Irish investors accelerating investment in energy transition, but regulatory risks remain top barrier to growth
More than eight out of ever ten Irish investors believe investment in energy transition assets is increasing rapidly, according to new research from KPMG.
That compares to 72% globally the survey of 1400 senior executives from around the world, including 50 from Ireland, carried out by KPMG’s Energy Transition Investment Outlook Report found.
James Delahunt, Corporate Finance Partner, Sustainable Futures, KPMG in Ireland, explained that strong economic and energy demand growth is driving continued investment in Ireland’s renewable energy.
“From a corporate perspective, this has historically led by the multinational technology companies. However, we are now increasingly seeing growing appetite from indigenous Irish corporates,” said Mr Delahunt.
“A combination of drivers, including energy price volatility and new sustainability reporting requirements, is driving this change, with investments in energy storage, energy efficiency and renewable energy sources being most in demand.”
“Key challenges for further renewable energy deployment include grid infrastructure, regulatory and policy certainty, and the planning system, each of which is within our power to address.”
Investors are also mitigating risk through diversity in investment, with fossil fuels continuing to play a key role in an orderly transition.
The research found that 74% of Irish investors are still engaging in fossil fuel projects.
Only a quarter of global executives surveyed said they are not making new investment in fossil fuel, compared to 26% in Ireland.
“While over 95% of industry experts consulted last year believe that the 80% RES-E target for 2030 will not be achieved, the belief is they are fundamentally achievable soon after that if key planning, grid and policy issues are resolved,” Mr Delahunt said.
“Major successes achieved in the last year include the publication of the Ireland initial DMAP, the ORESS-2.1 terms and connection, the new electricity connection policy and the award of the first round of LCIS contracts.”
Despite a prolonged period of geopolitical volatility and high interest rates, the findings show high confidence in energy transition.
Energy efficiency and renewable and low carbon energy are the most attractive areas for investment in the next two years.
70% of respondents in Ireland say their organisation invests in energy transition assets to comply with regulations, compared to 56% globally.
While 46% of Irish organisations are investing in energy transition assets for energy security and independence, compared to 37% globally.
However, the KPMG research also highlights how continued investment could slow down due to regulatory risks.
Half of the Irish respondents identified regulatory or policy risks as the top barrier to investment in energy transition assets, compared to 40% globally.
Market volatility was second for 32% in Ireland and 36% globally.
“Policy and regulatory actions are undoubtedly shaping the energy transition—both as powerful drivers and as obstacles. It’s clear that without a supportive regulatory framework, we risk holding back progress in this critical transformation,” said Mike Hayes, Decarbonisation and Nature Leader & Global Head of Renewable Energy, KPMG International.
“The path forward demands more than ambition; it needs stable, transparent, and consistent policies, like subsidies for renewables, carbon pricing, and mandates for clean energy.”
