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
Mr Francie Molloy
Mr George Savage

Witnesses:

Mr Campbell ) World Wildlife Fund Northern Ireland (WWF NI)
Dr McGarel )

The Chairperson:

I welcome the Committee back to today’s third evidence session in its inquiry into renewable energy and alternative land use. Once again, I remind Committee members that mobile phones must be switched off.

The next set of witnesses is from World Wildlife Fund Northern Ireland (WWF NI). I ask Mr Campbell and Dr McGarel to come forward and give their presentation. Thank you very much for coming; you are very welcome. We held two evidence sessions this morning, which we found informative and helpful to our inquiry. After your presentation, members shall ask questions. Whoever wants to lead off may do so.

Mr Malachy Campbell (World Wildlife Fund Northern Ireland):

I thank the Committee for its invitation. I will outline the work of the World Wildlife Fund and its policy background. Alex will then outline the relevance of the ‘ Northern Ireland Rural Development Programme 2007-2013’, but the questions and answers that follow may prove to be the most valuable part of the session.

The Chairperson:

Your written submission suggests that the Department of Agriculture and Rural Development (DARD) should revise its guidance to include opportunities for renewables under three of the four axes of the Northern Ireland rural development programme. Will you expand on that?

Dr Alex McGarel (World Wildlife Fund Northern Ireland):

I will expand on that, Chairman.

Mr M Campbell:

WWF is probably the largest conservation organisation in the world. Our mission focuses on:

“conserving the world’s biodiversity; ensuring that the use of renewable natural resources is sustainable; and reducing pollution and wasteful consumption.”

We are a solutions-based organisation. We see the rural development programme as an opportunity to increase the use of renewables in Northern Ireland. DARD and this Committee have an important role in helping to achieve that end. WWF strongly supports the development of renewables, given the serious nature of the threat that climate change poses to the planet, biodiversity and human beings. We generally apply criteria to the development of renewables. We cannot take a carte blanche approach, because some renewables can have a negative impact.

I will summarise the policy context before moving on to the rural development programme. As the Committee may be aware, approximately 70% of UK legislation originates from EU-based legislation. Therefore, the EU is an important driver of policy. The European Commission’s energy package, which was announced in January, set targets for all member states. The target for the UK is to generate 15% of its energy from renewables. The Climate Change Bill, which will soon become law, sets targets to reduce UK carbon dioxide emissions by at least 26% by 2020, and by at least 60% by 2050. Those targets will be important drivers of policy.

In Northern Ireland, the targets for generating electricity and energy from renewables are low. Northern Ireland has tremendous wind-power and biomass potential. Targets being set by some of our near neighbours in Scotland and Wales, and even in Yorkshire and Humberside, are much higher. The Scottish and Welsh Administrations, for various reasons, see renewables as an opportunity for energy security, economic development and job creation. We would like renewables to be viewed similarly in Northern Ireland.

Scotland had a target to produce 40% of its electricity from renewables by 2020. That target was recently revised upwards to 50%. Its target for 2010, which was to produce 16% of its electricity from renewables, has already been met. Scotland is, therefore, forging ahead. Although the potential in Northern Ireland may not be quite as large as that in Scotland, opportunities exist here that should be taken.

I mentioned Yorkshire and Humberside, because that area is roughly equivalent to the size of Northern Ireland, and it is also largely rural. Its targets are quite high, too. Yorkshire and Humberside aims to produce 22% of its electricity from renewables by 2010. The Yorkshire and Humberside ‘Regional Economic Strategy 2006-2015’ has assessed that meeting its targets could create 13,000 jobs. That is an important point, because, in setting higher targets and driving that policy, an opportunity arises to create jobs, and that is where DARD can play an important role.

I will now hand over to Alex, who will deal with the rural development programme and spending.

Dr McGarel:

WWF firmly believes that the Northern Ireland rural development programme can provide a range of opportunities to encourage increased use of renewables.

First, axis 1 aims to improve the competitiveness of the agricultural and forestry sectors. EU strategic guidelines for the rural development programme encourage member states to use the axis to, among other things, create new innovative outlets for the production of renewables and to help the development of renewable energy materials in a processing capacity.

Two measures in particular in the rural development programme offer that opportunity. The first — measure 1.3 — concerns farm modernisation, where energy efficiency can be increased by installing solar panel and wind turbines, and enhanced environmental performance can be achieved through the use of woodchippers.

WWF is keen to prioritise the gamut of opportunities that exist with renewables. Projects should be prioritised in order tohelp move to a decentralised power base so that the focus is not just on producing energy in one place. The farm-modernisation measure offers a perfect opportunity to do that. That would improve farmers’ competitiveness, because fossil fuels, which are so costly to the agricultural sector, could start to be displaced.

An opportunity also exists to use biomass, the hierarchy of which must be considered in order to maximise the efficiency of biomass projects. The UK Government’s biomass strategy has examined that cost-effectiveness argument and listed the hierarchy of opportunities available.

First, the strategy suggests that farmers should use waste that is already on their farms — in excess of that used on their land to maintain nutrient levels — to produce combined heat and power or electricity.

At this juncture, I want to mention that WWF NI supports the Rose Energy initiative. We see it as a win-win situation, because power is being generated from waste that amounts to more than what can be spread on land to produce energy. Although we recognise that it is not an ideal solution, it is probably the best one available at this stage to help protect waterways and displace fossil fuels.

Secondly, to take advantage of non-waste opportunities, the UK Government strategy suggests that oil, and then gas, should be replaced. However, it comes down to the opportunities afforded to individuals to replace domestic oil boilers with biomass. That fits neatly into the rural development programme, particularly the farm-modernisation in axis 1.

WWF maintains that there should be a hierarchy in that section of biomass, with the first tier using existing woodlands as the source and the second using newly created woodlands, access to which I will talk about in a moment, because it ties in with new forestation.

Thirdly, we should establish perennial biomass crops, such as the short-rotation coppice. The opportunity to do so is also available under axis 1 of the rural development programme. Finally, we suggest considering using annual agricultural biomass crops.

The second measure to consider under axis 1 — measure 1.4 — concerns supply-chain development. The previous programme spent a great deal of time trying to expand and develop the food chain and trying to make farmers more aware of where they featured in that. Under axis 1, we want to see more done to develop bioenergy.

Therefore, to summarise axis 1, it is about prioritising. The measures have been drawn up. Many other competing priorities that farmers are encouraged to consider relate to animal health and welfare, and so on. We argue that, for the benefit of cross-cutting Government priorities, huge opportunities exist to examine renewables under that axis.

Axis 2 deals with improving the environment and countryside. The EU’s strategic guidelines focus more on how the measures can contribute to the Kyoto principles and mitigate climate change. From a climate-change perspective, the rural development measures axis 2 — the agrienvironment programme and first afforestation — focus on mitigation and carbon sequestration. However, both those measures provide scope to contribute to rural renewable-energy initiatives.

Under the agrienvironment programme, there is opportunity for site-specific or collective special environmental projects. Small hydroelectric schemes, for example, could fall into that category. Scope is available in that category for farmers to come up with ideas that particularly suit them. Again, the Department could encourage them to consider opportunities to enhance renewable energy. We stress that the Department has a responsibility to ensure that those do not compromise the programme’s other objectives, particularly the Water Framework Directive and biodiversity obligations. There is also potential for overlap with axis 1. Some small on-site environmental projects could be funded under axis 1. The Department will have a job simply to decide under which axis those projects should fall.

Earlier, under axis 2, I mentioned the first-afforestation measure that encourages farmers to plant forests, which would use tree cover help to mitigate climate change. It could be linked to other axes; for example, through the woodchipping opportunities that are provided by axis 1, the opportunities for village renewal in axis 3, and so on. Therefore, a great deal of crossover between axes could benefit collectively and help to contribute to the Government’s overarching objectives for renewables.

Axis 3 deals with quality of life in rural areas and diversification of the rural economy. Again, guidelines focus on opportunities for the axis to contribute to the creation of jobs and conditions for growth. WWF stresses that those opportunities could develop the potential for innovative use of renewable-energy sources and could contribute to creating new outlets for agriculture and forestry products. All six measures that were available from the European programme have been selected under axis 3. Measures 3.1 to 3.4 all have a specific indicator, which is a volume of energy to be generated from renewable projects. It totals 1·5 million kWh per annum. Therefore, the need for renewables has been recognised, and there is an associated target. Our rough-and-ready calculation estimates that that volume of energy would cover around 300 homes. That is good, but even more focus could be put on renewable-energy utilisation.

Moreover, specifically under measure 3.5 — village renewal and development — community-based incentives to invest in rural-energy opportunities are encouraged. We argue that DARD should prioritise projects that aim to introduce or utilise renewable energy. I should stress that, under that axis, no definitive lists of which activities are acceptable have been produced. That, in some ways, gives much more scope. A particular concern about axis 3 is that, because it will be delivered through local authority clusters, there is a risk that local focus will not keep in sight the national priority’s need to try to increase the use of renewables. Therefore, DARD must find a way in which to ensure that local authorities are aware of their responsibilities to embrace renewables in that way.

The Chairperson:

Thank you very much. You mentioned the need for Northern Ireland to have a long-term energy strategy that would help to develop renewable energy’s potential. That would be DETI’s responsibility. In the meantime, DARD’s existing renewable-energy action plan provides an indication of how Government intend to support the development of renewable energy in the rural economy.

Do you consider that plan to have been successful so far?

Mr M Campbell:

I am not familiar with all the details of the renewable-energy plan. Thus far, much of it has been concerned with exploring opportunities. Northern Ireland may have the best potential in Europe for growing biomass, yet biomass is almost insignificant in the context of our energy production. Around only 4% of our electricity is supplied by renewables, and that is dominated by wind power. Great potential is yet to be exploited.

As Alex said, there is potential for agricultural waste to be used more for processes such as anaerobic digestion. Given the enormous potential of renewables, their penetration and development has not been as successful as we would have liked and, thus far, they have not been exploited.

Dr McGarel:

Inevitably, the Department’s plan has been based on the opportunities for the agricultural sector to utilise renewables. A strategy is needed to ensure that that effort fully complements a broader scope for renewable utilisation across Northern Ireland. DARD will obviously consider the agricultural aspects, and those could neatly fit into such a strategy. The strategy could help to ensure that priority is given to the renewable energies that are most efficient and most suitable for Northern Ireland and that help to give the agricultural sector a good return.

Mr Elliott:

Thank you for your presentation. I was slightly cautious when I heard that WWF NI was coming to talk to the Committee for Agriculture and Rural Development about renewables, but your presentation was interesting.

In your written submission, you support the principle of decentralised electricity, and you point to its greater efficiency. How does that fit into the rural community and the farming community?

You talked about how the energy generated from waste on farms can be used. You said that surplus waste is used after farmers put what they need onto the land, but we classify that as fertiliser rather than waste. However, I understand what you meant. It is quite interesting that WWF NI supports that concept and the Rose Energy project. Can you expand on that?

Your written submission says that a range of other technologies should be developed, rather than there being an overemphasis on the development of wind power. Much has been said about wind power’s benefits. Some people think that it will resolve the issue of renewables in Northern Ireland, but you evidently do not agree with that opinion.

Dr McGarel:

We fully agree that, as long as waste can be used on the land, it is not waste but fertiliser. A finite amount of nitrates is produced, and the remainder is waste. That excess can be converted into heat and energy, and the most efficient way in which to do that is to keep it on farms so that heavy loads are not being transported away from farms. In Germany, fiscal incentives enable farmers to do that, but those are not in place here. The main problem with, and weakness of, the Rose Energy initiative is that waste must be taken off farms and transported some distance to where it can be utilised. Given that the policy infrastructure is not in place to allow that decentralisation process, transportation is the best option in the circumstances. We want to see more incentives to encourage on-farm utilisation of waste, because that would provide a decentralised base for energy production. A network of those across Northern Ireland would be a successful outcome and set us up well for the future.

Mr M Campbell:

WWF has continually said that the concept of energy efficiency needs to be included in all future energy policies. That involves not just making better use of the energy that we consume but reducing the absolute amount of energy that we consume.

Technologies such as combined heat and power, which is very appropriate for a decentralised system, can operate at an efficiency rate of between 75% and 90%. That is important because the current centralised grid system is so inefficient. Take Kilroot power station and the amount of energy that it provides to consumers — it operates at an efficiency rate of approximately 27% to 28%, which is pretty poor.

With wind turbines, capacity is measured. In Scotland, for example, some of the wind turbines are estimated to operate at about 50% efficiency — roughly speaking, about 15% capacity. Therefore some wind turbines operate much more efficiently than fossil-fuel power stations. Combined-heat-and-power systems that heat homes as well as provide electricity have an efficiency rate that is at least twice that of some of our power stations. It is reckoned that combined-heat-and-power systems can generally contribute a 50% reduction in carbon dioxide emissions. By contrast, the emissions levels of the current fossil-fuel power stations are higher. The centralised grid is very inefficient, and that is one reason why we support a decentralised system, as I believe do the farming community and the Ulster Farmers’ Union.

A couple of surveys have been conducted on the potential for wind power in Northern Ireland. A report published in 2003 by PB Power reckoned that wind power could contribute around 95% of all the renewable energy that could be generated in Northern Ireland. Thus, wind technology is the dominant technology at present, and is likely to remain so. However, one technology will not solve all our problems, such as climate change, lack of energy security and rapidly increasing fossil-fuel bills. A range of factors must be involved: energy efficiency measures; combined-heat-and-power systems, using, say, biomass; wind power; solar power; and wave power. Any approach must be multifaceted.

Mr Elliott:

I return to the point about farms converting waste to energy. Is it practical, efficient or even cost-effective for every farm to have a combined-heat-and-power plant? Dr McGarel, you said that the idea is that waste would not be transported to a central area, but we cannot have those plants littered all over the place either.

Dr McGarel:

I suspect that if we were to look at the infrastructure of Northern Ireland farms, we would find that not that many farms have more waste than they can utilise on the land. Something like 10% of non-intensive farmers are looking at the derogation — in other words, they have more waste than they have land on which to spread it. Therefore, that is not a huge number. The main sectors would be the intensive pig and poultry sectors. I would have thought that groups of farms, rather than every farm, could start to consider those solutions.

Mr M Campbell:

Mr Elliott asked a good question. Obviously, there are economies of scale. However, as the Committee is probably aware, Scandinavia has a district heating system, which, rather that involve individual farms and businesses, is organised on a slightly larger scale. There are other examples that we can look to for guidance.

The Chairperson:

Those people could come together naturally rather than being forced together.

Mr W Clarke:

Will you explain why feed-in tariffs should be introduced in the North?

Mr M Campbell:

Feed-in tariffs have been used in Spain and in Germany, and are considered to be one of the most successful drivers of development, particular in Germany. Germany leads Europe in many areas; for example, in wind power and, I think, in bioenergy production. The feed-in tariffs have been viewed as being central to Germany’s success. With a feed-in tariff, a small-scale producer will get paid a certain rate, usually over and above the normal rate for consumers, on a long-term contract. Such tariffs provide some degree of fiscal security and a guaranteed price for the energy that is produced.

The concept of feed-in tariffs has recently been launched in the Republic of Ireland. Minister Ryan announced in January the introduction of feed-in tariffs for combined heat and power produced from biomass, and also for wave power. It seems to be a concept that can work well. The Committee is probably aware of the Northern Ireland renewables obligation — one of the concepts being explored at present is the banding of that obligation. Wind power is dominant and is one of the cheapest forms of electricity production, so the obligation is being banded to try to encourage other forms of technology. It is an attempt to counter the predominance of wind and to encourage the use of other technologies — perhaps biomass, or solar power. That can and should also help to boost the development of renewables here. Feed-in tariffs are just another possible method, and our organisation thinks that they are worthy of consideration. One can look to examples in other countries as to how successful they have been, and how they may work.

The Chairperson:

I think that the introduction of feed-in tariffs was rejected last night at Westminster.

Mr M Campbell:

You are probably all familiar with the Stern Review. Its report also looked at what might be called fiscal incentives for the development of renewables. In that report, feed-in tariffs are praised and viewed very favourably, so the concept is worth exploring.

Mr T Clarke:

Your submission lists a set of principles and measures that you say are necessary for controlling potential environmental impacts on bioenergy crops. How do you propose that those standards be applied to the Northern Ireland agricultural sector?

Mr M Campbell:

WWF has been working on the application of standards for some of those resources both at a European level and further afield. The approach that we have been advocating is that, to oversee and administer the criteria, an independent body should be set up, similar to the Forest Stewardship Council, which is an independent assessment body to evaluate the sustainability of wood product. It is along those lines that there should be an independent body to assess the application of those standards.

Mr T Clarke:

If that were the case, is it likely that small farmers could be discouraged from growing bioenergy crops?

Mr M Campbell:

I would like to think that it would not discourage them. We have previously said that small-scale producers should not be disadvantaged. The standards that WWF, for example, advocates primarily relate to overall greenhouse gas emissions, and are aimed at ensuring that any measures taken are to solve the problem rather that to contribute to it; that watercourses are not polluted; that no toxic chemicals are released into the environment; and so on. Those are the basic criteria that we are advocating. Those should not necessarily disadvantage a small-scale producer.

Dr McGarel:

The standards are largely being prepared in a way in which some of the more vulnerable habitats, such as tropical rainforests, are being protected. They are being developed on an international scale, and the idea is to protect those larger habitats rather than affect the potential small-scale production that might take place here.

Mr Burns:

Apart from direct funding support in the Northern Ireland rural development programme, are there any other measures, such as training, that DARD could implement in order to help farmers, rural businesses and communities to contribute to the attainment of Northern Ireland’s renewable-energy targets?

Mr M Campbell:

I am aware that an interdepartmental working group will be looking at, for example, bioenergy, and that is unlikely to be done in isolation. Initiatives such as the Reconnect grant focused on the fitting of renewables. Policies can drive the rural community and the production of energy. Enormous subsidies are given to fossil fuels, and, as such, renewables are not playing on a level field. If some of those subsidies could be redirected and renewables could be supported, that would help overcome the worst of that imbalance.

Ultimately, any small-scale renewable should stand independently. We are not saying that renewables should be permanently subsidised — they should be able to stand on their own two feet. Regardless of the action that the Department takes, the matter must be tackled in conjunction with other Departments.

Dr McGarel:

The supply-chain development programme should help. In the programme on food-chain development, farmers were made aware of how their products were used and told how to improve their products to get them into markets. That type of training would help and encourage farmers to regard renewables as potential areas of developments.

The obligations on farmers to reduce their carbon footprints are the same as those placed on other citizens. Farmers can be encouraged to reduce their carbon footprints through the training that the supply-chain development programme provides.

Mr Irwin:

You said that renewables should not be continually subsidised by the Government. However, in order to get farmers to establish those schemes — particularly biomass ones — on farms, an incentive must be provided. The schemes will not be taken up unless there is an incentive for farmers. Many investments mean that farmers are cash-strapped; they must spend a lot to meet nitrate directives under the farm nutrient management scheme. If an incentive to move in that direction were offered, a number of large farmers would be interested.

Mr M Campbell:

I am sorry if I was not clear — we are not opposed to initial incentives. As I said, fossil fuels are hugely subsidised, and that skews the market. Therefore, financial support — particularly in pump-priming/start-up — would be important and helpful. However, renewable schemes should be able to stand on their own two feet in the longer term. The relentless increase in oil prices may change the economics of the renewable industry, but initial support would be valuable.

Mr Elliott:

Mr Irwin said that it is difficult to encourage farmers to participate in a scheme that is not profitable. Unless a scheme is shown to be profitable, it will not be attractive to farmers. The farming community has been aggressive towards the Department for not placing farming issues at the heart of rural development programmes. Do you have any proposals on how to tie the three axes together to deliver something that may be helpful as a renewable energy source?

Dr McGarel:

No ideas come to mind. However, as Malachy said, the rising price of oil should encourage farmers — through the farm-modernisation programme — to examine ways in which to replace oil on their farm, whether it be for heating and lighting or for installing solar panels or wind turbines. That could come under axis 1.

An example of the difficulty that could occur is shown by the short-rotation coppice programme. The crops that the programme tends to replace, such as wheat, have become more lucrative on the farming and open markets. Consequently, more of an incentive may be required for that type of programme, where global pressures have created disincentives.

Using the measure in axis 3, or the agrienvironment measure for collective action in axis 2, an opportunity exists for farmers to work together. The benefit for a farmer who takes part should be more than if he or she acts alone.

Mr M Campbell:

I have mentioned the potential for job creation a number of times. A report was written in 2003 by WWF Scotland called ‘A Smart, Successful, Sustainable Scotland’, which stated that there existed the potential to create 50,000 additional green jobs in Scotland through further development of renewables, including organic farming and other initiatives. That was in addition to the 80,000 jobs that then existed. Therefore, that factor must also be considered. Investment in renewables also means investing significantly in the rural economy.

The Chairperson:

You mentioned the possibility of revising DARD’s guidance to include renewable energy. Has your organisation presented to the Department your findings or thoughts on how that should be done? If so, what was the Department’s response?

Dr McGarel:

To date, our organisation has focused on the potential for the rural development programme to deliver for the EU Water Framework Directive. Several Departments are looking at the opportunities afforded by the rural development programme to help meet their targets, some of which are set by the Water Framework Directive. DARD’s own review of renewables has largely pointed the Department in the direction of using the programme to help increase use of renewables. We referred to it in a consultation that we had with DARD rather than target renewables per se in our correspondence with it.

The Chairperson:

Being the Department of Agriculture and Rural Development, the Department spearheads the whole rural development programme, not to mention the expenditure of the very considerable sum of £530 million. How do we harness that finance to aid farmers in the rural community and to aid society? Some of that money comes from the farmers, under voluntary modulation — at least, that is what the Department called it. The Department decided that it was voluntary, yet it takes that money out of the pockets of farmers. It is a new interpretation of the word “voluntary”. However, leaving that aside, how can we use every penny to the best possible advantage in helping the environment and the farming community?

Dr McGarel:

WWF NI has a seat on the monitoring committee of the rural development programme. That is a key way in which to ensure that the programme delivers as it should. We are conscious that we are working alongside people with other priorities, especially social priorities. We see the monitoring committee as an important means of influencing the programme as a whole.

We also keep an eye on the development of the rural development network, which is another requirement of the programme. Any influence that we have in that respect, we will try to maximise, in order to ensure that the network is aware of all the responsibilities. Those involved in the programme as a whole are determined that it will deliver as best it can. Individual interests represented will have to fight their corners hard. However, we must ensure that we get the maximum delivery for all sectors across society, as well as for individual farmers. The nature of the funding, much of which comes from voluntary modulation, means that there is a duty on the Department to ensure that farmers retain their competitiveness as a result of the programme.

The Chairperson:

The Department has told us that a considerable amount of the money should be going back to farmers and their families.

Dr McGarel:

That is exactly how it should be happening.

The Chairperson:

Is that, therefore, not a way in which to ensure that the programme will help rural communities?

Dr McGarel:

Yes, but the money should be returned through axes 1, 2 and 3. They should not be understood as three separate axes; there should be recognition that they are cross-cutting.

The Chairperson:

You say that there should be such recognition, but is that what is planned?

Dr McGarel:

I think that that is what is planned. I am concerned that it happens in that way, not least because there are three different delivery mechanisms. Axis 3 has been shorn for delivery by local authorities. At present, the clusters are developing their strategies for axis 3.

The Chairperson:

It will be hard to find out how the clusters will develop their strategy, because they have not met to discuss it yet.

Dr McGarel:

There are 26 strategies that will have to form clusters, each of which will have competing priorities. That is why we see the process as being so important. I am not sure how much control the Department can have over that process, having devolved it to the individual local authorities.

The Chairperson:

The Department is the driver for the clusters. It seems to be in control of the situation; it is demanding that the clusters be formed.

Dr McGarel:

The programme contains European targets against which each measure must deliver. Those targets tend to be of a general nature and based on equality principles. WWF NI was involved in the development of additional programme-specific targets. There are renewable targets under axis 3. Axis 2 includes biodiversity targets, and we have been involved in developing those targets.

The Chairperson:

Thank you for your presentation. It was very interesting. Today’s presentations have provided fresh evidence that the Committee and the Department will have to take on board. Your presentation will help us to make a determination at the end of our inquiry. Good afternoon.

Mr M Campbell:

Thank you.