HARNESSING THE WINDS OF CHANGE

EddieO'Connor Founder of Airtricity

the recent decision to sell Ireland’s renewable power force is creating waves and Eddie O’Connor, CEO and Founder of Airtricity is set to cash in on this whirlwind opportunity. Having learnt the ropes in the world of electricity, peat power and now wind energy, he speaks to Jill Acheson about his entrepreneurial encounters

With a potential asking price of €1 billion the robust wind energy company, Airtricity, is set to net its Chief Executive and Founder a very tidy profit indeed. The announcement to sell Airtricity Holdings comes just weeks after the company sold its North American division Airtricity North America for a similar sum to German renewable energy giant Eon. The utility group NTR owns a majority share of Airtricity, a stake of 51%, while the founder Eddie O’Connor holds 4% of the group’s 50 million shares yet should yield approximately €20 million from the upcoming sale. The sales process is due to be completed by mid 2008 and presently Credit Suisse and NCB are acting as financial advisors to the company for the planned transaction.

O’Connor is evidently a man who likes to take the business bull by the horns, but simultaneously he conveys an endearing sense of modesty and is not one to brag about his business prowess. His current business undertaking started out as The Future Wind Partnership ten years ago amidst a period of demand for clean and cost effective power as well as the de-regulation of the industry. While others were slow to react, O’Connor made the brave change to renewable energy, a move that has most certainly paid off. Wind energy is now heralded as practically the only way forward for mass power generation and so the sale could not come at a better time for the forward thinking businessman. By way of summing up his entrepreneurial experiences, O’Connor confesses, “throughout my life, I have been used to being told it can’t be done, it’s too radical, it’s too revolutionary, it’ll never work here, but it hasn’t ever bothered or phased me.” This battling approach has been moulded from years of enduring a country which was on its economic uppers, where emigration was more of a priority for the people than trying to start their own business.

“The Ireland of the time was a pretty disastrous place to work because we had very little business, and were only beginning to see the emergence of companies like CRH and Kerry Group and these are great companies, and also GPA which started off very well. But we didn’t have the flourishing private sector that the Celtic Tiger has now brought in its wake.” He is of the belief that Ireland, as a whole has really benefited from the effect of the Celtic Tiger and this, combined with a much greater emphasis on education and the US dominated manufacturing industry here have had a significant effect on our economy.

Life Changing

O’Connor is a chemical engineer by profession and in 1970, after a two year role as President of the Student’s Union, he joined the ESB. He describes his time at the semi-state as being relevant to all subsequent developments, “I began to learn about electricity and energy and I got on very well there and was very happy there. ESB was a very well run company, successfully overseeing the growth of the Irish electricity market and had introduced concepts like strategic management long before they would have been met anywhere else in Ireland.” O’Connor looks back fondly on his time at ESB and describes it as a life changing experience that formed a kind of apprenticeship for the young innovator.

From 1987 to 1996 O’Connor put his business acumen into overdrive where he worked as Managing Director of Bord na Mona. Describing his arrival at the company, O’Connor says, “it was in phenomenal difficulty, and had been loosing money hand over fist. It was quite literally a beached whale, and it was also employing 4200 staff, which we managed to cut to 1800.”

Decision Maker

The entrepreneur describes his move from ESB to Bord na Mona as a dramatic experience. He moved from being in charge of fuel purchasing with a staff of six and a budget of one hundred million to a managerial role over staff numbers of over four thousand. The move was a complete contrast and one of the big cultural shocks that he ever had in his life. However, this experience did not seem to dampen the enthusiasm of the young O’Connor.

At one stage in his blossoming career at ESB, O’Connor was actually headhunted by Paddy Moriarty, who trained staff in the semi-state. “He came out to see me in the house and he asked me, would I like to go and work for another company. I was shocked because here was a chief executive trying to head hunt me out of our own company!”

During his time at the peat plant, he is confident that he did a lot of work that any manager would be very proud of and this is certainly evident in his entrepreneurial career path.

He agrees that there were some tough decisions to be made at the time, “the company was going to go under, and we weren’t in the business of letting companies go under. We were very happy to go to the staff and tell them that there was another way, but that the other way was going to be painful.”

Changing Mindsets

A very memorable turning point in O’Connor’s business life came in 1991, “I had become convinced that global warming was a fact, and felt myself that I wanted to do something about it. I tried to get Bord na Mona to deal with energy but I didn’t succeed at that.”

O’Connor is a man who has constantly excelled when the task at hand seems close to impossible and he has always strived to make his ideas a reality. The mid 90’s brought with them a prevailing wind of alternatives for O’Connor, but he concedes, “there weren’t too many people of the same mindset as me at the time, and you can call it a lonely position but I didn’t find that. I found it to be very realistic; that’s the way life is, people live in the here and now and they are very happy there.” Obviously O’Connor is not one of those people and he appears to be a born challenge seeker evident from his experiences of the last ten years.

Leaving peat powered Bord Na Mona behind in 1996, O’Connor quickly paid a visit to his friend and academic Brian Hurley, who had been dealing in wind energy all his life and who had never lost the faith. “I remember going to see him and going to see my accountant pal Louis FitzGerald and solicitor John Lavery. The latter said to me, ‘how much money do you need Eddie’ and I said, about half a million would be grand, so he rang me back about ten days later and said ‘I have the money now’, and I said, that’s great.” It’s moments like these where you gain an insight into the world of Irish business networking and the truth in the old cliché, it’s not what you know but who you know.

The chief executive is honest about his early days involved in the world of wind power, “I was the only paid worker in Future Wind Partnership at the time and yes, we had that amount of money, which was a low amount but was high risk and we completely failed in our first venture really because the government at the time really didn’t want to back wind energy.” He says that this attitude to wind energy is still prevalent to some degree, which he sees as a great pity as it is a massive natural resource and a source of free fuel, which is under exploited here in Ireland.

Renewable Revolution

Attitudes to wind energy are changing somewhat now, with the new orientation of the government and the fact that for the first time we have two Green Ministers in government. He believes that until Fianna Fail do something in this country, it’s probably not being done. The Greens see the business of government as making things happen; they’re not just there to make up the numbers in the Dail.

“I think the government are doing a hell of a lot now, they’re only in power a short time, and it takes a long time to turn around a big ship. I’m very happy with the performances of the Taoiseach, Eamon Ryan and John Gormley, they really are trying to change this place. They’ve made a heroic commitment of cutting Ireland’s emissions each year until 2020. This is a very brave and courageous move and it is the right thing to do. This government will be looked upon as having served future generations very well,” enthuses the energy man.

Airtricity’s main customer base are the country’s SMEs and O’Connor says that at the start it wasn’t easy to break into this market. “We started out by offering a reduction in price. We’ve never tried to sell on pure green alone, because that would be an impossible sale. These small businesses are not rich folk so we like to make a contribution to them because we know they need it,” comments O’Connor.

Airtricity have been the first in the world to offer premium electricity at a reduced rate, and this is something that O’Connor is very proud of. He says that Ireland’s electricity prices are extremely expensive and there is no way they can come down so we will have to get used to this fact. Ireland has put all its faith in fossil fuels and O’Connor says we have a regulator who just wants to deal with gas, which he feels is mind numbingly stupid.

Embracing Failure

O’Connor believes that the American attitude to business failure is most definitely the best in the world. We have a lot to learn from our cross Atlantic counterparts where if you fail once you’re employable and if you’ve failed twice or three times you will be snapped up. He contends that Americans really have embraced the idea that to be successful in business you need to have failed in order to function fully in the business world. Speaking about his own personal experience of learning from your entrepreneurial endeavours, he offers, “I learned from my mistakes and everybody makes loads of mistakes. I hate managers who say that they have never made any mistakes; it is part and parcel of being good at what you do, so I hope I learnt from them along the way.” Empowering Spirit O’Connor’s own entrepreneurial inspiration, reads like a who’s who of Irish business, eschewing the names of the likes of Tony Barry of CRH, Denis Brosnan of the Kerry Group and Tony Ryan of GPA. The energy entrepreneur is adamant that the Irish as a race are no greedier than any other nation on the planet. He also declares that capitalism is essentially a framework on how to make people rich and believes that most people thrive in this societal structure. “It is a uniquely human trait that we will endeavour to make the most out of a system of free enterprise,” says O’Connor. O’Connor is the epitome of a business man who has constantly thrived on the disapproval of others, therefore ensuring that his entrepreneurial spirit has always come to the fore. A fitting interpretation of one of Ireland’s most inspirational business figures, is that he truly is an eternal optimist and has never let a business opportunity slip through his fingers. One tip for those who may be aspiring to follow in the entrepreneur’s footsteps, in the words of the man himself, “I am a firm believer that you need to take a risk in life and in business; you should never take things as you find them and the main point is to never look back.”

Published in the December/January 2007 Issue of Irish Entrepreneur