Blog 27_ Price Fixing
"For those Studio Apartments on reclaimed land off Fairview in Dublin, you suggested a price of EUR 150,000. How did you come up with that price? Wouldn't the construction of those apartments be subject anyway to the same constraints as the Government's own Housing For All plan, namely, Planning delays, lack of Manpower, Infrastructure delays, etc."?
"For those Studio Apartments on reclaimed land off Fairview in Dublin, you suggested a price of EUR 150,000. How did you come up with that price? Wouldn't the construction of those apartments be subject anyway to the same constraints as the Government's own Housing For All plan, namely, Planning delays, lack of Manpower, Infrastructure delays, etc."?
Let's take the second part first. In relation to infrastructure, what I'm suggesting is that providing a couple of large sized connections to a single site within the Dublin City boundaries is far easier for the utilities like Uisce Eireann, ESB networks etc, than it would be to provide hundreds of smaller sized connections to geographically dispersed locations. Similarly, for planning, there would be just one planning application to be processed rather than hundreds of individual applications for smaller sites. The lack of manpower doesn't arise because the construction project is being combined with the building of a sea wall to protect the north side of Dublin city from climate change induced flooding due to increased frequency of storm surges and sea level rise in the years ahead. There are a limited number of international companies that do this very specialised reclamation work and they typically bring their own experienced staff who live on board an anchored ship for the duration.
Turning to the sales price of EUR 150,000, I'm taking it as a net price under the Government's Help to Buy scheme. According to the present rules, purchasers can avail of up to a 10% rebate of income tax subject to a max of EUR 30,000. While the cost to the owner occupier is still EUR 150,000, it allows the actual sale price to rise to EUR 167,000. A Studio apartment for that price is not that unusual, even in the big cities of the western world; the Bronx, in New York is a case in point. A simple google search will turn up several Studio apartments, converted lofts, etc for sale at that and even for slightly lower in the Big Apple.
As an input to detailed cost calculations for the Studio apartments I'm relying on the data in the Total Development Cost Study published by the Department of Housing, Local Government and Heritage in September 2024 which details the costs to a private developer in constructing a range of different building types.Taking two figures from that study; that for Case Study #3 - Urban 2 bed apartment and that for Case Study #4 - Purpose Built Student Accommodation (PBSA); the construction cost of the Studio apartments will be much closer to the figure for PBSA (EUR 203,000) than to the much larger two bed urban apartment (EUR 592,000). Note: all figures are rounded.
The PBSA units in the case study are 30 sqm each but we can add another 7 sqm for a share of the common space so 37 sqm in total. By comparison, Studio apartments are 49 sqm each so an ajustment for that will be necessary.
The total development costs are split into Hard Costs (actual construction costs) and Soft Costs (everything else) - for PBSA it's almost a 50::50 split. Dealing with the soft costs firstly, let's see what we can take out as irrelevant to a state commissioned project. Land is 15.73% of total cost and in this case since we propose using the Infrastructure, Climate and Nature fund to build a protective sea wall (a valid Climate measure) and reclaim new land, so the land cost is actually zero. Finance costs are 9.48% but since this is Government funded (or seed funded if the apartments in each block are sold upon completion) this is also zero. We can take out Sales and Marketing costs at 2.35% also and assign that job to an existing Governement department or agency. That comes to approximately a 28% reduction in costs. Hence our starting price is reduced by this percentage leaving a cost of EUR 146,000 per 37 sqm PBSA apartment. Pro rata then the preliminary costing for a 49 sqm Studio apartment is EUR 193,000.
Next to tackle the Hard or Construction costs portion. The cases in the Development study are for the construction of a home in a single block - a 58 unit block in the 2 bed apartment example and 121 units for PBSA. Our situation is different which will help to lower the hard costs. We are proposing the construction of multiple identical blocks each containing 120 Studio apartments. This kind of project is ideal for using what are called Modern Methods of Construction (MMC). MMC speeds up construction and lowers costs. There are a whole range of techniques used but to give one example which involves the use of off-site construction - bathrooms: 120,000 bathrooms will be constructed off-site by multiple suppliers and then brought to site and lifted into place and connected up. MMC can save anything from 10 - 40% on construction costs but I am taking 25% as typical. Applying this as a reduction to the Studio apartment hard cost element reduces the total construction cost to EUR 168,000 which is the sales price suggested (allowing for rounding).
With a community of up to 50,000 people living in this new Dublin quarter, a large amount of Retail and other services will be necessary: Supermarkets, restaurants, cafes, bars, hair dressers, pharmacies, gyms, creches, etc. All of these will be accommodated using the Ground Floors of each block. There is already a contingency of 3.32% built in to the Soft costs of the construction but the proceeds from the sale of this commercial property could be used as a second contingency in the event of any shortfall, in order to assure the EUR 150,000 sales price for the Studio apartments.
The Case Study#2 two bed apartment price includes the provision of a single car parking space for each apartment in the basement. There is no such allowance in the case of these Studio apartments. There will be some parking spaces provided in the basement of each block as these are essential at least for people with mobility issues but, they will be sold separately (price to be determined later). Many owner occupiers may decide that, living essentially within walking distance of the city centre and with Bus, Dart and Luas on their doorstep, they don't need to own a car and might prefer to use instead something like the GoCar car sharing service or Yuko click and drive, as needed. It is anticipated that a Dublin Bikes station will be accommodated on site with Bleeper and Moby Bikes also available.
In modest sized apartments storage is always an issue so, a shipping crate sized and locked self storage unit with power will be available for each resident in the basement, taking up space not utilised for car parking.
This studio apartment proposal, while Dublin centred, has the potential also to radiate its effects outwards into the surrounding counties as these homes may suit some who currently are forced to travel long distances to work etc., due to the shortage of affordable accommodation in Dublin. Plans are expected shortly from Cork, Limerick and Galway which, if funded and executed on, are expected to address the housing crisis in each of those cities and surrounding areas.
Blog 26_ Chasing Cars
"We need to reduce emissions from Transport but sales of new electric car sales have dropped, so where do we stand now?", asks one concerned voter. Yes, in 2024, new electric car sales fell from the 22,852 registrations seen in 2023 to 17,459 cars in 2024, a 23.6% decrease.
"We need to reduce emissions from Transport but sales of new electric car sales have dropped, so where do we stand now?", asks one concerned voter. Yes, in 2024, new electric car sales fell from the 22,852 registrations seen in 2023 to 17,459 cars in 2024, a 23.6% decrease.
New registrations of second-hand car imports held some surprises also. Imports from Japan alone exceeded 23,000 cars last year, almost all were petrol cars as diesel is used less commonly there. Why Japan? In Japan they drive on the left so only minor adjustments necessary to use the cars here. In addition, Japanese drivers replace their cars very frequently so there are too many second-hand cars for their own market to absorb. Hence they need to export them. It's amazing however that a low mileage two year old car can be bought in Japan, transported to Ireland, eye watering tax paid and still be sold for around EUR 20,000. Many of those cars too were made in Europe - VW Golfs and Audis, exported and sold in Japan only to be returned to Ireland as second-hand cars. There are a lot of emissions in that supply chain!
The message from that is clear - price is a factor . Electric cars are too expensive for ordinary drivers at present and there has been no time for a second-hand market in these cars to emerge. This has not been helped by the Government decision to reduce the new electric car maximum grant from EUR 5,000 to EUR 3,500. Perhaps we need to increase that again? The other factor of course is that, as with all new technology, firstly the early adoptors will buy just to have the "new new thing". Once that wave breaks, however, selling to the rest of the market is always tougher.
There is the promise of much lower priced electric cars entering the market from China and some have started to appear. However, there is already talk of applying EU tariffs on those cars to protect the European car industry which can't compete at Chinese price levels. It seems inevitable that European car manufacturers will threaten mass unemployment unless action is taken. Our access to these lower priced vehicles may prove to be short lived.
I go way back with electric cars myself. I recall, as a postgraduate engineering student in UCD, many years ago, being on a stand in the RDS at the "Spring Show" with an electric car. My job was to explain the advantages of the car to the general public. The car had been designed and built in UCD and had many of the modern features of today's cars, such as regenerative breaking etc. The big problem at that time was the battery - we had to wait for battery technology to develop before electric cars would become viable.
Electric cars are a fantastic technology. I don't have one myself as I'm a big user of public transport, being lucky to live within walking distance of Bus, Luas and Dart. However my brother and a number of my friends have taken the plunge and they highly recommend going electric. It helps if you can charge the car at home especially, using your own solar panels or with low night-rate electricity. Many people only drive an average of 20-50km each day and electric cars are ideal for that. If it fits your lifestyle and you can afford one, it is a great investment.
Some have resisted buying an electric car because of "range anxiety" fearing that they could be left standed on a long journey with a flat battery. True we don't have anywhere near enough public chargers. It took around 100 years to get the petrol garages in place and it will be some time before the electric chargers catch up but much more effort is required. An improvement in charger etiquette is needed also. A friend told me she was driving to Donegal recently and having forgotten to charge overnight, she was worried about being stranded so she stopped at the half way mark and plugged in, going off to have a coffee. She returned about 40 mins later to find another car had pulled up alongside, plugged her charging cable out and plugged his car in - not nice!
There are many good reasons to buy an electric car but buying one solely because it is cheaper to run might not be a good one. The state collects more than EUR 2 billion in tax from motorists every year, largely coming from tax on petrol and diesel sales. If people switch to electric cars, these receipts will fall and that tax will have to be made up somehow. In many USA states and in some European countries, they are already increasing the annual road tax substantially on electric cars to restore the tax take and we can expect that to happen here also. Apart from tax loss, the other argument used is that the road tax is intended to be ring-fenced for road repairs and electric cars, being much heavier due to the battery, cause more wear and tear on the road surfaces.
Electric options for commercial diesel powered vans, lorries and trucks are not mature yet but one interim step might be HVO (Hydrotreated Vegetable Oil). This biofuel is a renewable resource and produces a 90% reduction in emissions. It is starting to appear on fourcourts around the country. HVO is more expensive than diesel at present but a simple tax change could fix that. Many of the existing diesel vehicles are alreay suitable to use HVO but of course check with your local Garage before switching.
Finally, to get emissions down, we need to give people more public transport options. I was in Bordeaux France last year. It is a city slightly bigger than Cork and they already have five light rail lines criss-crossing the city, with a sixth under construction. It is so convenient you would only exceptionally need to use your car. We are simply not serious about public transport in Ireland. Can you imagine Cork with six light rail, or even one? We need new Luas lines for Cork, Limerick, Galway etc. and more for Dublin and we need them operating in the next five years. We have the money, all that we need now is the political will.
Blog 25_ Doctor Doctor
"If Slaintecare were fully implemented in the next five years, would all our healthcare woes be over?", reads one email. Let me start by quoting a distinguished former leader of Fine Gael who most would agree has "done the state some service", namely Alan Dukes. He said recently in an interview that "Slaintecare was always a utopian project".
"If Slaintecare were fully implemented in the next five years, would all our healthcare woes be over?", reads one email. Let me start by quoting a distinguished former leader of Fine Gael who most would agree has "done the state some service", namely Alan Dukes. He said recently in an interview that "Slaintecare was always a utopian project".
When the Slaintecare proposals were being developed in the early 2010s, it seemed as if other healthcare systems like for example the NHS in the UK and the public system in Canada, were forging ahead and leaving us behind; providing services free at the point of entry and available to everyone, in a timely fashion. Ten years plus later all has changed.
Headlines from Canada talk about a healthcare system "on the verge of collapse", about a "hospital crisis only getting worse" and "Canadian patients want other options outside crumbling health-care system". I have relatives living in Vancouver so I can confirm the accuracy of these reports.
Meanwhile, in Northern Ireland, NHS waiting times for elective procedures are even longer than here. Almost 200,000 adults have taken out private health insurance, even though they have free access to the NHS and that figure is increasing all the time. A significant number of NI medical consultants have applied for and been appointed to, positions in the Republic.
What about the UK mainland? I was in London recently with a close relative receiving a Fellowship from one of the Royal Colleges of Medicine. Most of the recipients were UK nationals. I was astonished at the negativity in the speeches from the President of the college and a number of the other senior officers. "Congratulations on your Fellowship", he said, "but I am sorry to say that you are entering the senior ranks of the profession at a time when the NHS is starved of funding , beds and staff; you will be frustrated; you will be unable to use your skills to the best extent for your patients; you will find it very difficult to do your job" and more like this.
Does this mean that the NHS no longer boasts some of the best Nurses, Doctors and Hospitals in the world? No, absolutely not - they still have all that. You have only to think of Great Ormond Street and other world leading hospitals there. What it does say is that they are now finding it a huge challenge to provide everything for everyone free and in a timely fashion.
What about elsewhere in the world? My wife is a Doctor involved with a Medical visiting group. Each year they visit a different country for an exchange of ideas and practices. I have accompanied her on these trips.While I do not attend the Science sessions, the closing thank-you dinner has given me the opportunity to interact with senior clinicians from all over Europe plus North and South America. Last year we were in Italy and the 2025 trip is to Penang. My first question is always to ask about how health system is funded and then to enquire regarding the current status. I can report that Public health care services everywhere have the same problems. Not enough budget, not enough beds and not enough staff. Sound familiar?
Why is this happening now? I believe that one reason is because our health care systems are victims of their own success. It's within many peoples’ lifetimes that a heart attack was treated with bed rest and an aspirin and if you broke your leg, you probably died of an infection. But now, diseases which, as little as five years ago were fatal, thanks to our wonderful nurses, doctors and researchers, to the pharmaceutical and the medical devices industries, are treatable as merely chronic conditions. So people are living longer, a lot longer, which is unquestionably a good thing, ("Do not go gently into that good night", Dylan Thomas), but older people need more healthcare. In our case add a rapidly increasing population and the demands placed on the system are soaring.
In the light of that should we persist with Slaintecare? Yes most definitely. We are off to a slow start but, if excuted on, it will immeasurably improve the present outcomes. Will it result in a publically funded and free to all, single tier, wrap around healthcare system, as originally envisaged? That seems unlikely. We will almost certainly still need a parallel private system funded by insurance. Those who can pay for insurance should be encouraged to do so, leaving more public capacity for those who can't and for all when needed. Let's be clear: if you are gravely ill and require a heart lung transplant or have a very serious brain injury, for example, you need to be in a public hospital, insurance or no insurance.
Many GPs here are due to retire in the years ahead and even at present some hospital consultant posts, particularly in smaller hospitals, attract no applicants. We are filling the gaps by recruiting from abroad, often from the third world, where these health professionals are even more badly needed. This is in defiance of WHO codes of practice and some would consider it bordering on the unethical.The new Programme for Government talks about addressing this problem by creating more medical school places but we need to be careful here.
About a decade ago, in Argentina, restrictions on entry to Medicine were lifted, resulting in a large intake to the universities. This worked fine for the first few years, even if PA systems in corridors outside lecture rooms were needed to accommodate students. The problems arose once clinical year training and in particular intern year was reached. There were simply not enough hospital places for all the students. The hospitals could no longer treat patients if required to facilitate such a large increase in interns. Training the next generation of doctors is absolutely necessary but doing so is an added burden on hospitals and senior medics. There's a joke in Rio de Janero that half the taxi drivers have medical degrees!
The medical schools in Ireland train a large cohort of students from abroad. Full fees are charged, often paid for by their respective governments. Our colleges depend on these fees to balance the books, as medicine is a very expensive course to run. No Irish student is allowed apply for these places and pay the fees. The Irish who are passionate about studying medicine but lose out in the CAO points race however often go abroad to study and stay there. The foreign students we train may remain here for a couple of junior doctor years but then go back to their own countries as they never intended to practice here.
Here's a controversial suggestion: Reduce the number of training places for foreign students and allow Irish students to apply and pay. Give a substantial fee reduction to those in this cohort who sign up to work in Ireland for a minimum of five years post qualification. With the same number of medical school places and no additional training pressure on hospitals, we get an increase in doctors working for the HSE.
Blog 24_ Carbon Copy
"We should use Direct Air Capture techniques to remove all carbon dioxide from the athmosphere and solve the climate crisis", proposes one correspondent. That would not be a good idea.
"We should use Direct Air Capture techniques to remove all carbon dioxide from the athmosphere and solve the climate crisis", proposes one correspondent. That would not be a good idea.
Direct air capture is a new and developing technology which can remove carbon dioxide from the air. At present it is very energy intensive and for that to change will require a number of research breakthroughs. It is sure to have a role in the future but it is not a silver bullet.
Carbon dioxide (CO2) and Methane (CH4) are the two greenhouse gases typically discussed. CO2 causes around 25% of global warming and CH4 causes 10%. You might be wondering what makes up the remaining 65%? There are some trace elements of other gases involved, but the biggest greenhouse gas of all is water vapour. Why we don't start by eliminating that?
Attempting to remove water vapour from the athmosphere isn't a practical or effective solution. Water vapour is part of the Earth's natural water cycle, moving between the oceans,athmosphere and land through processes like evaporation, condensation and precipitation. Removing water vapour would disrupt these cycles, potentially causing severe consequences for ecosystems, agriculture and weather patterns. Furthermore, water vapour has a very short residence time in the athmosphere - only a few days or weeks.It condenses to clouds and falls as rain, naturally regulating its levels.
If all CO2 were removed from the athmosphere, it would have catastrophic consequences for the planet and all life forms. Plant life requires CO2 for photosynthesis. Without CO2, all plant life would die, leading to the collapse of ecosystems dependent on them. As plants died, oxygen production would cease, endangering all oxygen breathing organisms and leading to mass extinctions.The Earth's average temperature would drop significantly from 15 degrees C today, to around minus 18 degrees C. CO2 is vital for maintaining Earth's climate and supporting life. Its complete removal would render the planet lifeless and frozen.
Prior to the Industrial Revolution CO2 levels in the athmosphere were approximately 280 parts per million (PPM). As of 2024, these levels have risen to 424 PPM which is a more than 50% increase. We need to reduce CO2 levels, not eliminate them.
Blog 23_ Going Nuclear
"Let's just accelerate the decarbonisation of the electricity grid by replacing our fossil powered generating stations with some nuclear powered ones", says one critic. Maybe not.
"Let's just accelerate the decarbonisation of the electricity grid by replacing our fossil powered generating stations with some nuclear powered ones", says one critic. Maybe not.
In order to do that, we would firstly have to change the law. Generation of electricity by Nuclear fission is prohibited by the Electricity Regulation act of 1999 (Section 18).
Nuclear power does offer reliable, low carbon, generation of electricity ok, but it comes with a number of downsides:
- Nuclear plants are costly to build and can easily take 10 years to complete. Hinkley Point C in Wales consists of two 1630MW units. Construction started in March 2017 with the first unit scheduled to go live in 2029-2031. The projected cost is £15 billion at 2024 prices.
- The plants would produce radio-active waste which remains dangerous for hundreds of years. Properly storing and managing this waste is expensive and challenging.
- There is always the risk of a nuclear accident. Chernobyl (1986) and Fukushima (2011) come to mind. As well as a loss of life and indeed serious health impacts, accidents can also cause long term environmental damage. There is still a 30km exclusion zone around the Chernobyl plant nearly 40 years later.
- They bring security concerns as any nuclear installation is a potential target for terrorists.
A new design of nuclear plant termed Small Modular Reactors (SMRs) is on the horizon. As the name implies, these are smaller and more flexible nuclear units. On paper at least, they offer several advantages over the traditional large-scale reactors: enhanced safety features, reduced risk of accidents, less costly and faster to construct.
Two big disadvantages however - they still produce radioactive waste which has to be stored and managed and there are so few in service currently. It will take a minimum of ten to fifteen years of practical experience to verify whether SMRs have lived up to their promise. Hence I would say they are not relevant at present.
The above plants are examples of nuclear fission where a heavy atomic nucleus (eg uranium 235) is split into two smaller nuclei releasing energy in the process.
Nuclear fusion on the other hand is where two light atomic nuclei are combined to form a heavier nucleus, releasing energy. This is the type of nuclear energy that powers the sun and is the "holy grail" of electricity generation because it produces no long term waste. Lots of research effort is being devoted to this at present but several breakthroughs are needed before any practical implementations are possible.
From where we are now, the path to decarbonisation of the electricity network in Ireland should be built on wind and solar, combined with sufficient short and long term storage, and backed up by Fast start-up Gas plants (replacing legacy fossil generators) burning biomethane/green hydrogen, together with an expanded set of International Interconnects.
Blog 22_ League Tables
There are some league tables you want to be near the top of. For example, if you are a GAA fan, you want to see your county team near the top of the Allianz League Division 1. Similarly, if a soccer fan, seeing the team you support near the top of the Premier League is desirable. Ditto for rugby and other sports.
There are some league tables you want to be near the top of. For example, if you are a GAA fan, you want to see your county team near the top of the Allianz League Division 1. Similarly, if a soccer fan, seeing the team you support near the top of the Premier League is desirable. Ditto for rugby and other sports.
Recently, in a league table for most congested city in Europe, Dublin took the bronze medal position behind London and Paris. That is one league table you don't want to be near the top of. Letter writers to the media have had a field day, congratulating Dublin City Council on their "success" in blocking off roads, changing traffic light sequencing, inserting unused cycle lanes etc., in order to create semi-permanent traffic jams.
Another league table Ireland is close to the top of is easiest western country in which to get a passport. Currently, those residing here legally , perhaps work permit holders, can apply for an Irish passport after 5 years. For successful asylum applicants, the residency requirements are even less.
An irish passport enables holders to travel, live and work in all EU countries and in the UK. It is one of the most powerful and accepted passports in the world. So much so that, in intelligence circles, it is widely acknowledged that both the CIA and Mossad have used fake Irish passports on missions in the past. Oliver North used fake Irish documents to enter Teheran in 1980 during the Iran-Contra affair.
Perhaps it would be ok to slip a few places down the passport list? Let's make that 10 years minimum residency for all new applicants, similar to the rules obtaining in Italy and Spain. We want new citizens to integrate into our society and become "more Irish than the Irish themselves". What about adding a citizenship test as well to ensure a basic working knowledge of English or Irish, together with an understanding of our culture, our politics and our democratic values?
Blog 21_ Waiting Patiently
"I have a relative languishing on a hospital waiting list for hip surgery", says one voter. "I'm pleased to see you stress the importance of speeding up delivery of the Elective Hospitals, but how long will that take and how much will they cost?"
"I have a relative languishing on a hospital waiting list for hip surgery", says one voter. "I'm pleased to see you stress the importance of speeding up delivery of the Elective Hospitals, but how long will that take and how much will they cost?"
I understand the frustration - into the eighth year since they were agreed on by all parties and very little progress. The questioner is right to enquire about the timeline, but also about the cost, given how bad the state has become recently at delivery and cost management of big projects.
Other big projects underway wouldn't inspire confidence.
The proposal to pipe water from the Shannon at Parteen basin up to Peamount in Dublin was originally estimated to cost between EUR 800 million and EUR 1.4 billion. By 2020, this was upgraded to between EUR 1.9 billion and EUR 2.4 billion. However, the latest projections are in the range EUR 4.6 billion to EUR 6 billion, with the possibility that it could run as high as EUR 10 billion, in a worse case scenario. Even at that, Dublin won't see the first litre of water from the Shannon before 2030, if indeed the project ever goes ahead.
The National Children's Hospital will be one of the most expensive hospitals in the world, costing EUR 2.2 billion at least, without taking into account a large number of disputed claims, yet to be decided. It was first proposed in 1993 and it is still unclear when exactly it will open, so, way over budget and behind on delivery. Large numbers of design changes during works were blamed by builders for the delay, but it took so long to construct, that children's medicine and so the requirements, had changed in the meantime.
The tragedy is that we were once able to manage these projects. Building work started on Tallaght University Hospital in 1993 and it opened on time in 1998 within budget. Somehow, in the meantime, we have lost the skill-set needed to achieve this.
Based on the most recent Slaintcare Progress Report, given all the hoops the elective hospital projects still have to jump through, I seriously doubt if construction will start before 2030 and expect that the final cost will dwarf the initial estimate.
Furthermore, if policy changes elsewhere take a huge bite out of Irish tax receipts from the activities of the multinational sector here, as could happen in the years ahead, then, at this rate, the elective hospitals may never be built.
Here's what I would do to fix this problem:
1. Scrap the remaining stages of the Government's Infrastructure Guidelines for the elective hospitals. Government approval, in principle, has already been given to the project. I understand the need for these guidelines in general but the bigger risk here is that these long overdue and much needed hospitals, if delayed further, will never be built. Final cabinet sign-off required before the construction contract is placed.
2. Build each hospital in phases and equip, staff and open each hospital once the building work finishes on phase one. Use modular construction as far as possible.
3. Skip the design phase by buying in the design of a world-leading elective hospital and simply use that, for example, the Wyvern Hospital in Sydney Australia. Building work commenced on Wyvern in March 2022 and phase 1 opened for service in December 2024. Total time taken to build, equip, staff and open the hospital was 2 years and 9 months. It cost less than EUR 60 million and includes 85 beds, 8 operating theatres with 150 staff. Further phases to follow.
4. No design changes permitted after construction begins.
5. I would start with the Dublin Elective but only because if we locate it at Connolly Hospital in Blanchardstown (one of the Dublin options), we get access to a large green field site which will speed up construction. Quickly move on to Galway and Cork hospitals.
6. Work on Manpower Planning, IT system and Procurement to run in parallel with construction.
7. Quarterly project meeting to be chaired by Minister of State. Ex officio members to include Dept and HSE nominees, RIAI president (or nominee), EI president (or nominee) and SCSI president (or nominee).
8. Target to commence construction January 2026. First Hospital opens December 2028. All three up and running before the next General Election in November 2029.
Blog 20_ In the Mews
"I think your Housing plans are brillant", writes one person but adds that studio apartments won't suit him; he needs something bigger for his family. "Do you have any other ideas that might help people in my situation"?
"I think your Housing plans are brillant", writes one person but adds that studio apartments won't suit him; he needs something bigger for his family. "Do you have any other ideas that might help people in my situation"?
Building studio apartments will indirectly help everyone who wants to purchase a home. It will reduce the competition for homes built under the Housing For All (HFA) plan. Those for whom a studio apartment, close to all services and facilities, is adequate eg a single person, two people or even two people and a child will no longer be in the market for a home.
The key thing is not to suggest anything that would interfere with HFA. That plan has to do the state's heavy lifting for a wide variety of homes including social homes, cost rental, affordable purchase, first home scheme etc.
There is one area where I could suggest a new policy and that relates to mews houses. A mews house, or a converted mews, is a house built at the end of the garden of a main residence which opens out onto a laneway, often a quite large laneway. Sometimes this would be on the site of an old disused stables or garage, hence "converted mews". These potential mews homes would have all the necessary infrastructure close by. Also as individual homes, they are generally built by small local construction firms and would not impact the manpower available to the much larger HFA building companies.
It has been estimated that there is capacity for building up to 12,000 new mews houses in this way in our main cities: Dublin, Cork, Limerick, Galway etc. How to unlock this potential? Some incentives will be required for owners of the main residences.
One suggestion is to create an architectural and structural envelope, say max 2 floors, 3 beds etc. If the design stays inside that envelope, then the building of the mews house should be planning exempt so, no planning permission required. A further incentive for the owner would be to allow a tax credit for capital gains tax, if the mews is sold to an owner occupier.
Of course in this case, there would be no fixed price as the price would be determined by the market. However this could bring an additional 12,000 homes to the market for owner occupiers over the next five years, all within the city boundaries and close to existing services and facilities. Let's do it.
Blog 19_Fire and Fossil Fuel
One correspondent expresses surprise at my opinion that the transition to net zero worldwide could take as long as 100 years (See Blog No 11). To see why I believe that to be true, consider everything we have in this world, and I mean everything:
One correspondent expresses surprise at my opinion that the transition to net zero worldwide could take as long as 100 years (See Blog No 11). To see why I believe that to be true, consider everything we have in this world, and I mean everything:
Every road, every bridge, every factory, every hospital, every school, every stadium, every home and apartment, theatre, cinema, every office block, all of transportation including aviation and shipping, Electricity, piped water and sewage, all of mining, domestic appliances, modern medicine and agriculture, TV and Radio, Publishing, Telecommunications, The Internet and all of IT, everything else you can think of, in fact our entire civilisation, was built on two things: Fire and Fossil Fuel. We need to convert all of the above to net zero energy but it will not be easy or fast.
There is no fire on any other planet in the Solar System and, for that matter, there is no fire on the sun. The earth is the only planet in the Solar System which has fire and every day, billions of fires take place here. Think of all the internal combustion engines for a start. Fire is only possible here, because the oxygen concentration in the athmosphere is in a very narrow range. If it were substantially lower, then open fires would not be possible - a fire once lit would immediately go out. If the concentration were substantially higher, then the whole world could burn.
I have argued elsewhere that the difference between fossil machines and net zero machines is that the net zero machines - electric cars, heat pumps, wind turbines, etc. - are all solids and solids must be mined. I believe the transition will take 100 years because we cannot do all the mining of metals and minerals that would be required to make the net zero machines by 2050 or any time even close to then.
Take one metal everybody is familiar with: copper. Copper will often be found in use for water pipes or for the hot press cylinder in a home. It is important because there is no substitute for copper in the Periodic Table, for the manufacture of the net zero machines. You can't say, "we don't have enough copper, we'll use zinc instead". Copper has the highest conductivity by far, apart from the precious metals. Copper must be used for all the windings in the electric motors of the cars, for the heat pumps, for the wind turbines and even for connecting solar panels.
The situation re copper is that the price is close to historical highs and the present demand can be met. However, to complete the net zero transition, vast amounts of extra copper will be needed. It is unclear if the mining companies are even looking for all the new mines that must be discovered and exploited to supply a forthcoming exponential increase in demand.
We know a lot about mining. It is the world's oldest industry. Humans have been doing it for 50,000 years. The Romans were mining coal in Britain when they were there. From the moment prospecting starts, it can take up to 20 years before the first kg of metal can be produced from a new mine.
The sheer volume of the mining required will, I suspect, slow the completion of the worldwide net zero transition until well into the 22nd century.
Blog 18_ Out of Gas
"Where do you stand on the construction of a liquified natural gas (LNG) storage facility in Ireland ?", asks one questioner. The first thing to check is how secure our current gas arrangements are and what would happen if our gas supply was interrupted.
"Where do you stand on the construction of a liquified natural gas (LNG) storage facility in Ireland ?", asks one questioner. The first thing to check is how secure our current gas arrangements are and what would happen if our gas supply was interrupted.
Previously, we have been able to rely on our own reserves of gas starting with the Kinsale field following which we had Corrib. Kinsale is finished and Corrib is fast running out and now supplies only about 10% of our needs. Accordingly we rely on imports for about 90% of the gas we use. This gas is supplied via two undersea pipelines from Moffat in Scotland and originates in Norweigan or UK North Sea gas fields, so we are at the end of a long pipeline from the source of the gas.
Damage to undersea pipelines (and indeed cables) has occurred in European waters over the past few years, caused either accidently or deliberately. Even if it is unlikely that it could happen to our Irish Sea pipelines or indeed to those supplying us from the North sea, nevertheless it is a risk. That risk is made more serious by the fact that, if it did occur, because of the undersea location of the fault, it could take many weeks if not months to repair.
About half of gas is supplied by Gas Networks Ireland to Industry/domestic customers here and the other half goes to the generation of electricity. To quantify the impact on electricity we can take a look at the very informative Dashboard on the Eirgrid website. Currently the fuel mix generating our electricity is as follows: Gas (60.80%), Renewables (14.86%), Imports via our UK electricity Interconnectors (13.72%), Coal (7.27%) and other (3.35%). So a risk to our gas supplies is also a serious risk to the electricity network.
If damage to our pipelines occurs, then what reserve in Ireland do we have to call on, apart from the 10% supplied by Corrib? I asked someone who should know this and he said about 48 hours! So then, in 48 hours, the lights will go off, no heat, no cooking. industry will collapse. It would be economic armageddon. I presume the 48 hours was an exaggeration but it surely indicates that we would have limited time to find a remedy.
In 2023, the Department of the Environment, Climate and Communications, published an Energy Security in Ireland to 2030 Report. It concluded that Ireland needed a state controlled Floating Storage Regasification Unit (FSRU). This is a ship that can store LNG at high density and is temporarily docked at a port where a connection to the Gas network is available. In the event of undersea pipeline disruption, it can supply gas as required until the emergency ends. If in due course, we develop a sufficiently large local biogas or green hydrogen supply then the FSRU ship can be disconnected as no longer needed.
Given the severe consequences of pipeline disruption, I support the provision of an FSRU as soon as possible.
Blog 17_ Rent Freeze
Would I support a Rent freeze, someone asks? I would certainly like to see rents stabilise but I am worried whether or not a rent freeze would work right now. Maybe we can achieve the same effect in another way.
Would I support a Rent freeze, someone asks? I would certainly like to see rents stabilise but I am worried whether or not a rent freeze would work right now. Maybe we can achieve the same effect in another way.
Landlord representatives claim a rent freeze would drive more smaller landlords out of the market thus reducing supply and making matters worse. Others dispute this, but it is generally held that a rent freeze is good for tenants in situ but very bad for those looking for a place to rent.
Landlords see the issue of tenant rights as a zero sum game. Whenever new rights are proposed for tenants, landlords claim the net effect will be to subtract rights from them.
According to the Daft.ie Rental Price Report Q3 2024, average monthly market rents were as follows:
Dublin EUR 2,476 up 5.2%, Cork City EUR 2,077 up 10.4%, Limerick City EUR 2,221 up 19.2%, Galway City EUR 2,189 up 10.5%, Waterford City EUR 1,659 up 5.8% and Rest Of Ireland EUR 1,586 up 8.3%.
These are the rates for new tenancies and the figures for those remaining in a rented home would have been lower. Even so the figures are stark, particularly for Limerick, which is now on a par with Cork and Galway. Economic growth in Limerick has been strong, but there has been almost no new housing supply, something the new Mayor is determined to rectify.
Professor Lyons of TCD, commenting on the daft report, showed a very interesting correlation for Dublin between numbers of apartments built and rent rises that year. In years when apartment building was low (2018 - 2022), rents rose substantially, but, in years when the number of apartments built was high (around 9,000 in 2023), there was a virtual rent freeze. It looks as though we can take apartments completed in a year as a proxy for private rental properties coming to the market and potentially apply this country wide. To complete the picture: in 2024 apartment building in Dublin fell back and rents have started to rise again.
So it seems we can engineer a natural rent freeze if we build enough apartments. As with house prices, so too with rents, it all comes back to supply. In my Blog post no 4, I have shown how thousands of new "living above the shop" rental properties could be brought to market. This would make a substantial difference but, in the longer term, the Government's Housing for All plan, which has been tilted towards social homes, will need to make provision for more private rental properties as well.
Blog 16_ Food and Trees
Some people want to see Ireland plant more trees and produce less food because trees help to mitigate climate change and agriculture has more to do to reduce emissions. I hope we can plant trees and produce the food.
Some people want to see Ireland plant more trees and produce less food because trees help to mitigate climate change and agriculture has more to do to reduce emissions. I hope we can plant trees and produce the food.
Forest cover is now back to around 12% of the country, the highest figure since the 16th century, but we are still below the European average.
Personally I love trees and love walking in woodland areas. I'm all in favour of planting more trees. It always strikes me as amazing to realise that the vast bulk of every tree in the world doesn't come out of the ground but is instead sucked out of the air. The wood of a tree is made largely of cellulose and the carbon and most of the oxygen for that comes from the CO2 in the athmosphere.
The deputy secretary general of the United Nations, Amina J. Mohammad speaking recently about Climate Change emphasised how worried she is at the slow progress being made in dealing with it. She listed the now almost inevitable impacts coming our way including:
Extreme Weather Events: Increased frequency and intensity of heatwaves, droughts, and wildfires. More intense storms and hurricanes due to warmer ocean temperatures. Heavier rainfall and increased risk of flooding in some regions. Significant melting of ice sheets in Greenland and Antarctica, leading to sea level rise of 0.5 to 1 meter or more. Submersion of low-lying coastal areas.
One impact she particularily mentioned was food production. Countries she said that currently produce some or all of their own food won't be able to in the future and will have to rely on others who still can.
Ireland of course will be subject to some of the same climate impacts as everyone else but our Met Office is predicting dryer, warmer summers with an extended growing season so we will still be able to produce food.
According to Board Bia, Irish food exports feed about 40 million people around the world. In a climate changed future, we could be expected to feed 400 million.
So by all means less us continue to improve forest cover but also position ourselves to respond positively, if the World Food Programme comes calling.
Blog 15_ Housing Plan B
I like your affordable housing proposals says one correspondent, but you'll never get planning permission for that. All those whose views of the sea are impacted plus the usual NIMBY brigade, he suggests, will band together and try to put a stop to it so you better have a Plan B ready.
I like your affordable housing proposals says one correspondent, but you'll never get planning permission for that. All those whose views of the sea are impacted plus the usual NIMBY brigade, he suggests, will band together and try to put a stop to it so you better have a Plan B ready
Actually, I am confident that planning permission would be granted because it is in everyone's interest to build a large quantity of affordable homes for sale. We are in the middle of a Housing "disaster" (President Higgin's word) with a whole generation stuck in their family-home bedrooms or paying eye-watering rents and unable to buy a home of their own.
Many local residents who might think of objecting are already living on land reclaimed from the sea in the past . Furthermore, all of them will have adult children/grandchildren (or will have friends/neighbours who have adult children/grandchildren) who would like to buy a home near where they grew up but can't find anything affordable.
The question they have to ask themselves is: do they want their adult children/grandchildren living a hundred kilometres away, where they rarely see them and are unable to offer assistance should a family emergency occur, or, would they put up with a little local inconvenience, and instead have them living nearby where they can see them frequently?
On the other hand, I am an Engineer, so, just in case, I can offer a Plan B but, it will mean going higher and denser. The diameter of the inlet varies along its length from 300m at the Fairview Park end to 900m further out. Plan B would involve reclaiming a strip of land on the industrial/port side but still leaving 250m minimum of Bay area unaffected.
Just a stones throw away on East Wall road, on the banks of the Tolka River, a new development is under construction: the East Wharf scheme. It comprises a mix of a hotel, some retail and commercial plus a large number of apartments (all Build To Rent). The hotel is 15 stories tall which sets a planning precident for the area. By raising each new apartment block to 15 stories and placing them closer together it will still be possible to construct 20,000 studio apartments on the smaller site.
A corollary of this change would be that, while the new apartments will be secured from the impact of future climate induced storm surges and sea rise, there will be no additional protection for the north city generally.
Blog 14_ New Land
Met one NUI graduate at a gathering over the last few days who has been working in Hong Kong for the last five years and was just back with his Hong Kong native wife. He said he was very impressed with my Housing proposals especially going outside the box to use reclaimed land.
Met one NUI graduate at a gathering over the last few days who has been working in Hong Kong for the last five years and was just back with his Hong Kong native wife. He said he was very impressed with my Housing proposals especially going outside the box to use reclaimed land. He mentioned that 25% of all developed land in Hong Kong is reclaimed from the sea, amounting to some 7,000 hectares - my proposal is a lot more modest, at a mere 130 hectares.
He asked why I was suggesting to use the sea area off Fairview for Housing and I explained it was because most of the land in that area is already reclaimed land. Eastwall was reclaimed from the sea in the 19th century and Fairview Park is built on land reclaimed in the 20th century. The port area of Dublin has been continuously extended over the last 100 years by reclaiming land from the sea. Hence it seemed natural to focus on that area because it could be seen as continuing a process that had been going on for centuries; the next step being to reclaim the land stretching out from Fairview Park to the tip of the port.
The conversation moved on to climate change and we both agreed that, at the present slow rate of progress, the global transition to net zero is likely to take up to 100 years and consequently it would be prudent to start taking some protective measures now. I explained that that was another reason why I selected the sea off Fairview. It's because that whole area is shown as particularily vulnerable to future flooding due to climate change with the increased frequency of storm surges and the expected sea level rise of 0.5m to 1.0m.
The Housing proposals include the building of a sea wall which will protect the new homes and the whole of the North City. Of course the rest of the Dublin coastline (and later our other cities) would, in due course,also need protection so this would be the first part of a "Cathedral Project" ie one taking several political cycles to complete. He went on to ask how that would all be paid for and I told him about the Government's Infrastucture, Climate and Nature Fund and that I was expecting that a portion of that would be used to complete the wall and reclamation works.
Blog 13_ Energy Storage
"Explain what you mean by Energy Storage and why you think it is a key enabler for increasing levels of Net Zero Energy on the Grid".
"Explain what you mean by Energy Storage and why you think it is a key enabler for increasing levels of zero emissions Energy on the Grid".
We are facing five years of amber alerts on the Electricity Grid. Fortunately, Eirgrid are confident that interruption to supply is unlikely this winter. We could have been in a much better place if we had provided an adequate level of energy storage over the last number of years and it remains an urgent requirement as the net zero energy available to the Grid increases.
There are two categories of energy storage: short term storage and long term storage. By short term is meant storage for a number of hours say 3/4 hours, whereas long term storage is suitable for 3/4 days or even longer.Typically short term storage is provided by means of batteries which can be charged and then later discharged as required.There are various technology solutions suitable for use as long term storage but the one providing over 90% of storage in the world today is called pumped hydro storage. This is where there is a lake at the bottom of the mountain and a lake at the top. In some modern installations the lower lake is actually the sea. When there is excess energy available it can be diverted to pump water from the lower to the upper lake where it is stored as potential energy. Then later, when supply is tight, the water from the upper lake can roll down again to the lower lake through a turbine to generate electricity.
The present situation in Ireland is that we have a limited amount of battery storage and a single pumped hydro system (Turlough Hill). Two things about the battery storage: Firstly, since we have an all Island electricity system, some storage is in Northern Ireland and some is in the Republic. Without a satisfactory interconnector between the two jurisdictions, the effectiveness of the storage is reduced. Secondly, the battery storage is only partly state owned. Most systems are privately owned and operate on the basis of storage contracts from the Energy Regulator. However representatives of the industry have written media opinion pieces arguing that they would really like to operate differently. Instead of Grid storage contracts, they would like to do what every business does, namely to buy low and sell high. In this case they would be happy to use their technology to buy electricity from the Grid when it is cheap and then sell it back when it is expensive. Consequently, it's not clear how secure even our limited short term energy storage will be when the present contracts end.
I explained in an earlier blog how, as more and more renewable systems are connected to the grid, increasing amounts of the energy generated is wasted, reaching 8.5% in 2022 and probably more now. To eliminate this waste by urgently providing substantial levels of both short term and long term energy storage is long overdue and is now a policy imperative.
For more technical details see:
Engineers Ireland Yearbook 2025, "Why pumped hydroelectric energy storage is a perfect fit for Ireland's path to zero emissions electricity generation" Author: Chris Bakkala CEng MIEI
Blog 12_ Energy Waste
"Can you elaborate on your claim that net zero energy is currently being wasted", asks one voter?
"Can you elaborate on your claim that net zero energy is currently being wasted", asks one voter?
Let's start by saying that electricity, once generated, is a matter of use it or lose it. The Grid can only accept electricity which can be supplied/consumed elsewhere.
There are, for the most part, two forms of electricity generation in Ireland - the fossil generators (mostly gas) and the weather dependent generators (wind and solar). What can happen is that especially, in the early morning, if the wind is blowing strongly and the demand is low, too much electricity is being supplied to the Grid. In response to this situation, the Wind operators are asked to turn off some supply (Note: there are other technical reasons why they they might be asked to reduce supply as well).
You might well ask why don't we turn off some of the state owned fossil generators instead? It turns out that we can't do that because those generating stations were designed for continuous use and can't just be turned off or on at the flick of a switch. If they were turned off and needed to be turned on again (if the wind dropped, say) then it could take several hours before they would be able to supply power to the Grid again.
So the wind operators are told to switch off and, from this year on, they get paid for this electricity which they don't supply ("constraint" payments). Guess who pays for this wasted electricity? The consumer pays. It is one of the elements contributing to our electricity bills.
There's potentially even worse to come. The wind operators have taken a court action against the Energy Regulator (CRU)'s decision not to allow them retrospective payments for constraints in previous years. If they win that case, a further hike in all electricity bills is likely.
In 2022, almost 8.5% of electrical energy from wind went to waste which amounted to 1,279 GWh. Let's for convenience call that 1,279 units. Now, you may have noticed numerous Opinion pieces in the media recently asserting that we can't connect any more Data centres to the Grid because it would result in the emission of additional CO2 into the athmosphere but - is this actually true?
Taking the average annual Data center consumption of electricity as 50 units, it rather looks as though, in theory at least , if instead of wasting electricity as above, another 20 or so data centre equivalents could in fact be connected, without the emission of a single extra molecule of CO2! An added bonus would be a reduction in all electricity bills.
Note: All Data center or other large user Grid connections must of course be prior approved by Eirgrid as to where, when, how, etc.)
Blog 11_ Climate
Climate change is the existential issue of our time. The signs are not encouraging.
Climate change is the existential issue of our time. The signs are not encouraging. Addressing the G20 meeting in Rio de Janeiro last year, The President of Cop29 in Baku reminded them that they account for 80% of the world's emissions. Worryingly, none of the G20 countries are on target to meet the reductions required by the Paris 2030 accords.
We can break down the G20 further and say that 6-10 countries essentially control the future of the world's climate: China, India, Russia plus a few others.
While Ireland agonises over the closure of its one coal-fired power station (Moneypoint), China and India operate between them currently over 1,500 and are busy installing one new one each week (over 80% of the world's coal is now burned in Asia).
Adding to the problem is that the use of energy in the world is increasing rapidly. According to the IEA (International Energy Agency) the total energy used in the world increased by 50% between 2002 and 2022 and they predict a further 50% increase between now and 2050.
It no longer sounds unreasonable to suggest that, at the present rate of progress, the Net zero transition worldwide could take up to 100 years with all that that entails. The Climate scientists have made clear what will happen: more extreme weather events, including the likelihood of much heavier rainfall here in winter, exacerbated by rising sea levels. Ireland will need to get very good at flood protection and soon.
Blog 10_Values
I’ve been receiving emails asking me for my position on the “hot button” issues facing society, from transgenderism, through assisted suicide, conscientious objection, to hate speech legislation and abortion.
I’ve been receiving emails asking me for my position on the “hot button” issues facing society, from transgenderism, through assisted suicide, conscientious objection, to hate speech legislation and abortion.
For many correspondents the issue they mention is a “key decider” for them. They want to know where I stand, because my answer on that one issue will decide their vote, they tell me. Some say they are very happy with my other policies and proposals, but cannot vote for me without knowing my position on that one issue.
On both sides of the debate on such topics, there are often great depths of feeling. Each side considers itself acting with the best intentions, for the greater good of the individual and of society. Therefore each side often feels that views that disagree with theirs are deplorable.
The fact that such issues have dominated my e-mails is a further pointer to the depth of feelings on them.
While the concerns are many, and distinctions can be made, I believe life is better than death; that, except in extraordinarily-rare cases, a human is born male or female; that a person should not be forced to act against their deepest convictions and that it is unhealthy for democracy if governments impose inappropriate restrictions on holding and expressing opinions.
General principles such as these would shape the stance I would take on particular proposals coming before the Seanad.
Blog 9_ Facts
Misinformation is false or inaccurate information- getting the facts wrong. Disinformation is false information which is deliberately intended to mislead - intentionally misstating the facts.
Misinformation is false or inaccurate information- getting the facts wrong. Disinformation is false information which is deliberately intended to mislead - intentionally misstating the facts.
The spread of misinfomation and disinformation, particularly via social media, has affected societies' ability to improve public health, address climate change, maintain stable democracies and more. The advent of online AI (Artificial Intelligence) could magnify the problem. How do we equip our children, in the 21st century, to resist these deformations of reality?
Maybe we need to take a step back in order to take a leap forward? In the medieval scheme of education, the syllabus was divided into two parts: the Trivium and the Quadrivium. Focussing on the Trivium, it in turn consisted of three parts namely: Grammar, Dialectic and Rhetoric. Grammar meant learning a language. Under Dialectic, pupils learnt how to use language, how to construct an argument and importantly, how to detect fallacies in argument. Rhetoric taught pupils to express themselves in language, how to say what they had to say eloquently and persuasively. Use of eloquence to make the worse appear the better reason would be restrained by the previous teaching in Dialectic.
Dialectic and Rhetoric: these are the tools of learning that pupils at an impressionable age need, in order to resist the malign influencers of our social media driven age. Let's add them to the Transition year curriculum in our secondary schools!
Blog 8_ Data centres
There are just over 120 Data centres in Ireland currently connected to the Electricity Grid and they use around 21% of all electricity generated. By comparison, residential customers use 28%.
There are just over 120 Data centres in Ireland currently connected to the Electricity Grid and they use around 21% of all electricity generated. By comparison, residential customers use 28%. The other 51% is made up of non-residential and heavy power users (excluding data centres). The 28% figure is not out of line with other European countries like Germany, Spain, Italy and France where residential use is between 25 - 30% also. There is currently a Data centre connection moratorium in place for the Dublin region because the electricity grid there requires improvement works before resuming connections.
Many of the newer Data centres are used to provide web services and these can actually save the country electricity, as we would otherwise be using far more. To see how, consider an SME making widgets. One day the Sales Manager comes to the CEO and says he's been talking to the existing customers and some prospective customers and if the company could supply a different type of widget then sales would increase significantly. A business plan is produced which confirms a large improvement in Sales but extensive revisions to machine software will be required and it will take 6-9 months effort by the IT team to produce and test the new software before applying it to the production machines.
The CEO now has a choice. One option is to purchase/lease the PCs, servers, disks, processing power, switches, routers and a wide range of development and testing software that will be required, then connect it all together, power it up and install the software. This will result in a large increase in the use of electricity by the SME.
The other and lower cost option is to rent facilities from, for example, Amazon Web Services (AWS) - Google, IBM etc offer similar services. In the AWS Data Centres, all of the Hardware and Software is virtualised and may be used flexibly over the Internet by a large number of customers at the same time. There will be times when the IT team requires increased processing power or at other times increased disk space and all of this can be accommodated in the AWS rental contract. The power usage of the AWS Data centre is shared by hundreds of SMEs simultaneously, with all using far less electricity than would otherwise be the case. This is good business for Amazon also. In the 2nd quarter of 2024, AWS accounted for more than 60% of Amazon's overall operating profit!