that means that you have Northern Ireland sitting in the middle and one part looking towards London and one part looking towards Dublin to see

how it works, what best works and all the rest of it. And and then beyond that, like Northern Ireland has is almost an island within an island because like geographically, it’s always been remote from the rest of the island because of just the landscape issues. so it it has a self contained energy network or electricity network inside. Well, pretty much there there are two points of connection south of the border. and

A third one that’s been talked about for all the time that I’ve been involved in in energy and still hasn’t happened. and there’s there’s a connection from Northern Ireland and Scotland. but the all intents and purposes it has to be almost managed as a self-contained system. and that makes it tricky. I wouldn’t be forgiven if I didn’t mention my sister. So she actually works for the system operator in Northern Ireland, she’s the director of operations and she it’s her job to make sure that

the lights stay on in Northern Ireland. because of that that issue with the network and how confined it is, it’s really it’s really tricky to make sure that there’s enough generation available in in that part of of Ireland.

Adam Sroka (07:45)
Yeah, that’s really interesting. My co-founder worked on that interconnector you mentioned way back and he has fond memories of being at Belfast and doing that work. it does beg the question like energy security becomes a really difficult thing in a geography like that, in a complex network like that.

It must be an unenviable job your sister has to try and kind of balance all the constraints.

Gary Connolly (08:08)
I know. No, absolutely. and she because I’m involved in renewables, you know, I I make her life hell. Because th what what we do, you know, what ESB runs one farms in Northern Ireland. We run a thermal plant in Northern Ireland as well. But we have one farms. you know, we we’d be keen to look at opportunities for offshore in in Northern Ireland waters as well. ⁓ but that just adds to the complication of of trying to balance the system. And I think in fairness to the system operators

across both islands, if you like, Ireland and GB. the work that they do to keep the system balanced is is to their eternal credit. And, you know Northern Ireland was in the vanguard of of of the level of integration of renewables in the on the system, you know. we got the forty percent more or or more quickly than anybody else got did. And that that’s a

That’s that’s a significant challenge in the context of of trying to keep the system stable.

Adam Sroka (09:02)
Yeah, because I guess the smaller you get, the kind of spikier and the more difficult that challenge gets. yeah, no huge achievement. I think and it does make me think it’s like you meet younger people now and they don’t know what a brown out is or a black out. Like it’s not a thing that’s really part of their world because actually

where we are, we’re very fortunate that we do have very stable systems and a lot of hard work has gone into it. It always makes me laugh when you see the local residents Facebook group and people are talking about something like energy bills and they’re like, what’s that standing charge and da da? You have to understand how much it costs.

Gary Connolly (09:38)
But it’s re it’s a real challenge for us as a sector as well, because what we are all trying to do is really complex. And the average person walking up and down the street doesn’t really understand and that’s good in the sense that when they flick a switch the lights come on. And that’s that’s exactly as it should be. But the work that’s required to make sure that that happens is phenomenal. And the to try and explain that to people in a way that is engaging and easily understood is not not easy either.

Adam Sroka (10:04)
Yeah. And I mean, being energy nerds, you just think, why don’t you love this as much as I do? Let’s sit and listen again. Let’s talk about policy and coordination then. You’ve been involved in quite a few cross-cutting groups like the renewables industry group. Like where have you seen those kinds of groups have a real impact and that kind of collaboration make a significant difference?

Gary Connolly (10:24)
So I think ⁓ I like I’ve been lucky because I’ve worked with, as you say, what it was at the time, the Northern Ireland Renewables Industry Group. I’ve worked with the Wind Energy Ireland, the the the equivalent body on the on the island. I’ve worked with the Renewable UK, I’ve worked with Scottish Renewables and they all do a tremendous job from my point of view. And I think the reason that they’re successful is because they’re seen rightly so as a trusted voice from the policymaker point of view. And I and I think it might be

might be contrary to popular belief, but I genuinely believe that the policymakers are trying to do the right thing. They’re trying to make the system work so that we you know we have the energy security, we have the the relatively low cost and and all the rest of it. And of course the you know the low carbon piece as well. and all of us as developers I think struggle to you know rightly so we we’ll all promote our own projects, you know, so we will say you should do X because X is the right thing for

you know, project Y. ⁓ and the and the good thing about the the the trade associations, the industry associations is that they will represent the industry in the round. and then and because they do that then the you know the governments trust them. And I like I had really positive experience of that when I was chairman of of the Northern Ireland group. where we you know you could see that we were actually making a real difference in the context of of some of the stuff to do with renewables back that was, you know, that was back in the

around two thousand ten time, you know. But the s so things like planning policy, for example, when it was, you know, I think sometimes people get fixated on a particular guideline. And when I started working in this in this sector, you know, everybody said, well the tip height for turbines can’t be any more than 125 meters. And you ask people why 125 meters and there’s no rationale really. It’s just that, you know, and there’s the planners are trying to make sure that they’re not too tall and all the rest of it.

But whenever you engage with the policymakers and explain to them that A, it’s almost impossible to get machines to meet that s that spec. And B, if we can put up slightly bigger machines, then you need fewer of them and that’s potentially a a a less negative impact on the countryside. So so that type of engagement really helped and and made a difference. And I think the other thing that Northern Ireland was particularly again at the forefront was in the context of constraint and curtailment because

Because of that islanded system that we had, you know, that i island within an island, you know, the there was projects starting to come online and because of the level of instantaneous penetration that could be coped with, you know, the this notion of projects being turned off because there was just too much energy in the system was very real for us back in, and is still very real today. ⁓ but the good thing about the the industry groups at that time was

that we were able to articulate the reasons that even though projects were were being curtailed or constrained, that that the it was important to keep bringing more projects online because there was a proposal at one stage to say, right, the ones that are already built, protect them at all costs. And then the ones coming online would have to pick up all the curtailment constraint. And that that would have just stopped development. So so so, you know, the that’s just a couple of examples of

how your trade a association can make a difference from my point of view.

Adam Sroka (13:37)
Yeah. And I’ve been involved in some of these in GB and it’s like really positive, but very frustrating experience because you can see the material impact it makes, but it just takes ages because you’ve got to get lots of very busy people together. You’ve got to kind of formulate something quite structured. needs reviewed. needs back and forth. And then people like, I sense myself doing it.

dichotomy of being frustrated with stuff not going quickly enough, but then knowing how long it takes and like how it’s actually just takes a long time because these are complicated things. There’s a lot at stake. No one like you’re never going to get to a solution where everyone’s happy. That’s unfeasible. So you’ve got to keep making sort of small steps and make change gradually, I guess. It’s yeah, it’s an interesting space. And I’ll consider that it’s almost like a microcosm. It’s another parallel universe in Northern Ireland where you’re doing it. But

faster and sharper because it’s more constrained and you’re a bit further on.

Gary Connolly (14:36)
I think

like one of the sad things for me personally is is that like I was lo I was fortunate to work in Northern Ireland from about two thousand eight through to twenty fifteen ish. and I think, you know, that was that was, you know, if you like the purple patch in terms of delivery of renewables in Northern Ireland and and we’ve lost our way since then, you know. Just in the context of you know, I think it’s part of it’s because of the way devolution has worked out that and you know, there’s been a a view that says, Well, look, we’ve done the heavy lifting and so

the rest of the UK can pick up now and that was all true, but I think we’re now in ⁓ we’re now actually losing ground again and and we need to pick up the pace to to make it happen again.

Adam Sroka (15:14)
That’d be nice a bit of like actual sort of competitive edge to it and something else to go each other about but I can see that. So you’ve had a career pivot from onshore into offshore and I always think that they couldn’t be so dissimilar.

when you speak to people that have worked in them, it’s like ultimately, yeah, it’s wind turbines, but that’s like almost where it stops. And living in the data layer, I’m obviously a bit removed, but from your experience then, was it a bit of a shock going into offshore and what carries over and what doesn’t?

Gary Connolly (15:47)
Right. That that’s a really interesting take, Adam, because I would almost have said the opposite. Really? Okay. Okay. In the sense that so technology, the broad technology is the same. but the ch for me the challenges are still the same. So w whene Whenever I was trying to build an onshore wind farm, I was worried about consent, I was worried about grid, I was worried about route to market, I was worried about energy yield, I was worried about the agreement of the people that owned the land

and communities around where I was trying to work. And I still worry about those things in the context of offshore wind. But the the you’re absolutely right in the sense that it is different. I would say the biggest difference is in is in terms of scale. Yeah. and That’s scale in the context of you know, physical scale and and what we’re what we’re trying to do and the, you know, the amount of energy that can be generated and the size of the turbines. and all that stuff. But then of course the other issue is the scale in terms of the investment that’s required Yeah.

You know, and and because the offshore projects are so large compared to a typical onshore project, and because it’s more expensive just because you’re working in a very harsh environment, then the numbers, you know, that was a thing for me at the time. the numbers were eye watering. and of course, let’s say it’s a factor of a hundred, and you pick a number, but let’s say if it’s a factor of a hundred. So that

The problem and this is where there is a similarity between on on and offshore. In both cases you invest all the money at the start and then hope you get it back. Yeah. But from an offshore point of view, it’s just, you know, it’s a complete factor of scale difference in terms of, you know, it could be a hundred times more. So so I’d say that’s been the biggest fundamental difference. The the other thing that’s different is is the complexity in the sense of

Adam Sroka (17:08)
It’s like four years.

Gary Connolly (17:28)
We’re building a project off the coast of Edinburgh at the moment, H Cape. and at the last count there was something in the region of sixty contracts associated with that with that project. and that wouldn’t be typical on an on an onshore project. In an onshore project, you would have a contract for, you know, the the Sovels works, you’d have a contract for the balance of plant, you’d have contract for the turbines. And then there’d be other ancillary bits around that. But that’s in a in a sense, that’s most of what what needs to be done. Whereas offshore

It’s it’s just so many co contracts, so much complexity. And then, you know, as I as an like I’ll always be an engineer and I’ll always, you know, I’ll always be keen to see the big toys and all the rest of it. ⁓ and just the complexity of what the engineers can deal with in the sense of, you know, what they can do fifty fifty five meters below the level of the seabed or b below the the sea level, ⁓ on the seabed, you know, without being able to get there. It just it blows my mind all the time.

Adam Sroka (18:23)
And I think, for me, it’s like we, when we look at…

the amount of money that goes into actually should we, can we build a wind farm here? Like the big bear and the surveys and stuff is just like really frightening and scary. And the other thing I think when I’m talking to like normal people that aren’t energy-daring.

You see the wind farms often on the horizon out of the sea and you just think, okay, maybe you’ve been to Whiteley or you’ve seen a great big untrawable and you’re like, that’s really big. You just cannot fathom how much bigger that one out on the horizon is than the one you’ve just stood next to.

Gary Connolly (19:00)
Like this classic father Ted. Yeah. Yeah. Near and far, you know that’s father.

Adam Sroka (19:06)
I’ll say

as reference, definitely. the, and like you see, I saw a video of them constructing like the actual innards of the turbine and like the tiny little people donning around in this, like, and you just think it’s mental how big they get and talking about like constraints and when you were talking about the regulatory piece as well, it’s like we’re now bumping into, well actually like it’s too heavy for the road. Like it doesn’t matter what.

want to do it where you want to do it. The thing’s too big and the roads won’t, you can’t deliver it. tough life.

Gary Connolly (19:36)
And

and actually that’s a that’s a really useful really useful segue in the another difference because I would say seventy five percent of the challenges that I would have faced looking after an onshore project was actually getting the kit to the site. Okay, and you know, and because you know Yeah, and just just trying it around corners and and up up very narrow roads and all that stuff ’cause you don’t by definition you don’t build wind farms, you know, on the outskirts.

Adam Sroka (19:53)
and completely stuff.

Gary Connolly (20:04)
Well, widely excluded, but you don’t you don’t bull them off on motorway. so whereas the good thing about an offshore project is you just load all the stuff onto a ship and then you take it to wherever you need it. So you don’t have that kind of logistical piece onshore that that you need to worry about from a from an onshore point of view.

Adam Sroka (20:21)
That’s where the easy bits end.

what about the kind of soul of ESB? Like what does ESB do that makes it different? What do you bring that’s different to the way you deliver and develop and trade and operate?

Gary Connolly (20:36)
Yeah. So so I think and you know, I would say this, wouldn’t I? But I used to I would say ESB is a great company to work for. And why is it a great company to work for? ⁓ I think at at heart it’s an engineering company. You know, I would say I don’t actually know the numbers, but I’m guessing there’s something like seventy percent of the people that work in ESB are are an engineer of one variety and or another. so it’s it’s a natural home for engineers.

It’s it’s actually driven by values. Okay. And I know that’s the that’s the in vogue thing to stay now if you’re a company, you know, we have but like if there’s there’s about ten thousand people that work in ESB and I would be reasonably confident that if you went and picked one up random randomly and asked them, you know, what our four values are, they would tell you. ⁓ and like I I had our chief executive in Edinburgh last week, you know, for for a visit to the H Cape one farm and

He he often says, Look, as an organization, if you have any concerns about what you’re doing, just ask yourself the question, what do your values tell us? Mm-hmm. And it’s a it’s a really good touch point in the context of saying, is this is this the right thing to do? ⁓ and what that means for me personally is that it it means that so I go home and go to bed at night and I can sleep because I know I haven’t done anything that’s outside the realms of what

aligns with my values and the company values. I think we’re financially strong. Okay. ⁓ and that’s really important to the other part of the organization, which are the accountants. ⁓ like these they invest a lot of time and effort to make sure we’re financially strong. But but that it’s more than a it’s more than a label. Like we are government owned. We we have to be seen to ⁓ you know do the right thing from a from a financial point of view as well. so I think

All of those factors contribute to to ESB having the culture to be conservatively brave, I would say, is probably the best way to describe it. So so we we’re not reckless, but but we definitely try things that ⁓ that are that takes us take us outside of our comfort zone. And that’s why, you know, like we only started working on offshore one in twenty seventeen. Right. so so and and now we have a portfolio.

We’re involved in a portfolio in the UK of about seven gigawatts. we don’t own all of that because every project, virtually every project that we’re involved in is is a joint venture with with other parties. so so it like that’s to me that’s a really good example of says why why ESB recognizes something that’s really important from a an energy space point of view and then gets on and does it.

Adam Sroka (23:18)
Yeah, that’s really interesting. I the value thing is like, can be really cringe and like a lot of companies you look at them and it’s like you could just word soup. But it leads into, I do, I personally do a lot of the kind of strategy consulting piece.

helping people figure out, what should we do and why should we do it stuff? think like even strategy is a dirty word in that everyone says it. No one really knows what it means. And they’re just kind of just, yeah, strategy. And I think values are the same in that they’ve kind of been like muddied and murky. But for me, the point of strategy values is that cognitive shortcut. It’s that if in doubt, like this is your safety net. Like if you behave this way or you do these things, you can’t go too far wrong.

Gary Connolly (24:06)
It’s

a test. It’s absolutely the test, you know. So if if you’re trying to figure out, you know, should we invest in another offshore wind farm or should we build an onshore wind farm? Or, you know, should we should we trade Russian gas? Yeah. That type so so if if you’re having those challenges ⁓ associated with the organization and you go back and say, Well what what do our values say? Like they have real value? They absolutely have real value from my personal perspective.

Adam Sroka (24:34)
Yeah, it gives everyone that shared language and like just stuff goes smoother when everyone’s on the same page and like sometimes it will put people off and that’s okay. I think most companies like to be so beige and bland that like they don’t put anyone off and you end up with beige bland outputs. Whereas if your values, it’s not for some people, it’s nothing wrong with that. That’s fine. It’s a good place for you. That’s good. Onto projects then, financial strength.

doing things interestingly. In your opinion, what makes an offshore wind project bankable today? What makes a good project that people should be looking out for?

Gary Connolly (25:10)
So so by definition, so I’m assuming we’re starting on a on a basis that we have a consent and that we have a grid connection. Because if you don’t have those two things, you you you you you don’t have any kind of a project. But assuming assuming that those two are there, there there’s a few others. I think like one one that strikes me is is that and it’s I actually think is the most important one. ⁓ so projects are built by people. So if you don’t have the right project team together

Then you’re not going to be able to to d deliver a project. And, you know, having the right team together means if, you know, if you excuse key the cliche, you know, you have to have the right people on the bus, which also means that if you have the wrong people, you have to get them off the bus as well. You know, so it’s it’s a it’s a two way process. But If you get the right people, I think that’s the first thing and that makes a difference. Because ultimately you’re going to rock up, you know, You’re going to rock up to a bank and say,

So we want to spend £3 billion on a project and we want you to give us £2 billion of that. Okay, and they will rightly say, well why should we give you £2 billion? You’re We’re going to give you more than you’re going to invest in it yourself. So tell us why. And I think the people and the experience behind the the individuals are there that’s one big factor. Mm-hmm. Like I think the other thing that’s really important in terms of a bankable offshore project is

the whole piece a around the su the supply chain. ⁓ because like you you cannot get to the banks and say, you know, it’ll be all right in the night. You know, because we we have learned we’ve learned hard way to be frank, in terms of if you don’t have the contracts in place for your foundations, if you don’t have very solid contracts in place for your turbines and

cr you know, over the last number of years, if you don’t have contracts in place for the people that are actually going to, you know, lift and shift that stuff, effectively the vessels and all the rest of it, then the wheels can come off the wagon really quickly. So so I think the supply chain piece and having that nailed down is really important. and then the third thing of course is the is the route to market. You know, because and that route to market is critical, particularly for a company like us, you know, ’cause we’re we’re about minding our financial strength and

And making sure that we don’t put at risk what effectively is a state resource. You know, the the company, we pay a significant dividend to to the Irish government every year. so we need to be we need to be mi mindful of that. We need to be guardians of of what we do. and currently a government backed route to market is still the most secure option for us to ⁓ to bank a project.

Adam Sroka (27:49)
There’s a lot there. That’s like… The people piece is interesting because

I don’t think there’s anything wrong with this, but it makes me think that you basically can’t, you need to have the experience in the room. Like a load of grads that really clever, went to a good uni, couldn’t get together and raise the money and do it. They wouldn’t have the credibility. You kind of want to see people that have the scars and have the expertise. And even like, okay, not so much just young people, but like a load of tech entrepreneurs come in and…

just like experienced operators, would they be able to get that kind of like, would they pass that test? ⁓

Gary Connolly (28:28)
So they

like so I I’m speaking very much from personal experience here in the sense that, you know, one of our first forays into offshore wind as as ESB was alongside EDF and a project called Nerd Negilla N and G. and that that was a really challenging project did a lover. You know, it came in late ⁓ and and you know, cost more money than it should have done. ⁓ and if someone said to me today, So why did that happen?

Like I’ve said re I’ve said many times to people, so we as an ESP, we didn’t know what we didn’t know. Okay. And I know working on Inc. now and working on the projects that are coming down the line, we do we know a lot more stuff than we did when we started. And we also know the stuff that we don’t know and where we need to go and get help for that. So can a bunch of graduates that that have, you know, graduated with first class honors from University of Glasgow or wherever it happens to be, can they build an offshore one price?

⁓ absolutely, ’cause they have the technical skills and the intelligence and all that stuff to be able to do that. ⁓ but do they know where the the bear traps are? Probably not. Okay. And and that that’s not that’s not that different to any other field of work. Of course. you know, you need people like myself with grey hair to say, here, just watch out for that one.

But that’s that’s normal business. I think part of the challenge of offshore wind is it’s still a young industry. You know. Like offshore wind is full of people like me who who started off on a completely different career path because you know, when I was a student, the notion of offshore wind didn’t really exist. so when when you have a scenario where you’re in a relatively young industry, you don’t have, you know, the academic learning, you don’t have

Adam Sroka (30:05)
Of course, yeah.

Gary Connolly (30:14)
the ⁓ experience of of working in other projects. So a lot of people are learning as they go. and the more of that information you can capture at this stage, the better when you when you go off to start a new project.

Adam Sroka (30:27)
I’ve got a question. Could I go and build an offshore wind farm? Would I be bankable? If that was the measure, does the team, could I just go and raise the money and build an offshore wind

Gary Connolly (30:38)
So the the really interesting thing is, and I’m not gonna make any comment about your capabilities and I’m

Adam Sroka (30:44)
I’ve got a couple of grey hairs. More than a couple.

Gary Connolly (30:45)
But

but I think the really interesting thing, so like I before I worked for ESPE, I would have known them as an entity and said, Look, that’s a really good company, it’s a big company and all the rest of it. We can’t build offshore wind farms by ourselves. it’s just the scale of the investment. Yeah, of course. so we took on to build one, you know, average size offshore wind farm today and got it fantastically wrong.

It could bankrupt the company. Yeah. Okay. So so any individual or any kind of startup organization or any of that stuff, my my honest views is that that’s not where it’s at. And and sometimes people get frustrated because they say, you know, you’re not leaving room for pioneers and and all of that all of that good stuff. But but, you know, you need you need money, you need experience, you need the the resource behind you and and unfortunately or fortunately that comes from

Adam Sroka (31:28)
ever.

Gary Connolly (31:38)
Large companies.

Adam Sroka (31:40)
So we’re in body Scotland, what about Scotland and the wind industry? What are your views on where things are going?

Gary Connolly (31:48)
So so I had never I had rarely visited, never mind worked in Scotland until twenty fifteen. ⁓ like for us, you know, coming from Northern Ireland, for us Scotland was somewhere you just drove through when you’re going to England, you know.

And and then I got the opportunity to start working over here in in twenty fifteen. And I have to say, since twenty fifteen for the last decade, I like I I’ve just loved the place. I think it’s a fantastic place to be. I think it’s a it’s a really positive place from an energy point of view. I think the mindset is fantastic and all that stuff. And so long may that continue. it like Scotland has one of the best resources in the world from an off offshore and onshore wind point of view. so so that that makes it really positive. I think the other thing that Scotland

Scotland is pioneering in many ways. ⁓ so sc so Scotland from a UK point of view and some might say from a a global point of view, like Scotland has been at the forefront of floating offshore wind and I I would say that they can they will continue to be. you know, we will continue to be we we have interest in floating offshore wind projects in in Scotland. And you know, They will be at the forefront of of what happens in the commercialisation of floating offshore wind in the world. I think the other thing Scotland’s

gonna be it’s gonna be really important from a Scottish from a global point of view, certainly from a UK point of view, is being able to deliver projects that are farther from shore and also projects that are in deeper water. I think you know they’re they’re set in their stall like now they have challenges. Like the biggest single challenge that Scotland has is a grid, the grid system in the sense that actually the physical wires but also the cost of of ⁓ using that system to export electricity. So again I think

The the the future is bright for Scotland from an energy point of view, but there’s work that needs to be done to make sure that it can actually deliver its full potential.

Adam Sroka (33:39)
It’s palpable, the thing you mentioned you talking about there, all of it, the pros and the cons, like you can feel it in the air here when people talk about energy and it’s a good passionate place. It’s very exciting living in Edinburgh and working in Glasgow that it attracts so many people to come and live here for this. actually a lot of the people, lot of English accents in Edinburgh are doing exactly this, like they’re coming to be in the energy space and make a big difference. And it shows that it’s drawing talent in.

for something good, like something, an interesting way to spend a career, like doing good stuff.

Gary Connolly (34:13)
And

and and we shouldn’t forget, you know, the transition that people have been making from oil and gas into the offshore sector as well has been really important. You know, the the number so that that really interesting engineering stuff that I’m talking about in terms of what the guys can do offshore, like that has all come from the oil and gas standards. You know, they they have pioneered that and and they’re you know, they’re they’re making that transition for from a lot of them are from from oil and gas now.

You know, oil and gas very fickle, you know, with the times we’re currently live in, you know, it it suddenly makes sense to produce as much oil and gas as you possibly can. But, you know, in three years again, who knows where it’ll be. So so I think the the renewable sector from a Scottish point of view is a much more stable platform from a national point of view, but also from ⁓ a jobs and roles point of view in the context of you know, it’s it doesn’t have the boom and bust nature. I don’t think that the oil and gas sector can have.

Adam Sroka (35:09)
Yeah, I think that’s wholeheartedly true because you’re not transporting something that is easily transported around the world on ships.

the centralized incentivization to kind of make this happen and go a certain way. We’ve just opened our Aberdeen office. So we’re very familiar with people that are making their way over to the renewables industry from oil and gas. And there’s so many great people out there that are just hungry to keep going and doing interesting things. it’s an exciting space to see how it

changes and again if you’re into big toys and big pieces of kit it’s great industry to be adjacent to. We talked about supply chain a little bit is it keeping pace with what we need? Like do you feel that supply chain is becoming more stable in this space?

Gary Connolly (35:56)
The supply chain piece I think is is really interesting from my point of view because if you talk to any government, so you talk to the Irish government, you talk to the Scottish government, you talk to the guys in Westminster, they all say, you know, we want to see local content, you know, and we want to build a turbine factory and, wherever, Dundee, or we want to build a cables factory, or or we want to build jackets and Belfast or whatever it happens to be. it might

be controversial, it might be the wrong thing to say, but in some ways I think that’s kind of past the post for us. in in the sense that ⁓ there are other people that have been doing that for a long time that can do it more cheaply than we can do it. And you know they they j they just have the kind of infrastructure that they need to deliver that stuff. And and therefore I think we’ve kind of missed the boat in that sense of of trying to build turbines or jackets or whatever it is that we

But I’ve seen really good examples ⁓ in Scotland and elsewhere of companies that I have identified a niche in the supply chain and saying, we can do that, and they do that really well. And they make good money at it because it’s a value added service that they provide. It’s not it’s not about, you know, hammering out a piece of steel and doing it for the cheapest that they possibly can do. You know, that like from a Scotland point of view, there’s companies there like

Like I always talk about Briggs Marine who did work for us on on NNG, you know, a company of about a thousand people based on the on the first the first of the fourth. and if someone says to me, What do Briggs Marine do? and I say, I’ll tell you what they do. They come along and they ask you, What’s your problem? and then we’ll fix it for you. And that’s you know, that’s kind of what they do. And and because they do that, so they supply vessels, they

You know, they’ve they provide engineering scopes, they fix they fix broken pieces of kit. They do all sorts of stuff. and they have figured out that that they’re they’re in a niche that they can provide that service, that there’s not too many others that are doing that. There’s another company called ⁓ Aventus Energy who ⁓ again originated in the oil and gas sector and they’re now doing a lot of work on on the offshore side. They’re working for us on on Incape. again, similar scenario whereby it’s a group of individuals who figured out

There’s a gap in the market here and and they’re filling that. Another another really good technology company in Ireland is a company called XOcean, who make autonomous vessels for survey work. and again, the people behind that said, There’s nobody doing this well and we we can do it. they actually came from a a wave and tidal company. That’s where they started off from. And that that became

difficult for them, but they the in in terms of the work that they had to do for that wave and title work, they saw there’s actually no one can get the the information that we need quickly and cheaply. And so they they went off to do that themselves and then they’ve been working all over the world doing that. So so for me, for the supply chain from a UK and Ireland point of view, it’s about innovation. It’s about figuring out what’s needed and and providing it to the development companies as opposed to trying to say

You know, we can make a we can make a foundation five percent cheaper than those guys can do it for.

Adam Sroka (38:59)
I wholeheartedly agree. like you’ve touched on, so we know X-Ocean very well, recently announced AWS pioneers in their space. AWS, Amazon Web Services have recently announced that X-Ocean are one of their big leading pioneers in some of the sort of digitization and forward looking use cases. And it touches right into that value add piece. And I guess where we live is that like, what’s your view on

digitization and the impact AI and data can have on what the next 10 to 20 years of this industry might look

Gary Connolly (39:33)
So so for me, looking specifically at the offshore side, and there’s no reason why it can’t happen onshore as well, but looking specifically at the offshore side, like The big challenge for us is gonna be around making what we do as safe as we possibly can. And One of the things that you can do to make the job safe is to stop putting people offshore. Mm-hmm. Okay. And I think, you know, things like improved connectivity to the turbines, you know, better AI better AI systems.

use of of remotely operated, you know, whether it’s vessels or submarine vehicles or drones, you know, all of those things can help can hopefully help fix some of the problems that we’re likely to see on turbines over the next twenty five, thirty years and avoid the risk of putting, you know, a young man or a young woman on on that jacket, on that foundation, because you know, it is it’s not ⁓

it’s not an easy working environment and it can be a dangerous working environment. So anything we can do to to reduce that level of risk and of course doing that reduces the cost as well. So that that’s where I personally see the the main use for the kind of you know the tech frontier in terms of sorting out what what I do in my day to day job.

Adam Sroka (40:52)
That’s amazing. ⁓ really plug ourselves for change, but we recently won ⁓ Scottish Enterprise funding to do a feasibility study on marine mammal observation and invasive surveys. So can we help some of these autonomous survey companies like Exocean look at detecting fishing line and like leftover debris in the water, pods of mammals and things like that? Because some of the regulation at the moment, man,

dates that there needs to be a human on the boat that does that and can we prove that you can get equivalent or better results in a kind of semi remote setup because for exactly that reason okay the regulation says one thing but

Can we change it? Can we prove that it’s changeable and without any harm to the environment? So it’s often why I’ve said ecologists. So like under no circumstance am I here thinking, it doesn’t matter. the opposite. Can you do a better job in a safe way that scales, reduces the cost and makes this easier for everyone?

Gary Connolly (41:53)
Like in fairness to like to the the health and safety sector, have moved from being ⁓ a sector that’s about you shall and you shall not, you know, and the barrier needs to be one point two meters and blah blah. So so they have moved from that kind of regulation space to say, you do a proper risk assessment and if you can convince us that the risk assessment means what you’re doing is safe, then do that. And and that’s exactly the same thing in the context of the the the environmental model. So it’s not about

Setting the regulations and setting the rules, it’s actually about assessing the risk and making sure that that you don’t ⁓ you don’t overstep the risk. And if you can do it in a different way, fantastic. No.

Adam Sroka (42:33)
don’t know, I don’t agree. So before I let you go, any hot takes or controversial opinions? Any like sort of juicy goss or heard it here first?

Gary Connolly (42:41)
I I would say and and again it could be slightly controversial, but I think ⁓ like we’ve had the fortunate experience of being involved in building Inch Cape at the minute. Like Every single piece of metal that has come to that project has come from China in terms of foundational structure. They have delivered on time, on budget, really high quality, ⁓ really good safety record. You know, so so

it possibly has helped us is that we’re actually working alongside Red Rock Renewables who are a Chinese company. And and maybe that’s had an impact on that. But but it certainly demonstrated to me what China can do. I think it’s only a matter of time before Chinese turbines start to appear in the in the market for UK projects and I think that’ll have a complete disruptor effect in the context of where the industry goes. Because speaking very frankly,

⁓ we don’t have enough competition in the turbine space at the moment to to build ⁓ an offshore wind farm, you know. There’s two stroke three suppliers. and they’re they’re kind of at capacity. So it’s a seller’s market from their point of view. and it’s it’s I think it’s hampering the competition a wee bit. So but if we see if we see competition come from China, then that that’ll that’ll disrupt the whole market space.

Adam Sroka (44:00)
That’s a good one. That’s one of the better hot take moments we’ve had. mean, look, we’ve seen exactly that play out in Bez where like everyone and their dog is now buying Chinese batteries because yeah, exactly the same thing on time, affordable, qualities high, like tick, tick, tick, tick, tick. So yeah, very interesting.

Gary Connolly (44:20)
Like geopolitically it’s it’s difficult, you know. But but

but I think you know ⁓ like ultimately if you take it at face value, ⁓ you know, the the quality of what can comes across is is ⁓ is second to none, I would say.

Adam Sroka (44:34)
Yeah, you can’t spin up a turbine factory in six months, right? Like, takes some time and that’s a significant investment.

Gary Connolly (44:40)
And I think sometimes we forget, you know, we forget that China’s is the biggest offshore wind market in the world. You know, so so it’s not as if they’re gonna send us over something that has never been built or tried or tested. You know, it’s it they’re all they’re all there operating in that market space. So and and ultimately, you know, we’ll get we’ll get what we pay for in the context of you know, if we want if we want a particular quality and a particular standard and warranty and all the rest of it, then we we’ll get it.

Adam Sroka (45:07)
Very good. Okay, well, what’s next for ESP in the sector?

Gary Connolly (45:10)
So so w one of the things one of the things for ESB is you know, I told you where Herdys came from. We’ll be a hundred years old next year as an organization. we ironically we started off as a as a renewables company. So in nineteen twenty seven, the first kind of national electricity generation in Ireland came from a big hydro scheme in in the country. ironically, built ⁓ built by a visionary Irish man.

with ⁓ with a lot of help from Siemens in Germany. Really? In nineteen twenty seven. And those turbines, those those ⁓ hydro turbines from Siemens are still there generating electricity. Yeah. so so we’re very focused on where we came from, what we’re about, and we are very focused from an Irish point of view in terms of delivering energy. And I as as our chief executives has said in the past, you know, there’s never been a significant

change in Irish energy policy that ESB hasn’t been at the heart of. Yeah. And I think the next one for us now is going to be offshore wind. And that’s part of the reason that I’m over in Scotland and England doing offshore wind is to make sure that we can, you know, we can get the scars in her back as we were talking about earlier on, and then take them back and deliver. So just literally just before Christmas we secured a site called Tonneau off the southeast coast of Ireland. So I would say that’s, you know, that’s going to be

It’s gonna be one of the very early offshore wind farms in in Ireland and ESP’s gonna be right behind that. So I think that there’ll be a focus on that now for the next five, six, seven years to to actually make sure that that happens. Very cool. And in the meantime, we’re still continuing the the lover projects on this side of the water as well. Yeah.

Adam Sroka (46:52)
Very smart.

Look, this has been amazing. mean, before we let anyone go, I always like to ask the question, if there’s anything you’d like to promote or plug, or if people in the audience want to find out more about you or ESP, where should we point them?

Gary Connolly (47:04)
so so the the simplest place is the is the website. I always laugh to myself because when I came to work in Scotland initially and I told people it was from ESB, you know, I might as well have been telling them I came from A B C because it meant nothing to them, but but ESB stands for the electricity supply board. ⁓ it’s quite unusual actually because it’s an organization that has been set up by an active government in Ireland. So it sometimes it causes confusion whenever we’re trying to get

trying to get funding and stuff because they say, show me your company registration and we go, Well, funny you should ask. So so but the the good thing about it is is that so it’s very easy to find out about ESB. It’s ESB dot IE. ⁓ everything that you they need to know. Like I suppose we’re not we’re not in the business of selling stuff in the sense of of what you know some of your other other clients and other ⁓ contributors will be. all we want to do is make sure that we love our energy

to Irish consumers and actually British consumers, for the for the best pot for the best cost that we absolutely can for them. So y you know, you’ll find if you go into that website you’ll find ways through to your electricity supply companies and so on. But that’s my job is to is to make the electricity, not to sell it.

Adam Sroka (48:17)
Cool. Well, look, it’s been an absolute pleasure. Thank you so much for joining us here in Glasgow. You’re welcome. And we look forward to seeing you over the waters in Monaco.

Gary Connolly (48:27)
Thanks, William.

Adam Sroka (48:30)
Thank you once again for listening to the Hypercube Energy podcast. As always, if you have any feedback or comments or you want to get involved, please get in touch. And if you want to find out more about what’s happening in data and AI across the energy sector, please join the Beyond Energy community and I look forward to speaking to you soon.