Can Wind Power Make Us Rich Again?

0:00David McWilliams: This episode of the podcast is brought to you by Count of its Gerald Ireland, proud sponsors of my own festival, the Dawki Book Festival, which is on the 18th and 21st of June. Now, in Dawki, you're going to expect four days of ideas, of literature, of politics, of economics, comedy and culture with over 100 writers, including Salman Rushdie, Tim Berners-Lee, the man who founded the internet and, of course, Booker Prize winner Anne Enright. join us this summer in Dalky. Thanks again to Cantor Fitzgerald Ireland, helping people plan with clarity, invest with confidence and build lasting wealth.

0:36David McWilliams: Find out more at cantor Fitzgerald.ie. Cantor Fitzgerald Ireland Limited is regulated by the Central Bank of Ireland. Today's podcast is all about the extraordinary, maybe even gigantic potential opportunity that is wind farms in the Atlantic off Ireland's Atlantic coast, which is actually seven times greater or bigger than the island itself. An extraordinary way to reimagine Ireland for the 21st century. That's all coming up in a couple of minutes.

1:09Support for this podcast is brought to you by Walden University. Ever catch yourself thinking, what if I could go after what I actually want and really make a difference? You're not alone, and that's exactly why I want to tell you about Walden University. For over 50 years, Walden has helped working adults like you get the W with the knowledge and skills to build the future you want and make a difference where it matters most. If you've been waiting for the right moment, this is it. Head to waldenu.edu and take the first step. Walden University, set a course for change. Certified to operate by Shev.

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2:16To understand the economy, you have to understand human nature. This podcast is powered by Acast.

2:42North at Syrah, south at Syrah. German bite. Southeasterly becoming variable, three or four. Thundery showers, good. How are you doing there? It's podcast time. That is John dropping the book that he was reading, The Shipping Forecast, out of. The reason we are doing... How are you, Ed? I'm great. I love The Shipping Forecast. It's such a big part of my youth. I used to go to sleep with it every night. Certain people are the things you want to see before because I don't even ask any questions, John. By the way, John is sounding particularly good. About two minutes ago, he was sounding like Rasha's Tierney.

3:20It is Christmas. You are coming down with something horrendous. I'm dying. Of course, that's always the way. That's always the way that the whole Irish nation contracts a virus the week before Christmas. Yeah. And it's largely to do with the fact that we're actually tearing the arse out of things and not getting enough sleep, right? Well, I might be coughing and spluttering throughout this, but anyway. Anyway, what we're going to talk about today, we are going to talk about the reason we start with the shipping news.

3:47David McWilliams: The podcast today is going to be about the enormous and transformative opportunity that is the Atlantic. I was down, as you heard last week, in Inchidoni, in Clonacilty, last week during Storm Bram. And one of the thoughts that came to me as I was being blown off the headland there. Blown into a pub. Blown into a pub. Scannels is the pub. Is it? That's the one. Yeah, yeah, yeah. This is our clonicilty, our clonometer. When it comes to pubs, our clonometer suggests that Scannels is the place to go. Shannon and I went on a small pub crawl, a Tuesday night clonicilty pub crawl, and we decided that at the end of it, Scannels.

4:30But it had to be Murphy's. And Beamish. And Beamish, of course. Oh, no, no, we had Murphy's. We went to the bar, ordered a stout, and your man looked at me. And I was like, come here, Langerhuancha. I was like, get out of here. So Murphy's a bit... Anyway, all we're saying is that the idea is

4:47David McWilliams: the Atlantic is this enormous resource. The Irish Atlantic, that's what we're going to call the territorial waters of Ireland, are seven times larger than the landmass of this country. And when you are faced with this extraordinary south wind, you realize the power of nature. And if we can, obviously it's a massive engineering problem and a massive engineering challenge, but if this country could channel the extraordinary wind power of this enormous, vast area, maybe not doing anything other than selling leases to other people. I mean, you don't have to do it all yourself. We figure out, and we talk about the various different financing options, but the potential is enormous.

5:34David McWilliams: And basically what happens is Countries need to come up with a trick or a plan every generation. Our last plan was the idea getting the Americans over. That was the trick, right? That was the transformative trick. It was a very, very good one. But as we did in the last podcast, who knows what's going to happen? A future plan has to be a resource plan or could be a resource plan if you're lucky enough to have this extraordinary asset out there called the Atlantic. So the podcast today is going to be upbeat. Good. Transformative. Good. It's going to be talking about opportunities. Tick. Tick. But there is going to be the dilemma.

6:16David McWilliams: Can a country like Ireland, given what we know about our inability to build a metro, to build a children's hospital, to build, you know, et cetera, given that we know we haven't added one inch of rail infrastructure since independence, given what we've destroyed in rail infrastructure? Is it even logical to assume that from an engineering perspective, we could harness this extraordinary opportunity? So that's what it's going to be about. It's going to be about the potential, but also the challenges and the ideas that Ireland needs, as I said, a once-in-a-generation trick, an economic plan. This seems to be one of the more logical ones.

6:59So that's what we're going to be talking about today. Yeah, we have lots to talk about on that. But actually, just before we get there, Mike, There I was, flicking through the Wall Street Journal, as I do on a weekly basis. What have I done to you? This man used to read The NME and Kerrang. And Viz. And Viz. This is Buster Gonad. But I came across this review. Oh, yes. Yeah, you know. The book is going from strength to strength. Go on. The Wall Street Journal, okay. This is the not-so-humble brag. Yeah, yeah, yeah. You're allowed. You're allowed. Yeah, okay. So the Wall Street Journal is, as you know, the sort of, it's the Financial Times of the United States.

7:39It's the sort of the Bible for all finance, monetary, economic sort of things. And it's sort of a really, really nice review at the weekend.

7:48David McWilliams: Yeah. But more importantly, the review was by a guy called James Grant, Jim Grant. Now, in the world of monetary economics, of financial markets, there is, and I know you might find this a little bit of a boring title. But the Grant's Interest Rate Observer, John. Oh, yeah. That's the next one I'm going to be on to. It's giving you the horn. I can sense it already, right? Okay. Well, you're going to have to subscribe. Right. So the Grant's Interest Rate Observer is the Bible for conventional and unconventional monetary history, monetary observation about the world of finance, about the world of bonds, about the world of geopolitics, of economics, the whole thing.

8:32David McWilliams: and it's written by a guy called Jim Grant. Now, Jim Grant has been writing this Bible. It comes out twice a month. Because he's not invited to any dinner parties. No, exactly. He's got no mates. So he's just at home writing. He just sits at home writing this Bible twice a month, right? Since 1983 and it has consistently been the go-to. So Grant is the guru of monetary economics. Right, okay. And the Wall Street Journal, as you kind of expect, would get someone like that to review a book about money. so number one you're being reviewed by a legend in the game right and number two he loved it brilliant brilliant yeah yeah I know I read it I actually read it and it was very it was a glowing it was glowing but I didn't realise his background yeah well that's the thing so I mean the thing about like reviews is obviously number one is they're great if they're good and if they're shite we don't talk about them yeah right that's the rule of the game right but number two there's a whole pile over there yeah exactly but number two it's the person who writes them is consequential.

9:32Oh yeah. Because they come with their own credibility or lack of credibility in this case. Yeah. Enormous credibility. It's like a restaurant reviewer as well. Yeah, exactly. It really matters who who's doing the review. And when it comes to economics Jim Grant is as good as it gets. And also because he's older like he's probably about 80 now he's read a lot he's riddled a lot of his own books but he's also read a lot and he's really very much steeped in this world. And yeah, it was great. It was wonderful. So there you go, Christmas present. Christmas present, St. Patrick's Day present, Bridges Cross present, birthday present, the whole thing.

10:08But if you're interested, it's in the Wall Street Journal at the weekend. And it's wonderful. And the Wall Street Journal just says, grab a copy. There you go. There you go. Anyway, that was that. That was that. So that's all good. And now we are going to talk about wind, John. Wind. Wind farms. You know, we haven't built a wind farm in 20 years. in Ireland. I mean, offshore wind farms, 20 years. No way. We haven't updated or built a new wind farm in 20 years.

10:40David McWilliams: Because of the ranelisation, as we talked about the other day. I'm not entirely sure, to be honest, but there's probably a lot of that going on. You know, it was the Arclos stuff where we had the NIMBYs, the ranelisation down there. I know in Galway Bay as well, there was a lot. But, you know, notwithstanding that, the future depends on being self-sufficient in energy. And wind seems to be the easy one. At least having some capacity. So basically, let's just talk about energy is the font of all economic growth. You may well have innovation. You may well have shumterian economics. You may well have extraordinary inventiveness when it comes to products, etc.

11:23David McWilliams: But if you cannot power the economy, nothing happens. So in the same way as the basic building block of humanity is ingesting energy and protein in order for us and our muscles to work, right? In a very physical base, the same process for the economy. You have to ingest energy. And the key thing is to try, number one, get energy as cheaply as you can. Yeah. With all sorts of environmental sort of caveats, it's clean and whatever, right? And number two, make sure your supply of that energy is as consistent and stable as you can. Yeah. So therefore, over the last, since the Second World War, there has been a constant problem with energy supplies.

12:13David McWilliams: Number one, because the price of energy, particularly fossil fuel-based energy, fluctuates. Yeah. And number two, you get periodic problems of supply. the greatest example of that in the last five years would have been the Russian invasion of Ukraine. And the consequence of that is the turning off of Russian gas. So suddenly the rest of Europe thinks, oh my God, what are we going to do? We've got an LPG. We've got to get it from America. We've got to get it from the Middle East. And of course, the Middle East has always been a source of instability because it has energy. Yeah. Yeah. And there are cartels as well.

12:47David McWilliams: They're a cartel. And Saudi Arabia, as we know, is the swing producer. So then there's lots of politics involved and all that sort of stuff. But without energy, we don't have any economy. That's the first thing. The second thing is that fossil fuels, as a general rule, warm up the globe. If you're worried about global warming, stop burning shit. Yeah. Okay. Because burning stuff warms the place up, right? And so third then is the general idea. Throw another log in the fire there. Two more logs in the fire. Exactly. Exactly. But the third idea is if there is a source, alternative source of renewable energy, and I know there's a huge amount of debate amongst engineers and environments, but particularly amongst engineers, as to whether it all makes sense from a financial perspective.

13:41David McWilliams: But if there is another source, it would be inconceivable not to try and harness that. Absolutely. And that source is the wind. because we know, so when you're sitting in Inchidoni, right? So Inchidoni Beach, beautiful, right? But in the middle of this storm, you're thinking to yourself, the power of the nature on display last week was breathtaking, right? It was breathtaking. And there is a reason. It's exciting, isn't it? Yeah, there's a reason why musicians wrote and play that trad song, The South Wind. Yeah. On gwi anis, as they say, os gwaeliga, right? because the south wind is a natural wind that blows onto this country from the Atlantic.

14:24David McWilliams: What is really interesting about the south wind is that it is unnaturally warm, or it can be warm. So it's perplexing, you know. They're normally kind of the ends of hurricanes or tropical storms that are thrown off from, and they follow the same Gulf Stream. So they come from the Caribbean, in effect, do they? Yeah. Right, so they come from the Caribbean, So they're kind of warm, which is kind of unusual, right? But the point is they're unbelievably powerful. And it's not that you actually put up wind farms to capture the power of storms. What you're trying to do is get something consistent over time.

15:01David McWilliams: But we are absolutely blessed by this extraordinary resource. And then the question is, you know, why don't we figure out, like, it's weird in Ireland. And for long, we have understood the tourist potential of the West Coast, right? We marketed the wild Atlantic way, et cetera, right? But it's the energy potential of the West and the Southwest Coast, which always seems to me to be something we're kind of overlooking, or at least we are putting up more challenges to the opportunity. We say we can't do this, et cetera. So it would seem to me that if you look at Ireland's Atlantic territory, right, it could change this country from being an energy importer, which we are, because we have absolutely no fossil fuels here.

15:49David McWilliams: We have absolutely none of our own capacity. We have no gas, we have no oil, etc. So we are a very degenerate per head of population energy importer. We're very, very wasteful, right? We could aim to, over let's say a 50-year period, turn this, because it's not going to, this is not going to happen quickly. This is cathedral thinking. Yeah, exactly, exactly, Exactly, exactly. We could turn this country from being an energy importer to a renewable energy superpower, an exporter. If you look at, again, potential is one thing, execution is another, right? But if we had, let's say, sort of an ambition, an appetite for large infrastructure, we could actually, I mean, the power of the Atlantic is gigantic.

16:35David McWilliams: and it could completely transform the country. But also, it would be absolutely ridiculous to have a 50-year plan for this country that doesn't involve wind and harnessing the wind. Now, amazingly, the Department of Finance had a 30-year plan for the state, I think published about three weeks ago, we spoke about it. Yeah, yes. Nothing about this. Nothing on wind. Nothing about are we going to go from an energy importer to an energy exporter, which would seem to me to be the biggest natural resource and opportunity that we have. But talking about finance, just before you, we have committed to being, I can't remember the exact figure, but being carbon neutral as far as we can by 2030.

17:27That's next week. If we don't hit that, we face fines in the billions. Yeah. So it just strikes me that the logical thing to do, instead of handing over billions in fines, that we put the billions into wind. Exactly. And I'm going to talk about how this can be financed later on, but you're completely right. I mean, this is the way the world is going. We are going into a global arrangement,

18:01David McWilliams: whether people like it or not are really supported, that we should not pollute the world any more than we're doing. We shouldn't warm it up any more than we're doing. And so what you see in Ireland is a massive opportunity. There's no need ever to think about penalties. We should be thinking about becoming a massive electricity exporter. Now, this is a huge engineering challenge, but before that, let me just give you the figures of how big the potential is, right? So Ireland's Atlantic, let's just call it this, right? Yeah. Is 400... That's Rocko, Shannon, Fastnet. Exactly. That's your, exactly.

18:41John's shipping forecast, but it is 490 ,000 square kilometers, right? Right. To give you a sense of that, that's seven times as big as the island itself. So it's huge. At the moment, all we're worried about is undersea cables and we have only two Navy... And those Ruskies. ...two Navy ships, right? So again, it's really funny in Ireland, And rather than saying, talking about the Atlantic, this resource as a blessing, all the commentaries, oh, it's terrible. Yeah. It's terrible. We can't police it. I'm like, think big, guys. Think cathedral thinking. Think like John Gray, our friend who built the reservoir in Vartree that we still use.

19:21Yeah. And he built it in 1863. Yeah. Right. Think big. And Ardna Crusher. And Ardna Crusher. And Ardna Crusher, we spent a quarter of our GDP making. Yeah.

19:30David McWilliams: It's incredible. It is incredible. Yeah. And in 1936, Ireland was 96 % renewable energy. So our electricity production was all renewable because our crusher was renewable. And again, we still have a very high renewable energy level. But can I just ask you a quick side question here? Yeah. If we were to spend 25 % of our GDP now, what would that be? So our GDP is about 450 billion, about 100 billion. Wow. Okay. That's a lot of price. Yeah. It's a lot of it. Now, of course, the GDP figure we all know has been elevated because of multinationals and all that. But, you know, we're talking a lot of dough, right?

20:11A lot of dough. But if I come back, right, the key thing to the efficiency of any wind power is the power of the wind, the speed of the wind. And on average, the Atlantic, the Irish Atlantic, has wind speeds which are 25 % higher than the North Sea. Yeah, yeah, yeah.

20:28David McWilliams: And the North Sea is the source of Denmark's wind farms. And Denmark is the most efficient producer of wind-based energy in Europe. So from a potential, the Irish wind is 25 % stronger and more consistent over the course of the year. So that's the first thing, right? That means that turbines could generate more electricity than anywhere else in Europe if you were to put them up. But the most important thing, Jonathan, remember is this is a permanent advantage. This doesn't go anywhere. It's free. It's free. It's nature's bounty, as you would say, John. It is the deliverance of nature that we are blessed with.

21:07Okay? Now, the numbers are kind of mind-boggling.

21:10David McWilliams: Studies estimate that technically, the wind energy potential of the area of Ireland's Atlantic is 600 gigawatts. Now we're going to get into terminology. Right. Right. That's 600 ,000 megawatts of electricity. In layman's terms, 600 gigawatts is an enormous amount of energy. And at a capacity of around 50%. Okay, because basically we're saying the wind doesn't blow that often. So just say it's about 50%, right? This amount, and we'll get into it. So 600 gigawatts of offshore wind could generate 2 ,600. Another word, John, we're going to give terawatt hours of electricity. Just to give you... What does that mean?

21:57David McWilliams: Before we get bogged, right? This is as much renewable energy as the entire European Union's annual electric consumption every year. The whole lot. The whole thing. Including industry and not just residential. All 500 million citizens of the European Union and its adjacent countries. So Norway and these are the countries that are basically... Could be, could be potential. It's never going to be this big. If you were to harness the entire wind energy of the territorial waters of Ireland, you could provide electricity for everyone in Europe, which is kind of mind-boggling, mind-blowing. And is that, I know this is hypothetical, but is that kind of covering all that sea area with wind farms?

22:49Not all, but as much as is technically possible. So that's never going to happen. But it gives you a sense of how big, and with engineering advantage, with competition in engineering, with innovation, how big this whole thing could be, right? Again, there is an element of blue sky thinking here. There's an element of dreaming here. We are the week before Christmas.

23:13David McWilliams: But what we always said in the podcast is that you need to be what's called a good ancestor. One of the key things in life, so Jonas Salk, a little tributary here we're going to. Jonas Salk was the man who came up with the vaccine against polio. Oh, yes, yes, yeah, yeah. American, American scientist, right? And the amazing thing, just think about it after the pandemic where every single pharmaceutical company was making millions and billions from the vaccine, right? Yeah, yeah. Salk gave it away. he gave away the vaccine. He didn't take one cent for himself and in so doing he liberated hundreds of millions of people from a disease that killed and deformed humans throughout our history.

24:06Yeah, polio was really common. In Ireland up until the 50s.

24:13David McWilliams: And you'd see when we were young, you'd see particularly older men with deformed limbs from polio when we were kids. So polio was a real disease in this country, right? It afflicted hundreds of millions of people. Jonas Salk gave away the vaccine. And when he was asked why you gave away the vaccine, he says, because I want to be a good ancestor. And what he meant is a really nice term. What he meant by that is, is I want to leave this planet better than when I found it, when I arrived here, right? And the idea would be to do things today for people who are yet to be born. You will never, ever meet them because you will be dead.

24:56David McWilliams: It's the idea, it's that old expression, you plant trees for your descendants to find the shade under, which is, I think, an Arabic expression, right? It's that same idea. So it's kind of custodianship of the planet, custodianship of the world, right? And again, this should be driven. Now, in fact, in fairness, Jonas Salk did give polio away, but he did also get Picasso's wife as a lover. Well, that's a fair trade. It's a fair trade, you see what I mean? Poor old Picasso thought he was the big man. But Jonas came in, so there are upsides to altruism, John. And those upsides cannot be quantified by finance, right?

25:34Okay, this is a little aside. I'd say RFK would have a problem with that. RFK would have a massive problem with that. Okay, but let's come back to it.

25:43David McWilliams: So even a small percentage of that total 600 gigawatts could be a complete game changer. Just to give you a sense of how big that is, we talked about generating potentially 2 ,600 terawatts per hour, right? At the moment, Ireland's total electricity demand is 30 to 35 terawatts. Right. Is that including or excluding data centers? Well, that is including data centers. Right, okay. And of course, the data center is an interesting argument, John. Because if you have a source of free electricity, which has been generated by wind, which is in effect free as well and it's renewable then you can have a data center industry.

26:37Yeah. Absolutely. The whole West Coast could be full of data centers. Yeah, yeah, yeah. If you really wanted that because you would have... See it on the burn, just data centers. You would love it, wouldn't you, John? Just data centers. Data centers everywhere. But my point is... Look at these rocks.

26:51David McWilliams: Notwithstanding the burn and notwithstanding the beauty sometimes you have to build things or you should build things but it's an aside. It just means that you could build data samples if you choose to do so. Yeah, yeah, yeah. So now, it's not that the state doesn't have a program for government. Like, we have a program for everything, John. And the program for government says that rather than the 600 gigawatts that's out there, our commitment is to deliver 5 gigawatts by 2030. Right. From wind farms. And then the future frame. Go for it, lads. Yeah. Don't be hesitant. Don't be unambitious, lads.

27:31Go for it. But in fairness, they have a framework which says that production should be ramped up

27:36David McWilliams: with targets of 20 gigawatts by 2040 and 37 gigawatts by 2050. Now, this is enough to exceed Ireland's consumption of electricity. But the idea would be, why not go for the real thing? Why not say, actually, we could go and become an exporter, right? So again, the state is saying this is a potential. but it's not going all out. So it's a little bit like Norway saying, oh yeah, well, we have the oil but we're only going to drill a little bit of it. So, I mean, the potential is there but of course the tricky thing, John, is it is an engineering nightmare to do this. Okay, let's talk about the engineering element and the finance element, how we actually pay for this after a bit of this.

28:25okay so mac the the kind of biggest challenge in fulfilling this yeah or even partly fulfilling this potential is the engineering is building this stuff where does it go uh how is it financed you know so so talk to me a little bit about that well again you know everything that is

28:48David McWilliams: worthwhile is tricky and difficult. So, for example, building the London Underground would have been difficult at the time. New York subway, we were talking about the engineers, right? Is that sometimes you need these dreamers to come in and set aside what we know about engineering and invest and try to figure out doing new ways of doing things. But, of course, the challenge is the following, right? Irish waters are very, very deep in the Atlantic. In general, they're more than 60 or 70 meters deep, right? Now, that means that traditionally, if you look at wind farms, you mentioned them off the coast of Dublin Bay or off the coast of...

29:33Arco. Arco. They're very shallow. Yeah. So what you do is you basically, it's like having a, you know, one of those things in your teeth when you get a new tooth, they drill the hole in the middle? An implant. An implant, all right. So conceive, John, of an implant, right? Yeah, yeah. So basically you get a new tooth and you drill a hole

29:51David McWilliams: and the drill fixes itself to your jawbone, right? So that's the way traditional wind farms have been engineered. But they're basically fixed to the bottom of the sea. Yeah, into bedrock, yeah. But you can't do that, or it's much more difficult to do that as you go further and further down because the steel in itself has to be much, much stronger. So what they're doing in Scotland now, which is broadly similar types of seas, is they're in effect anchoring the new wind farms with anchors. So you imagine like a boat. So the platform kind of floats a little bit. So it's a combination of cables, but the best way to envisage this is the difference between the implant and an actual traditional anchor of a boat.

30:38So you throw the anchor out, the anchor hits the bottom at a certain stage and there's a little bit of give and take. Yeah. Now, that's what they're doing in Scotland, right? But it's really technically difficult to do, right? Because these are enormous structures, right, that you're trying to do it. But in many ways, the engineering challenge, obviously it really matters, but engineering technology is changing constantly. And getting better. And getting better. Getting better and better and better. And making things easier. It's why, you know, there's a lot more oil being found because the technology of drilling for oil is available.

31:18They knew it was there. They just couldn't get at it.

31:20David McWilliams: Exactly. And interestingly, all resource economics is cyclical. So that is based on as the price of oil goes up, more and more difficult oil fields become profitable at that higher level. Exactly. And it's the same thing for electricity. So as the cost of electricity, because of the cost of oil and fossil fuels, goes up and has been going up as a general rule over the last 100 years, lots and lots of things are economically feasible because the price of electricity has risen. So we can talk about that in a second, but there is an example, there's a thing called Highwind, if you just Google it, H-Y-W-I-N-D, Scotland, and that is the pilot of floating wind farms.

32:05So these wind farms that sort of move around, it is achieving an average of 54 % to 57 % capacity,

32:11David McWilliams: which is the highest of any UK wind farm. It outperforms all fixed offshore projects, right? And it demonstrates that these floating turbines can survive in the North Atlantic. or at least the North Sea. Because the idea is, on the one hand, your storms are great for generating the energy to capture, but they're also very destructive. Yeah, yeah, yeah. And if you think about it, right, what we're talking about is fixing a 300-meter tall structure. They're huge, okay? In a 100-meter deep Atlantic, with anchors that are sufficiently weighty weighty to keep the structure going, but allow a little bit of flexibility.

32:58David McWilliams: And why do you need the flexibility? Because waves of six to 10 meters are not uncommon in the Atlantic. And you're a hundred kilometers offshore. Like you're miles away. Like you're not, you're not going to see these things. Completely and utterly exposed. So you're completely and utterly exposed to the very types of conditions that we experienced last week. So that is, you know, could these structures handle the constant motion and the battering of the storms and all that sort of stuff, that's the engineering challenge, right? Now, but the question is, who said this was going to be easy? Do you know what I mean?

33:35And again, what I'm trying to do here is

33:39David McWilliams: think, do we in Ireland have the engineering capacity, have the national ambition, have the education structure? Because you'd need to train up a whole generation of engineers, right? and technicians, you know, people who could make these things. So what we're talking about is creating an entire ecosystem. Yeah. Like the Industrial Revolution. It's like the Industrial Revolution. But we can kickstart that by importing some of that expertise from Denmark, from Norway. Exactly. From Scotland. From Scotland. Yeah. And to get us up and running. Exactly. Because we have the money. We, as I said before, we need to have the ambition.

34:20Otherwise, you know, it's not that we're not going to have any electricity. We're going to be fined billions. And we're at the end of a pipeline that starts in Russia. Yeah. Which you don't want to be.

34:30David McWilliams: Yeah. As a general rule. Yeah, yeah. Or you're importing laboriously LPG from Saudi Arabia or Qatar. Yeah. Right? So you're doing business with all sorts of people, but you're exposed to, and because we're very small, it means that our ability to negotiate scarce resources. So a company's always going to deal more with Germany than us because there's 100 million odd, nearly 90 million Germans. So they're going to have real, real industrial money. We're the size of Manchester. We're the size of Manchester, right? We're getting a bit bigger than Manchester. Manchester's getting smaller. But, you know, the size of Manchester leads conurbation, right?

35:07Okay. Anybody who is involved in the premiership can understand the significance of this, okay? But to come back and just look, you know, you'd need to build a... Court in the West of Ireland. A BetterHelp ad. Hold on. One second. I just need to...

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36:56Terms and conditions apply.

37:01Which can actually service these. Now, what you're talking about, right? You need a port, right, that has enormous dry docks and wet docks.

37:10David McWilliams: It has heavy lift cranes. It's got spaces for dozens of these tall 300 metres. structures. You know, you need to upgrade the keys, the berths, all that sort of stuff. So where would you put that? Well, there is a port in Shannon, Foynes Port, which has actually got a very, very it's a deep port, just the tip of Shannon, right? So that could be done. But at the moment, it's a very rudimentary port. In fact, the only port in Ireland that can actually deal with this sort of stuff is deep enough. It's Belfast. But it's in the wrong part of the island. Yeah, yeah, yeah. Constitutionally and but this is something you do with Northern Ireland.

37:44This will be this will be all part of a plan for United Ireland. And let me ask you this then. I mean, I don't know if you can answer that, but do you need just one big port or do you have a collection of smaller ports along the coast?

37:58David McWilliams: Well, you know, it's really interesting. If you take the example, it's an interesting question, John. The example there is Norway. So in Norway, because they have ports that are, and terminals that are feeding off very, very significant oil platforms that are miles off the sea. Yeah, yeah. Interestingly, in Norway, all those little villages and towns compete with each other to get the contracts to be the towns that actually receive the thing. Oh, right, okay. Whereas in Ireland, remember the Shell to Sea protest? Yeah, yeah. In Ireland, it's like, oh, fuck off, we don't want that, right? We don't want any of that gas, right?

38:39So, I mean, there's a huge mindset shift that has to happen. In Norway, those villages and towns compete with each other to get the business.

38:47David McWilliams: In Ireland, from what we saw with the Shell to See campaign, or at least not that specifically, but the mindset was a rejectionist mindset. We would have to completely change that. And I think, you know, Limerick, Galway, Sligo, Dunygal, Quiddy Island and Cork, all those sort of things, right? What I'm saying is these are all potential game changers for the West of Ireland, where you could have a renewable energy, which is consistent with our climate change objectives. You could have, what I'm talking about is an industrial revolution here. And think about it at that level, that you're basically reframing the economy to create an industrial ecosystem that can power Europe, not just here.

39:36David McWilliams: And that involves massive interconnectors, massive amounts of cabling, massive amounts of, again, I come back to this word, engineering hardware. But the prize is you become an energy exporter. In a world that requires more and more energy because the world is growing all the time. And you do it in an environmentally, not just conservative, but in an environmentally beneficial way. Now that's, I suppose, the challenge. And people say, oh, but it's too big. But it's time to think big. Okay. How do you finance this? Do you envisage this as using some of the Apple money, for instance, or is it some sort of private finance?

40:30I think, look, the great thing is the Colosseum was financed, right? Vespasian, our friend. All big projects have financing dilemmas, right? How do you get the money? How do you build it? I'll give you an example. Perpetual bonds. So in Holland, we take you back, John, before we end. Before we entered 21st century Ireland, we go to 17th century Holland.

40:54David McWilliams: The Dutch realized very, very quickly after many generations that the sea was a problem. They had to build massive sluices and dikes. And they had to put up all sorts of anti-flooding buildings. And they realized this in the 17th century. So the Dutch have been reclaiming parts of the North Sea for hundreds of years. German Bight. Is that what it's called? That's the parts of the sea. Okay. Can you? German Bight, right? Okay. I thought the German Bight was something else. Yeah, I know you did. Anyway, they've been doing it for years. Now, how do they do it? Amazing. The Dutch issued perpetual bonds in the 17th century, which were bonds that they used to finance building the dykes and the polders, right?

41:43David McWilliams: Yeah. But they were bonds that never paid the capital back. And they are still paying interest. So, for example, yes, if you can find a Dutch bond issued by the Dutch state, you can go to the Central Bank of Holland, which still exists, and you can cash it in. How much will you get? I don't know. A couple of percentage points. Right. And Gilders. So it's amazing, right? Yeah, yeah, yeah. So these are what's called perpetual bonds. are called perpetual bonds because they pay into perpetuity. This is the sort of innovative finance we could do. We could raise this sort of finance. We could raise European Investment Bank finance.

42:23We could, at this stage, I suspect anyway,

42:25David McWilliams: that there will be a fiscal union in Europe. Remember we talked about that last week? Yeah, yeah, yeah. That'll be one large bond market. This is the way in which you issue 100-year bonds backed by the state. The income flow we know is going to be the income stream from the generated electricity. It would be not impossible, but tricky to do. But the point is, if the Dutch could do in the 17th century a financial package that paid money into perpetuity and that financed all their infrastructure needs. And those infrastructure needs came at the same time as Amsterdam was becoming the most important city in Europe, the wealthiest city in Europe, and the Dutch empire was becoming the wealthiest empire in Europe.

43:15David McWilliams: Why couldn't we do it now? It's all about ambition, the alchemy of money. This is what I've always said. The alchemy of money is that it allows you travel in time. So you can borrow today against income that is not going to materialize for another 50 years. That's the magic of the bond market. So in effect, you're traveling in time. You're borrowing from tomorrow to pay for today. And all you need to get right is the rate of interest, which is the risk premium involved. And given that we have in Europe 10-year bonds, 30-year bonds, we're going to have 100-year financing soon, there are the benchmarkers against which we can raise this money.

44:00David McWilliams: And what this would do for Ireland, it creates also a brilliant savings product. So Ireland as a country, we're sitting on 150 billion of deposits in Ireland. Money's doing nothing. It's stuck in the banks. The banks in Ireland are thought to be places that capital has regenerated and spread around. They're not. They're safe deposit boxes. Can you imagine having a savings product which is linked to the rate of interest which you would accrue from this massive investment? and you could actually finance lots of this internally. And one last point is this idea of EPICS, the extreme positive incentives for change.

44:44David McWilliams: The state working with the European Investment Bank and the European Central Bank could say, look, this is a European-wide project that just happens to be located in this part of Europe. So it all comes together. And again, what you would do is you would change the tax treatment. So at the moment, for example, capital gains tax for any finance is about 30%, right? So imagine dropping that to zero for these bonds. So suddenly it becomes much, much more attractive to get involved in this market, making it liquid. Yeah, yeah, yeah. And you just become innovative. I mean, I know it sometimes is beyond the Irish state, but innovation, John, I mean, leave it here, is actually part of the human condition.

45:37David McWilliams: And all we've got to do is think big, think differently, have an ambition, and imagine what the country could look like in 100 years' time. Why? Because we'll be dead, but we should be driven by Jonah Salk's idea we should all become good ancestors. We'll talk to you Thursday.

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