The Friday Interview:Irish company CES Energy is gearing up for three major projects in Australia, Belgium and the UK that will involve investments running into the tens of millions of euro. By contrast, here at home, its projects involve just hundreds of thousands of euro.
It's not because the company does not want to do business here, managing director Tom Marren says. He believes it is largely down to the fact that the market is only just beginning to realise the potential savings that can be drawn from new energy technologies.
"We've spent a lot of time over the last five years [ since the company was formed] ploughing energy, resources and money into this, but one thing we have found is that we have educated the market a lot," he says.
CES Energy manufactures and sells combined heat and power (CHP) units. Put simply, these are self-contained units that can be fitted into individual buildings. They produce both electricity and heat, which provide all of the structure's energy needs.
As the generators produce electricity, they also give off heat, which is captured and distributed around the building. The system also uses this heat to drive air conditioning (by cooling the hot air).
This contrasts with the usual process, whereby the heat produced by generation simply escapes into the atmosphere, and the electricity is used to produce heat and drive air conditioning units, as well as provide light, power computers and a range of other items.
The units are connected to the general electricity network, so if they cut out, this connection kicks in automatically. They can also supply the network with any electricity they are not using, which can be offset against the cost of taking electricity from the network.
The units are gas-powered, so their running cost is linked to the price of gas, which is at a low at the moment - although that won't last forever.
Tom Marren and his brother, general manager Brendan Marren, say their system can cut about 30 per cent from energy bills, meaning they will undercut the general market price by 30 per cent.
Irish businesses have not been very enthusiastic about the technology to date, but the brothers are having no difficulty selling it abroad.
CES Energy is raising €50 million through a subsidiary, Cogent Energy, to fund two major contracts it has won in Australia. It will supply combined heat and power units to Blackmores Healthcare, a natural products specialist which last year had sales of €94 million and profits of €14 million. The second project involves fitting units into Sydney's biggest commercial buildings. Brendan is responsible for the link with Australia as he lived and worked there for 14 years.
CES is also investing €20 million in supplying and fitting CHP units in a large mixed-use development in Tubliza, about an hour outside Brussels in Belgium. It will consist of a shopping centre, hotel, apartments and commercial buildings. "Instead of putting in individual boilers and chillers in all the units, we're going to build a central energy plant, which will provide district heating pipes and district cooling pipes," says Tom.
"District heating" is another new phenomenon. Tom explains that the way it works is that, for example, instead of every apartment in a block having its own hot-water boiler or heating system, this is provided centrally, which is more efficient and uses less energy. It can be used in apartment blocks and housing developments, and the technology allows each household to switch the services on and off as they need them.
The idea was developed in Denmark, which, as a result of a decade-old policy of encouraging investment in alternative energy technology, now makes €8 billion a year from exporting these products and linked services.
The lord mayor of London, Ken Livingston, has recently taken up the cause of district heating systems and CHP. As a result, CES is lining up a major project in London, which is poised for a huge surge in development thanks to the 2012 Olympic Games.
But despite the international success, the Marrens insist that they are still "more interested in the Irish market".
You may ask why, but the answer is simple: the Government wants to see 10 per cent of all energy needs met from CHP by 2010, but it currently stands at less than 3 per cent. Factoring in demand growth of about 3 per cent a year, we're a long way from hitting that target, so there is huge scope for growth.
In fact, the brothers argue that the Government will need new policies to meet the target. Last year, it introduced grants of up to 30 per cent of the cost of CHP units in an effort to get the process rolling. While Tom says this was a step in the right direction, he says the Government needs take at least one more.
"A grant is fine, but it's just a once-off thing," says Tom. "For the long term, in European countries, they give you a premium on your 'spill price' as well. The Government actually needs to do this."
The "spill price" is the money paid for any excess electricity the CHP unit generates which is sold to the general network.
Like many people in their sector, the Marrens are critical of the Government plan to spend €270 million on carbon offsets.
Instead, they say the money should be spent on creating incentives to invest in new energy technologies. More than once, they point to the €8 billion in export earnings that the Danish companies are raking in. "They'd be laughing if they saw what was going on here," Tom says.
Leaving arguments about the big picture aside, CES is beginning to make headway in this market. It will be fitting its systems into the new Hilton hotel in Kilmainham, Dublin. However, the brothers say that, while the orders are starting to come in, "the floodgates haven't exactly opened".
The name Marren is already familiar to people in construction. Marren Engineering is a business that provides and installs heating, ventilation and air conditioning equipment in buildings.
The brothers were looking to diversify five years ago and, while energy was not on everyone's radar in the way that it is now, they could see what was coming down the tracks. "There is a natural progression, but it's a very different area in one way," Tom says. "It made it an awful lot easier to jump into it."
On the Record
Name:Tom Marren
Job:Managing director, CES Energy
Age:39
Education:De La Salle, Raheny, Dublin, Trinity College Dublin, University College Dublin
Why are they in the news?:CES Energy, is investing €50 million on a major project in Australia and another €20 million in Belgium.
Family:Married with children
Something surprising:Loves running marathons
Something not:Is a qualified engineer
Name:Brendan Marren
Job:General Manager, CES Energy
Age: 37
Education:De La Salle Raheny, Dublin
Family:Married with children
Something surprising:Ran several successful telecoms businesses in Australia
Something not:Like his brother, he loves running marathons
