The Future of Biomass Energy in Ireland:

Lessons from Europe

Chris Kennett, DT118Supervisor: Eanna Ni Lamhna

WIP 46th November 2012

CLIMATE CHANGE ENERGY PRICES

ENERGY SECURITY

Changing weather patterns

Rising global temperatures

Rising sea levels

Threat to biodiversity

Emissions control

Carbon capture and recycling

International agreements

Proven reserves outpaced by demand

Dependency on small energy portfolios

Inefficient use of energy resources

Uneven distribution of energy resources

Diversity and efficient use of energy

Local resources

Climate change, energy security and price stability are all behind the

2009/28/EC Renewable Energy Directive

20% reduction in primary energy consumption in20% increase in energy efficiency20% contribution from renewable energy sources

Further obligation for 10% transport fuels from RE sources

Ireland’s commitment

16% final consumption of energy from renewables:

RES-E 40%RES-H 12%RES-T 10%

Biomass: 10% of world final energy consumption IEA, 2007

1 hectare agricultural land yields 10-15 tonnes yr dry mass11,000 ha -> 30MW power -> 30,000 housesEfficiencies - max. 45% heat or elec., 90% CHP

We‘re the best in Europe at growing trees! Plus …

Biomass can be sourced everywhere

Biomass can be a waste product of other processes

Biomass can be used in (some) existing power stations

Biomass is especially good at producing heat

Biomass can generate lots of employment

But …

Biomass gets less attention than other renewable energy resources.

Ireland’s 2020 targets require:

Electricity: Edenderry power station (30% co-firing)- 5000 ha of short rotation willow coppice, plus- 110,000 fresh tonnes of forest wood chip, plus- 70,000 tonnes of pine kernel shells

Electricity + Heat: small-scale CHP & heat boilers- 70,000 ha of short rotation willow coppice (+miscanthus), plus- 1.3 million fresh tonnes of forest woodchip- 127,000 tonnes of straw

Electricity + Heat: anaerobic digestion CHP- 10,000 ha of grass, or- slurry from 800,000 cattle

Transport- 90,000 ha of wheat or 60,000 ha of sugar beet (petrol substitute), plus- 230,000 ha* of oilseed rape (diesel substitute)

* As oilseed rape is used as a break crop in a four year rotation with other arable crops, the actual land requirement is actually 4x 230,000 ha.

Farmer Consumer

Large-scale biomass energy (long chain)

Contractor/Energy Centre Utility CompanyAgri-forestry – Collection, Processing, Storage, Delivery – Generation, Supply – Power

€ €€ €€€

Small-scale biomass energy (short chain)

Agri-forestry, Processing, Storage, Delivery Heat & PowerFarmer Consumer

€€

Farmer Consumer

Large-scale biomass energy (long chain)

Contractor/Energy Centre Utility CompanyAgri-forestry – Collection, Processing, Storage, Delivery – Generation, Supply – Power

€ €€ €€€

Small-scale biomass energy (short chain)

Agri-forestry, Processing, Storage, Delivery Heat & PowerFarmer Consumer

€€

Farmer Consumer

Large-scale biomass energy (long chain)

Contractor/Energy Centre Utility CompanyAgri-forestry – Collection, Processing, Storage, Delivery – Generation, Supply – Power

€ €€ €€€

Small-scale biomass energy (short chain)

Agri-forestry, Processing, Storage, Delivery Heat & PowerFarmer Consumer

€€

Farmer Consumer

Large-scale biomass energy (long chain)

Contractor/Energy Centre Utility CompanyAgri-forestry – Collection, Processing, Storage, Delivery – Generation, Supply – Power

€ €€ €€€

Small-scale biomass energy (short chain)

Agri-forestry, Processing, Storage, Delivery Heat & PowerFarmer Consumer

€€

Stimulate Consumption

Stimulate Production

POLICY, REGULATION & INCENTIVES

How might we stimulate biomass supply and demand in Ireland?

Objectives

- understand the range of incentives that others have tried- understand which measures have worked better than others- examine scope to capitalise on strong agriculture and forestry sectors- identify barriers to progress- examine a comparable European case study where there has been success- identify existing barriers and new priorities for Ireland

Methodology

- General background research through attendance at RE conferences- review academic research into biomass markets in Europe- identify a successful programme in another European country- compare policies, programmes and achievements with Ireland- recommend new priorities for action in Ireland

INSTALLED CAPACITY

TOTAL ELECTRICITY

WOOD & WOOD WASTE

WOOD & WOOD WASTE

FOREST COVER

LAND AREA (excl. water) POP'N

MW MW % Share % LAND km2 (01/01/2011)EU27 857561 14039 1.6% 35.0% 4185098 502,404,439FINLAND 18125 1807 10.0% 69.0% 303815 5,375,276AUSTRIA 24053 2024 8.4% 47.2% 82445 8,404,252SWEDEN 39198 3142 8.0% 74.9% 410335 9,415,570HUNGARY 9338 464 5.0% 19.9% 89608 9,985,722DENMARK 14482 704 4.9% 12.0% 42434 5,560,628BELGIUM 18552 554 3.0% 21.6% 30278 11,000,638SLOVAKIA 7326 160 2.2% 40.8% 48105 5,392,446NETHERLANDS 27292 551 2.0% 8.8% 33893 16,655,799PORTUGAL 17834 342 1.9% 36.5% 91470 10,572,157CZECH REP. 18680 254 1.4% 34.0% 77247 10,486,731GERMANY 153067 2042 1.3% 31.7% 348672 81,751,602ESTONIA 2702 35 1.3% 51.0% 42388 1,340,194SLOVENIA 3102 38 1.2% 59.8% 20151 2,050,189UK 89436 631 0.7% 11.8% 241930 62,498,612LITHUANIA 2738 16 0.6% 32.5% 62680 3,052,588SPAIN 97444 502 0.5% 56.0% 498980 46,152,926ITALY 103343 438 0.4% 35.0% 294140 60,626,442FRANCE 120377 286 0.2% 31.0% 549970 65,048,412POLAND 33145 42 0.1% 28.8% 304255 38,529,866LATVIA 2511 2 0.1% 44.6% 62249 2,074,605IRELAND 7639 5 0.1% 9.5% 68883 4,569,864BULGARIA 9603 0.0% 21.6% 108489 7,369,431GREECE 14306 0.0% 130647 11,309,885CYPRUS 1426 0.0% 18.8% 9241 839,751LUXEMBOURG 1720 0.0% 33.6% 2586 511,840MALTA 571 0.0% 1.0% 316 415,198ROMANIA 19551 0.0% 26.7% 229891 21,413,815

Basis for selection +/- 50% Ireland’s figures; Sources: Europa 2012 Energy Figures; CIA World Factbook; Eurostat

Source: ‘State of Europe’s Forests 2011’ (Forest Europe & United Nations)

Clancy D, et al., A stochastic analysis of the decision to produce biomass crops in Ireland, Biomass and Bioenergy (2012), http://dx.doi.org/10.1016/j.biombioe.2012.08.005

Decision: Conversion of Hectare of Land to Biomass Crop

Cumulative distribution of willow and miscanthus investment options

Clancy D, et al., A stochastic analysis of the decision to produce biomass crops in Ireland, Biomass and Bioenergy (2012), http://dx.doi.org/10.1016/j.biombioe.2012.08.005

Policy

Renewable energy policy (NREAP)

Forestry & agricultural policy

Incentives

Fiscal instruments

Obligations – purchase, sale and remuneration

Obligations – use

Spatial planning & regulation

Other mechanisms

Forestry & energy crop policy

Denmark

Dependent on imported oil & gas 1970s (oil crisis)

Diversification - own oil & gas initially (North Sea)

- wind & bioenergy more recently

Mature biomass sector (co-firing and CHP)

Ireland

Similar position today – depdent on oil/gas imports

Expanding domestic gas supplies, electricity grid

Focus on renewable wind energy (commercial)

Development of marine energy (R&D stage)

Biomass sector largely ignored (except co-firing)

Denmark

Long-term, cross-party agreement since 1970s, leading to strong consumer/investor confidence

Focus on infrastructure & decentralisation + tech. –61% of homes connected to district heating network

CHP/DH – fuel flexibility, evolution from oil/gas to RE

Ireland

RE policy and plans relatively new, status quo largely maintained

Focus electricity grid – RE from wind and co-firing in peat-fired power stations

No progress on district heating

Aim: Increase cost of fossil fuels, reduce cost of RES&W: draws on gov’t revenue, inconsistent applicationApplications: taxation and tax relief, grants/subsidies

Denmark

Carbon tax on heating fuels

‘Scrappage scheme’ for older oil/gas boilers (€4.5m)

Ireland

ReHeat & CHP Deployment Schemes closed –agricultural, commercial and industrial targets

Greener Homes scheme closed – domestic heating

Aim: steer investment direction, avoiding public purse

S&W: stimulates market, consumer pays

Application: quota (e.g. FO) and bonus models (e.g. FIT)

Denmark

Feed-in tariff for electricity – incl. co-firing & CHP

Biomass agreement: 1.4M tonnes biomass co-firing

Ireland

Feed-in tariff for electricity – incl. co-firing & CHP

No mandatory obligation for co-firing (aim: 30%)

CHP component indirectly stimulates heat market

Aim: minimum obligation to use renewable energy

S&W: technology specific

Application: e.g. boiler installation / upgrades

Denmark

Connection to district heating network obligatory if available. Very effective!

Ireland

None? Building standards?

Aim: integrated physical/energy planning, simplification

S&W: legal constraints, depending on territory

Application: empower local authorities

Denmark

Simple ‘one-stop-shop’ approach to planning and licensing for new energy generation facility

Empowerment of local authorities to plan heat networks and consent smaller applications.

Ireland

Many licensing/planning bodies complicate process, trying to simplify process for small applications.

Aim: encourage afforestation / energy crop planting

S&W: funded by Exchequer

Application: grants, subsidies

Denmark

Targets 1.1M ha by 2030 (double existing area)

Land competition / forestry obligations hinder prog.

550,000 ha presently, 2,500-3000 ha planted p.a.

Ireland

Targets 17% land cover by 2030 (~1.1M ha)

Good support for forestry, poor support for e. crops

730,000 ha presently, 7,000-9,000 ha planted p.a.

Denmark

Demonstrates long-term actions deliver success.

Ireland

Long-term but flexible policies and plans needed

Creative no/low-cost funding mechanisms needed

Simplify consenting process

Consider empowerment of local authorities

Detailed feasibility study for district heating needed

Co-firing obligation for biomass needed – a quick win that will stimulate forestry / energy crop markets

Review NREAP urgently!