COMMITTEE FOR AGRICULTURE AND RURAL DEVELOPMENT

OFFICIAL REPORT

(Hansard)

Inquiry into Renewable Energy and Alternative Land Use

24 April 2008

Members present for all or part of the proceedings:

Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Trevor Clarke
Mr Willie Clarke Mr William Irwin
Mr George Savage

Witnesses:

Mr Graham Furey )
Mr Michael Harnett ) Ulster Farmers’ Union
Mr David McIlrea )

The Chairperson:

The first witnesses are from the Ulster Farmers’ Union. Gentlemen, you are very welcome. Thank you for taking the time to be with us this morning. Please introduce yourselves.

Mr Graham Furey (Ulster Farmers’ Union):

I am Graham Furey, deputy president of the Ulster Farmers’ Union.

Mr Michael Harnett (Ulster Farmers’ Union):

I am Michael Harnett, chairman of the union’s rural enterprise committee.

Mr David McIlrea (Ulster Farmers’ Union):

I am David McIlrea, vice chairperson of the rural enterprise committee.

The Chairperson:

You have been provided with our terms of reference and informed of the purpose of our inquiry. In return, you have provided the Committee with a written submission, for which I thank you. If you wish to make a presentation based on that submission, members will ask questions afterwards.

Mr Furey:

In order to allow more time for discussion and questions, we will attempt to be as brief as possible.

Given decreasing food prices and the reduced profitability of agriculture, the Ulster Farmer’s Union (UFU) has been considering alternative land uses, and renewable energy is one of those. Clearly, there is a focus on renewable energy’s potential to mitigate worldwide climate-change problems, which the European Commission has recognised. That indicates a whole new direction, which has created many opportunities for renewables and for those who can produce raw materials or energy from non-fossil sources.

Northern Ireland possesses some of the best potential renewable energy sources, such as high tides, average wind speeds that are greater than in many other European countries and, due to our climate, a greater potential for biomass production. Therefore, our potential to benefit from such opportunities is at least equal to, if not greater than, that of other European countries.

Unfortunately, as we know, Northern Ireland imports the highest proportion of fuel in Europe — 96% — and pays some of the highest energy prices. One need only to have listened to the radio in the last few days to realise that the prices of oil, gas and all other fuels are increasing dramatically. The problem is that those fuels are all imported, and we currently have little potential to mitigate those rises.

Having paid high prices for energy, we promptly waste it — sometimes as a result of energy producers’ design inefficiencies — on a vast scale and in proportionally greater amounts than other countries.

There is potential to significantly improve Northern Ireland’s balance of payments. If the Government were to encourage locally generated energy, we would not have to import so much fuel, and that is a key consideration. Furthermore, the development of a rural energy network in Northern Ireland could produce substantial environmental benefits.

Some short-term policy decisions must be focused on energy; however, it is essential that an eye is also kept on the development of renewable raw materials. In five to 10 years, such materials may potentially provide the greatest opportunity for economic growth and employment in all Northern Ireland sectors. We might dwell on that point later.

Mr Harnett:

I will try to be brief. This is a huge topic, but I wish to make three main points. First, I hope to show that there is a huge market potential. Secondly, I will talk about sustainable raw materials and the way in which they will become more important. Thirdly, I will show the importance of having central Government responsibility to cover the whole area of sustainable materials.

Our submission contains a complicated diagram showing Northern Ireland energy supply and demand, although it need not be, and it is important that members can follow it. Finding figures for the total energy input for Northern Ireland has been very difficult. With help from the Department of Enterprise, Trade and Investment, I was able to get the 2002 figures. Therefore, members must bear in mind that the figures are six years out of date and are based on an oil price of $20 a barrel.

Figures for power-station efficiency etc are quoted often, but often they are taken purely from the power station’s perspective, not from a Northern Ireland perspective. I wish to show how Northern Ireland, as a whole, is very poorly done by because it uses 100-year-old energy systems.

There are three main inputs of fuel — coal, oil and gas. Between them, they have 58 units of energy, or petawatts. Thirty-one of those 58 units go into electricity generation. Therefore, the lion’s share — 53% — of all the energy coming in to Northern Ireland goes into electricity production. Eighteen of those units are wasted at the power stations or in the distribution lines. In other words, slightly over 60% of that energy is lost in heat and goes straight up the chimney. If that heat was available — let us use a big “if” for the moment — for houses, factories or anywhere that heat is required, we could reduce the input of energy, not just by the 18 units that have been lost, but also by the amount of fuel that it takes to replace those 18 units. Therefore, if we had a distributed generation system, instead of importing 58 units of energy, we would need only 24 units. That means that, in a more efficient system, only 57% of the energy that came into Northern Ireland in 2002 would have been needed.

Those figures are complicated. However, they show that £1·1 billion was spent on energy, when, had we had a different system, we would have only needed to spend £500 million. That means £600 million was wasted due to the design of our energy systems, which are 100 years old.

The Chairperson:

Just for clarification, are you still using the figures from several years ago?

Mr Harnett:

The figures come from 2002.

The Chairperson:

The cost was £1·1 billion?

Mr Harnett:

The figure of £1·1 billion comes from the Carbon Trust’s ‘Northern Ireland Energy Study 2002’. The diagram in our submission, and the accompanying figures, are reproduced from that document.

The oil price is not $20 a barrel now; it is nearer to $120 a barrel, and Invest NI is advising that it will be £200 a barrel very soon. That puts those figures in perspective. People do not often sit here and say that you can save £3 billion just by reorganising the system, but that is what I am saying. That saving can be made simply by generating electricity through combined heat and power (CHP) plants, without even taking renewable energy into consideration. That would be as big a change in energy production as the Internet was in computing — a quantum change. We do not need to make that change all in one go. However, even in 2002 terms, a saving of 1% is £40 million. Forty million pounds spent on the rural economy would be money that would be kept in Northern Ireland, not spent on imports.

Mr Furey said earlier that 96% of our fuel is imported; a closer figure is probably 99·6%. Yet we have some of the greatest energy resources. If electricity is generated in a distributed generation system, it does not have to be powered by fossil fuels. A litre of lubricating oil — vegetable, hemp or rapeseed — will produce the same energy as a litre of diesel. Used in a combined heat and power plant, it would stretch three to four times further. As energy would be used more efficiently, there would be no need for the huge amounts of land for energy that are quoted in relation to power stations.

The problem is the difficulty in accessing the grid and in getting the value that we require. For electricity produced at peak time in the middle of winter, the value might be estimated at 4p or 5p per unit plus renewable obligations certificates (ROCs) and other Government incentives. To buy electricity at that peak time would cost over 50p per unit. The former utility regulator recommended that 80% of the value should go to the producers — approximately 40p.

If you were able to have an anaerobic digester, or any of the alternative renewable technologies, paying 40p a unit even for those 2 hours, the payback time would not be eight or 10 years as it currently stands — it would be less than two years, possibly only one year. That would mean that the financial institutions would back it, and the Government would not need to put large amounts of money into pushing a system that does not pay.

The second point I wanted to cover regards sustainable raw materials. To speak from personal experience, if I produce one litre of oil by growing oilseed rape and then put that into the fuel system, it may possibly be worth 60p a litre. If I convert it into lubricating oil, it is worth £2·50 a litre. There is a lot more added value. Bearing in mind that you can make from vegetable oils anything you can make from mineral oils, the potential is huge — there are renewable plastics and renewable insulation. That is the next key. Over the next 4 to 5 years, the emphasis will shift onto sustainable raw materials. Those sustainable raw materials should be produced, and then used for fuel afterwards — we could have two bites of the cherry. We could feed our people, and then put the waste products through an anaerobic digester to retrieve the fuel from it.

The third point is the importance of central Government’s taking responsibility for sustainable development — not just an energy policy, or a renewables policy. It is essential to have a central viewpoint.

I want to end with some quotes from the Northern Ireland Forum for Political Dialogue’s Standing Committee D. The former energy regulator Douglas McIldoon was questioned by the Committee in 1997, and he said:

“There are substantial benefits from having agriculturally-based renewables. They can bring new jobs to rural areas as well as a CO2 reduction which is important given the world-wide commitment by Governments to reducing CO2 emissions. So that is a double bonus. Renewables are also environmentally sustainable — we will always be able to grow willows or turn cow manure into energy. It also adds to fuel diversity because the more sources of electricity you have the more secure you are against shocks from the world market. It also improves social structure in rural areas … The last possibility is what is called trading at peak demand. As we move to a competitive market in electricity, the price that a generator will get will vary throughout the day. So, if you have a machine that you can sell electricity from at, say, 6 o’clock in a winter’s evening, you will not get tuppence for it; you might get 10 pence for it. That is what happens a lot in England: some people make their money by trading at peak times because they have that kind of trading mechanism. It may also be possible to have a biomass plant serving their own premises during a lot of the year, but also making money by selling electricity at a high price for maybe 200 hours of the year. That is not possible at the moment but it may very well be possible in the future”.

Ten years later, it is still not possible. Again, those figures related to 1997.

When Edwin Poots asked whether the Office for the Regulation of Electricity and Gas had an environmental role, Mr McIldoon said:

“We have a duty to ensure that electricity is used efficiently, and efficient use of electricity has an environmental impact. Obviously, if you can get more motive power, more refrigeration, more light out of fewer kilowatt hours of electricity, that is good for the environment because you are burning less fossil fuel. It is part of our environmental role to encourage energy efficiency. We have a general duty to encourage electricity to be used in a way which is benign towards the environment, but we do not have an overriding duty. For instance, we do not have a duty to encourage renewables against fossil-fuel electricity. We do not have a duty that overrides the duty of other environmental watchdogs. There is an environmental agency which sets parameters — we cannot go beyond those.”

Those hopes were in 1998. We are no further on today.

Mr McIlrea:

I will give the Committee a few more examples. Until now, a centralised distribution system has been regarded as the most efficient way of supplying energy. The approach is being reconsidered because although in many cases a bigger a plant is more efficient, that is not true of Northern Ireland, where communities are better suited by a small, localised approach.

On the issue of sustainable raw materials, hemp can be used in the building industry. As a crop it comes under the remit of the Department of Agriculture and Rural Development. However, hemp for building comes under the auspices of the Department of Enterprise, Trade and Investment; and used for housing it becomes part of the brief for the Department for Social Development. The problem is that no joined-up body links the Departments together to ensure that a very good, locally produced product is used in Northern Ireland buildings.

The Ulster Farmers’ Union is not singling out any Department for criticism, because several Departments must be involved. A joint body — an umbrella group — over several Government Departments is needed to make the whole thing work and ensure the most efficient use of energy for Northern Ireland.

The Chairperson:

Are you advocating that some Department, or the Office of the First Minister and deputy First Minister (OFMDFM), take overall responsibility for bringing together all the strands to agree a policy that will be developed throughout Government?

Mr McIlrea:

I think that it must come from the centre, because energy affects the policies of every Department.

Mr Furey:

It needs to be cross-Departmental; it is very much —

The Chairperson:

I am trying to find out where you think the impetus and energy will come from to take things forward. When you say it should from the centre, do you mean a particular Department, or OFMDFM?

Mr Furey:

We would say that it is OFMDFM. It must be a combination of at least three, if not a lot more, of the Departments. In fact, using sustainable raw materials in housing and other areas means that in some way every Department will be involved. Each Department currently sticks with its own area of responsibility. Some may call it empire-building, but there must be some crossover in energy strategy.

The Chairperson:

Do you feel that there is not enough impetus in taking forward the vitally important issues of energy, which is the responsibility of another Department and Committee, and land usage by farmers?

Mr Furey:

An impetus was given 15 months ago by the direct rule Minister, who injected a fairly large amount of money. I do not know if that has been lost, but it appears to have been divided up. The Department of Agriculture and Rural Development did not get that much money; it got enough to help set up a research and development facility at Hillsborough, and things like that. A lot of the rest of the money has been spread around other Departments, without joined-up thinking on how it should be spent, where it should be spent, and whether it has been spent.

There was a commitment at that time that the local Government would drive this matter forward, even here in the Stormont estate, but nothing has been done about that either, as far as I know.

The Chairperson:

We will hear from the Department later this morning, and it will be interesting to see what slant it puts on the matter or what evidence it presents.

You mentioned that 18 units of energy are being wasted. Is that in power stations, or in the domestic market?

Mr Harnett:

They are wasted entirely in the power stations. Kilroot, which is the more inefficient of our power stations and one of the largest, is nominally 32% to 33% efficient, practically 30% efficient. That means that 70% of the energy goes straight up the chimney. The Southern Government, meanwhile, claims that there is an 18% to 19% energy loss from the 275,000-volt high-voltage transmission lines. The figures in this document suggest that only 8% or 9% is lost. The truth probably lies somewhere in the middle. Certainly, a good 10% of energy is lost on the transmission lines. The diagram in our submission is useful in showing the loss as waste, and that is before we talk about inefficiencies in domestic and industrial situations.

Gas turbines are the most efficient power stations, at about 46% or 47% efficiency. However, when the same losses are taken in consideration, almost two thirds of the energy is still being lost up the chimney or in the power lines.

The Chairperson:

Your submission talks about the need to integrate renewable energy into the existing energy network, necessitating:

“difficult but minor changes to the current supply chain structure”.

What would those changes be?

Mr Harnett:

The best example is this: when British Telecom was privatised, it had to allow other people onto its network. The situation is similar with the electrical network: it is very difficult to connect, and when you do connect, the prices offered are the spill, or very low, values, for example if electricity is being produced at a time when it is selling for 50p per unit and you get only 4p or 5p per unit. Do not cloud the issue with ROCs, which are supporting renewables, or other issues: focus purely on the electricity production.

Theoretically, it is much simpler to link a small generator onto the grid than it is to link a computer onto a network. The technology is not difficult. However, people have become accustomed to a system that has been established for more than 100 years, and which was designed 100 years ago. Technically, it is not difficult; practically, it could be very difficult.

The Chairperson:

Who has to make the changes?

Mr Harnett:

The simplest thing would probably be to have easier connection and a proper value for the electricity that is put in. I have a CHP unit linked to a ground-source heat pump that has been working on my estate for the past five years. The unit is 11 times more energy efficient than buying electricity through the grid. However, when I wanted to sell electricity to myself across the grid, it was potentially costing me 3p or 4p to generate it, and 45p, at certain times of the day, to send it across the road. I ended up installing my own cable. That 45p for the connection charges was where the problem lay. If the system was truly opened up, the true cost of distribution should be only 10% to 15% at most; it should not be the biggest part of the problem.

Mr McIlrea:

We are challenging the status quo. Energy has always been seen from the top down; renewable energy should be seen from the bottom up. Renewable energy offers more security of supply. If one of our power stations went down, Northern Ireland would have great difficulty in keeping the lights on. If there were a lot of small generators feeding onto the grid, and a few of them went down, that would not really matter; it would not be a major wipeout in the same way as when a power station going down. That is where we are giving a better security of supply to customers.

Mr Irwin:

As you suggested, a successful biomass-based energy system will depend on short, structured supply chains. What can Government, and DARD in particular, do to promote the successful development of such systems?

Mr McIlrea:

Northern Ireland people view heating houses using biomass boilers as being new and fancy. However, it has been happening in the rest of Europe for up to 40 years. In places such as Austria, Germany and Denmark, a group of farmers produce the fuel, which is then pumped into one or two boilers in a town, which will heat the entire town. Therefore, there is a direct link between the farmers who produce the fuel and the communities they serve. The supply chain is short and does not involve transporting fuel across the country or importing it from halfway round the world. That gives great security of supply; it keeps money in the country and in the community, particularly the rural community, where it is needed.

The Chairperson:

How are the farmers paid to produce the fuel?

Mr McIlrea:

Farmers are paid by the quantity of heat that they sell, using a simple heat meter, which works in the same way as an electricity meter. I brought a large-scale developer to Denmark to show him a heat meter. The person whose house we visited showed us in but thought that we were a bit strange, because it was just like me asking you, Mr Chairperson, to let me see your electricity meter because I had not seen one before. Heat meters are commonplace over there, whereas we consider them to be totally new.

District heating schemes are simple to operate, yet none do so in Northern Ireland on a practical scale. Again, it will take another Department to promote the idea that district heating schemes work. They work everywhere else, and it is not hard to find examples.

The problem is that housing is not within the remit of the Department of Agriculture and Rural Development. Therefore, there must be a joined-up approach, which is why we are looking to the Office of the First Minister and deputy First Minister to form an umbrella group that will inform each Department about the good technology that exists.

The Chairperson:

What technologies are used?

Mr McIlrea:

The technology for producing heat involves a simple biomass boiler that runs on woodchips. Hot water would be round each house in the same way as it is when it is produced by electricity or gas.

Mr Harnett:

Combined heat and power systems are often thought of as a big and industrial. In fact, they come down to eight kilowatts and are of a domestic size. Therefore, CHP is similar to a PC in a house. I spent many years in the computer industry trying to persuade people to link computers in a distributed network; now I am trying to persuade people to link the electricity system. It took six years for the industry to move towards that point.

For example, although an eight-kilowatt system is insignificant in NIE’s terms; linking enough of them would produce something more powerful than Kilroot power station. More importantly, every house, perhaps, has a 20-killowatt connection. Therefore, no more infrastructure is needed to link eight or ten houses, or a small community network, together. It is already there. It is not as though a main power line must be installed to connect them to the grid as would be the case with a new power station.

I envisage a Housing Executive block of flats having a small CHP system that runs on vegetable oil — such a system would run just as well as one fuelled by ordinary diesel. The CHP system may produce more electricity than the block of flats needs; however, it will produce heat for the block of flats, and then a small amount of electricity could be moved to other local buildings through the grid. Although the system would be designed using the requirement for heat, the electricity could be moved easily, whether it is produced in Fermanagh or wherever. Energy can be moved easily through the grid. However, it will, obviously, be used close to where it is produced.

Mr W Clarke:

Should DARD set up co-operatives now to deliver that biomass potential, rather than wait until later? A consistent supply is needed.

Mr McIlrea:

Yes. That is DARD’s role. However, the market must exist also.

DARD could set up a lot of co-operatives, which could produce a lot of materials. However, there would be a problem if there were no market for those products. Alternatively, we could create a large market but have no products to supply it with. A joint effort is needed. Everybody needs to work together, otherwise we could end up with a lot of raw materials and nowhere to sell them or vice versa — it could be a white elephant. The Department of Agriculture has a role to play in those matters.

Mr Furey:

The Department has encouraged some production of willow, biomass and woodchip through the challenge fund for short rotation coppice. That has been useful. Often, farmers had to show that they had a contract for woodchip before they were granted funding. Some of that work has proved fairly successful. Ultimately, farmers will not become involved in such schemes unless there is a benefit to them. They will not produce such crops for the sake of doing so, or because everyone thinks that it is the right thing to do. That is why we would like the supply chain to be shortened as much as possible, and why my colleagues talk about farmers controlling the burner, if you like. Farmers could sell heat units rather than sell the woodchips to somebody else only for that person to burn them and sell the heat units.

The Chairperson:

The challenges that farmers face regarding profitability and sustainability have been acknowledged, and they will certainly need to see some benefits from going down this route or they will not do so.

Mr Harnett:

Farmers have access to slurry, which is a huge resource that is considered to be waste. Anaerobic digestion generates a huge amount of energy, but it is hard to move the gas around; it will not go on to the gas grid because it will not be accepted there. However, the energy produced is perfectly capable of running a CHP unit — it could be stored during the day and produced at peak load time, and producers would thereby get a high value for it. Why are we losing so much energy by throwing slurry into tanks? Such perceptions of waste occur across the market — just think of the situation regarding councils and food waste. However, it does not pay to become involved in anaerobic digestion because one cannot get the right value for the electricity produced.

Mr Bresland:

You outlined a Government support structure in Germany guaranteeing a price for electricity that is generated by anaerobic digestion plants, which has led to the widespread adoption of that technology. Would a similar scheme work in Northern Ireland, and, if so, what role could DARD play in that?

Mr Harnett:

A similar scheme would work, but a better solution would be to get the true value for the electricity. For example, one solution would be for the Government, knowing that electricity is worth 40p a unit but that farmers are not getting that value, to provide a subsidy in the medium term. However, a better solution would be to get a true crack at the market and sell the product at its true value. In the short term, Government intervention might be the answer, however, in the long term, farmers would hope to compete properly in the market.

Mr W Clarke:

In your submission, you suggested that a body similar to the National Non-Food Crop Centre be established here. Please elaborate on the need for such a body?

Mr McIlrea:

The National Non-Food Crop Centre is an umbrella group that is funded by the DTI and DEFRA, which gives it a link to two Departments. There were so many people who were creating new products and new ways of using land for the benefit of society that a body had to be established to promote that work.

We tend to view agricultural land as being used for the production of food and food alone. However, after the food has been used, more products can be created from it. The Ulster Farmers’ Union believes that a centre similar to the National Non-Food Crop Centre should be established here. We have great facilities in CAFRE, AFBI, at Queen’s University and at University of Ulster at Jordanstown, and some superb research is being carried out. However, we must put those ideas into practice and help farmers who have products to sell to get those products recognised and through whatever standards they have to be put through to get to market. That is where such a body could really help.

They help to link research to agriculture and then on to market.

The Chairperson:

They provide proper co-ordination?

Mr McIlrea:

Yes.

Mr W Clarke:

I agree entirely; such a body would be a useful conduit, particularly regarding hemp, which David mentioned. Hemp is a great plant to grow; it has been grown in County Down. Some time ago, I led a delegation to speak with Bríd Rodgers, who was the Minister of Agriculture and Rural Development at the time. However, at that point, the Department was afraid to think outside the box. The assertion was that willow should be grown, and that there would be no grant aid for growing hemp.

Hemp can be used in the construction industry; textiles, and as a food supplement, and it is easily grown. Do you agree that this is the type of research that the body could undertake?

Mr McIlrea:

Yes. Problems arise in a lot of these areas because the end product could be something other than food and would not come under the remit of the Department of Agriculture and Rural Development. That the land would not be being used to produce traditional products such as milk, eggs, cheese and beef can be a huge stumbling block.

Mr Harnett:

I have been growing hemp for five years — it produces more biomass, in dry mass, than willows, if necessary. It also acts as a very good insulation material, and the fibre is as strong as steel. For example, grass fibre could be used instead of glass fibre, and it would be much more sustainable. The functional oil, which is the food from the oil, is one of the healthiest available. There are 25,000 known uses of hemp. The plant is very good at drawing out phosphates, which are perceived as a problem here. It will pick up heavy metals that are in the ground, and it is good for remedial purposes.

The opportunities are huge; we can grow better hemp or oil seeds here than anywhere in Europe. The reason for that is that Ireland lies on a high northern latitude, which means more hours of daylight. However, the island is artificially warmed by the Gulf Stream and is warmer than it should be for its latitude. Crops therefore grow much better and give better yields.

Mr Furey:

Some farmers in Londonderry are growing hemp. A plant has been brought across from north Wales but has not been commissioned yet; is that right Michael?

Mr Harnett:

There is difficulty with funding.

Mr Furey:

Therefore, there is a plant that is ready to start producing some of those materials, and a group of farmers who are keen to do so. They have grown a few hundred acres of hemp in the last couple of years.

The Chairperson:

What are they doing with the product?

Mr Furey:

The problem is that at present they are not doing a lot with it. As far as I know they have harvested the crop, and it is waiting to be used.

Mr Harnett:

In France, hemp is used to produce 15% of most of the cars in Europe. Non-woven products constitute a major industry, which started from nothing and now produces such items as rear seat mats, or parts of the dashboard. Fifteen per cent of the cars in Europe are being produced from non-woven fibres, such as hemp. The specific plant mentioned was used during the foot and mouth disease crisis to produce every mat that had to go on a farm. It was also used for slopping up oil in Russia. That was haw that plant was used before it was transferred here.

Mr McIlrea:

Farmers are ready to grasp these opportunities. They will always try to be the first to adopt new technologies. They are just waiting for the drivers from the market. They also realise that the market can jump forward, and that they may not be in a position to supply the product, so there needs to be co-ordination.

Mr Furey:

We keep coming back to that.

Mr W Clarke:

This is a wake up call for Ireland. One has only to look at food, fuel and grain prices. This is an island; we should be sustainable. We should be investing in our sustainability.

A number of years ago, no matter which Department our delegation approached, it came up against a brick wall. We tried to link up with a group in north Belfast, a deprived area, to build a paper pulp mill that would use hemp, as a by-product, to strengthen recycled paper. We met with trade unions, which were supportive of the plan. However, we received no support from the Government.

With the devolved Assembly, there is now — I hope — an opportunity to change that. If not, we are all wasting our time. We need to take a cross-cutting approach to examining the enormous development potential of hemp, among other crops.

Mr Furey:

David said to me before we came into the Committee today that as far as agriculture is concerned we could almost argue against each other. However, Northern Ireland has to export a lot of its produce, for example, beef and milk; and farmers react to that. However, given the opportunity to produce something that would be used here, farmers would view that as another potential market, and they would also not need to rely so heavily on the export market.

As David also said, if production and use is kept here, moneys would also circulate internally. Opportunities exist. However, I would not like us to get to the point where we have to start importing much of our food because of fuel costs. The food/fuel debate is raging throughout the world. Even in Europe there are questions about whether the figures are wrong or whether farmers have done the wrong thing. The public are starting to debate that issue and ask questions.

The Chairperson:

At present there is certainly a big debate about sustainability and food production.

Mr Harnett:

That is why, at this stage, we should examine the use of sustainable raw materials. We are bypassing the food/fuel debate, because sustainable materials can be used to produce food and then fuel, which allows us to have two bites at the cherry. We must set up a system now, not in five years’ time when the rest of the world is doing so.

Mr T Clarke:

In your submission, you suggest that because Government use significant amounts of energy, more renewable energy sources should be used to nurture the market. How can DARD help in that process?

Mr Furey:

It was originally thought that the use of renewable energy would be driven by the Stormont Estate, for example, installing a woodchip boiler to heat Parliament Buildings and the other buildings. That would set an example for Government buildings across Northern Ireland.

In Omagh, the local leisure centre uses renewable energy to produce heat. The market must be pump-primed: there is no point agreeing that something is a good idea but letting someone else execute it. If local government is seen to be driving such an initiative, people will recognise that and want to become involved.

Mr T Clarke:

David, will you explain what the other council is doing? Although it is local government, it is probably still a good model to examine.

Mr McIlrea:

Cookstown District Council and Omagh District Council have installed biomass boilers. Cookstown is the best example: local willow producers in the area harvest the crop for use in the local leisure centre to heat the water in the swimming pool. It was recently reported in the media that the council is saving £1,000 by switching to biomass energy — a significant benefit. The supply chain should be kept short because it benefits the farmer, who grows the crop and receives a good chunk of the revenue, and the customer, who sees a reduction in prices. That, in turn, will help Northern Ireland.

On another issue, would the Government not consider sourcing locally produced raw materials, such as hempcrete, for use in their building programme? It is more efficient, and will assist in the drive towards a carbon-neutral and sustainable society. Furthermore, it will keep the money here. There are only benefits from such a course of action; we cannot see any negatives.

Let us consider the food-versus-fuel debate. If Northern Ireland were importing food on a large scale, then the argument that people would have to be fed first would be valid. However, we are a food exporter. Therefore, substituting some of that exported food for fuel — that we are already importing — can only be a benefit.

Mr T Clarke:

Cookstown District Council manages its own biomass production. How labour intensive is such a project? We all know how electricity is generated, and we take it for granted when we switch on our lights. However, we have something to learn when it comes to calculating how much labour is involved in the process. How much is involved in getting power to the end user?

Mr McIlrea:

There are simple examples of the process in countries such as Denmark and Austria, where the end user turns a switch to produce hot water. It has the simplicity of gas for the end user. The labour-intensive element is taken on by the farmers, who are the energy producers. They are local, so if something goes wrong they are available to fix it. Farmers already have the skills base; very little training is required. The machinery involved is no more complicated than farmers already use and in some cases is simpler.

Mr Harnett:

Cookstown District Council saved £1,000 a week, but it is worth emphasising that even if nothing were saved, all the elements of the fuel price have been generated in Northern Ireland, and have not been imported. Even if it is more labour-intensive, it means more employment in Northern Ireland. We should be emphasising that aspect and not necessarily focusing on the savings that can be made. Unfortunately, perhaps, the councils only see the savings, bearing in mind the way the venture is geared up.

The Chairperson:

It is an encouragement.

Mr Irwin:

I am a member of Armagh City and District Council, and I am aware that a biomass burner is to be installed in the Palace Building. I am not sure how much progress has been made on that project. A delegation from the council went to Denmark a couple of years ago and our eyes were opened. They were much further ahead of us. One of the plants that we visited produced electricity from pig slurry; another used straw. However, straw is not so readily available in Northern Ireland. We also visited a factory that made woodchip boilers. Their technology is very advanced. You will be aware that there is a big problem in Northern Ireland with chicken litter. Could that be used as fuel?

Mr Harnett:

It is not as good for producing energy as other methods, but there are processes that it could be fed through. The advantage of that is that it is much cleaner when it is put back into the environment, and the problems that it can cause are reduced.

Mr McIlrea:

I visited factories in France and Saudi Arabia that used chicken litter. They added nitrogen, phosphate and potash to the chicken litter and sold it in pellet form as a fertiliser. Many of our problems with nitrates and phosphates in Northern Ireland are connected to the distribution of nutrients rather than a major over-supply. By using the nutrients in the chicken litter, those producers could cut down on import substitution.

The price of fertiliser has rocketed in the past nine months. If we can have import substitution by using what we already have, that can only be good.

It is such a simple process. Nobody has taken it up because it is not patentable. It is basically just adding to the chicken litter to turn it into proper commercial fertilizer. People do not think it can be that simple, but it is.

Mr Furey:

The problem is that it cannot be used as a fertilizer and then burned to generate electricity or heat. There is only a certain amount of litter produced in Northern Ireland. We must be careful that we do not do one thing and later realise we could have done things another way. A decision must be made on how to go about it. We know Rose Energy is thinking about building a chicken litter power plant. If it does, there is no sense in building another place to process poultry litter to make it into fertilizer as then there would be inefficiencies and division.

The Chairperson:

Care must be taken that we do not choose so many paths that we prove to be inefficient in them all rather than choosing the best path and then seeking to be efficient and sustainable in that.

Mr McIlrea:

The greater number of small solutions available the better. What may appear to be practical and of good value could change in two years time. Five years ago, renewables was an issue, but there was no financial incentive there because oil was cheap. We are now in a totally different climate. Renewables are a lot more prominent now because of the price that oil has reached. It is now of more interest to everyone. I cannot say that one technology is the best. It will be a combination of a lot of things.

Mr Furey:

What David may be getting at is that it may be better to create 500 small anaerobic digesters in Northern Ireland than to create five very large ones. If we go down that route, the large plants will not be necessary, and we have all alluded to that. Small, localised distributed generation would be preferable whether it produces electricity, heat or some form of renewable raw material.

Mr W Clarke:

I agree. Direct rule has been a major stumbling block in relation to this, and we are in a hangover period. We are waiting to be told what to do instead of taking the initiative by saying that every new housing estate should be powered by biomass. We could take that decision, especially in relation to social housing. We should be taking that decision. Every new hospital, school, and council building should use biomass. If such an environment is created, can you ensure that your members can deliver the raw product?

Mr Furey:

If the price is right.

[Laughter.]

Mr McIlrea:

To suggest that all power sources should be biomass would be creating a massive market in which there is no supply. There needs to be some encouragement to allow people to choose biomass, maybe some of them at their own speed, that allows both fuel sources to work in tandem. If all Government buildings were to be heated through biomass tomorrow, there would not be enough to achieve that.

Mr W Clarke:

Your members have to grow the raw product. The directive should be that, in five years time, biomass will be our source of heat. We need to tell you that we need your co-operation. We need you to tell your members that this is the way to go, and that this will be a sustainable market.

Mr McIlrea:

People will step up to the mark at that point.

Mr Harnett:

It is a rapidly changing market. For the next five years or so the focus will be on energy, thereafter it will be on sustainable raw materials.

The right questions have not been asked in the report in question. The question of how efficient the generating system is has been asked many times. I find it amazing that no-one has asked how efficient the Northern Ireland system is. It is incredible that we have reached this point without anyone having asked that question.

Mr T Clarke:

Something that you mentioned when you were talking about Rose Energy has brought a question to mind. What about the Nimby factor — “not in my back yard”?

Mr Furey:

I know what the NIMBY factor is.

The Chairperson:

That particular issue will be coming before us, and therefore we will not prejudge the outcome of that.

Mr T Clarke:

People are conscious of energy prices and what price oil and gas are going to be, yet still do not want this development in their vicinity. How do we overcome the fear that people have? How do we sell this to local people and overcome the concerns that they have?

Mr Furey:

One of the issues is the size of something like that, and that is why we keep talking about fairly small projects, which should not have a massive impact on any particular area. Obviously, large solutions are required for large problems, and the poultry litter is one of the big problems out there. I do not wish to comment on that. Obviously, everybody’s views have to be taken on board, and at the end of the day a sensible decision has to be made.

Mr T Clarke:

We have been discussing the Rose Energy proposal, and I know that there has been a strong lobby around that issue, but the same concerns apply to any form of biomass facility. Some proposals have been passed recently in my area. In the last few years a biomass facility has been passed, probably for energy use. We should move away from the issue of burning litter. There are concerns around all biomass developments, and people still do not want them in their backyard.

Mr Furey:

Look at anaerobic digestion facilities: the Fivemiletown development was the initial one. If five of those big plants are created there are going to be problems, but if 500 small ones are created there should not be the same problems, because they can be done on-farm, and the Nimby factor should not come into account. However, planning permission and related matters have all to be dealt with.

Mr Harnett:

If I might just interject there, at the moment a lot of money is being spent on slurry tanks. With the amount of work that has gone into those slurry tanks, it would take very little to make them into small anaerobic digestion facilities — every one of them. The tanks are there already, and a person looking from outside would not even know the difference. There would be no more smell than is already there. It already exists, it simply means that, instead of just putting a big pile of stuff in a tank, we put it into a tank and take energy out of it.

The Chairperson:

Has that recommendation ever been made to the Department?

Mr Harnett:

It is all parked, but it does not pay at the moment because the payback period is so long that it cannot be financed. The Department would not want to finance it.

Mr Furey:

There are also more regulations involved with that. Once gas is generated, there are a lot of regulation problems.

The Chairperson:

Gentlemen, you have recommended greater interdepartmental co-operation in promoting the renewable energy agenda, endorsing the model that is being used to introduce biodiversity regulation. In your view, how has that model been so successful, and what can DARD learn from it?

Mr Furey:

That goes across the Department of Agriculture, the Environment and Heritage Service and the Department of the Environment, along with the agriculture sector and the environmental organisations.

Mr Harnett:

I am on the biodiversity committee, and I am very impressed that a group of people who are not involved in government are able to monitor what is happening across all Departments, and to influence that quite strongly. At the moment, implementation plans have been drawn up by every Department. They are fed back to the committee, and we highlight very rapidly which Departments are implementing biodiversity measures and which are lagging behind. DARD was one of the poorer Departments to begin with, but the plans have now been re-written. The pressure can be put back on those Departments to make them look at things again. The committee even assists with writing the Departments’ implementation plans if necessary, and there is a more co-ordinated approach to the issue.

The Chairperson:

Where did DARD stack up in the assessment?

Mr Furey:

The biodiversity assessment?

Mr Harnett:

The first assessment that was carried out showed that all Departments were doing very well regarding implementation. The one implementation plan that had to be referred back for a rewrite was the one from DARD. Some sections of DARD were actually quite strong, such as the Forest Service, for example, because DARD split the issues among sections within their own group. However, the agriculture section was one of the poorer ones. I think that that has been corrected since.

Mr McIlrea:

We do not want to direct criticism, but rather encourage all Departments to go forward.

The Chairperson:

You need to know from what basis you are working. Dancing around issues is no use, gentlemen. It does not work. We must deal with those issues. If we want to take matters forward, we need to know exactly where we are and where we want to go. It is vitally important that we encourage people and Departments to take the issues forward.

Mr Furey:

Certainly, it would be useful if all Departments set out what they envisage for the future of renewable energy and the use of raw materials in Northern Ireland, and if a committee or a group of lay people, if you like, examined that in order to determine where progress could be made and where breakdowns or gaps exist in people’s thinking.

The Chairperson:

Gentlemen, the Committee could, certainly, discuss this matter with you for much longer. I trust that we will have an opportunity to examine the issues further. However, we must move on to its next evidence session. Thank you very much indeed. Good morning.

Mr Furey:

We thank the Committee and appreciate its giving us its time.