COMMITTEE FOR AGRICULTURE AND RURAL DEVELOPMENT

OFFICIAL REPORT

(Hansard)

Inquiry into Renewable Energy and Alternative Land Use

1 May 2008

Members present for all or part of the proceedings:

Dr William McCrea (Chairperson)
Mr Tom Elliott (Deputy Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Thomas Burns
Mr Trevor Clarke
Mr Willie Clarke
Mr Pat Doherty
Mr William Irwin

Witnesses:

Mr Jonathan Buick )
Dr Andy McCrea ) Action Renewables
Mr Terry Waugh )

The Chairperson (Dr W McCrea):

The Committee will now hear evidence from Action Renewables. I welcome, Dr Andy McCrea, Mr Terry Waugh and Mr Jonathan Buick.

I remind members and witnesses that energy matters fall within the remit of another Committee and it is not our intention to delve into that area of responsibility. Inevitably, there will be some overlap. However, I ask members and witnesses to address their comments to the terms of reference with which they have been provided.

Gentlemen, you are very welcome. Thank you for coming. The Committee has received your written submission. Please introduce yourselves and talk to us about that submission. If you wish to give the Committee further information, that would be very helpful also. After your presentation, we will open the forum for questions. I trust that you are as comfortable as possible and can begin your presentation.

Dr Andy McCrea (Action Renewables):

Thank you, Chairperson and members of the Committee, for inviting us. I am Andy McCrea, the director of Action Renewables, and my colleagues are Terry Waugh, the deputy director, and Jonathan Buick, who is one of our programme managers.

We have provided the Committee with a written submission, and we thought that it would be helpful to provide a set of notes today, which I hope all members have and can refer to. I will quickly read through those notes, and members can ask questions afterwards.

Action Renewables is a private company with charitable status, and it is funded totally by the Department of Enterprise, Trade and Investment. It is based in the Northern Ireland Science Park and is guided by a management board — and members may recognise some of the names of board members. Brian Norton is president of the Dublin Institute of Technology and an ex-dean of the University of Ulster; Declan Gormley is the chief executive of Ulster Weavers; Allan McMullen is the chairman of the Construction Industry Training Board; Sue Christie, who will give evidence later, is the chairperson of the environmental lobby group, Northern Ireland Environment Link; Gerry Hodgkinson is from Viridian; John Gilliland, with whom members will be familiar, is the chairman of Rural Generation; and Wallace Ford is a retired senior auditor and partner from Ernst and Young.

Since the company’s creation, almost five years ago, it has followed a four-strand action plan. The first strand is about raising awareness. When we started, renewable energy did not have the profile that it has today. Hardly a day goes by without people hearing something about renewable energy or climate change on the news. Therefore, our first task was to raise awareness, and we have been fairly active in doing that.

The second strand of our work has been to provide support. We talk about being vertically integrated, by which I mean that we work with developers and policy-makers, we sat on the DARD-led interdepartmental renewable energy policy steering group, and we work hand-in-hand with people who wish to put solar panels on the roofs of their houses. As a third strand, we have organised several keynote conferences and seminars, and, fourthly, we have recently published quite a bit of research that is specific to Northern Ireland, and that is a theme that I will be returning to on a number of occasions.

Policy is one of the key themes that the Committee asked us to examine. When Action Renewables started, the environmental sector was the main driver for renewables, and the main concerns were water and air pollution and climate change, which had just emerged as an issue. In recent years, several key issues have developed, which fall into DETI’s realm, such as fuel availability, bearing in mind that Northern Ireland is more than 95% dependent on imported fuels. As well as fuel availability, there are issues of resource depletion — we have heard about peak gas, and so on — and fuel diversity and security. We now realise that control of those fuels is completely out of our hands and the Assembly’s hands. A few days ago there was another price shock, because the price of natural gas is increasing by 28%, and the price of electricity will also increase by a similar huge margin. Therefore, those are key issues for DETI. Northern Ireland has some of the highest levels of fuel poverty in Europe and, probably, in the world. Around one quarter of our electricity customers are in fuel poverty.

Rural businesses have a key interest in renewables, which is important from the point of view of diversification and the possibility of having a sustainable farming industry. However, the key driving force is economics. If the economics of renewables are not favourable and are not at the top of the list, we are wasting our time, and a number of key pieces of evidence have brought that point to the fore — the main one being the report by Sir Nicholas Stern, a chief advisor to the Treasury. Sir Nicholas stated that the cost of doing nothing would be twenty times higher than the cost of actually doing something. We must bear that in mind, especially as we are, hopefully, moving toward a period economic growth in Northern Ireland. Our industries must be sustainable, particularly those in the agricultural sector, and land use is one of the key cornerstones of our economic policy.

It is OK to talk about renewable energy, but what sources are available to us? Action Renewables have completed a major piece of work in that area, which involved managing a joint research project between two Departments North and South — the Department for Communications, Energy and Natural Resources and DETI — and a report was published in January. We examined how renewables could be introduced into the electricity grid by 2020. The report is called the ‘All Island Grid Study’.

The report’s conclusions are that renewables can make a very significant impact on the electricity supply system and can reduce carbon dioxide emissions by a very considerable margin. However, several assumptions were made, and those clearly need more work. It is an excellent, world-class piece of work but it needs to be developed further, particularly in with regard to embedded generation, which is of great interest to farmers and farm-based communities. Also to be considered are: how we can connect renewables to the NI system; the cost of those connections, and the actual value of having embedded generation on the system.

The report also highlighted the requirement for significant investment in the electricity grid, and stated that there would be major socio-economic barriers — planning, of course, springs to mind. To illustrate those conclusions, I have some figures that were prepared in the early stages of the study. Two interesting conclusions can be drawn from the figures. The first concerned the level of penetration of renewable energy into the electricity market. The possible percentages were 15%, 20% or 30%. Those penetrations are composed chiefly of three resources — wind, biomass or biofuels, and marine technologies. To get renewables into the system, those are the three components that we will have, and there is no doubt about that.

When we looked at those penetrations, we considered 15% penetration as reasonable, 20% as stretched, and 30% as really pushing the boat out. The Republic of Ireland has now adopted a target of 33% penetration by 2020.

The UK enjoys the best wind resource in Europe. It is there — whether we chose to use it or not is the decision that needs to be made.

The Danes have a good wind resource, and for that reason they chose to base their renewable energy economy around wind turbines. Indeed, most of the wind turbines installed around the world have been Danish in origin. There is a huge wind resource for the UK also. That resource is best in Scotland and down the west side of Ireland. Unfortunately, although the wind resource might be good in the west of Ireland, most people live in the east. Therefore, there will be a problem in transporting wind energy from the west to the east, and it will involve building electricity lines, which is a principal area where the investment will be needed.

The same problem exists on mainland GB — wind energy is fantastic in Scotland but most people live in the south and a grid infrastructure is required to transport electricity to the south. That is a very simple illustration of the issues.

Countries such as Germany and Spain have huge wind energy programmes. Last year, Germany implemented a programme to harness 3,000 megawatts of electricity. That is more electricity than we have in our system, and yet their wind resource is much worse than ours. A wind turbine on a hillside in Spain, or Germany, would generate approximately half the electricity of an identical wind turbine in Northern Ireland.

Wind will be the primary large-scale renewable resource for Northern Ireland. If we are to reach it our targets, it will be primarily through wind energy.

Northern Ireland is well blessed with marine resources, and in eight to 10 years’ time a major source of renewable energy will be tidal. The Republic of Ireland is better placed than we are for wave energy — unfortunately, due to geographical reasons, they steal all our waves. However, Northern Ireland has a superb tidal resource.

Bio-energy is today’s sector of interest, and is included in all projections. It might be reasonable to assume that heat will contribute more to our targets than will biomass electricity. However, we shall see.

In recent years, there has been huge interest in rural wind energy, which will benefit the rural community in several ways. First, farmers and rural communities will be offered capital sums to encourage them to accept large-scale wind farms. Farmers will get a revenue benefit for every wind turbine on their land, which could be significant in areas where there are low-value hill farms. A properly-sited small wind turbine producing 2·5kW to 6kW can provide significant benefit to farmers, and I have a couple of case studies that will illustrate that point for the Committee. We are convinced that rural communities, too, can benefit from wind energy.

People need sound advice in order to make wind energy a success, and that means good site assessment, correct wind-speed assessment and, just as important, choosing the right machine. Not all wind turbines are suitable for Northern Ireland. We may have the best wind resource, but the machine used must match that resource.

We have carried out research on micro wind turbines, which bolt on to the side of a house. We feel that they remain unproven and that more work needs to be done.

I said that we have two case studies: one is a farm with a 6kW wind turbine. The first thing we are usually asked is: what is the length of the payback period? For this study, the payback period is eight years, which most people consider reasonable, and that would be without a grant. If the recent proposed gas and electricity price increases are taken into account, the payback period falls to six years. No one knows what the price of electricity, gas or oil will be in subsequent years. At the moment, the payback period for a 6kW machine, which is a reasonable size, is between six and eight years.

We have also used the installation of a wind turbine by dairy farmer John McCleneghan as a case study. The figures show a convincing payback period of between five and seven years. However, that also does not take into account the increases in electricity and gas prices. In this example, Mr McCleneghan would be on a real business earner. Wind energy can work, but expert advice is needed to ensure that the correct machine and site are selected.

The rural community has shown a great deal of interest in anaerobic digesters. They digest a range of wastes to produce heat, electricity that is categorised as renewable, and dry and wet by-products, which can be sold. Anaerobic digesters can also facilitate the nitrates/phosphates balance — something in which the farming community is very interested. Single farms can have anaerobic digesters on site, or farms can act, collectively, by supplying raw materials; taking the products away, and, perhaps, even by sharing the heat and electricity produced.

If I may return to the ‘All Island Grid Study’, which states that bio-energy sources fall into several categories. The first four: incineration of MSW residues; landfill gas; mechanical biological treatment of biodegradable municipal waste, and anaerobic digestion of sewage sludge are concerned with waste and municipal waste. Landfill gas is a resource that has not been exploited in Northern Ireland. Those are essentially waste treatment technologies.

The technologies most relevant to the farming sector are the anaerobic digestion of wet agrifood slurries; incineration of dry agricultural waste and crops; combustion, pyrolysis, gasification, composting or digestion of other wood wastes, all of which have been included in the resource assessment that was part of the grid-study analysis.

The poultry industry here employs in excess of 6,000 people. Through the incineration of poultry litter, there is an opportunity to treat a waste product while generating renewable electricity — that would make a sizeable contribution towards meeting electricity targets. There are also waste materials such as straw, spent mushroom compost, vegetable oil, tallow, meat and bone meal, and other food-industry wastes that could be digested, or incinerated, to produce energy.

I am sure that the Committee is familiar with the landmark project at Ballycassidy Sawmills, Balcas, which produces wood chips and wood pellets and is already making a contribution towards our electricity targets. Wood chips and wood pellets are, in themselves, a source fuel that during the past couple of years has been developed in the small-scale and domestic market — particularly with regard to pellets.

The Committee will also be familiar with energy crops and the pioneering work being done by DARD with farmers such as John Gilliland on the use of short rotation coppicing, particularly of willow and miscanthus. Unfortunately, Northern Ireland does not have a huge waste resource from forests. However, there are some areas on hills and mountaintops, which are still owned by the Forest Service and may be available for wind farms. I am sure that the Committee is familiar with wood chips and wood pellets. Pellets tend to be used in the small-scale and domestic sector.

Action Renewables has a community officer who is working with around 60 community groups, all of whom are interested in developing renewable-energy projects. A range of funding sources is available. However, while they are generous, they only go so far. For example, a grant of 65% can be obtained from the low carbon building programme, which is topped up by NIE. That is grand; but where does the other 35% come from? That is the problem at present. Community groups cannot get bank loans and do not have access to the balance of funding that is required, which means that projects simply cannot go ahead. Action Renewables would like to see a low-interest loan fund that community groups could access, or a recycling loan fund, into which money would be paid back from energy savings. We support such measures for community groups.

We thought that it would be useful to update the Committee on the Reconnect programme, which, as members will be aware, was an environment and renewable energy fund (EREF) grant for domestic customers. I have not included any figures in our document, because we are still in the final stages of rolling up the scheme. Action Renewables managed that programme.

Interestingly, the spread of technologies in the scheme is relevant, and solar water heating was where the where the lion’s share of the funding went, with almost 50% of the grants being issued for that technology. It may be surprising, but Northern Ireland has an excellent solar resource.

The surprise for us was the biomass sector. There has been a huge interest in pellet boilers, particularly among agriculture community and in rural new-builds. We expected that there would be greater uptake of grants for wind power technology than there was, but we were surprised by the uptake of grants for biomass boilers and heat pumps.

People ask me whether those technologies work. The answer is: absolutely. Most have done so for hundreds of years and are well understood. The truth is that they work extremely well across the world, particularly in countries such as America and Canada, and in parts of Europe. How come they have not worked as well in Northern Ireland? The answer is simply in application. Houses here are different; homes are insulated to different standards; installers are not familiar with the technologies; the climate is different; energy prices are different, and soils are different. When those factors come together, they create a learning curve. That does not mean to say that they cannot work well: they can. However, Northern Ireland is at the early stages of that steep learning curve.

We have found that the very small number of problems that have been occurring have been largely due to installation difficulties. In other words, installers must be trained to install the technologies properly. That is vital; and it has been fortunate that, as well as managing the grants, Action Renewables has also been running the installer academy. That has meant that we have had a very close relationship with the people installing boilers and with the customers having them installed. The other factor is capital cost. Boilers are expensive, and I have already mentioned payback periods, which are changing.

To round off the presentation, I would like to briefly mention policy. If renewables are to be a success, and are to be optimised economically, they must be led by an Assembly champion. The area must be made a priority by the Assembly. Ideally we would like to see the formation of a committee on renewables, but there should certainly be a sustainable energy or sustainability committee, which is cross-party, cross-departmental, and preferably chaired by a Minister. The first and most important role of that committee would be to set targets.

Our experience in working in the community is that targets are very confusing. There are targets such as “20% by 2020”, “50% by 2060”, and “12% by 2012”; those targets are very confusing to the general public, and to us. Do the targets refer to electricity or to carbon dioxide; what are they referring to? Those targets are OK for people who are involved in the field, but how can they be communicated to the public at large, and made a priority? I have suggested that there could be a much simpler target; for example, that Northern Ireland should be self-sufficient in renewable energy within a generation. I am not suggesting that that would be the target, but it should be something like that; something that is an easy concept to capture.

Action Renewables is working hard to establish a centre of excellence. There is world class excellence in our universities; there are people who at the moment are academics, but who are also entrepreneurs. We need to capture that expertise. This is one of the few regions that does not have a centre of excellence to bring the ideas forward to commercial success. That success must also be linked to a sustainable jobs strategy. There must be a jobs strategy that involves and takes up those sustainable energy technologies.

I have outlined a policy and a route map, but there must also be a strategy. That strategy must consist of a balance between carrots and sticks. Northern Ireland is in the unfortunate situation at the moment of not having either carrots or sticks. The South of Ireland has both, which immediately puts it at an economic advantage: it has legislation and grants. Northern Ireland has neither of those things. Action Renewables is working to improve that situation. Although I do not have time to go through them, our presentation identifies the elements of the strategy needed to take this forward.

The Committee asked us to make particular recommendations. First, farmers need leadership. We work day and daily with farmers groups, and they need to be told whether, for example, they should be growing short rotation coppice. It is fair to say that the economics and demonstrations are not conclusive at the moment. DARD and AFBI are carrying out a lot of good work, but the conclusions are very difficult to see, which means that it is very difficult to point farmers in the right direction.

The application of technologies must be tailored to the situation here. It is easy to say that growing miscanthus in Wales works well, or that the use of biomass there works well. That will not translate to Northern Ireland. Applying the technologies here is different from applying them the other regions; and work and support needs to be carried out to discover the best route for Northern Ireland. That work has not been completed yet.

Experience so far has shown that it is very difficult to pick a winner; and that in such a situation flexibility and diversity are the keys to success. Let us do several things that we know might produce a winner and let us not put all of our eggs in one basket. Even during the past year the attitude of the world has changed on energy and food crops, and it would have been terrible to have gone in the wrong direction in the middle of that debate.

It has been demonstrated that renewable energy can contribute to combating rural fuel poverty. It has already been shown that solar panels will provide 50% of the domestic hot water requirement. The capital costs have to be met by someone, but it has been demonstrated by DSD that the use of solar panels to provide hot water can be successful.

Biomass boilers can provide a useful contribution to combating fuel poverty, but again the infrastructure; fuel supply and delivery mechanisms must secure. Although this is still early days, that is happening. Rural communities can benefit significantly through the installation of renewables, and there is a need for capital support to help them during that process. I have suggested recycling loan funds as a possible way forward.

Anaerobic digesters are a very topical issue, and I am sure the Committee knows that a demonstration digester is being constructed at Hillsborough, which is to be welcomed. That will allow us to better understand whether we should be taking the collective route or the on-farm route and the range of fuels being produced in Northern Ireland and their suitability for digestion.

Jonathan Buick has been working extensively with experts from around the world on models for anaerobic digestion. Those models are perhaps not directly translatable to Northern Ireland. We are also aware of the difficulties farming communities have in attracting Carbon Trust investments, because most of them are not large enough in size to qualify for support.

Our effort to help farmers has shown that rural businesses must be recognised and supported. DARD needs to be disseminating information, and we know that it is doing so, but more must be done. From working closely with DARD and AFBI, we know that they need to provide farmers with more than just learning via CAFRE; they need to be including information about supply chains. Areas of good practice must be identified and rolled-out across the Province.

The Chairperson:

Thank you for that very detailed presentation and your submissions, which will be useful for the Committee to have.

The rural community faces challenges today, not in the future, and your evidence suggests that Northern Ireland is lagging far behind in providing solutions. How long will it be before we will have solutions, rather than simply identify problems?

Dr A McCrea:

That is a fair question.

First, we are on the road to finding solutions and delivering them, some of which are world-class and exemplary. We have established a renewable-energy installer academy, which is a world-class model. We have delivered courses for, and registered, more than 830 installers. That is a new business, and one which we have demonstrated can work. People from countries such as Wales have asked if they can replicate our model.

Moving away from the farming community for a moment, Northern Ireland is already at the cutting edge in other areas. The SeaGen project in Strangford Lough is the first of its kind in the world. However, we are in danger of losing the learning, knowledge and experience that we have gained, which is why I am suggesting the establishment of a centre of excellence. It would provide the opportunity to capture that work and make Northern Ireland an exemplar. We may not be able to do it on our own; we may have to network with people in Scotland, or with those in the South of Ireland who have already set up two centres of excellence, in Limerick and Cork. In spite of the world-class work being carried out on Strangford Lough, we have no centres of excellence. Decisions must be taken immediately if we are to make progress. The first, vital step is for the Assembly to recognise its importance.

From that point we then need to understand the correct steps to be taken. As I have said, that is not an easy decision to make, and I am afraid I do not have a silver bullet. Some of the work we are undertaking could lead to success. Short rotation coppice is underway, however, early work is challenging the economics of SRC. Anaerobic digestion could be a useful are to develop and become exemplar in.

We must deploy renewable energy generation at ground level. We do not want to be falling behind. There has been a hiccup that has stopped us from getting ahead of the pack. However, I think that the Assembly will realise that renewables must be included in any sustainable energy plans, and in economic plans in particular. The need to continue to develop skills and awareness is essential. If we do not have the skills, we are not going anywhere. If we can not turn ideas into businesses, we are not going anywhere. Grants can help take that forward, but we are still at the early stage of the process.

The Chairperson:

Do you have any figures for the level of fuel poverty in the rural areas?

Dr A McCrea:

I do not have particular figures. The Housing Executive carries out house condition surveys, which would give detailed figures. Having previously worked for NIE, I know that high levels of fuel poverty exist. For example, it was typical to find in farming communities that there were elderly people living in a big house, in which, perhaps, they had raised six children who had fled the nest, and were left with high energy bills.

The Chairperson:

Is there a problem with contaminated scrap wood from landfill sites? Does different legislation apply to that type of material?

Dr A McCrea:

Wood trimmings would be clean, and would be acceptable. As you rightly say, the difficulty is that lead-based paint, and other types of paint, might have been used on scrap wood. However, the technology exists to strip away paint and get to the wood core. People in Northern Ireland are looking at how they can turn scrap wood into a usable product. It is an issue, and the residue from that process would have to go into specific landfill sites. Nevertheless, it is a resource that could be used.

The Chairperson:

You have identified the significant gap that exists between renewable electricity generation and the exploitation of renewable-heat sources. What are likely to be the most effective Government or DARD interventions to encourage more renewable-heat projects?

Dr A McCrea:

We have completed two reports in the past year. The first specifically examined available renewable heat opportunities, and drew heavily on the previous work done by the Carbon Trust and Invest Northern Ireland. It is currently with DETI for consideration.

Another useful development is the establishment of energy services companies (ESCOs). They would have a particular role in rural communities, perhaps supplying schools, small enterprises and business parks with a range of energy efficiency and energy services including the use of energy crops. We have produced a report on that subject, which is also being considered by DETI. I suggest that when those reports are published they should be presented to the Committee.

The Chairperson:

That will be an important part of our deliberations, because we are investigating land use by farmers and renewable sources of energy. How will you encourage the farming community to actively engage in the development of renewable energy sources, and what role should the Department play?

Dr A McCrea:

The farming community is very active and enthusiastic about embracing these technologies. There is a high level of interest, and there are a number of reasons for that. First, the only alternatives to gas outside Belfast are oil, and, to a lesser extent, coal. New technologies offer alternatives, and we must ensure that the infrastructure exists to allow people to make use of those new technologies. We must be able to transport the fuel.

For instance, how will Balcas, which is in Enniskillen, transport its products to Ballycastle or Newry? We must ensure that that infrastructure development takes place. That is one area in which DARD could provide encouragement. DARD must allow AFBI’s research work to continue. It must identify the key technologies for the farming community in Northern Ireland. As I said, however, there is a danger that we could go in the wrong direction; farmers should be encouraged to be as flexible as they possibly can.

Mr Terry Waugh (Action Renewables):

The farming community needs to know more about the economics of renewables. We have already mentioned John McClenaghan, who had installed a 220 kW wind turbine. When I asked him why he did it, he told me that the economics were right, and that it paid him to do so. He appreciates his environment, but he had installed the wind turbine because it made him money. We are carrying out a great deal of research on the subject, which DARD could help us with. The farming community needs leadership, guidance and support from DARD. Farmers will not go down that road by themselves.

The Chairperson:

The initial costs of some of those technologies are very high.

Mr Waugh:

They can be, yes.

The Chairperson:

How can DARD play a role in encouraging farmers to invest in those technologies?

Dr A McCrea:

That was one of the roles we envisage for the grant. It would be available to encourage awareness of renewable energy sources. For instance, the sight of a solar panel in every street or in every new development in the country would raise awareness significantly. Grants would increase the number of installations through economies of scale. Developers could use a properly trained site plumber to install a large number of units in order to keep installation costs down.

Terry’s point is absolutely right. The trial of the anaerobic digester at Hillsborough will help people to understand the economics of the situation. The last thing that we want is for people to go out on a limb and find that the economics are not right. DARD should start to look in-depth at the economics of renewables.

DARD could also help with the formulation of policy. One thing we feel needs discussed is whether, for example, we should be pushing NIE to pay a higher return for electricity that is exported to the system or conversely, pursue the policy of renewable obligation certificates (ROCs). There has been quite a bit of discussion about those recently. Perhaps Mr Buick would discuss our findings in relation to ROCs and feed-in tariffs.

Mr Jonathan Buick (Action Renewables):

Your earlier question referred to renewable heat. There have been renewable obligations for electricity generation and for transporting fuel. However, we do not have a renewable heat obligation. That is something that wider Government needs to consider to provide a support mechanism for the generation of renewable heat.

We have carried out recent work looking at a renewables obligation and the support that would provide to a possible feed-in tariff. That work clearly shows that the feed-in tariff is a good mechanism for encouraging new and emerging technologies into the market. However, the market — particularly for existing technologies like large-scale wind and hydro-electric — is well-established and the lack of a feed-in tariff is not holding back some of the large-scale technologies such as wind farms. As Andy has mentioned, other issues — such as lack of investment in the grid to allow greater access for those technologies and problems with the planning regimes, both North and South — have caused problems in getting more renewables on to the system.

Moving to the smaller scale — households and farms — and feed-in tariffs, we feel that a renewables obligation would provide much better support for them. That is because it would provide a return on all electricity generated whether it is used on-site or is exported to the grid. If we were to move to a feed-in tariff, electricity that is predominantly used on-site would not be supported.

A perfect example is Antrim Area Hospital where a 660 kW wind turbine is providing the base load electricity for the hospital. If we were to move to a feed-in tariff, the hospital would get no support as it is not exporting any electricity to the grid. However, the ROC system would provide the hospital with tens of thousands of pounds in income each year as the hospital is generating electricity and can sell ROCs independently on the market.

The ROCs system would work well. However, the complexity and bureaucracy involved needs to be examined. That is what we need to deal with, rather than attempting to change wholesale to a different system.

Mr Elliott:

You said that the renewable energy installer’s academy has been a success. Could DARD do anything further to enhance or support it?

Secondly, it was interesting that you mentioned that wind is almost going to be the answer to the renewables issue in Northern Ireland. I am from County Fermanagh where there are a number of wind farms and indeed on-farm wind farms. Recently, there has been some opposition to those, particularly from environmental groups and the Government. The Northern Ireland Tourist Board also recommended that no further wind farms should be created in Fermanagh. How then do we get over that issue? If we are going to have more wind-generated electricity surely we will need more wind farms?

I do not know whether you mentioned off-shore wind farms. However, I do not believe that we have the facility to create many of those. We are running out of opportunities, especially in Fermanagh, to develop any more on-farm wind farms.

Short rotation coppice willow and miscanthus are not profitable at the moment. What can DARD can do to support that. Not many farmers are involved in it: it is just not profitable.

Dr A McCrea:

You are absolutely right. We hope that the renewable energy installer academy will move to the next stage, which will be to get architects, designers and specifiers up to speed. We anticipate that a new generation of houses will be built to specifications of zero-carbon emissions. We are far from that point at present, and to get there by 2016 will a challenge. It will be a challenge for us, locally, and the architects have a huge way to go.

One or two key construction companies are moving almost ahead of the times, but the challenge for the renewable energy installer academy is to move with those groups. Furthermore, we need to get that knowledge back into the apprentice programmes.

There are particular difficulties with the lack of grants. An installer has to have been through the academy to be able to deliver on the grants but, if the grants are not available, there will be no hold over the installer. Things will fall apart a bit when that happens.

The member’s question about wind farms raises a perpetual difficulty: the answer is leadership. We need to understand the issue. It is a question of balance, and a fine line must be drawn between the needs of the environment and public acceptance. Recently, on the Isle of Lewis, a major wind farm development was accepted, then rejected, then accepted again and, most recently, rejected a second time.

Those problems are not unique to Northern Ireland and the only way to solve them is through leadership. We can look to our European neighbours to see how that might work. Germany, Austria and other major countries have no problem in that respect: it is an issue of psyche, or acceptance. We have work to do, there: it is part of our work.

The member referred to the Northern Ireland Tourist Board. I live in Bangor, so wind turbines do not surround me, but I think that they might contribute to tourism, rather than detract from it. Preliminary work has been done in Scotland which shows that wind farms have no detrimental impact on tourism and even that they can, to an extent, encourage it. The member is correct: that is the nub of the problem and it can only be solved by the Assembly’s leadership. It must first recognise the issue, and then strike the balance, through planning committees and other mechanisms.

Mr Waugh:

Some wind-farm companies are particularly good at this; others are not. Some will do a great deal to encourage and provide incentives for the local community. They will convince them of the positive economic aspects of having a wind farm in the community or on their doorstep.

Dr A McCrea:

The third question was about having a wind turbine at every house. We have discussed that point with the Planning Service, in the context of permitted development rights for wind turbines. At one stage, it was considered that small-scale wind turbines would be granted such rights on the same basis as satellite dishes. We oppose that: as I said in the presentation, we are not convinced that small-scale wind turbines, at this time, can provide the output that the suppliers claim for them, and we would like to know much more about issues such as vibration, noise and output. However, once the manufacturers get the product right, they can make a contribution. I described it in the following terms: the market is absolutely begging for a small-scale, house-mounted wind turbine, but, unfortunately, the product is not available at present. Work needs to be done on that.

The member’s last point, about short rotation coppicing, is very relevant. Much work has been done on that, and the member is correct about the economics involved. However, the economics will completely change if short rotation coppicing can be mixed with, say, the amelioration of sewage waste. Some good exploratory work has been done on that front in Northern Ireland and elsewhere, too. That completely changes the economics. DARD, for example, could explore the issue in more detail and consider how farmers could be involved. That would at least put the matter on a par with other food-cropping alternatives. More work must definitely be done to demonstrate the benefits. However, you are absolutely right; short rotation coppice on its own is not economically feasible at the moment, but it can become more economically feasible when combined with bioremediation.

Mr T Clarke:

Your presentation focused on wind, and I know that the emphasis is on renewable energy. However, to pick up on Tom’s point; I would not want to see a wind turbine beside every home. Why is there not more focus on other forms of energy, such as biomass and so on, which have been proven to work in other countries? Why are we not at a more advanced stage on those issues?

Dr A McCrea:

The map of wind strengths that is in our presentation says it all. I take your point, but whether we choose to accept it or not, we enjoy the best wind resource in Europe. Other countries have grabbed the opportunity with both hands. Wind power is commercial, which is key. Again, this matter comes back to economics, and account must be taken of whether it will cost more money to develop other systems. Unfortunately, we are not a Mediterranean country, so we do not have an enormous solar resource, but we have a good wind resource. The question is; do we choose to use the resource or not? Hard decisions must be taken, and we must weigh up the alternatives. We know and understand the problems, but, unfortunately, the demand for electricity is rising, not falling, so we will have to meet an increasing demand.

Mr T Clarke:

The emphasis seems to be placed more on wind than on other energy sources. I take your point; the map shows that wind is an important resource, but there are other options. There seems to be a lack of enthusiasm about getting other methods proven so they can be put into practice. The same emphasis is not being placed on those methods.

Mr Waugh:

The answer to your question lies in the Reconnect programme, which has finished recently. Almost 50% of those grants were used on biomass and pellet boilers. Thus, people who live in rural communities and housing developments see the financial benefit of having a wood-pellet boiler as opposed to a wind turbine. A very small number of grants were used to install wind turbines. We may think that the emphasis is on wind power, but, in practice, people are opting for solar water heating and wood-pellet boilers.

Mr T Clarke:

I want to return to the issue of crops. Moving towards increased production of wood chip would help the farming communities. However, more investment in wind power will not give the farming community anything to produce — it will get them a bit of a return from the grid, but it will not provide them with a sustainable income.

Mr Buick:

The greatest market for biomass crops is heat rather than electricity generation. There is great potential in Northern Ireland for the creation of energy services companies — perhaps groups of farmers could come together to install heat-generating technologies. Technologies that generate combined heat and power could be used on-site by large industrial heat users, such as hospitals, schools, hotels and so on. Those could also generate some electricity as well. We could explore those key markets, rather than go down the route of having one really big power station. Large-scale electricity generation needs will be met predominantly by wind, by wind farms, in particular. Two scales are involved; the large-scale generation is connected to the transmission electricity grid, and the small-scale generation is out of the grid, which actually reduces the load. We believe that biomass has a role to play in the latter.

Dr A McCrea:

I want to turn to targets and the resource work that is being carried out. Chairman, with your permission, I will provide members with a copy of the grid study. The resource is there; we understand it and we know the associated costs. If we are to move forward economically by 2020 — within that horizon — wind is the solution. There is simply no other answer, unfortunately.

I wish that marine technologies were available sooner, but they will not be for eight to 10 years. I wish that Harland and Wolff and Shorts could play their part.

As Jonathan said, biomass is a heat solution, which is where the rural community will be involved. However, on the back of that, members of rural communities will all have to reduce personal electricity consumption. New houses will be built to a standard that can integrate that. However, the resource study states that wind is the form of energy that will best help us meet our targets, which we cannot refute.

Mr W Clarke:

What are the barriers to the development of renewable energy in rural areas? Are gasification and pyrolysis systems proven? I know the autoclave system and often try to look an example, but it is like guarded secret — people do not like visitors looking at their systems. It is a better alternative than incineration. Are there any examples of such systems in Europe that the Committee could visit?

What impact will the abolition of the Reconnect programme have on the renewable energy industry? Hundreds of businesses that were established are at risk. What should we be doing to improve the situation?

Are you not concerned that the Department for Social Development is still installing oil-heating systems, which is contradicting the fuel poverty strategy? Instead of installing wood-pellet systems or communal wood-chip systems in housing estates, the Department is putting people into fuel poverty.

Dr A McCrea:

A piece of planning legislation, PPS 18, has been issued for consultation, and I sit on the committee that is dealing with that. PPS 18 was supposed to put renewable-energy planning into context — there was no guiding planning legislation in Northern Ireland that had a predisposition towards renewables.

We hope that issuing PPS 18 for consultation will oil the wheels for planning — I have not seen the final draft of the document, but it was the Minister’s intent that it would help with planning issues. An example of how that would impact on the rural community is wind turbines. We hope that there will be a sensible and consistent basis for making planning decisions, because there has been a lot of inconsistency. It would also impact directly on biomass, because there has been dispute in different parts of the country about the planning merits of biomass — some groups favour biomass and some environmental groups do not. Perhaps, PPS 18 will provide some consistency on that.

The Committee should take a keen interest in the consultation on PPS 18 and ensure that the best interests of the rural community are represented, which would also help with barrier on planning. The other barrier was cost, which links tightly with your good question about grants.

There are examples of gasification and pyrolysis across Europe. Gasification has been difficult, and there have been a number of pioneering projects here — the B9 project, and the work at Ballycarry. The big issue with gasification is the tarry by-product: it does not seem possible to produce the electricity in a gasifier without producing a by-product, which is a problem. Therefore, gasification is still at the research and development stage. It is also expensive.

Pyrolysis is a similar type of technology. America is the best place to see good examples of pyrolysis, but there are also a couple of good examples in Europe, the details of which I am happy to give to the Committee.

We are disappointed about the ending of the Reconnect programme for a number of reasons. The programme promoted awareness, so there is a massive interest in the grants system. It also brought forward an industry that Northern Ireland has thrived on. The fundamental problem is funding — where does the grant money come from?

The Reconnect programme and funding for renewable energy have to compete economically with other priorities such as education and health; it is up to the Assembly to decide on those. My solution would have been for a longer-term grant at a lower level. We are trying to initiate a complete culture change to get people thinking in a different way, particularly in the construction industry and among builders. Unfortunately, that culture change will not take place over two years; it will probably happen over ten years, depending on how much money can be put into the scheme. I would have preferred a tapering grant, which would help to reduce the capital costs of the products over a longer period, and perhaps I would have offered lower grants.

Now that some of the technology is almost commercial, there are opportunities to introduce a grant scheme that would consider what technologies are to be encouraged. Those include more expensive technologies such as the biomass technologies. That is a matter of funding and resource allocation, and we accept that it must compete with other priorities.

I understand that the Department of Social Development is up against a timescale issue on fuel poverty; it needs a solution now. It recognises fully that it is dealing with a vulnerable community, and that it cannot make that community any more vulnerable by introducing a fuel supply that is not as secure as DSD would like. Although I cannot speak on behalf of DSD, I recognise that more work must be done to ensure that the infrastructure is secure, that the boilers are completely proven and that the renewable energy installer academy trains people who can service those boilers and who understand how to service the industry. Your question is spot on, and that work must be developed.

Mr W Clarke:

Will you expand on the issue of geothermal technology; how suited is that technology to Ireland, and what is the take-up? What do you think about hydrogen-fuel-cell technology, and have you carried out any work on that? Tom Elliott mentioned wind farms.

Mr Elliott:

They should all be put in the Mournes.

Mr W Clarke:

There are quite a few wind farms in the Mournes. It might be that, given the global pressures that affect the price of oil and gas, the luxury of choice is not available, so sustainability must be achieved on an all-island basis. A spatial strategy is needed to deal with wind turbines; it cannot be dealt with by the North or the South in isolation. The best-suited places on the island must be found. We all say that we do not want nuclear power, so we have to make our minds up about where electricity will come from. Do you agree that action must be taken now?

Dr A McCrea:

I absolutely concur with that.

The Chairperson:

Please remember to discuss our subject, which is the impact of renewable energy on agriculture. We have been on the verge of straying into matters to do with DETI and DSD. At the beginning of the inquiry, other Committees asked us not to stray into their remits.

Dr A McCrea:

I take your point, Chairman.

Mr W Clarke:

That is the problem, and that is why we are in this situation.

The Chairperson:

It may be a problem, but the Committee has a responsibility. We would be rebuked by the other Committees.

Dr A McCrea:

I mentioned that the strategy must have support across the Assembly. It is not enough for one Department or one Minister to deal with environmental issues, for the Minister of Agriculture and Rural Development to deal only with the issues that affect her Department, and for the Minister with responsibility for energy to deal with energy issues. Those Ministers must be brought together; they almost have to be locked in a room and not allowed out until a solution is found. I apologise for straying into the remits of other Committees.

The Chairperson:

I was reminding members, as well as the witnesses, that we have strict remit to which we must adhere. The Ulster Farmers’ Union suggested that OFMDFM should try to bring all of the other Departments together because it is a cross-departmental issue.

Mr W Clarke:

Can I have an answer to my question on geothermal technology?

Mr Waugh:

I will address the geothermal issue with specific reference to the rural community. Three weeks ago, I was fortunate to see a deep geothermal system in The Hague that is installed on a tomato farm. It is 2,500 metres deep and provides sufficient heat for 27 hectares of glass houses. Within ten miles, a 2,500 meter-deep geothermal borehole supplies heat to an entire housing development of 5,000 houses.

Northern Ireland has even greater potential because it has an enormous deep-geothermal resource. It will probably take five to 10 years for such potential to be realised because of the economics and the cost in Northern Ireland, but there is potential for the introduction of deep — as opposed to shallow — geothermal systems.

Mr W Clarke:

Do you have an opinion on hydrogen fuel cells?

Dr A McCrea:

We are working on that issue with the University of Ulster. However, that work is in its formative stage. It is a developing technology.

Mr Bresland:

You said that attitudes towards renewable energies need to change. What steps need to be taken to achieve that? Does the Department require an attitude change?

Dr A McCrea:

That is a good question. Everybody — and it does not matter who we meet with — claims to be in favour of the introduction of renewables. However, the Assembly needs to make a real commitment to a buy-in at the highest level — rather than agreement and head-shaking. Northern Ireland has an engineering and academic history, and rural communities, historically, have embraced such technologies, and we now need the funds to aid progression — that is the main attitude change required.

Mr Elliott:

Society might be keen on the idea of introducing renewable energy sources. However, when the time arrives to put theory into practice, society, planners and other agencies object to selected locations and the installation of energy sources.

The Chairperson:

Although elected representatives must provide leadership, we must be sensitive to the will of the community. If elected representatives force measures upon the community, constituents have a wonderful way of reminding them that they are the final arbiters and have the power to remove them from their position. I am currently involved in a situation where a community has said that it has enough wind farms and does not want them to cover the whole landscape. The community has rights, and we must ensure that we include the community in any decision because they have the final say and we are their servants. Leadership is necessary, but sometimes we might ignore the views of the community. We must remember that the community has a greater power and a greater say.

Mr P J Bradley:

Thank you for your interesting presentation. I have three short questions, to which I will accept three short answers. In your reply to Willie Clarke, you mentioned the establishment of financial incentives for introducing renewable energy. First, how will financial support to farmers in rural communities be structured? Secondly, you explained that not all machines are suitable; what subject-to-planning advice can you offer to ordinary interested individuals? Thirdly, what is your view on wind turbines that are out at sea and out of sight?

Dr A McCrea:

Those are three good questions — we are being well tested. We are working to help at least 60 rural community groups to get access to finance. Such groups need a recycling loan fund, or something similar, in order to draw down money. Recycling loan funds have worked successfully elsewhere. There is still a role for grants in encouraging wider deployment of small-scale Reconnect-type technologies, and the uptake of grants has been high among rural communities. However, that requires financial commitment in competition with other financial priorities. Those two approaches are essential for any policy to make progress. The other stick is to introduce legislation that forces builders to install solar panels or other renewable energy devices in new homes. That can be done, and we know that it works.

In response to your second question: not all machines are suitable. The Reconnect programme was a huge learning exercise and will end up with about 4,000 installations, each one of which has been inspected. If I may focus on just one technology, for example, heat pumps. Our advice now on heat pumps is to install one in only a new building. As a general rule, existing properties are not sufficiently well insulated to make a heat pump financially viable. There are three rules before installing a heat pump: first, super-insulate your house far in excess of building control requirements; secondly, install under-floor heating upstairs and downstairs; and, thirdly, and most importantly, carry out a heat-loss calculation on the property. That is something that architects cannot undertake, yet it is essential before installing a heat pump.

Furthermore, because heat pumps are based on solar energy technologies, the heat retention of the soil must be assessed. Terry made the distinction between deep geothermal and surface technologies. Installers will try to convince you that they know all about this — but they are still learning, we are all learning. Therefore, when you ask what is suitable, the answer is that we are still learning how to apply the technologies. One valuable aspect of our work is, we believe, to share that knowledge with the renewable energy installer academy so that installers may be trained.

As regards your third question, which was about wind turbines and the Planning Service, we work closely with the Planning Service. Many Planning Service staff have never come across those technologies, so when they get a planning application it will be the first time that they will have heard about a biomass boiler or a wind turbine —

Mr Waugh:

I am sorry to interrupt, but I think that Mr Bradley’s question was about wind turbines at sea.

Dr A McCrea:

You are absolutely right — we would love to see more offshore wind developments around Northern Ireland, but wind turbines at sea are much more expensive. There is also the cost of connection. Therefore, a strong grid would be necessary in those areas.

Mr P J Bradley:

Perhaps the Government could support such a project. When flying back from Cardiff, we saw wind turbines off the coast of Wexford, but I do not know who owns them.

Dr A McCrea:

That is the Arklow Bank wind park, which is owned by Airtricity.

Mr Waugh:

Offshore wind projects are good news for Harland and Wolff, which is generating huge income as an installer.

Mr Irwin:

After last week’s Committee meeting, I spoke with a man from Fermanagh who is involved with anaerobic digestion systems and who faxed me information about them. Part of the problem is that the average person knows very little about such systems. Incentives and guidelines are needed, from the Government and others, before people will go down that road. Northern Ireland is miles behind the rest of Europe on these matters.

Am I also right in saying that the Westminster Government has pushed for wind turbines on the east coast of the UK?

Dr A McCrea:

That is correct. Unfortunately, the project to install an anaerobic digester in Fivemiletown has folded as a result, surprisingly, of local opposition. We have mentioned the key area of awareness several times. People have to be convinced that the new technologies are appropriate, that they can work, and that they do not produce any harmful effects. DARD has a key role to play in providing information.

Mr Buick:

It is also important to establish community buy-in and ownership of many of those projects. Communities can sometimes be galvanised against large companies establishing more wind farms and making profits on the back of the local population. There are alternatives. There are ways by which communities can take ownership of wind farms. I own part of a wind farm in the south of England because the local community was given the first opportunity to obtain shares in that development. When the people in those communities see the turbines turning, it does not create a bad feeling. It creates a good feeling because the turbine is generating revenue.

The Chairperson:

Gentlemen, our time is up. Thank you for that very helpful presentation. The information that you are leaving with us will also be very useful. I hope that the time that you have spent here has been profitable.