Speech by Dan Neville TD in Dail Eireann on the Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010 12th May 2010
I welcome the opportunity to contribute on the Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010. Any measure to improve environmental protection must be welcomed. There is a view that this is a Green Party Bill but all parties in the House are green because they all support improving more environmental friendly approaches to energy production and consumption.
JHM Crops Limited, based in Adare, County Limerick, along with experts from the University of Limerick, was the pioneer in introducing the energy crop miscanthus into the country. Miscanthus can be used by peat-burning electricity stations. In January 2009, miscanthus crop-growing companies were informed by the Department of Communications, Energy and Natural Resources that a renewable energy feed-in-tariff price would be announced by January 2010. This would enable the miscanthus product to be able to compete with peat for use in peat-burning stations.
Therefore, peat could be replaced with a highly efficient, environmentally friendly material. It could facilitate competition or a partial replacement. If the development were to take place as promised, it would represent a great boost to the industry and to the suppliers and farmers who grow the crop. At present, some 5,000 acres are grown nationally but that could expand exponentially if the power station market were opened up.
Interestingly, some 10% of the national crop is grown in my constituency in Limerick. A commitment was given by the Department of Communications, Energy and Natural Resources that an announcement would be made on the renewable energy feed-in tariff, REFIT, price by last January. This was promised at a meeting held on 2 December 2009. The REFIT price is crucial for the survival of the miscanthus business in Ireland. In excess of 5,000 acres have been planted. The scheme pays the ESB and Bord na Móna a special price for electricity produced from biomass such as miscanthus. The scheme makes it viable for those in the industry to help the Government achieve its aim of 30% biomass co-firing in peat power stations by 2015. This is an excellent opportunity for the Government to achieve the objectives it set out. Failing an announcement very soon, everyone involved, including the developers, manufacturers and growers of the product, will be put in a very difficult position. The industry is relying on the promise made by the Department of Communications, Energy and Natural Resources upon the announcement of the REFIT scheme and it has put considerable investment into the supply chain to deliver miscanthus to peat-fueled power stations. Investment has already taken place on the basis of the promise given by the Department. Everything is in place to deliver miscanthus immediately and the industry is waiting for the REFIT price to be announced. Uncertainty is crippling the business and the industry in general. I understand some miscanthus is used already in peat-fueled power stations at a loss of between €38 and €39 per tonne. I suggest the proposal is viable and can operate in an efficient manner.
The proposed approach to the power stations is part of the much heralded green economy. It has significant potential and simply requires a relatively small amount of support to succeed. The alternative is to forget about using indigenous biomass and to import fuel to meet the 2015 goals, leaving the State without security of supply. During the next five years we will have an opportunity to ensure that in reaching our target we supply the product from native sources with consequential benefits for the economy, job creation, farmers and the agricultural industry which produces the crop.
In concert with the Department of Agriculture, Fisheries and Food, the miscanthus business in Ireland has emerged from the research and development stage to early demonstration. At this stage it is essential to establish solid end-use markets for the growing yields of miscanthus in 2010 and beyond and to develop the number of acres grown with consequential benefits for the growers, the economy and job creation through the manufacture of the final product.
I refer to JHM Crops based in Adare, County Limerick. It has taken a lead in each stage of the miscanthus expansion in Ireland and the end use of the produce has been no exception in this regard. The company has researched markets that expressed interest in the product for heat, horse bedding and the building of processing plants for growers of miscanthus. Such processing and power plants are not pipe dreams but real tangible projects that will be up and running by the middle of this year with promised Government support. Such support should involve the inclusion of miscanthus in the ReHeat programme which has been delayed as well as the delay in the announcement of the REFIT price. The company has also undertaken a rapid expansion in the selling of miscanthus logs which has gone from strength to strength and will be rolled out on a national basis during the course of this year.
These markets will develop off the back of a large end-user, affording the industry confidence that demand and supply are secure. The large end-users were to be the peat power stations referred to in the bio-energy action plan. The failure to announce the REFIT price for electricity produced from biomass such as miscanthus is a major factor affecting the industry. The miscanthus business is ready and all aspects of the supply chain are in place to deliver to power stations immediately. However, a viable price must be paid by power stations and passed on to farmers for growing the crop. Given due attention to the demand side through the announcement of the REFIT price and other supports in the form of grants for pilot schemes for processing and commercial heat plants, there will be growth in the market in the short term leading to solid viability in the long term. The industry will then reach a stage at which it could take advantage of the progress being made by miscanthus for bio-fuel. I refer to examples of upgrading from oil to biodiesel and others involving water treatment and fertiliser.
One advantage to Departments and agencies willing to lend support to the miscanthus industry is that it is a proven feed stock for boilers and power stations. It is not a new, untested energy crop. Austria has been burning miscanthus for more than 15 years without cause for complaint. Drax in the UK has been confident enough in its use of miscanthus to commission three new biomass plants.
The industry was confident that the Department of Communications, Energy and Natural Resources would add miscanthus to the renewable energy feed-in tariff scheme but, unfortunately, this has not taken place. Support from the Department of Agriculture, Fisheries and Food is crucial for the industry as well. The Department should establish grants that attracts interest from farmers and companies. They could work closely with all Departments and agencies to achieve a strong biomass market to ensure clean, secure heat and power together with jobs in rural areas, which have had little good news recently. The industry supports farmers by encouraging them to take the lead and to take ownership of projects. All that is needed is the support to get demonstration projects off the ground and then the existing significant interest will mushroom.
JHM Crops in Adare has been the pioneer at each stage of expansion in the miscanthus market with a vast range of projects instigated and supported by the company. It has carried out research on best practice in regard to growing, harvesting and processing, as well as in-depth research on potential market opportunities. This gives the company a competitive advantage over possible rivals but it has pointed out that it has been quite cost intensive to rely on its own resources. In the current climate, the opportunity now exists for a Department or agency, with all the resources available, to take ownership of progressing the miscanthus and biomass markets further. JHM Crops has said that its wealth of experience and expertise in the sector will be available to advise and assist. However, without an immediate announcement by the Government on the REFIT price, the market will never take off and proposed projects will have no foundation on which to build. If the REFIT announcement is made, Ireland has a great chance of becoming a European leader in the miscanthus and biomass industry, putting us on the road to a low-carbon economy.
Most people do not understand what biomass is because it is a minority crop but one that offers an enormous opportunity for development. Miscanthus, also known as elephant grass, is a fast growing, perennial, woody-type grass that originated in south-East Asia. Already familiar as a flowering plant, the non-flowering forms are of interest agriculturally as they grow rapidly, have low nutrient requirements, produce high yields, suffer from no known pests or diseases, are environmentally friendly and may be harvested every year after the first two years. The energy crop grows to a height of 2.5 m to 3 m and is harvested in cane form every spring. Once established, the crop does not require fertilisers, disease control or weed control.
This low level of maintenance together with the fact that it remains in the ground for a minimum of 15 to 20 years, yielding a crop every year after the initial two years, has made it a popular choice with farmers. It has been shown to be well suited as an energy crop to the Irish climate and soils, and a minimum yield of six to seven tonnes per acre can be achieved from the fourth year onward. Mr. John Clifton-Brown of Trinity College Dublin, an expert on miscanthus, sees parts of Ireland as having the most suitable conditions in the world for growing miscanthus. Miscanthus is one of the most efficient and environmentally friendly means of producing sustainable biomass for renewable energy and other markets. It produces biomass three times more efficiently than wheat, yielding a quality product that can be used across a range of markets.
With more stringent environmental regulations and biodiversity laws coming on stream in the coming years, energy crops such as miscanthus provide farmers who require a steady return from their land with an alternative land use option. We have heard much from Government agencies and non-governmental organisations on the importance of using carbon-neutral fuels in the era of the Kyoto Protocol and the Copenhagen climate change summit. Miscanthus is a carbon negative source of energy, a net carbon sequester. This is achieved through two mechanisms. Leaf, which represents in excess of 30% of dry matter and the majority of the nutrients, falls to the ground during senescence where it composts returning the carbon to the soil. In addition, the fibrous root structure which can extend up to 1 m into the soil during the growing season dies off during senescence and represents deep recalcitrant carbon in the soil. Therefore, as an energy crop, miscanthus offers exceptional carbon savings. Put together, the high yield, low labour cost and carbon negative nature of the crop make miscanthus an attractive energy crop for Irish farmers to grow.
I am making the case for the immediate promotion of miscanthus production at a crucial stage in the development of the product itself and of the market for that product. Experience on the Continent shows it is a crop suitable for use in power generating stations. Although I stand to be corrected on this, a source tells me that Bord na Móna supplies peat to power stations at no cost to the ESB. I ask that support be given to farmers who grow miscanthus so that they can compete in the market. We are asking for the support promised to the industry on 9 December 2009.