US multinationals based in Ireland are likely to follow in the footsteps of Ikea by creating their own energy supply, in an effort to control their energy cost.

The Swedish furniture giant yesterday announced it had made its first foray into the Irish energy market through the construction of a new wind farm in Co Leitrim. Located in Carrickeeny, the plant is being constructed by Mainstream Renewable Power, and the electricity it generates will be used to supply Ikea's two Irish stores, in Dublin and Belfast. The wind farm will have a capacity of 7.65 megawatts and consist of four turbines. It will have an expected annual production of 25GWh, generating the equivalent electricity for approximately 5,500 houses a year. Ikea will sell electricity generated by the wind farm to Irish energy supply company Vayu, which will supply electricity to the retailer's Dublin and Belfast stores under a 15-year contract.

Blazing a trail
It is understood Ikea is the first corporate in Ireland to go down this route, but it's unlikely to be the last. According to David Gascon, head of electricity at Vayu, Ikea's initiative is "not new", and has successfully been pursued by giants of the corporate world such as Google, which has invested more than $1 billion in low-carbon power. He sees further potential, particularly among US multinationals, and says Vayu talking to one in the IT sector.

Kenneth Matthew, chief executive of the Irish Wind Energy Association says other corporates could to adopt a similar strategy. Ikea's move is part of the group's €1.5 billion sustainability strategy, which will see it produce as much renewable energy as it consumes by 2020.

“The real benefit is that energy is the second-biggest cost in store, so if we can be involved in supplying it, we can ensure the security of supply and keep costs down,” says Joanna Yarrow, Ikea head of sustainability.