Session 2007/2008

First Report

The Committee for Agriculture and Rural Development

Report into Renewable Energy and Alternative Land Use

Together with the Minutes of Proceedings of the Committee relating
to the Report, Minutes of Evidence and written submissions

Ordered by the Committee for Agriculture and Rural Development to be printed 24 June 2008
Report: 39/07/08R (Committee for Agriculture and Rural Development)

PUBLISHED BY AUTHORITY OF THE NORTHERN IRELAND ASSEMBLY
BELFAST: THE STATIONERY OFFICE

Membership and Powers

Powers

The Committee for Agriculture and Rural Development is a Statutory Committee established in accordance with paragraphs 8 and 9 of the Belfast Agreement, Section 29 of the Northern Ireland Act 1998 and under Assembly Standing Order 46. The Committee has a scrutiny, policy development and consultation role with respect to the Department for Agriculture and Rural Development and has a role in the initiation of legislation.

The Committee has power to:

Consider and advise on Departmental Budgets and Annual Plans in the context of the overall budget allocation;
Approve relevant secondary legislation and take the Committee stage of relevant primary legislation;
Call for persons and papers;
Initiate inquiries and make reports; and
Consider and advise on matters brought to the Committee by the Minister for Agriculture and Rural Development.

Membership

The Committee has 11 members, including a Chairperson and Deputy Chairperson, and a quorum of five members. The membership of the Committee is as follows:

Dr William McCrea MP MLA (Chairperson)
Mr Tom Elliott (Deputy Chairperson)
Mr PJ 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

* Mr Pat Doherty replaced Mr Gerry McHugh with effect from the 21st January 2008.

Report

Inquiry Aim and Terms of Reference
Approach
Summary of Recommendations
Findings and Recommendations

Statutory Progress
Dard Renewables Action Plan
Opportunities For Farm And Rural Businesses
Market Certainty
Business Market Focus
Non-Wind Renewable Energy
Anaerobic Digestion
Strategic Support
Cross-Departmental Monitoring
Additional Recommendations

Inquiry Aim and Terms of Reference

1. The Committee agreed the aim and terms of reference at its meeting of 29 November 2007 in the College of Agriculture, Food and Rural Enterprise, Enniskillen Campus. These were agreed as follows:

Aim

“To establish the potential economic benefits Northern Ireland family farm and rural businesses could derive from renewable energy and alternative land uses relative to existing land use and agricultural practices, the potential agricultural and environmental effects of any such changes and to what degree renewables should become a focus of DARD resourcing relative to other agri-rural objectives.”

Terms of Reference

a) The recent and current policy framework for the development of renewable energy in Northern Ireland, focussing on but not limited to those policies developed and implemented by DARD;

b) The range of renewable technologies currently in operation or planned in rural communities, taking into account, as appropriate, similar projects elsewhere;

c) The relative importance in terms of contributing to Governments renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable sources, and how relevant each could be to the NI economy;

d) The range of support available to renewable initiatives at local, national and European levels;

e) To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it;

f) The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community; and

g) The ways by which the Department for Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to the sustainability of the agricultural/rural sector and contributes to Northern Ireland’s renewable energy targets.

Approach

2. The Committee agreed to the placing of a public advertisement on 29 November 2007. In total, the Committee was pleased to receive 26 written submissions to the inquiry. These are contained in Appendix 3.

3. The Committee also agreed that a special advisor should be appointed to aid the Committee in its considerations of the subject area. Mr Jim Kitchen, Head of Sustainable Development Commission NI was appointed following the Committee meeting of 26 February 2008.

4. Following consultation with the special advisor, the Committee agreed on 8 April 2008 to receive oral evidence from the following 11 contributors:

Action Renewables
Agri-Food and Biosciences Institute (Hillsborough)
Carbon Trust
Department for Agriculture and Rural Development
Department of Enterprise, Trade and Investment
Mr Ian Duff
Northern Ireland Energy Link
Northern Ireland Authority for Utility Regulator
Sustainable Energy Association
Ulster Farmers Union
World Wildlife Fund Northern Ireland

5. The Committee received evidence from the above over three full days, including one held at the Agri-Food and Biosciences site at Hillsborough, Co. Down.

6. The Committee for Agriculture and Rural Development would wish, at this stage, to record their thanks to all those who participated in the inquiry through the provision of written and oral evidence.

Summary of Recommendations

7. The Committee for Agriculture and Rural Development makes the following recommendations:

(a) On publication of the Department for Enterprise, Trade and Investment Bio-energy report, both DETI and DARD should examine it along with this report for areas of complementarity;

(b) Government needs to seriously address the actions needed in order to achieve the PSA target of 12%. This should be addressed urgently;

(c) The Department of Agriculture and Rural Development should devise realistic timelines for the implementation of the Renewables Action Plan. This timeline should include key challenging and measurable targets for the achievement of outputs;

(d) The Department should address, as a matter of urgency, the legal status of the Agri-Food Waste Challenge Fund and the match funding element of the £10 million renewables programme. The Department should also exploit potential funding available through the European Union;

(e) The Department needs to identify and communicate specific renewable energy funding programmes available through the Northern Ireland Rural Development programme rather than generic measures that may or may not provide funding. Again, this should be undertaken as a matter of urgency;

(f) The Executive should increase the use of biomass as an energy source, introducing a hierarchy of its use. There is widespread agreement that the best use of biomass is for heating, replacing fossil fuels. Below that in the hierarchy comes electricity generation and finally liquid bio fuels, the least carbon-efficient use of biomass;

(g) Public sector procurement should favour biomass heating solutions, helping to create the market demand to stimulate the industry. Such a commitment would be aligned with the Government’s climate change and sustainable development objectives;

(h) Measures in the three axes of the North Ireland Rural Development Programme should be used to facilitate the establishment of ESCOs (or similar vehicles). The NIRDP could also support training in the necessary business practices to set up the companies, develop proposals, negotiate contracts with end users and promote the widespread adoption of successful small-scale RE business models;

(i) The Committee believes that the Executive should be pro-active in its support for low-carbon innovation, being prepared to challenge its own aversion to risk in its support for the development of renewable energy schemes The Executive should review current funding schemes and consider successor funding to ensure the ongoing development of the non-wind renewable energy sector;

(j) The Committee recommends continued and, where necessary, enhanced support for research on farm-scale anaerobic digestion trials. In addition, the Department of Agriculture and Rural Development and the Department of the Environment should explore whether the use of anaerobic digestion could be used as support for a case to extending the derogation on the Nitrates Directive and as a positive means of achieving compliance with the Directive;

(k) The Department for Agriculture and Rural Development should establish a (virtual) Centre of Renewable Energy Excellence to capture the benefits of the work being undertaken in Northern Ireland and to introduce best practice within a rural context. This could also include a non-food crops centre for Northern Ireland to link research to production and on to market;

(l) The cross-Departmental group on bio-energy, led by DETI, should report on a quarterly basis on its progress and that of the Executive in making progress towards its targets on the adoption of renewable energy. The Executive may also wish to consider establishing an external monitoring group, like the NI Biodiversity Group, to monitor progress;

(m) A key objective for DARD should be to increase the exploitation of RE opportunities;

(n) Northern Ireland has enormous potential to participate in the RE sector, especially by the agricultural industry. This potential should be exploited;

(o) There should be a review of the Northern Ireland energy strategy, including a legal regime for heat;

(p) Short Rotation Coppice Willow is a very effective crop for bio-remediation, which also makes its production economically attractive. The Department for Agriculture and Rural Development, and other relevant Executive departments, should develop the mechanisms to deliver planned production;

(q) Northern Ireland building regulations should be revised to promote the use of renewable energy technologies in all buildings;

(r) Planning Service needs to be more facilitative of small-scale planning renewable energy technologies; and

(s) Energy is a legitimate concern of many Assembly Committees and should not be reserved by the ETI Committee.

Findings and Recommendations

Statutory Progress

8. The Committee Inquiry coincided with a period that has seen fuel costs escalate to all-time highs and with the threat of prices increasing by up to 40% over the next year. It has also coincided with a period that has seen sustained pressures on the agricultural sector that have been exacerbated by high energy costs.

9. Overall, the Committee was pleased with the standard of the majority of the presentations. It was disappointed, however, that the statutory sector had not made the progress it would have hoped, with the Department of Enterprise, Trade and Investment Bio-energy study, originally scheduled for March 2008, now not available until the later summer. Recommendations have been made, therefore, in the absence of this report and the Committee recognises that the outputs deriving from the study may well have an impact on these.

10. The Committee noted that the government departments participated in a number of cross-sectoral working groups. However, the Committee was concerned that these groups appeared to prefer establishing research into renewable proposals rather than endorse actions to implement them. The Committee would be concerned that, as a result of this perceived inaction, the Executive targets of 12% of energy deriving from the renewable sector will not be achieved.

Recommendation

On publication of the Department for Enterprise, Trade and Investment Bio-energy report, both DETI and DARD should examine it along with this report for areas of complementarity.

Government needs to seriously address the actions needed in order to achieve the PSA target of 12%. This should be addressed urgently.

DARD Renewables Action Plan

11. The Committee was particularly disappointed with the oral presentation provided by the Department of Agriculture and Rural Development (DARD). Whilst the Committee recognises and encourages the research being undertaken by the College for Agriculture, Food and Rural Enterprise (CAFRE) and at the Agri-food and Biosciences Institute (AFBI) at Hillsborough, the Committee was disappointed to learn that the Department’s Action plan had not progressed in the first 15 months of its existence. The Department also apprised the Committee that they were “still establishing whether, under current legislation, it has permission to legally create the [Agri-Food Waste] challenge fund”[1]. This despite having announced the fund some 15 months previously.

12. Additionally, the Committee learned that the £10 million renewables programme announced by the Department had not progressed at all. Indeed, there was the belief that this had actually retreated whenever the Department apprised the Committee that the match funding element for the programme, £5 million, had only recently been applied for and had not, at the time of writing, been secured. The Committee was extremely disappointed to learn that the only substantive bid for resources actually secured was for £2.55 million from DFP for the next three years under the Chancellor’s innovation fund.

13. The Committee also heard that funding for renewable energy projects was available under the Northern Ireland Rural Development Plan 2007 – 2011.[2] However, it was not evident under which measures this funding was available. Unfortunately, the delay in actually progressing the renewable energy action plan is replicated by delays in implementing the Rural Development Programme.

Recommendation

The Department of Agriculture and Rural Development should devise realistic timelines for the implementation of the Renewables Action Plan. This timeline should include key challenging and measurable targets for the achievement of outputs.

The Department should address, as a matter of urgency, the legal status of the Agri-Food Waste Challenge Fund and the match funding element of the £10 million renewables programme. The Department should also exploit potential funding available through the European Union.

Finally, the Department needs to identify and communicate specific renewable energy funding programmes available through the Northern Ireland Rural Development programme rather than generic measures that may or may not provide funding. Again, this should be undertaken as a matter of urgency.

Opportunities for Farm and Rural Businesses

14. The Committee found that there was a lack of focus on the opportunities for family farms and rural businesses in the development of renewable energy with most of the attention, investment and fiscal support being for large-scale wind developments. DETI’s Bio-Energy research may lead to a policy change which will begin to address this imbalance, which will be necessary in meeting their non-wind component of their 2012 target. Locally produced Bio-energy can only ever produce a small (but significant) proportion of Northern Ireland’s energy needs.

Recommendation

The Executive should increase the use of biomass as an energy source, introducing a hierarchy of its use. There is widespread agreement that the best use of biomass is for heating, replacing fossil fuels.[3] Below that in the hierarchy comes electricity generation and finally liquid biofuels, the least carbon-efficient use of biomass.

Market Certainty

15. Rural businesses need more certainty of the market if they are to invest in the bio-energy sector; lack of confidence in the supply chain is a major barrier in the renewable energy sector. Farmers’ long-term commitment to energy crops needs the support of secure market demand.[4]

Recommendation

Public sector procurement should favour biomass heating solutions, helping to create the market demand to stimulate the industry. Such a commitment would be aligned with the Government’s climate change and sustainable development objectives.[5]

Business Planning Focus

16. Small renewable energy enterprises should focus their business planning towards the goal of delivering heat, not biomass, moving their production up the value chain. This may best be delivered by groups of farmers, rather than an individual, by creating Energy Supply Companies (ESCOs) or ‘heat entrepreneurs’.[6] The Department is asked to note that Action Renewables has submitted a report on the establishment of ESCOs to the Department for Enterprise, Trade and Investment.

Recommendation

Measures in the three axes of the North Ireland Rural Development Programme should be used to facilitate the establishment of ESCOs (or similar vehicles). The NIRDP could also support training in the necessary business practices to set up the companies, develop proposals, negotiate contracts with end users and promote the widespread adoption of successful small-scale RE business models. [7]

Non-Wind Renewable Energy

17. Non-wind renewable energy generation is an immature industry, at its earliest stages in Northern Ireland. In time, it is likely to develop through market demand, when consumers have confidence in the technologies and as fossil fuels rise in price and decline in availability. Experience from the wind industry demonstrates the importance of Government subsidies and support in the early stages of development and, indeed, the Stern Review highlighted the role of publicly-funded research and development. The Committee received a variety of proposals in submissions, ranging from changing the Renewables Obligation Certificates system, through establishing a low-interest community loan system, to introducing renewable heat grants. It was not possible for the Committee to determine the relative merits of these proposals without much more detailed consideration. There was, however, widespread support for the re-establishment of the discontinued Reconnect programme of DETI’s Environment and Renewable Energy Fund.

Recommendation

The Committee believes that the Executive should be pro-active in its support for low-carbon innovation, being prepared to challenge its own aversion to risk in its support for the development of renewable energy schemes The Executive should review current funding schemes and consider successor funding to ensure the ongoing development of the non-wind renewable energy sector.[8]

Anaerobic Digestion

18. Anaerobic digestion is a specific technology offering potentially significant benefits to rural business. It may help to solve the problem of excessive amounts of nutrient-rich farm waste, while generating useful dispatchable energy. The evidence was divided on whether the best way forward was for a limited number of centralised plants[9] or a dispersed regime of farm-scale digesters.[10] One larger-scale plant is likely to open by the end of 2009.

19. The evidence received by the Committee suggests that more research is necessary on the likely costs and benefits of farm-scale digesters in Northern Ireland. DARD’s proposed Agri-Food Waste Challenge Fund may help to stimulate further work on anaerobic digestion (see para. 13).

Recommendation

The Committee recommends continued and, where necessary, enhanced support for research on farm-scale anaerobic digestion trials. In addition, the Department of Agriculture and Rural Development and the Department of the Environment should explore whether the use of anaerobic digestion could be used as support for a case to extending the derogation on the Nitrates Directive and as a positive means of achieving compliance with the Directive.

Strategic Support

20. The immaturity of the development of many of these renewable energy technologies suggests that it may be some years before their commercial application is taken up by many small businesses, other than the few early-adopting ‘pioneers’ in Northern Ireland. Nevertheless, that suggests a role for the Government in redoubling its efforts to provide strategic support for this embryonic industry. There is much of value on which to build – some world-class research at the universities and at AFBI, a range of commercial companies investing in the sector here and a budding demand for some of the technologies, as demonstrated by the high demand for EREF Reconnect funding.

Recommendation

The Department for Agriculture and Rural Development should establish a (virtual) Centre of Renewable Energy Excellence to capture the benefits of the work being undertaken in Northern Ireland and to introduce best practice within a rural context. This could also include a non-food crops centre for Northern Ireland to link research to production and on to market.[11]

Cross-departmental Monitoring

21. As previously stated, the Committee was concerned at the perceived lack of progress being made by government bodies. There was a perception among stakeholders that working groups established by government were little more than “talking shops” and that no real actions were being delivered or communicated.

Recommendation

The cross-Departmental group on bio-energy, led by DETI, should report on a quarterly basis on its progress and that of the Executive in making progress towards its targets on the adoption of renewable energy. The Executive may also wish to consider establishing an external monitoring group, like the NI Biodiversity Group, to monitor progress.[12]

Additional Recommendations

22. The Committee also received a number of suggested actions from witnesses which the Committee believes merits inclusion and which it recommends to the relevant bodies for consideration and implementation. These are detailed below.

Recommendations

A key objective for DARD should be to increase the exploitation of RE opportunities.[13]

Northern Ireland has enormous potential to participate in the RE sector, especially by the agricultural industry. This potential should be exploited.[14]

There should be a review of the Northern Ireland energy strategy, including a legal regime for heat. [15]Short Rotation Coppice Willow is a very effective crop for bio-remediation, which also makes its production economically attractive. The Department for Agriculture and Rural Development, and other relevant Executive departments, should develop the mechanisms to deliver planned production.[16]

Northern Ireland building regulations should be revised to promote the use of renewable energy technologies in all buildings.[17]

Planning Service needs to be more facilitative of small-scale planning renewable energy technologies.[18]

Energy is a legitimate concern of many Assembly Committees and should not be reserved by the ETI Committee.[19]

Renewable Energy schemes must be based on sound science, sustainable and carbon-justified, as well as economically viable.[20]

[1] Official Report, 24th April 2008

[2] http://www.dardni.gov.uk/index/publications/pubs-dard-rural-development/

[3] Carbon Trust, NI Authority for Utility Regulator, DETI, DARD, WWF et al

[4] AFBI, Ian Duff, Carbon Trust, Sustainable Energy Association et al

[5] Carbon Trust, DARD, Ian Duff et al

[6] AFBI, Action Renewables, Ian Duff et al

[7] Action Renewables, AFBI, Ian Duff , WWF et al

[8] Action Renewables, NI Authority for Utility Regulator, Sustainable Energy Association, WWF et al

[9] B9, Carbon Trust

[10] AFBI, , the Ulster Farmers Union, WWF et al

[11] Ulster Farmers Union

[12] Ulster Farmers Union

[13] DARD

[14] NI Authority for Utility Regulator

[15] NI Authority for Utility Regulator

[16] AFBI

[17] Action Renewables

[18] Sustainable Energy Association

[19] NI Environment Link

[20] AFBI

Appendix 1

Minutes of Proceedings
of the Committee Relating
to the Report

Thursday 29 November 2007
Conference Room, Cafre, Enniskillen

Present:
Dr William McCrea MP (Chairperson)
Tom Elliott (Deputy Chairperson)
P J Bradley
Allan Bresland
Thomas Burns
Willie Clarke
Trevor Clarke
George Savage

In attendance:
Paul Carlisle (Clerk to the Committee)
Jim Beatty (Assistant Clerk)
Mary Hawthorne (Clerical Supervisor)
Kathy Neill (Clerical Officer)

Apologies:
William Irwin,
Gerry McHugh

The meeting opened at 1.04pm in Public Session.

1. Apologies

As above.

2. Committee Inquiry

The Committee agreed the aims and Terms of Reference, a Forward Work Programme for delivery of the inquiry and a press notice which will also be inserted into periodicals as well as the local newspapers. It was agreed that the Committee would use the services of a specialist advisor, if necessary.

The meeting was adjourned at 4.00pm.

[Extract]

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Tuesday 26 February 2008
Room 152, Parliament Buildings

Present:
Dr William McCrea MP (Chairperson)
Tom Elliott (Deputy Chairperson)
P J Bradley
Allan Bresland
Thomas Burns
Trevor Clarke
Willie Clarke
Pat Doherty
William Irwin
Francie Molloy
George Savage

In attendance:
Paul Carlisle (Clerk to the Committee)
Emma Patton (Assistant Clerk)
Mary Hawthorne (Clerical Supervisor)
Kathy Neill (Clerical Officer)

Apologies: None

The meeting opened at 1.30pm in Public Session.

1. Apologies

As above.

2. Committee Inquiry

The Committee agreed that Mr Jim Kitchen, Head of Sustainable Development Commission NI, would be appointed as the Committee’s Special Advisor into their inquiry into Renewable Energy and Alternative Land Use.

The meeting was adjourned at 4.15pm.

[Extract]

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Tuesday 8 April 2008
Room 152, Parliament Buildings

Present:
Dr William McCrea (Chairperson)
Tom Elliott (Deputy Chairperson)
P J Bradley
Allan Bresland
Trevor Clarke
William Clarke
Pat Doherty
William Irwin
George Savage

In attendance:
Paul Carlisle (Clerk to the Committee)
Emma Patton (Assistant Assembly Clerk)
Mary Hawthorne (Clerical Supervisor)
Andrew Dibden (Clerical Officer)

Apologies:
Thomas Burns

The meeting opened at 1.35pm in Public Session.

1. Apologies

As above.

2. Committee Inquiry

Jim Kitchen, the Committee’s Specialist advisor, joined the meeting at 4.25pm and briefed the Committee on all written submissions for the Committee’s inquiry into ‘Renewable Energy and Alternative Land Uses’. He then gave his recommendations on which groups should be called for Oral Evidence. The Committee agreed to his recommendations and he left the meeting at 4.35pm.

The meeting was adjourned at 4.38pm.

[Extract]

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Thursday, 24 April 2008
Senate Chamber, Parliament Buildings

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

In attendance:
Paul Carlisle (Clerk to the Committee)
Emma Patton (Assistant Clerk)
Mary Hawthorne (Clerical Supervisor)
Jonathan Young (Clerical Officer)

The Chairperson opened the public meeting at 10.15am.

1. Evidence Session with Ulster Farmers’ Union.

The representatives joined the meeting at 10.15am.

The Committee took oral evidence from Graham Furey, Michael Harnett and David McIlrea, representatives from the Ulster Farmers’ Union. A question and answer session followed

The Chairperson thanked the representatives for their presentation.

PJ Bradley joined the meeting at 11.15am
The representatives left the meeting at 11.15am.
The Chairperson suspended the meeting at 11.15am.
The Chairperson reconvened the meeting at 11.20am.

2. Evidence Session with the Department of Agriculture and Rural Development

The officials joined the meeting at 11.20am.

The Committee took oral evidence from Dr John Speers, Joyce Rutherford and Martin McKendry, officials from the Department of Agriculture and Rural Development. A question and answer session followed

The Chairperson thanked the officials for their presentation.

The officials left the meeting at 12.30pm.
The Chairperson suspended the meeting at 12.30pm.
The Chairperson reconvened the meeting at 1.40pm.

3. Evidence Session with Northern Ireland Authority for Utility Regulator

The representatives joined the meeting at 1.40pm.

George Savage joined the meeting at 1.46pm.

The Committee took oral evidence from Iain Osborne and Sarah Brady, representatives from Northern Ireland Authority for Utility Regulator. A question and answer session followed.

The Chairperson thanked the representatives for their presentation.

The representatives left the meeting at 2.30pm.
The Chairperson suspended the meeting at 2.30pm.
The Chairperson reconvened the meeting at 2.50pm.

4. Evidence Session with Mr Ian Duff.

Ian Duff joined the meeting at 2:50pm.

The Committee took oral evidence from Mr Ian Duff. A question and answer session followed.

The Chairperson thanked Mr Duff for his presentation.

Ian Duff left the meeting at 3.35pm.

5. Date, time and place of next meeting.

The next meeting will be held on Thursday 1st May in Room 144.

The Chairperson adjourned the meeting at 3.37pm.

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Thursday, 1 May 2008
Room 144, Parliament Buildings

Present:
Dr William McCrea MP (Chairperson)
Tom Elliott (Deputy Chairperson)
P J Bradley
Allan Bresland
Thomas Burns
Trevor Clarke
Willie Clarke
William Irwin

In attendance:
Paul Carlisle (Clerk to the Committee)
Emma Patton (Assistant Clerk)
Mary Hawthorne (Clerical Supervisor)
Lindsay Dundas (Clerical Officer)
Jim Kitchen (Special Advisor)

The Chairperson opened the public meeting at 10.00am.

1. Evidence Session with Action Renewables.

The representatives joined the meeting at 10.05am.

The Committee took oral evidence from Dr Andy McCrea, Terry Waugh and Jonathan Buick, representatives from Action Renewables. A question and answer session followed.

Tom Elliott joined the meeting at 10.10am.
William Irwin joined the meeting at 10.16am.
Thomas Burns joined the meeting at 10.19am.
Thomas Burns left the meeting at 10.53am.

The Chairperson thanked the representatives for their presentation.

The representatives left the meeting at 11.18am.

2. Evidence Session with the Northern Ireland Environment Link

The officials joined the meeting at 11.19am.

The Committee took oral evidence from Professor Sue Christie, Pauline Mackey and Dr Peter Christie, representatives from Northern Ireland Environment Link. A question and answer session followed.

The Chairperson thanked the officials for their presentation.

The officials left the meeting at 12.15pm.
The Chairperson suspended the meeting at 12.15pm.
The Chairperson reconvened the meeting at 1.39pm.

3. Evidence Session with World Wildlife Fund for Northern Ireland.

The representatives joined the meeting at 1.40pm.

The Committee took oral evidence from Malachy Campbell and Dr Alex McGarel, representatives from WWF Northern Ireland. A question and answer session followed.

Thomas Burns joined the meeting at 1.45pm.
P J Bradley left the meeting at 1.52pm.

The Chairperson thanked the representatives for their presentation.

The representatives left the meeting at 2.21pm.
The Chairperson suspended the meeting at 2.21pm.
The Chairperson reconvened the meeting at 2.37pm.

4. Evidence Session with Mr Ian Duff.

The representatives joined the meeting at 2.37pm.

Tom Elliott joined the meeting at 2.42pm.

The Committee took oral evidence from John Hardy, Ruth McGuigan and Paula Keelagher, representatives from Sustainable Energy Association. A question and answer session followed.

The Chairperson thanked the representatives for their presentation.

The representatives left the meeting at 3.38pm.

5. Date, time and place of next meeting.

The next meeting will be held on Thursday 22 May in AFBI, Hillsborough.

The Chairperson adjourned the meeting at 3.38pm.

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Thursday, 22 May 2008
Agri-Food And Biosciences Institute, Large Park, Hillsborough, Co Down

Present:
Dr William McCrea MP (Chairperson)
P J Bradley
Allan Bresland
Thomas Burns
Willie Clarke
William Irwin
George Savage

In attendance:
Paul Carlisle (Clerk to the Committee)
Emma Patton (Assistant Clerk)
Mary Hawthorne (Clerical Supervisor)
Jonathan Young (Clerical Officer)
Jim Kitchen (Special Advisor)

The Chairperson opened the public meeting at 10.04am.

1. Correspondence Issued

The Chair briefed the Committee on Correspondence issued regarding the Inquiry since the last inquiry meeting which was held on the 1 May 2008.

2. Correspondence Received.

The Chair briefed the Committee on Correspondence received regarding the Inquiry since the last inquiry meeting which was held on the 1 May 2008.

3. Committee Business – SR The Financial Assistance for Young Farmers Scheme
(Amendment) Order (NI) 2008

Question put and agreed.

That the Committee for Agriculture and Rural Development has considered the Financial Assistance for Young Farmers Scheme (Amendment) Order (Northern Ireland) 2008 and, subject to the Examiner of Statutory Rules report has no objection to the rule.

4. Evidence Session with The Carbon Trust.

The representative joined the meeting at 10.07am.

The Committee took oral evidence from Geoff Smyth, a representative from The Carbon Trust. A question and answer session followed.

The Chairperson thanked the representative for his presentation.

The representative left the meeting at 10.52am.

5. Evidence Session with the Department of Enterprise, Trade and Investment.

The officials joined the meeting at 10.52am.

The Committee took oral evidence from Barbara Swann, David Sterling and Olivia Martin, representatives from the Department of Enterprise, Trade and Investment. A question and answer session followed.

The Chairperson thanked the officials for their presentation.

The officials left the meeting at 12.02pm.

6. Evidence Session with Agri-Food and Biosciences Institute.

The representatives joined the meeting at 2.33pm.

The Committee took oral evidence from Dr Lindsay Easson, Dr Alistair McCracken and Dr Peter Frost, representatives from Agri- Food and Biosciences Institute. A question and answer session followed.

William Irwin left the meeting at 3.09pm.

The Chairperson thanked the representatives for their presentation and hosting the evidence session for the Committee’s Inquiry.

The representatives left the meeting at 3.20pm.

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Tuesday 24 June 2008
Room 152, Parliament Builidings.

Present:
Dr William McCrea (Chairperson)
P J Bradley
Allan Bresland
Thomas Burns
Trevor Clarke
Willie Clarke
Pat Doherty
William Irwin
George Savage

In attendance:
Paul Carlisle (Clerk to the Committee)
Emma Patton (Assistant Assembly Clerk)
Mary Hawthorne (Clerical Supervisor)
Jonathan Young (Clerical Officer)

Apologies:

Tom Elliott (Deputy Chairperson)

The meeting opened at 1.39pm in Closed Session.

1. Apologies

As above.

2. Committee Inquiry

Special Advisor, Mr Jim Kitchen presented to Committee the recommendations of the Inquiry. The Committee deliberated the draft report.

The Committee read and agreed the Membership and Terms of Reference.

The Committee read and agreed paragraphs 2-22

The meeting was adjourned at 5.05pm

[Extract]

Dr William McCrea

Chairperson, Committee for Agriculture and Rural Development

Appendix 2

Minutes of Evidence

24 April 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Trevor Clarke
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Mr Martin McKendry
Ms Joyce Rutherford
Dr John Speers

Department of Agriculture and Rural Development

1. The Chairperson: I welcome the next set of witnesses, who are from the Department of Agriculture and Rural Development. I thank you for joining us this morning.

2. The Department’s ‘Renewable Energy Action Plan’ was launched on 29 January 2007. The Committee is interested in exploring what has happened since then. In making your presentation, I ask you to bear in mind the terms of reference of our inquiry into renewable energy and alternative land use.

3. Thank you for the response that you forwarded to the Committee. Please make your presentation, and we will have a question-and-answer session afterwards.

4. Dr John Speers (The Department of Agriculture and Rural Development): I thank the Committee for its invitation to attend the inquiry. My colleagues are Joyce Rutherford, who is head of the Department’s recently created renewable energy policy unit, and Martin McKendry, who is responsible for the renewable programme within CAFRE. We aim to address the inquiry’s aims and terms of reference in our opening statement.

5. DARD acknowledges that the development of renewable energy may open up opportunities to the agricultural community from the production and utilisation perspectives. Specifically, farmers could contribute to the production of energy in Northern Ireland, and the rural community could benefit from localised energy distribution.

6. DARD policy in that area sits within the sustainable-development goal of its strategic plan, the key objective being to encourage the increased exploitation of renewable energy opportunities. We are driving various actions to progress that objective. We are delivering the action plan, which was developed in consultation with stakeholders. We support a dedicated research and technology programme, which will provide an important evidence base for future policy in that area. We are exploiting opportunities to support renewable energy development through the Northern Ireland Rural Development Programme, and we are collaborating with the lead Department on energy issues, DETI, and others to ensure that opportunities for the agriculture sector are included in any wider public policies under consideration in that area.

7. We are conscious that the term “renewable energy” covers many areas. I will take a few minutes to focus on the Department’s approach to those areas.

8. Wind-generated energy is the most prevalent form of renewable energy available in Northern Ireland. Existing technology, in the form of wind turbines, offers a wide range of power ratings, from a few watts to several megawatts. We recognise that farmers can benefit from wind energy generation in a number of ways; specifically, by engaging with energy providers to assist the establishment of large-scale energy generation in the countryside. We can give those providers access to the land, for which the farmer receives an additional revenue stream. From that, there are a decreasing range of scales, down to wind-generated energy for single households or single businesses. To assist with the overall assessment of the current economic potential and the agrienvironmental impact, the Department has erected demonstration wind turbines at the College of Agriculture, Food and Rural Enterprise (CAFRE) campuses at Loughry and Greenmount.

9. I will now turn to biomass production. Short-rotation coppice (SRC) willow is grown specifically as an energy crop in Northern Ireland, mainly to generate heat. The product, in the form of willow chips, is used primarily as a fuel to generate heat in biomass boilers. Studies indicate that the economics of growing SRC willow as a fuel-only crop are marginal. We are aware that, bearing in mind recent energy prices, the economics of SRC willow are looking more attractive for heat production. We are also aware that the additional use of SRC willow for biofiltration has the potential to add value to the product, and, in turn will have a beneficial impact on the economic sustainability of the technology.

10. The constraints around the production of SRC willow in Northern Ireland are focused mainly on the availability of a local end-user, the cost of transport, and the distances travelled, bearing in mind the bulk and low value of willow chips. DARD provides some grant support, which is targeted at the establishment of wood-based SRC crop businesses and farm businesses through the SRC programme and the regional development programme. Linked to that support, under the programme to build sustainable prosperity, the energy from biomass infrastructure development scheme has allocated some £640,000 to 16 projects for the harvesting, drying and storage of SRC willow. CAFRE will continue to provide information by way of technology and knowledge transfer in this area, to assist landowners and farmers in making informed and rational choices about how to manage SRC businesses. DARD-funded work also continues at the Agri-Food and Biosciences Institute (AFBI) on the commercial development of SRC willow.

11. The Department is working with AFBI to assess the economic potential and agrienvironmental impact of growing miscanthus, which is also a biomass crop, and a small number of other grasses, which might have the potential to contribute as energy-producing feed stock.

12. Biomass from forestry and sawmill residues are also being examined. Our estimates indicate that publicly-owned forests in Northern Ireland have the potential to generate around 42,000 tons of forest residues a year. For several reasons, however, it is not possible to collect all of that. We recognise that scope exists to promote forestry residues as a renewable energy source. DARD’s Forest Service is working with AFBI and scientists to investigate the commercial viability and economic potential of the recovery and utilisation of forest brash for biomass heating systems. Sawmill residues also provide some potential as a renewable energy source. Indeed, there have been some changes in the market forces around wood-fuel businesses. I have seen sawmill residues being made available for wood-fuel services.

13. There is potential, under the rural development programme’s agricultural and forestry processing and marketing grants scheme, to provide support to forestry-related micro-enterprises for capital expenditure on buildings and new equipment aimed at improving the application of technology in the forestry sector. That support must be made available for renewable energy technologies.

14. Another subject is energy crops for liquid-biofuel production. Bearing in mind that Northern Ireland has one million hectares of land — two thirds of which is less favoured area (LFA) land and only 3% to 5% of which is used for cereal production — oilseed rape is potentially a primary crop for biodiesel production. There are no particular climatic constraints to growing oilseed rape in Northern Ireland, and yields close to those achieved in GB have been recorded. Although there is potential for increased oilseed rape production in Northern Ireland, there are some significant restraints. The crop has a limited place in arable rotation, and, therefore, large-scale biodiesel production in Northern Ireland is unlikely.

15. Another liquid biofuel is the fossil-fuel, petrol substitution bioethanol, which is produced from wheat or sugar beet. In Northern Ireland, wheat is grown in a relatively small area — almost 9,000 hectares, from the June 2007 census — and no sugar beet is grown at all here.

16. Another relevant fact is that Northern Ireland is a grain-deficient region and must import large quantities of grain as feedstuffs for the livestock sector. Therefore, large-scale bioethanol manufacturing in the region is unlikely.

17. I shall now look at conversion technologies. The Department is examining the potential roles that anaerobic digestion and heat generation might play. The anaerobic digestion of organic waste is a proven, well-tried and tested technology that can be successfully used to produce biogas for combined heat and power. Anaerobic-digestion plant can be designed as small on-farm units to deal with slurry, or as larger units to deal with slurry from several farms. Such plant can also be used for co-digestion with other organic waste.

18. Recent developments using supplements and green crops — such as maize grass or whole-crop silage — as a feedstock in anaerobic-digestion plant can significantly improve the efficiency of biogas production.

19. The total housed, livestock-manure resource here is just less than 10 million tonnes, and, in theory, if all that were used for anaerobic digestion, it could fuel approximately 90 one-thousand-ton-a-year anaerobic-digestion plants with an energy output of 73 MW of electricity and 60MW of heat. However, that potential is unlikely to be fully realised. Obviously, there are alternative uses for manure as a nutrient source — such as on the land — and the location of farms in relation to supplying the grid is a further constraint.

20. In that context, we are exploring the potential for an energy-from-agrifood-waste challenge fund, which could be match-funded through the European Union’s structural fund, and we are proactively progressing the legal basis on which the Department might introduce such a scheme and any state-aid issues that might be relevant to it. We hope to shortly be in a better position to advise the Committee in more detail about that scheme.

21. Biomass heating systems and potential air-source and ground-source heating pumps are being trialled at CAFRE and AFBI, and Martin McKendry will talk about the technology associated with that.

22. Commenting specifically on the terms of reference, concerning the policy framework for the development of renewable energy in Northern Ireland; there are a range of EU-level policy initiatives that are driving the renewable-energy agenda.

23. The Department of Enterprise, Trade and Investment holds the energy portfolio for Northern Ireland and takes the lead on all energy-related matters. Within that, DARD’s renewable energy action plan has been a catalyst in providing a focus for the Department’s efforts to identify the activities that support the development of renewable energy in the agrifood sector. The majority of those actions has been implemented, but some are still works in progress.

24. One of the actions to progress the implementation of activities in the renewable energy action plan, and to continue with DARD’s policy development of renewable energy in the agrifood sector, was to establish a unit within the central policy group, which Ms Rutherford heads up. The team was established some six months ago and plays a central role in developing the Department’s future renewable energy policy.

25. Mr McKendry will now say a few words about some current and future renewable energy technologies.

26. Mr Martin McKendry (The Department of Agriculture and Rural Development): It is fair to say that DARD recognises the growing interest in renewables in the agricultural and rural communities. That interest stems from increasing energy costs, increased awareness of climate change and EU targets. Those communities recognise that they have the resources, that is, the land, to provide solutions to some of those problems.

27. The renewable energy technologies that are available include wind, solar, photovoltaics, tidal, wave, and ground- and air-source heat pumps. Some of those technologies will have an impact on the agricultural and rural community, but some will not. However, we wish to concentrate on bioenergy, which includes biogas, biomass and biofuel.

28. There are three opportunities for farm businesses. Before we even address the issue of renewables, we must first address the main issue, which is to reduce energy consumption. There are also opportunities for farm businesses to displace fossil fuel energy in favour of producing their own heat, electricity or even biodiesel.

29. The second option is for farm businesses to produce feedstock from the land or from waste, eg, slurry, and sell or market that commodity.

30. The third option is to work together to market energy and the business opportunities that arise from that — the idea being to move up the supply chain.

31. The environment and renewable energy fund has concentrated on demonstrating existing technologies for farm businesses through AFBI, from a research point of view, and through CAFRE, from a knowledge and technology transfer point of view. We have been involved in a range of technologies, including biomass and wind turbines. There is also a sustainable energy unit, which uses combined renewable technologies such as biomass and solar. At Loughry campus, an air-source heat pump has been installed and land has been allocated so that the potential for non-food crops can be investigated. Non-food crops include biomass and other alternative market opportunities.

32. Our means of disseminating that information to the industry largely came about through a renewable energy open day in August 2007, which we ran in conjunction with the industry and with stakeholder partners. Information was also provided through our training in knowledge and technology transfer.

33. DARD has previous experience from the food side and from the production side of pulling farmers together to meet market requirements. Those transferable skills can also be used for the renewable side in the future.

34. Dr Speers: One of the Committee’s terms of reference relates to the range of support that is available for renewables initiatives, and Joyce Rutherford will talk about that.

35. Ms Joyce Rutherford (Department of Agriculture and Rural Development): Thank you for giving me the opportunity to present evidence to the Committee.

36. John and Martin’s presentations touched on some of the support that is available, but I will summarise it for the Committee. EU aid is available for the establishment of energy crops through a very modest scheme that was set up in 2004 to incentivise the growing of feed stock for bioenergy purposes across the EU.

37. In Northern Ireland, the main crop grown under that scheme is SRC willow, although a very small amount of oilseed rape is grown as well. It is likely that, because the ceiling has been reached on available funding across the EU, and because feed stock has been established, that modest scheme will finish after the next common agricultural policy health check. The Department is not aware of the details of that, but it is a matter of watching this space.

38. Support is available for renewable energy technologies under axis 1 and/or axis 3 of the Northern Ireland rural development programme 2007-13. In particular, under axis 1, agriculture and forestry processing and marketing grants may be able to support renewable-energy technologies. Under axis 3, the farm diversification scheme and the business creation and development programme will support renewable energy projects.

39. As John already highlighted, we are exploring the potential of a fund for the production of energy from agrifood waste, and we hope to be able to come to the Committee later this year with the outcome of that exploration.

40. With regard to the European renewable energy fund, the Committee will be aware that DARD has secured a total fund of £4·2 million. That fund is now closed. Basically, our aim was to secure some funding for research and demonstration purposes in order to prove the concept of some of the technologies that are available and to ensure that they are suitable for the Northern Ireland agenda and environment.

41. To carry on from that, although the EREF is closed, we were able to secure some funding through the Chancellor’s innovation fund to continue with our programme of technology transfer at CAFRE and the renewables research programme at AFBI. Therefore, although the EREF is closed, work is continuing through other funding streams to ensure that renewables are kept firmly on the agenda.

42. I shall now pass the Committee back to John. Thank you.

43. Dr Speers: To conclude, in looking at the terms of reference in relation to the potential role of farm and rural businesses and the ways in which DARD could implement a strategy for renewable energy, we recognise that we now have an action plan. As indicated in that action plan, it will be subject to review this year. That review will set out the strategic direction over the next three years, taking account the work of this Committee and the work of DETI and others as well as the wider energy policy that is developing in Northern Ireland.

44. The Chairperson: Thank you very much John, Joyce and Martin, for your presentation.

45. The Committee has heard evidence from the Ulster Farmers’ Union, and there will be several contributors to its inquiry. People from different Departments will be listening to different parts of the evidence. I and other members of the Committee appreciate all participants’ evidence, but I would be interested to receive representations that comment on, or even challenge, some of the presentations being given, so that the Committee can get an overall view. Each participant gives a presentation, and the Committee interviews him or her on the basis of it.

46. However, it is difficult to have interaction between different participants because the discussion will be wide-ranging. Therefore, I would like to have comments, and even challenges, if that is necessary. If that it not necessary, then, to be honest, we are not looking for a challenge for its own sake.

47. To return to the heart of the matter; namely, DARD’s renewable energy action plan, which has been operating for 15 months; please outline the plan’s achievements during that time?

48. Dr Speers: I shall ask Joyce to provide some of the detail. However, to preface some of her comments, we recognise that this was a new area of work for DARD. We have been investing in increasing our knowledge of the technology and our expertise in this area and in working with various stakeholders and centres to enhance our knowledge.

49. A key development has been to establish the policy unit in DARD to bring together, in a co-ordinated way, efforts across the Department. To that end, part of the unit’s remit is to establish a group of interested parties across the Department. That includes the research at AFBI, the technology work at CAFRE, the support available through our rural development colleagues, and the various interests on the forestry side. Over the past six months the Department has considerably strengthened its focus on renewable energy. The Department is also very aware of the requirement to undertake a substantial review of its action plan.

50. Ms Rutherford: The plan has 35 recommendations for action, of which 27 are under way or have been completed. Some, such as the review of the action plan, will be tackled shortly. Moreover, many of the actions were addressed under the EREF work, such as the technology transfer programme and the installation of demonstration technologies. Work is definitely under way. We have just completed our baseline, and we hope to give that to an industry-led stakeholder group soon, which will re-evaluate the action plan and suggest a longer-term strategy for the next three to five years.

51. The Chairperson: On which of the 35 recommendations has progress been made, and where is the evidence? We have to see, and be able to measure, what had been achieved. A review of the action plan was promised for this month. Is that review continuing? Your comments gave the impression that the review is about to commence.

52. Ms Rutherford: You have asked me a couple of questions, so please let me answer them. Take, for example, recommendation 1 in the action plan, which seeks to further increase the awareness of renewable energy technologies among the wider rural community. One activity that has already taken place was the CAFRE open day. Members may have had the opportunity to attend. There were 500 attendees. The Department has actively raised awareness of renewable-energy technologies among 500 people.

53. The Chairperson: It is not a one-day wonder, Joyce.

54. Ms Rutherford: I understand that. However, it represents an incremental step change for the agricultural community.

55. The Chairperson: There are tens of thousands of farmers. I applaud the occasion that you mentioned. I found it helpful and informative. How can that information reach other farmers?

56. Ms Rutherford: Martin can provide further details on that.

57. Mr McKendry: With regard to the 15-month action plan, the Department has initiated seven technology-transfer projects in CAFRE. We have delivered training, including the open day, to just over 1,500 farmers. That training has been organised specifically by CAFRE. Therefore, in addition to presentations that the Department has been asked to give at other meetings, it has specifically provided training to 1,500 farmers.

58. Those projects have delivered. Fifteen per cent of CAFRE’s heat and 1% of its electricity are now derived from renewable sources. With regard to your question on how awareness is being generated among farmers on the ground, the Department is in the process of spreading it further through training programmes. Last month, 103 dairy farmers participated at five events throughout Northern Ireland on practical ways to reduce their energy consumption. Another 80 attended the first of four SRC workshops. That work brings renewable energy into the training sphere and away from the awareness phase. During the next couple of years, the Department’s work will be to provide much more training to individuals and small groups.

59. Ms Rutherford: Papers are being prepared concerning the formulation of the stakeholder forum that will be set up to review the plan. We hope to make progress on that structure quickly, within the next eight weeks. The time frame has been scoped. We hope that the review will be complete around the end of the year. There is a timing issue because several studies are being carried out. The Department is keen to find out the outcome of this inquiry as well so that all of those considerations can be taken by the stakeholder group that will review the action plan.

60. The Chairperson: It would be difficult to respond to all 35 recommendations. Therefore, please send the Committee the Department’s position and the progress that has been made on each of them. The Committee wants to know about those that the Department cannot or is unable to progress. We do not want to see a flowery picture if there are weeds.

61. Dr Speers: I was going to offer to provide a progress report on the action plan. As you have indicated, the action plan was drawn up some time ago when the renewable-energy sector was in its infancy. Many of the recommendations may have been speculative in nature and have not been progressed for various reasons, including economic ones. The Department will certainly provide a detailed progress report on the action plan.

62. Mr W Clarke: What steps has the Department taken to get other Government Departments to buy into the plan?

63. Ms Rutherford: The Department has representation, through DETI, on a group in which Departments work together on a study to assess the potential market opportunities for renewable energy in Northern Ireland. Several Departments feed into that study. Therefore, there is a degree of cross-departmental co-ordination on the matter.

64. Mr W Clarke: There is co-operation but no action. Officials say that renewable energy has nothing to do with their Department but rather that it is the responsibility of someone else’s — it is like a game of tennis with the issue bouncing back and forth. Instead, officials should take the initiative by forming an action plan and demanding buy-in from all Departments.

65. If the farming community is being asked to grow a raw product, the market for that product must be provided. The Social Development Minister, Margaret Ritchie, and her Department must be asked to ensure that there biomass facilities are used in every new housing estate, and the Environment Minster, Arlene Foster, and her Department must be asked to ensure that biomass facilities are used in every Government building. That seems straightforward to me and that is what officials should be doing.

66. Dr Speers: I share your ambition that the market will be a driver for sustainable business, based on renewable energy, to which many Departments must contribute. That degree of co-ordination is not yet in place.

67. The Chairperson: It is easy to look at what others are doing. As the Committee heard in the first presentation today, promoting sustainable energy affects all Departments, making it vitally important that there is a co-ordinating body, whether it is OFMDFM, to bring them together. However, what is DARD’s target for renewables? Your silence suggests that such targets do not exist.

68. Mr McKendry: The CAFRE estate, which is part of DARD, has clear targets on renewable energy, which I referred to earlier, including a 10% reduction in energy consumption, 15% efficiency saving from renewable heat and 1% from renewable electricity.

69. Mr Chairperson: What is the Department’s PSA target for renewable energy?

70. Dr Speers: I do not have that specific information to hand.

71. The Chairperson: Will the Department provide that information?

72. Dr Speers: Certainly.

73. The Chairperson: I am concerned that on the one hand the Committee is being told that there needs to be a driver to use biofuel because of the economic challenges — profitability, sustainability — that farmers face today, whereas, on the other hand the challenge is rising fuel costs. What steps are the Department taking to: first, help farmers to utilise renewable-energy technology on their land and; secondly, to assure them that their businesses are going to be more profitable than at present? There has to be something to drive the process forward.

74. Dr Speers: There are a number of options available within renewable energy, of which many were outlined in our opening remarks.

75. The Chairperson: Those seem to relate to a long-term approach. How far does that vision extend?

76. Dr Speers: The Department’s approach is based on the view that those technologies — their efficiencies, contributions and sustainability — need to be proven in the Northern Ireland context. For many of those, that has yet to be done. As you indicated, Chairperson, cost infrastructure has changed over recent times. Therefore, before the Department makes commitments and recommendations it needs to ensure that there will be a sustainable market for the outputs.

77. We are all aware of the vulnerability of the food-production market — price reductions and fluctuations — which depends on factors outside our control. We do not want to move into commodity energy production, which would potentially suffer from the same fluctuation in prices.

78. We need to somehow determine where the niche is for Northern Ireland and where the value added is. Given the scale of our operation, we should not be a commodity player.

79. The Chairperson: You say that we have to somehow to arrive at that point, but who is determining where the niche is, and what timescale are we talking about? Is this matter on the long finger? It seems that immediate challenges — indeed, any challenges — are always put on the long finger.

80. Dr Speers: As Martin said, a range of trials are currently under way, and they are very focused and commercially oriented. They are the subject of both technological and economic analysis. The findings of those trials are being rolled out as we speak. They are real live projects that demonstrate the viability of renewable energy technology on farms now.

81. The Chairperson: You said that you are going to present some of that evidence.

82. Mr W Clarke: I want to pick up on a point that you made, Chairperson. It is fair enough to have trials and research and so on, but it seems that that is all that comes from the Department. All we hear is that the Department is looking at this or that, or that it is running a pilot scheme and so forth. All those technologies are proven throughout Europe, and we are playing second fiddle to the rest of Europe. What will happen? We will be passed by — we are that far behind.

83. I do not blame the Department; this problem is a hangover from direct rule. However, a sense of urgency is required. At the minute, as the Chairperson said, people are under immense pressure and are facing fuel poverty, and the Assembly, as an elected body, can do nothing about that. However, it can ensure that renewables are in place in the North of Ireland and Ireland. There should be less testing and more getting on with it.

84. What funding requests for renewables did the Department make to DFP in the last monitoring round?

85. Ms Rutherford: In the last monitoring round, a total of £2·55 million was secured from DFP for the next three years under the Chancellor’s innovation fund.

86. Mr W Clarke: That is peanuts. The Department should say to DFP that it needs £30 million.

87. The Chairperson: The Department certainly should not say that if does not have any programmes prepared. There is no use in making demands for money if there is no programme on which to spend it. If a Department is asking DFP or anyone else for funding, it must have a programme to put on the table, and it must be costed. One cannot simply demand £30 million and have no reason for doing so.

88. I am wondering why the Department has not presented DFP with programmes. Why has it not said, “This is exactly where our plans are, and we need finance to put them into operation.” To the best of my knowledge, £10 million was available in the Programme for Government. How much funding has been pulled down from that? How much of the money available from Europe has been secured?

89. Mr W Clarke: That is precisely what I am saying. I could draw up plans for the bids. The Department will never get a better opportunity to act than now. The community is in crisis because of fuel prices, and there will never be a better time for the Department to approach the Executive with a plan to resolve the issues involved. It should be telling them that it can do something about this issue, rather than saying that it cannot do much because of the global markets. This is an opportunity for the Department to take the lead and say that it wants proper measures to be implemented. There must be a cross-cutting approach across all Departments.

90. Mr T Clarke: My question follows on from the member’s question. He asked how much the Department received in the last monitoring round. The Department said that it received £2·55 million, and he said that that was peanuts. How much did the Department bid for?

91. Ms Rutherford: A number of bids were made under various umbrella headings. A bid was placed for money from the innovation fund, which I mentioned earlier, and a bid was made for the potential energy from the agrifood waste challenge fund.

92. Mr W Clarke: You said that the Department received £2·55 million, but how much did it bid for?

93. Ms Rutherford: That was a specific bid, and that bid was met.

94. Mr T Clarke: So the Department asked for peanuts, and it got peanuts. You did not make a substantial bid —

95. The Chairperson: With the greatest respect, we are only talking about peanuts if the bid that is submitted can be sustained. If the bid is not sustainable and cannot be scrutinised in depth, having been presented by the Department, there is no use bidding for money that is not going anywhere. The DARD renewable energy action plan has been in place for 15 months. It is easy to say that direct rule was in operation for part of that time, but we are no longer subject to direct rule. We are a year on from devolution; we cannot hide behind anyone else. We are talking about an action plan. The word “action” is to the forefront here. I am trying to find out exactly what action has been taken, because it is only on action that a bid can be made.

96. Dr Speers: There are a couple of fundamental points to be made. The Chairperson has underlined the importance of having a robust business case in advance of making a bid. One of the most important issues is market demand, which at the moment is unclear. There is no definitive position with regard to market demand. Two research projects, led by DETI, are under way to examine the market for renewable energy in Northern Ireland. That work will provide the information and evidence base against which bids can be made. Coupled with that, we must ensure that we invest in the right technology areas. We have already mentioned how renewable energy embraces a wide range of technology areas from different renewable sources. We must ensure that investment in Northern Ireland is appropriate for us. That is why the trials, the research, the development work and the commercialisation is ongoing at AFBI and CAFRE, so that we have an evidence base on which to base further proposals for —

97. Mr T Clarke: John, with the greatest respect; you said that a wide range of technologies is being developed. Why can we not pick one of those technologies after 15 months? Why are we not at the stage where one of those technologies is up and running? Why are we still talking about what is out there? Willow is not new. I do not know a lot about the technologies, but I have heard enough about them. In your previous presentation you made the point that willow technology is not new in other countries either. Why are we not looking at what everyone else is doing and copying them, as opposed to being left behind, as was said earlier?

98. Mr McKendry: We are at the demonstration phase at the moment, and people are adopting biomass burners.

99. Mr T Clarke: What are you doing to assist those developments?

100. Mr McKendry: Do you mean from the financial perspective, or the knowledge perspective?

101. Mr T Clarke: I mean from the financial perspective.

102. Ms Rutherford: Support is available from the rural development programme and can be applied for. Those have been widely publicised to the agricultural community. Applicants can work with rural connect Advisors to point them in the right direction.

103. Mr T Clarke: What are those?

104. Ms Rutherford: Rural connect Advisors are agricultural Advisors —

105. Mr T Clarke: What support has been widely advertised that we should be aware of?

106. Ms Rutherford: There are measures available under the agricultural processing and marketing grants scheme, particularly in support of forestry renewable technologies. Support is also available for the establishment of SRC willow technology from the woodland grants scheme. Axis 1 funding facilitates groups of farmers who come together to work on renewable energy projects. Support is also available for farm diversification. There is a wide range of measures, but we have to build confidence in the agricultural industry that those technologies can work commercially. DARD is focusing a great deal of effort on raising awareness and training.

107. Dr Speers: If it would be helpful, we can provide a table of the various financial assistances available from DARD for renewable energy technologies.

108. The Chairperson: What is the structure of the grants? Who can apply for the money? There are certain moneys set aside for rural areas. It is questionable how those moneys will be deliverable.

109. Dr Speers: There is scope to provide financial assistance for microbusinesses under the processing and marketing grant scheme and the forestry scheme. It might be helpful to the Committee to have a table of the various financial support measures in place or planned for.

110. The Chairperson: The phrase “planned for” can be a very elastic one. If schemes are opening, then I would like to know exactly when they are opening and how people can apply for grants.

111. Time is passing; and there a number of questions to be asked.

112. Mr Irwin: Given your experience to date, which of the available renewable energy systems offers the greatest potential benefit to rural communities while contributing to the attainment of the Government’s renewable energy targets?

113. Mr McKendry: There are a couple of issues in that question. The first is biomass, and centralised biomass systems. In Northern Europe, there are centralised plants producing hot water and delivering it to houses. Members of the UFU mentioned that earlier. The technology is sound and well proven, and the idea that the farming community would be moving up the supply chain, and would be delivering heat rather than wood chip, is more beneficial.

114. The second issue is anaerobic digestion, which is something that the Department has studied in Europe. We have looked at the economics and feasibility of anaerobic digestion, not only from the perspective of waste usage, the economics of which are marginal, but also from the perspective of production and green-crops, where the economics are much stronger. Those are the two main renewable energy systems in Europe that are well proven and well used and would provide local rural solutions in Northern Ireland.

115. Mr W Clarke: John — you talked about market demand. DARD can help create market demand — it is within the Department’s remit to do so. All schools could have biomass heating systems, and the same could apply to hospitals, museums and social housing. DARD should be talking to the other Departments and saying to them that this is what is being proposed will happen three years from now. Let us look at this matter in a cohesive fashion, and roll it out. This is not rocket science, and I am not shooting the messenger.

116. It is frustrating because this is something that is within the Department’s remit. The forestry industry could be included as well, because it is always being said that there are not enough trees in Ireland — this is a win-win situation. The trees grown do not have to be willow trees — any trees could be used for this purpose. It has been said that there is an investigation into forestry residue and into the recovery of wood residue. What is there to investigate? If there are any fallen trees; take them, chip them, and put them into a biomass burner.

117. Dr Speers: I agree that the concept of creating market demand and discussing the matter with other Departments is something that needs to be addressed pro-actively.

118. We need to have a better understanding of the scale and production of the field stock — and its potential constraints — before we encourage the introduction of a different heating or energy system to schools or hospitals, because the products might be vulnerable to a lack of consistent supply in the future.

119. Mr W Clarke: John — you could get the farmers together through the Ulster Farmers’ Union. You could have the raw materials ready in three years’ time. It is Civil Service jargon to say: “We are doing this, or we are doing something else”. You have admitted that the benefits of the technology have been proven throughout the world. Let us implement it here. If, as a result of this inquiry, we achieve that, then it will have been a success.

120. Dr Speers: I do not disagree. My only note of caution concerns whether a sustainable supply of the field stock required will be available.

121. Mr W Clarke: Grow the trees.

122. Dr Speers: Farmers are businessmen, and they will utilise their land in whatever way necessary to maximise their returns. It would be great if that could be achieved by growing fuel crops, but market dynamics can change. For instance, the cereal market is good at the moment. Market changes have the potential to disrupt supply and the continuity of supply of field stock.

123. The Chairperson: That almost sounds like an excuse to do nothing. We were talking about an action plan, and I will quote what the Minister said at Loughry Campus on 23 August 2007: “I am very keen to promote the opportunities that sustainable development of renewable energy in the agri-food sector and the wider rural economy can offer. I fully support this event and encourage all local industry to implement as many energy efficiency and renewable measures as possible.”

124. That sounds good — there is an energy action plan. However, the only thing that we do not have is action. I know that it is difficult for the witnesses to give the Committee answers this morning. We do not expect all of the answers this morning, but we do expect to hear some answers — make no mistake. Your answers will be scrutinised, because the Committee wants action.

125. Northern Ireland is falling behind as regards renewable energy; all of the other countries are passing us by. Others have visions and dynamism in this area, but it seems that we are trundling along, not knowing what to do. Such an attitude will not provide vision, and the crop will die.

126. Mr P J Bradley: I apologise for my late arrival. As this is the first session of the inquiry, I would like to make a few comments. My views may be out on a limb, but I question the wisdom of using good arable land for growing fuel crops when there is a world food shortage. Mr W Clarke told us what success will mean for him. However, to me, this inquiry will be successful if arable land is restored to growing food crops — its proper use. We should be looking in that direction and forget about growing bio-crops.

127. Should the island of Ireland be seeking to grow bio-crops when the oil reserves that are off the shores of Ireland could be considered? As this debate progresses, many questions will be asked about the state of our land. For instance, if land is being used for growing bio-crops, when will it become arable land again? When can it be used for food production?

128. My views may be out on a limb, but I will not fail to present them to the inquiry. However, I may change my mind as the Committee gathers evidence and hears from people with greater expertise than me.

129. What progress has been made in establishing the energy from agrifood waste challenge fund? What sort of project does the Department hope to see developed as a result of the initiative?

130. Ms Rutherford: To date, limited progress has been made. The Department is still establishing whether, under current legislation, it has permission to legally create the challenge fund. The Department is also working with DEFRA to establish our state-aid position, and hopes to be able to take a stance on that in the coming weeks. That is not to say that we should not proceed with the challenge fund on some basis, but we will have to explore options on how to do so. It is recognised that such a fund would give our farming community an opportunity to examine waste management and, perhaps, bring an additional revenue stream into their businesses by generating energy from waste.

131. Will you remind me what the second half of the question was?

132. Mr P J Bradley: What sort of project do you hope will be developed? What would be included under that funding initiative?

133. Ms Rutherford: We couched the proposal as a challenge fund because it is not for a specific type of technology. For example, we are not saying that we will fund only mesophilic anaerobic digester systems. We are examining the different technologies that are available for producing energy from waste. Couching the proposal as a challenge fund will allow different technologies to emerge.

134. The Chairperson: Why did the Department announce the challenge fund 15 months ago in its renewable energy action plan, if it were not sure that it could create it? Now, it is finding that there are legal difficulties. Frankly, judging by the speed at which some legal advice is obtained, if that fund is the answer to farmers’ prayers to save their industry, may the good Lord help them, because lawyers move very slowly. We must have an answer. How long will it take to find out whether the fund is legal?

135. Dr Speers: That issue has only arisen recently. The assumption was that the Department had the authority to administer such a grants scheme. On referral for legal advice, questions were raised, and we are seeking —

136. The Chairperson: Was the proposal not referred for legal advice before it was announced in 2007?

137. Dr Speers: For whatever reason, that seems not to have been the case.

138. Mr W Clarke: What opportunities are contained in the rural development plan to support small renewable-energy projects, such as on-site anaerobic digesters or the small-scale production of biodiesel?

139. Ms Rutherford: It may be economical to produce biodiesel for on-farm use only. Some measures would be available for capital equipment, possibly, under axis 1 of the rural development programme and, possibly, under axis 3, which covers farm diversification. However, I would need to look into that further.

140. Mr W Clarke: Given the high cost of fuel, producing biodiesel would be a win-win situation.

141. Ms Rutherford: It would be, if farmers have the crops available to meet the scale of demand.

142. Mr W Clarke: But it would be for the farmer’s own use.

143. Ms Rutherford: Some farms would be able to produce fuel for their own use. Was the other question about anaerobic digesters?

144. Mr W Clarke: Yes; could they be used on a small scale, perhaps as an alternative to slurry tanks? Farmers are receiving a lot of grant aid for slurry tanks. It has been stated that farmers wish to use slurry as fertiliser, because other fertilisers are costly. However, the by-product of anaerobic digestion is also a fertiliser and soil conditioner that could be put on the land.

145. Ms Rutherford: There may be some scope for on-farm anaerobic digesters under farm diversification measures.

146. Mr W Clarke: Is that all?

147. Ms Rutherford: Yes; until we examine the status of the energy from agrifood waste challenge fund.

148. Mr W Clarke: Is there an opportunity, for example, for a farmer to apply for grant aid towards the cost of an anaerobic digester instead of a slurry tank?

149. Ms Rutherford: Do you mean under the farm nutrient management scheme?

150. Mr W Clarke: Yes.

151. Ms Rutherford: No.

152. Mr W Clarke: Is there no flexibility to do that?

153. The Chairperson: Is that due to European legislation?

154. Dr Speers: The state-aid regulations were specifically for storage facilities; that was the nature of the scheme that was agreed with the European Commission.

155. The Chairperson: Would farmers be correct in continuing to store slurry for energy use?

156. Dr Speers: Yes. The farm nutrient management scheme was introduced in order to comply with the nitrates directive and to increase storage capacity during the close season.

157. The Chairperson: I appreciate that; however, as you said, things move on, and if another development meets European demands — for which the grant was available — and the grant is utilised more efficiently to produce a better return for the farmer, why not do that? Who would block that?

158. Dr Speers: We would be open to exploring that possibility, and, indeed, that is the rationale of the energy from waste scheme that we mentioned.

159. Mr T Clarke: You say that you would be open to exploring that possibility; however, the problem is that the drawdown of money finishes in December 2008. Given that you are open to exploring the Chairperson’s suggestion, which was a follow-up to Willie Clarke’s point, surely such exploration must be expedited, because, in addition to the reasons you outlined for setting it up, there would be problems delivering any new proposals by the end of December. When will you investigate the alternatives?

160. The Chairperson: Moreover, there seems to be no legal basis for the energy from agrifood waste challenge fund.

161. Dr Speers: We are seeking clarification on that point, although, it would be misleading to say that we have no legal basis for the fund. A question has been raised, and we are progressing as quickly as we can to clarify our legal position.

162. Mr McKendry: I wish to add a comment about that: if we want to learn from what other people in Europe have done, the best examples are instances in which farmers have come together as a group in order to produce energy or biodiesel. Economically, Governments have found that it was not as beneficial to direct money towards individual, smaller farms. We are not talking about industrial scale —

163. The Chairperson: Where did you get that information?

164. Mr McKendry: From the Austrians, Germans and Danes. The best examples, which, years later, are still functioning, are of groups that have worked together, rather than individuals working alone. We must be careful about directing a lot of money towards individuals.

165. Mr W Clarke: On that point, with which I entirely agree, why did we not introduce such initiatives under the nitrates directive? Why did we not roll that out to co-operatives? Given that it is more sustainable than storing slurry, which gives off greenhouse gasses, I cannot imagine why the EU would have stood in the Department’s way if that had been introduced.

166. Mr McKendry: The difference with the nitrates directive was that it involved slurry being transported from farms to stores and back again to be spread on the land. The implementation of the nitrates directive was purely a storage matter. However, if a farmer collects slurry in order to produce energy, he or she would actually be transporting a source of energy.

167. Mr W Clarke: That is an active process. Putting the by-product on the land would be fine because it is inert.

168. Mr T Clarke: Another way to put that would be to ask whether that possibility was explored by the Department.

169. Mr McKendry: Do you mean whether it was initially part of the nitrates directive?

170. Mr T Clarke: Yes. If the action plan covers 15 months, should that not be taken into consideration in it?

171. The Chairperson: We are where we are, and we want action. It will be interesting to see what is forwarded to the Committee. The Committee wishes to make progress, and it realises that farmers face many challenges. Profitability is essential, and I agree with Mr P J Bradley’s fundamental point; I want farmers to do what they do best, which is to produce the best possible food.

172. However, it must also be remembered that farmers cannot produce food at an unsustainable cost. The farming community can no longer be taken advantage of in that way, because farming families cannot survive on good wishes and goodwill alone. Farmers are the butt of many people’s jokes about crying wolf. However, anyone who is familiar with the industry knows that it is in crisis, and knows the challenges that it has been facing in the red meat sector, the milk sector, the pig sector and the poultry sector. The entire industry has faced many challenges. Farmers cannot be expected to hear that they need to produce food but that people do not want to pay a proper price for it and that they will be undercut by importing food of a different quality from around the world. That cannot be done.

173. The Department is famously saying “diversify, diversify, diversify”. However, farmers need to see exactly what areas they can diversify into — if, indeed, they want to diversify — because there is a large section of the farming community that wants to continue producing food, which is what they do best.

174. I have much sympathy with P J Bradley’s comments, bearing in mind the current talk of great food shortages across the world. Therefore, we must ensure that we can feed not only our own people but the world. However, we cannot feed the world on wishes or goodwill. We can feed the world only when farming is profitable; and farming, as a business, has a right to be profitable.

175. Thank you for your presentation. There is a great deal of information that you need to forward to the Committee, and we will view that with interest.

176. Dr Speers: Thank you.

24 April 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Trevor Clarke
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Mr Ian Duff

177. The Chairperson: I welcome Mr Ian Duff, who is here to make a presentation on coppice biomass. After the presentation, members will be free to ask questions.

178. Mr Ian Duff: Thank you, Chairperson, for the invitation. I am little bit surprised to be here, but if I can help you in any way I will be pleased to do so.

179. I will begin by giving the Committee some information on my background and experience. I qualified as an agricultural engineer and began my working life at the former Loughry College, where I became involved in the initial stages of willow harvester development — a very early attempt at what we would now call a “stick” harvester. The concept was to tie bundles of willow, which could be easily picked up by the farmer with an ordinary tractor and buck-rake. That was in the days when willow was seen as a crop for marginal land. As you have probably realised, it is now seen as being more of an arable crop.

180. After that, I spent 36 years in the Department of Agriculture and Rural Development (DARD) and retired in 2002. Since then, I have re-engaged with willow, and have organised two or three study tours for farmers, under the Concordia scheme, to see willow biomass being produced in England and Sweden. I will come back to that later. I have also helped to provide technical input into Countryside Services Ltd’s energy biomass infrastructure development scheme (EBIDS), which provides grant aid to farmers who wish to purchase harvesting equipment or build stores and driers for willow chips. That sums up my recent contact with the sector. I am very impressed by the courage and commitment of those pioneers who have gone ahead and done what they have done.

181. I will limit my remarks to the subjects of willow chip, woodchip and biomass, because that is my area of expertise. I have no current commercial interest in the sector, so I hope that I can be objective. The first fundamental principle is that if the production of willow biomass is going to work, it must demonstrate environmental improvement through economics. Unless the production, processing and burning of willow chip is economic, it cannot be sustained. It cannot continue on environmental benefit alone; people have to get an income from it. The second principle is that there must be enough for everyone in the supply chain, right through from the producer to the user. As you know, that has been a problem in the agriculture sector, and I have some views on that.

182. By way of background, as you have probably heard and know already, energy consumption in Ireland comprises 37% electricity, 34% heat and 29% transport. The heat sector has been subject to relatively little regulation compared with electricity, which seems to be the most regulated sector. About 700 hectares of land in Northern Ireland are currently being used for growing short-rotation coppice willow, and only 200 hectares are available for harvest this year, so production is still at its very early stages. Members are probably aware that this crop takes three years to grow before it is available for harvest. After one year it is cut back and then it is allowed two years’ growth.

183. The typical yield is 10 tons of dry matter per hectare per year, which equates to 11·5 tons of chip with 15% moisture content in normal storage conditions. Two and a half tons of chip is roughly equivalent to 1,000 litres of kerosene. On that basis, one hectare of willow will produce the equivalent of 4,500 litres or 1,000 gallons of kerosene or paraffin heating oil. Therefore, the crop can produce quite a lot of energy. It is generally harvested with 50% moisture content, which has to be reduced to 15% if it is going to be stored in chip form. Like any other organic material, such as grain, it must be dried before it can be stored. An added complication of willow chip and woodchip is that it heats very quickly when it is chipped. If it reaches 60°, it develops fungal growth, which, as we all know, is the farmer’s lung organism, and is not something that we want to encourage or allow.

184. It is a bulky product, and therefore not suitable for long-distance transport. No centralised marketing or distribution arrangements currently exist for this material in Northern Ireland. In contrast, in Sweden 1,250 farmers are growing the product on 18,000 hectares, and it is all marketed centrally by a federation of farmers’ co-operatives.

185. The difference is that in Sweden willow is burned when it is green; it is not dried at all. It is harvested and burned in large direct-heating-system boilers to supply power to towns or communities. A high proportion of willow is treated with sewage effluent to help growth and to help to process that material.

186. Looking objectively at where we are, we can grow the crop. We have world-leading expertise at Loughgall, with input from DARD. We can burn the crop; there are many boilers out there, mostly from Scandinavia. The problem area lies in the middle, with the harvesting and storage, and that is where the technical issues arise.

187. There are two types of harvester in Northern Ireland — rod harvesters, which keep the crop intact, and chip harvesters, which chop it into little pieces. We need objective, evaluated figures for the cost of the operation, as that is critical. Figures have been quoted, but we need to know the exact cost, because it is a significant part of the total cost.

188. A further type of harvester is available in England. We offered funding for it under the EBIDS scheme, but no contractors took it up. It is called a billet harvester, which cuts the rod into short lengths, so it does not heat to the same extent. However, it should still dry in the heap in the same way as a bundle of sticks. That system must be evaluated to find out whether the rod will survive and dry, or whether it will rot, in Northern Ireland conditions. The system works in the north of England, but it must be evaluated here. We should also consider the idea of harvesting on more marginal land in areas where willow is not grown at the moment. We would need equipment to harvest in those conditions. Those are the gaps in the harvesting process.

189. With regard to the gaps in the drying process, Countryside Services administered the EBIDS scheme, which was funded under Building Sustainable Prosperity through DARD. It funds 15 stores for farmers, and 11 of those will also dry the crop. We need to get a true picture of the drying costs. Figures of between £8 and £15 a ton have been quoted, but, if you do the theoretical calculations, that does not seem to be achievable. Hopefully, it will be achievable, but that must be validated.

190. Drying is an expensive, capital-intensive operation, with high running costs. Therefore, someone must evaluate and determine whether there are cheaper methods of drying. That must be done scientifically with mathematical modelling, not simply through look-see trials, which get us nowhere.

191. Getting a new sector up and running is like the classic chicken-and-egg scenario. People will not plant the crop unless they know that someone will burn it, and no one will install boilers unless there is a ready supply. To be fair to DARD, its challenge fund stimulated the 700 hectares that we have. The current grant scheme is not as generous, and you could argue that it should be increased, but the Committee should consider that matter carefully. It would be much better to suck material up the supply chain rather than try to push it up from below. If producers plant more crop, we may end up with an oversupply and a drop in price. The emphasis should be on usage. We should ensure that the material is sucked up the supply chain, establish a decent market for the product and make that system work. The other option is helpful in meeting establishment costs, but I would like the emphasis to be placed on sucking material up the supply chain.

192. How can we get more income? There has to be enough money for everyone in the supply chain. Bioremediation, of which I am sure the Committee has heard, is one way of dealing with that issue, and is widely practiced in Sweden. A couple of very good examples are under trial in Northern Ireland at the moment. Willow is able to clean and use up nutrient applied to it. Those trials offer considerable possibilities.

193. For example, waste from a food factory is being applied to one willow plantation, which will therefore help the nutrient and the growth of the willow. The effluent from the food factory will be treated, and the willow will go back to the boilers in the food factory. Thus, a very good, sustainable cycle is established. That sort of project is exciting and will hopefully develop. For that to happen, the regulators must have an open mind. They must evaluate and try out such projects, rather than always playing totally safe and never letting anything go ahead. We must try new things. Projects must be evaluated, and obviously they must be environmentally sustainable.

194. Let us consider the cost of the material and its value at the minute. To go back to the figures that I quoted earlier, 1,000 litres of kerosene costs £520 today, which is roughly 52p a litre. Some 2·5 tons of willow chip or woodchip could be bought for £85 a ton, which would be £210 in total. That leaves a margin of £310 for that equivalent amount of energy. Therefore, at this point in time, there is an attractive margin.

195. Why then are more people not installing woodchip boilers and getting involved in that type of project? We must accept that there is an increased risk and a high installation cost — as much as four times higher than the cost of oil installation. That quite considerable cost has to be earned back.

196. Another reason is that the product is bulky. There are also issues with specification, and convenience is also a factor. If I want a tank of oil, I simply have to lift the telephone. I can get oil anywhere, but it is not quite so easy to get a load of chip. Many of the good systems that exist on the continent are community-heating systems. People in Northern Ireland are suspicious about community-heating systems because they have had bad experiences in the past. That problem must be overcome.

197. What can be done to encourage such production? The public sector could set targets to generate a certain proportion of its heat from biomass. The private sector could be encouraged to install combined heat and power plants by offering enhanced capital allowances and business-rate exemptions. The planning application process could be made easier for developments that use community-heating systems. There could even be some form of heat certificate, which could be traded, as for electricity.

198. Another idea would be to create an association that could bring suppliers together. For example, I may have a contract with a supplier for woodchip in my area. If that supplier decides to stop farming or whatever, what do I do? It would be good to have an association that could perhaps address such problems, honour commitments made by its various members, and so on.

199. The final and key point that I wish members to note is that farmers and the rural community must maximise their share of the income available in the supply chain. For years, farmers have been what are called “price takers”. Members will be aware of the debate about supermarkets taking the bulk of the margin and the farmers being left with a bit at the bottom. I saw that when I worked in the potato sector; it can be seen everywhere. There is an opportunity for farmers to become involved further up the supply chain, thereby maximising their return. That has been done in Scandinavian countries, such as Sweden and Finland, by what are called “farmer energy groups” or “heat entrepreneurs”. The farmers’ group sells heat to a community development, such as a school or hospital. They sell heat, rather than the woodchip or the fuel; they sell an actual service. I have seen that system working in Sweden. It has exciting possibilities, and it must be encouraged in Northern Ireland, because it has many advantages.

200. We went to a farm energy plant in Lundsbrunn, which is a small community of 15,000 people. It has a nursery, a primary school and sheltered housing together in one location. In 1995, the boilers of those buildings were replaced with a biomass plant and an oil boiler, which are owned and run by five local farmers. The farmers fuel the plant with woodchip, run the boilers, attend any breakdowns and, generally, have an obligation to sell the heat, and the community pays them for it. In the summer they run an oil boiler, rather than the woodchip burner, because woodchip boilers do not work well with low throughput; they need to work hard. The farmers make all the decisions. That plant has a 15-year contract with the community, and it has four years still to run, so it has been running for 11 years. Heat is supplied by burning forest-waste woodchip — not willow chip in this case — which the farmers harvest. Some woodchip is bought from other farmers, and the group pays for it by the load, but most of it is gathered by the group themselves.

201. The second example is a small rural school, where two farmers provided and installed a boiler to provide heat. In that case, they have what they called a “package”, which is a little shed beside the school that contains the boiler that is connected to the school’s pipework. The farmers supply the package unit, fuel it and run it. If there is any problem, they are contacted by mobile phone; it is not the school’s problem. Surprisingly, that boiler was burning grain when we visited it, but, as members know, grain also has an energy value.

202. Those are only two examples, but such farm energy programmes have advantages. They generate a local income stream for the farmers. Farmers, as members know, are competent in looking after equipment — they do so daily — and the work meshes with their abilities. They also have the time in winter to keep up with the peak heat demands, and derive extra income from that. There is also the social integration of farmers and community working together. That also provides protection for both parties, as the farmers know that the contract is unlikely to be broken, or reneged on, because they are part of the local community. The schemes have a lot going for them and seem to work well.

203. In Sweden, such schemes are encouraged by bioenergy partnerships, which provide assistance to farmers to establish an energy group, look at their options, carry out a pilot study, prepare a business plan, develop proposals and negotiate contracts. That is a big issue for farmers. They are being asked to move out of their comfort zones and into unfamiliar territory; they will need support, facilitation and encouragement to adjust. I know from speaking to growers here that there is a nursing home that would be interested in installing a biomass facility, but farmers need to know how to get in touch with the proprietor and how to negotiate a contract.

204. That is my overview of the uses of wood energy and biomass, and the experiences of that in Sweden.

205. The Chairperson: Whose responsibility is it to sell this idea and this product?

206. Mr Duff: The issue is about rural development potential, which is of benefit to communities in those areas. That is where the need should be met and driven from. As you are probably aware, this sector is a difficult one, because DARD is involved with rural communities and the Department of Enterprise, Trade and Investment controls the installation of boilers. There needs to be cross-departmental co-operation, but ultimately the driver is rural community opportunity.

207. The Chairperson: You are convinced of the energy potential of woodchip. You also highlighted the technical challenges of harvesting and drying. How do you see the Government in general, and the Department specifically, helping to resolve those technical problems?

208. Mr Duff: The technical issues clearly relate to, at present, the research and development of harvesting and drying. The Agri-Food and Biosciences Institute (AFBI) and the College of Agriculture, Food and Rural Enterprise (CAFRE) should be working to develop those areas. However, there is much to be said for working with pioneer farmers. This does not have to be ivory-tower research; it is working in the field.

209. Mr Savage: If I heard correctly, you said that there are 700 hectares of willow in Northern Ireland, 200 of which are eligible for harvesting this year?

210. Mr Duff: When they were planted, that was the approximate figure.

211. Mr Savage: One of the things that you said, and which I support 100 per cent, is that farmers should be at the top of the list to be guaranteed returns, with others receiving their share thereafter. In Northern Ireland, at present, woodchip is in big competition with grain. If I owned 500 acres of willow and 500 acres of grain, wheat or barley, people would be watching carefully to see which performed better.

212. We need food, but on the flip side we need heat. Short-rotation coppice willow is economically volatile, and you recommended the use of remediation payments to encourage more planting. What barriers must be overcome before Northern Ireland can move towards the Swedish system, where willow farms are treated with sewage sludge from local authorities?

213. Mr Duff: There are overriding concerns about the risk of pollution. The sewage must be carefully managed to prevent the oversupply of nutrients to the crop. That is what has to be technically and scientifically evaluated and proven in Northern Ireland. If it is proven that that can be done, and the way to do it is established, then it can be done in other areas. It is a non-food crop, so there are not the same health issues. However, the amount of nutrients put in and taken out still has to be balanced, because if more is put in than the crop can use then obviously it is going to go into the water, and that is not acceptable. It is a matter of learning how to manage that, to make it work, and to control it. As you say, the farmer obviously has to get a return; in my opinion everyone in the chain has to get a reasonable return.

214. Mr Savage: Far too often it is the farmer who is at the bottom of the list, and I think that has got to change.

215. Mr Duff: If they sell the heat, they are in a much better position, and are in control of their own destiny. The striking thing about the process of negotiating contracts in Sweden, for example, is that it is totally open; it is agreed by everyone. It has to be beneficial to the old people’s home, it has to be beneficial to the farmer, and there are clauses in the contracts stating that if the world oil price goes up, or whatever happens, that they all know where they are going from the outset. Everyone has to get a return, including the farmer.

216. Mr Irwin: If 200 hectares are available for harvest this year, and there are 700 hectares in Northern Ireland, does that mean that there has been an increase in the product in the last couple of years?

217. Mr Duff: Yes, in the product that has been planted.

218. Mr Irwin: Is there any particular area in Northern Ireland that it is more confined to than others? In the west perhaps?

219. Mr Duff: There are quite a number of crops planted in Derry. North Antrim is probably the one area that does not have many. It is fairly evenly spread throughout the Province. There are some in Fermanagh, some in Armagh, perhaps not so much in Down, but it is reasonably well-spread.

220. Mr Irwin: Two and a half tons of woodchip costs £210, whereas oil is more than £500. Is that £210 the total price of the finished product, delivered to the house?

221. Mr Duff: I checked with one purchaser yesterday, and they were paying £85 delivered. In my opinion, that is not a great deal for the farmer that produced it.

222. Mr W Clarke: During your research, have you come across any Government interventions in the form of awarding tradable heat credits, or other such things, for using biomass?

223. Mr Duff: I have heard it spoken about, but I honestly have not seen it applied anywhere. I can see that it would be difficult. Electricity is easy to meter and so on, but heat is not. I have not seen it work anywhere.

224. Mr W Clarke: Although the use of artificial driers would obviously be more expensive, there would be a faster turnover; the product could be produced in a couple of weeks. Is there a potential to do that on a communal basis? I am thinking of the example you gave of a group of farmers collectively providing energy to a school or to social housing. An additional drying facility could be added to the boiler.

225. Mr Duff: Driers traditionally use proven grain-drying technology — basically, a perforated grain-drying floor. Normally that process takes up to six weeks; considering that it comes in with 50% moisture and has to be reduced to 15%, a huge amount of water has to come off that. It can then be emptied and another crop can be put in, so three loads can be processed through the harvest season, which is normally from January through to March. In my opinion it is essential that the facility be shared, and as many loads as possible processed. It could be done communally. However, none of the applications that were made through the EBIDS scheme were communal; they were all managed by individuals, although some said that they would be drying for neighbours. With the exception of one large co-op — Fane Valley, which has a large scheme in operation —most of the farm-based schemes are all for the use of farmers themselves.

226. Mr W Clarke: In Finland, 20% of energy needs are met by wood. How could such a change be driven in the North?

227. Mr Duff: I do not believe that that level will ever be achieved here, because Northern Ireland does not have the required amount of timber. Northern Irish farmers react positively and quickly to financial incentives. It does not take the Government to drive round bale silage, or whatever, if the benefits can be seen. If there is money to be made, it will happen. It is as simple as that.

228. Mr Bresland: You specifically mentioned elements of the Northern Ireland rural development plan as having the potential to provide targeted support, and you suggested that DARD should compile a specified integrated programme of measures. Can you say a bit more about what needs to be done?

229. Mr Duff: I honestly believe that what the Swedes have done cannot be bettered. They have facilitated a process in which groups come together and are helped to develop contracts, and so on. That process has worked. It seems to be a sensible way to go about it. The Northern Ireland regional development programme contains elements of lots of the things that are required — supply-chain development, diversification, and so on. It would be a matter of pulling various bits of that into a package that could be easily understood by farmers’ groups, rather than their having to do it themselves. I would like the package to be purpose-built. Whether that is possible under the legislation, I do not know.

230. The Chairperson: The Swedes have developed the process to a certain level. You seem to have a clear understanding of that and believe that a competence exists. Are you, therefore, saying that rather than try to reinvent the wheel, it is better to try to replicate the good elements of that system in Northern Ireland?

231. Mr Duff: The system would have to be tailored to Northern Ireland. However, matters such as contracts between heat suppliers and consumers should be sourced, adapted and made available to groups here. In that way, Swedish expertise and knowledge could be applied to our situation.

232. The Chairperson: You said that in Sweden, green willow, which has not been dried, is used. Why can it not be used in Northern Ireland?

233. Mr Duff: It can be used during a short period of the year. It is a matter of supply. A typical Swedish community-heating system burns sawdust, bark, forest waste and willow. The willow is fed into the burner as it becomes available. If a plant were to run totally on green willow, delivery would have to be well controlled. The green willow could not be allowed to sit because it would heat. What would happen if there were a wet week and farmers could not work? The system would become difficult to manage.

234. There is an argument about whether the moisture needs to be reduced to 15%. The exponents of the stick harvester will rightly say that they can reduce it to 25% or 30%. When that wood is chipped, it will last long enough to be burned before it heats. Possibilities that would reduce drying costs need to be tried out. I did not explain the stick harvester, as I assumed that you understood how it works: with the stick harvester the wood is stacked in the open air. The wind blows through it, and it dries naturally down to 25% or 35% moisture. Obviously, that is much more cost-effective.

235. Mr P J Bradley: I am conscious of the questions that the Chairperson, Mr Savage and Mr Irwin have already asked. You, correctly, said that down the years farmers have been price takers, rather than, I suppose, price makers, and that the emerging biomass market provides a unique opportunity for farmers to maximise their share of the product’s value to the final user. Is it not the case that any Government involvement would wipe out the affect of market trends and leave farmers at the mercy of external forces? Do you think that farmers will have a free hand in putting a price on willow? You recommended the establishment of farm energy groups — how can the Government and the Department best facilitate such initiatives?

236. Mr Duff: Facilitating involves using the expertise of rural development staff to identify facilitators who will bring together groups that will work with each other, as part of the rural development process.

237. As for being a price taker, if I were a nursing-home owner I would be comparing this to the price of oil or gas. That would be my bottom line. If the growers get together as a group and make a suitable contract with a nursing home, I cannot see how anyone else could muscle in.

238. Mr P J Bradley: Even if the Government have some level of input?

239. Mr Duff: Restricting Government involvement would be part of the beauty of a deal between the home and the growers’ group — it reduces the risk of a grant being pulled at the last minute. The deal is commercial and largely dependent on market forces. The Committee has already heard that the Government may reduce capital allowances, but most of the money will come from the market.

240. The Chairperson: Who can best take the initiative of bringing together and energising the process to form such groups?

241. Mr Duff: That is a good question. The initiative has to come from the willow growers. Some help is needed to bring together the users and the growers, not least because it takes three years to develop a usable product. That is where the Department, the LEADER groups, or someone used to working with rural communities come in.

242. The Chairperson: The overall vision for renewable energy has to come through Government

243. Mr Duff: OK.

244. The Chairperson: It has to come from Government because, as we said earlier, renewable energy and alternative fuel issues cut across practically every Department. Therefore, someone, or some Government body, must take the initiative and become a driving force. Farmers have suffered and endured so much in the food industry that there is no way that they will get into this otherwise.

245. Mr Duff: The use of wood energy should be sucked from the top of the supply chain, not pushed from the bottom. The driving force has to come from the user of the energy, whichever Department assumes responsibility. That is how to take a lead on encouraging the use of willow chip and other agricultural fuels.

246. Mr Savage: Do you envisage the possible formation of a farmers’ consortium in a scheme that might, for instance, increase the 700 hectares to 1,000 hectares? Could you see a viable, farmer-owned and farmer-controlled business starting up from that? Obviously, other people would want to get involved when it is set up, but it would be controlled by the farming industry.

247. Mr Duff: That could work, but some of the benefits of local involvement would be lost. One of the attractions of the Swedish scheme that I described is that the local community and the local growers are all working together and all trust each other. I would like to see local groups operating as a confederation as the scheme grows, so that if one local group ceases to trade the other groups could honour that commitment, as is done in the travel industry. That would give the investor confidence without the need for a large, controlling bureaucracy.

248. Mr Savage: To put it another way, do you consider a group of farmers coming together on 500 hectares, for example, to be a viable proposition?

249. Mr Duff: Yes, if they can grow that amount. As the Committee is probably aware, there are currently a number of groups working together in smaller areas. Members know as well as I do that the more people there are in a group, the more difficult it is to hold that group together. So there is an attraction in having several smaller groups.

250. Mr Savage: There are so many businesspeople who see it as a viable product and think that the farmers can be pushed aside; however, the farmers are essential.

251. Mr Duff: I agree absolutely. The heat sector is interesting. Most of the opportunities for willow chip range between 150 and 500 kilowatts, so are quite small. It would not be possible to supply power stations; their demand would be too big. There is something to be said for staying small. The co-operative in Sweden that markets all the willow chip has all its growers under contract, and I am aware of one operation in Northern Ireland that is currently growing under contract for a co-operative — I cannot recall what area that operation is based in, but I know that it is quite large. Therefore, it can happen, but, in my opinion, operations can sometimes get too big.

252. The Chairperson: Do you see renewable energy as a genuine way to rescue some farmers, at a time when farm profitability is low?

253. Mr Duff: It is attractive to certain farmers because the crop requires very little input — it is planted and harvested every two or three years, so it is an attractive proposition to someone who is cutting back. We have discussed how arable farmers will probably continue to grow cereals and keep their options open; however, there is a niche for renewable energy. As grain prices have changed over recent times, we have moved to the less-arable area of the country more than we had thought we would.

254. The Chairperson: Thank you, Mr Duff. It has been helpful to speak to you, and we also appreciate the presentation that you sent to the Committee prior to the meeting.

255. Mr Duff: Thank you.

24 April 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Trevor Clarke
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Ms Sarah Brady
Mr Iain Osborne

Northern Ireland Authority for Utility Regulation

256. The Chairperson: I now welcome the chief executive, Iain Osborne, and the head of social environment, Sarah Brady, from the Northern Ireland Authority for Utility Regulation. It is a pleasure to have you here. I realise that you have had a busy day, as you attended another Committee meeting this morning. You are either very popular or are simply using your time profitably.

257. The authority was established to ensure the effective regulation of electricity, gas and water and sewerage industries in Northern Ireland. It is responsible for issuing licences to utility companies and, interestingly, it works to encourage competition in utility markets. Perhaps we will learn more about that during the presentation.

258. The Committee is inquiring into renewable energy and alternative land use, and I think that you will make a valuable contribution to our study. We must keep within the Committee’s remit. We are interested in hearing what you have to say, so it is over to you. Your presentation will be followed by questions from members.

259. Mr Iain Osborne (Northern Ireland Authority for Utility Regulation): Thank you for your welcome. We are happy to assist the Committee with its inquiry. We thought that it would be helpful if I went through a few points, and then we will be happy to answer questions.

260. It is very important to have utilities in Northern Ireland that are economically, environmentally and socially sustainable. That requires partnership — no single stakeholder controls all the levers. The authority is consulting on how it ought to fulfil its responsibilities to achieve sustainable development. The policy framework within which the authority works is laid down in statute. There are a range of functions, and a couple of them have already been mentioned, which the authority must exercise with a view to delivering the statutory objectives.

261. The authority’s main responsibility is to consumers, but it has secondary duties relating to sustainability and promoting renewables. We deal with extremely capital intensive sectors, so there is inherently some conservatism in the way in which one approaches the physical assets, in particular, that one is dealing with. Therefore, we are aiming to protect not only the short-term interests of consumers, but their long-term interests. That requires a robust, sustainable sector, with as much competition as possible.

262. The Committee may wish to consider a few key topics, such as the renewables obligation and the existing support framework for the generation of renewable energy, grid access and the legal framework for heat. It may also wish to consider some of the things that we have been doing in the past few years to enhance competition and open the way to new investment in generation.

263. It is the authority’s view that the existing renewables obligation is a generous support measure. Iberdrola Renovables, the largest global renewables group, published data on the support that it received from different countries in 2007, and the results were interesting. Spain contributed between €72 and €78, the US contributed €81, whereas the UK contributed €114.

264. Several actions may be needed to support the renewables industry, but increasing the cost of the obligation is not the most obvious one. If one is focused on mitigating carbon — which is one of the fundamental drivers for supporting renewables — the obligation would be much more expensive than energy-efficiency measures. We are aware that DETI is considering proposals for banding the renewables obligation, and that raises some important issues. Banding may steer support towards less mature renewable technologies.

265. As regards supply security and overall investment efficiency, there is a lot to be said for creating extra incentives for dispatchable renewable technologies, such as anaerobic digesters, rather than the non-dispatchable generations, such as wind. Wind generation raises a number of technical issues, such as management of the grid, and it requires backup. Wind farms usually need the backup of a gas generator to generate energy when the wind does not blow. So there would be advantages to incentivising generation from dispatchable renewables, which are more predictable and more easily controlled and synchronised with the network.

266. Northern Ireland has enormous potential to participate in the renewables sector; and, in particular, there is great potential for participation from the agricultural community. We face significant grid-access bottlenecks, particularly in the west of Northern Ireland. Dispelling those will require substantial investment in the grid and a favourable planning regime.

267. We are concerned because, so far, it is proving controversial and difficult to build a new electricity interconnector between the systems in the North and South of Ireland. If it proves difficult to get planning permission for a new connector to run through a landscape that is not of enormous value, it will be even more difficult to get permission for one that runs through the landscapes of County Donegal and County Fermanagh. That said, most people would say that all the Northern Ireland landscapes are very precious. It will prove extremely difficult to get planning permission for the grid expansions in the west of Northern Ireland that are necessary to enable substantial growth in renewables.

268. I will briefly mention heat. As the gas regulator, the authority has quite a lot of experience in nurturing and building up a new fuel source. Consumers must be given confidence that when they buy into the system, and spend a lot of their own money — usually in installing a boiler and a distribution system — that they will not be ripped off. They must be reassured that their supply is not going to be bought in at a low price and jacked up without proper oversight and control.

269. Equally, the business investing in heat must have a legal regime that gives it confidence that it will be able to issue bills and collect money. The legal framework for heat in Northern Ireland is very deficient. It does not give clear ownership rights to heat; a clear basis for billing, or clear protection against abusive monopoly of power. I am not making a case for establishing a heat regulator; no doubt there are other ways through which that matter could be addressed. However, if we want to develop the heat sector, then a clearer legal regime is needed.

270. Finally, I will mention some of the things we have been doing to promote competition. The creation of the single electricity market is by far the most important development for Northern Ireland electricity since privatisation in the early 1990s. The market went live on 1 November 2007, and has gotten through its first winter, having operated broadly satisfactorily.

271. The single electricity market arrangement is quite different from those that were in place before, which were bilateral in character. Generators had to strike a contract with the suppliers who had the customers. We had a very strong market power at the retail sector with NIE, but, equally, we had very non-competitive arrangements in the generation sector. The SEM has swept all of that away.

272. There is now a pool of all of the electricity that is generated on the island of Ireland, other than that which is produced by small generators. Any generated electricity of 10 megawatts or more must be sold into the pool. All suppliers must buy their electricity out of the pool or directly from the small generator. Therefore, that immediately maximises liquidity and creates transparency in the market. The SEM is a market that can be modelled. Anybody contemplating making an investment and building an electricity generator can immediately see how the market is likely to operate. Therefore, we believe that a good number of the risks associated with building new generation capacity, whether it is renewable or conventional, have been removed.

273. With respect to the renewables sector, we have created a special access regime within the SEM for plants that are not setting the price. That is certainly true of wind farms and most non-dispatchable electricity generators. They are treated as base load: when the wind is blowing, they are able to serve the grid. Only in relatively unusual circumstances would a wind farm need to be constrained. Therefore, that special access regime will be substantially more favourable than the previous arrangements for new generators. Small generators can choose whether to participate in the SEM. As I said, 10 megawatts of power is the cut-off point above which one must participate; below it, one can choose to participate.

274. The alternative is that they can work directly with, and sell their power to, a supplier. Historically, there has been no competition for the latter service to be the partner supplier that buys the energy. In the first few months of the market, that sector has not leapt into life. However, we believe that it is potentially contestable. We expect that over the next year or two, new suppliers will compete with NIE to partner with renewable generators, to get power into the market and to take advantage of the support regime.

275. Finally, I will say a few words about grid connections. Earlier, I said that we are consulting on our role to promote sustainable development. One issue that we have mentioned in the consultation is grid connections. Obviously, we are aware of the fact that there are bottlenecks in the existing grid that make it difficult to connect, for example, large wind farms. There are also implications when new generators require modification and strengthening of the grid.

276. Some time ago, we also took a policy decision to allow generators to apply for grid connections only when they already have planning permission, which is a different approach to that in the Republic of Ireland. We believe that our approach is sensible because it gives NIE a clearer, more genuine signal about who is coming down the track. However, it, obviously, has implications. We mentioned that during the consultation. We wait to see whether people believe that that is a priority area in which more work should be done.

277. The Chairperson: Thank you very much. In your written submission, the table showing the distribution of renewable obligation certificates is heavily dominated by onshore wind-power generation. Which renewable technologies offer the greatest potential for future contributions to Northern Ireland’s renewable-energy targets?

278. Mr Osborne: We are professionally neutral as to the potential of different forms of generation. Our aim is a level playing field — the market itself can sort out which technologies have the most economic potential. Let me put a gloss on that slightly unhelpful response: it is quite clear that there is a great deal of wind in Northern Ireland, simply because of its geographical position. Therefore, wind power has a lot of potential. Equally, it is clear that because of the size of the farming industry — particularly the livestock industry — there are opportunities for methane digesters etc. I make those remarks as an observer. As a regulator, we aim for a level playing field.

279. The Chairperson: How can family farms and rural businesses derive economic benefits from those technologies?

280. Mr Osborne: There are opportunities to create electricity generation plants which can use resources that would otherwise be deemed to be waste and problematic, thereby creating value in that way, and taking advantage of the support regime to produce energy that has a value. To some extent, the barriers are the grid bottlenecks, about which I spoke, and scale. It is rare for developed countries to produce most of their energy through tiny, farm-level generation plants. Whether that means shipping rural resources to larger, central generators, or whether a way can be found to link individual plants, is still an open question. Suppliers might be willing to bear the transaction costs of dealing with large numbers of small generators on individual farms if it means that they can build a big enough portfolio for that to make financial sense.

281. The Chairperson: In evidence to a previous Committee this morning, you suggested that large-scale was necessary — is that correct?

282. Mr Osborne: Large-scale?

283. The Chairperson: I mean large-scale groupings — large numbers of small-scale enterprises in renewable energy. Is that approach feasible?

284. Mr Osborne: I do not remember commenting on that this morning. Such an approach might well be feasible, but it would be new in the developed world, where almost every country has large power stations because of the efficiencies of scale that can be achieved. I am repeating what I said earlier, slightly, but the barriers to having many small generators are partly engineering issues and partly to do with transaction costs in having to deal with many small players. The engineering issues — and I was having a conversation with one of the UFU gentlemen about this before I came in — are that if power is being generated close to the source of demand, in some scenarios that can mean that less work needs to be done on the grid because local generation and local demand cancel each other out; therefore less needs to come in from on high, so to speak.

285. That is the benign scenario, but it cannot necessarily be relied upon. At particular times of the day or year, the same set up might be generating more electricity than there is demand for locally, in which case the power will need to flow up into the grid. However, our grid, like all other grids in the developed world, is constructed for power to flow downwards and not upwards. A number of the components turn themselves off or blow up if they get backward flows. I am not saying that the problem is insoluble. There will, in the first case, be a research agenda, because I do not believe that people in Northern Ireland or anywhere else have fully understood the implications of backward flows; and then there will be an investment agenda to solve those problems. I am not saying that it is an insuperable barrier; I am saying that all the pieces are not in place.

286. Turning to transaction costs: it might well be possible for a supplier, if he can build a big enough portfolio and have a standard way of dealing with each of the small generators, to become an aggregator and develop a business that pays its own transaction costs.

287. The Chairperson: How will local farms derive economic viability from participating in renewable-energy?

288. Mr Osborne: Frequently, the main benefit of very small-scale generation is not the ability to sell electricity to the grid; it is that you are buying less. At farm level, a business case must be built around that. Beyond that, it may be a question of scale. As I mentioned earlier, I would not rule out the possibility of a farm-level plant being able to sell-back efficiently, but, given the costs that I have just been speaking about, farmers may find it more efficient to collaborate on a generation scheme. Some farms are quite large businesses and may be able to generate the required investment themselves, but the small farmer faces issues of scale.

289. Mr Savage: You have highlighted how generating heat from renewable sources could make a greater contribution to the Government’s renewable energy targets if a better legal framework were in place. How might that framework work and what role, if any, would DARD play in progressing that?

290. Mr Osborne: We have some thoughts on that, which I will share with the Committee. The first thing that I ought to say is that this is essentially a role for DETI, as the owner of the energy policy framework.

291. There are two key issues. One is to ensure that when someone is building a heat network they are able to build it — the provision of heat has a value, and there needs to be a clear framework around the metering of heat, as exists for electricity and gas. The metering for those two energy sources has been settled for years, but it is not entirely clear for heat at present.

292. Whether the heat network is in an industrial park or even in a village, the people connected to it will have made a big commitment. To disconnect from it will cost them a great deal of money. A small, local monopoly will have been created, and people will not be willing to make a commitment to connect to such a system unless they have some confidence that they are protected from the monopoly, either through general pricing rules or through some kind of regulatory regime. No doubt there are different ways that that could be achieved.

293. For farms in very rural locations, there may be serious limits as to how much can be done with the heat that is generated, beyond meeting the farm’s own requirement. At the moment we do not have any solution for farms that are close to business parks, villages or groups of houses, other than to keep burning oil.

294. This morning, I briefed the Committee for Enterprise, Trade and Investment on the painfully high prices of fossil fuels and on the fact that we cannot see any obvious reason why prices should fall. In time, oil is going to run out and carbon costs are going to rise, not fall. Therefore, heat may be an alternative option and, if it is the case that the price of oil and carbon continues to increase, it may be an increasingly economical option.

295. Mr W Clarke: Will you elaborate on the need for a value-for-money review of support mechanisms in the North, which you suggested earlier?

296. Mr Osborne: DETI has taken that on board and is doing a review. We are struck by the cost of the renewables obligation. As part of the SEM, we are working with the Republic of Ireland, which has a significantly less expensive feeding tariff. Nevertheless, there is also a long queue of people who are waiting to connect to their grid — enough to help them reach some fairly ambitious renewables targets. It is valid to query how much more we need to be encouraging people, when there is a big queue of people waiting to connect to the grid in Northern Ireland?

297. Obviously, if people have invested on the basis of a particular incentive, the Government ought not to whip out the carpet from under their feet. However, when considering future investments, it is important to question whether we are happy to be paying so much money towards support mechanisms. Certainly, if one considers that driving renewables is primarily about carbon abatement, then there are much cheaper ways to do that. It is not only about carbon abatement; it is also about removing ourselves from fossil fuels and security of supply. It may be worth paying the price, but it is a question that is worth asking.

298. Mr W Clarke: The Committee had a presentation from the Ulster Farmers’ Union earlier, who were concerned about the efficiency of Kilroot power station. Around 60% of the energy is going up the chimney. Do you have any role to play in that?

299. Mr Osborne: We are an economic, rather than an engineering, regulator. Ultimately, the way in which we set the SEM is that inefficient plants will find it more difficult to make money over time, because inefficiency means higher prices. There is an opportunity for people to build new and more efficient plants, and that will drive the inefficient plants out of the market. It is early days, but judging by the number of people who have announced their intention to build generating plants, I am confident that we will succeed, including with Kilroot, which is proposing to build a new gas plant.

300. The Chairperson: One of our power stations is wasting a great deal of energy and money. How could that be checked?

301. Mr Osborne: Economic incentives could be created for becoming more efficient.

302. The Chairperson: Does anyone oversee those power stations? Surely, it is not simply a question of economic incentives. If there is a high percentage of inefficiency and wastage, who can demand that they rectify that situation?

303. Mr Osborne: We lose a fair amount of energy when it is being converted. The same applies to internal combustion engine in cars as to electricity generation. If there is a good clean market and people can think of a more efficient way of doing things, they will clean up and progressively drive those who are less efficient out of the market.

304. There are more efficient approaches to combustion, doing it at a local level with CHP. More can be done in that area, but the total costs, including costs for grid reinforcement, must be taken into account. If all the elements are being priced appropriately, there will be one cost for more efficient operators and another cost for the less efficient operators, and the more efficient should win.

305. The Chairperson: The costs mentioned in your submission to the Committee for Enterprise, Trade and Investment this morning are quite considerable. The submission states: “our existing grid is not sufficient to connect all of this capacity, and its connection would create system operation problems to which technical solutions do not so far exist. The results of recent research sponsored by DETI and the Department of Communications, Energy and Natural Resources in the Republic of Ireland suggested that the costs of expanding renewables to 16% of production or more will be at least £2·5 billion each year across the whole all-island market. A major expansion of renewables might, therefore, insulate Northern Ireland from fossil fuel volatility and give us more control over energy costs”.

306. That is what I meant when I was talking about the small operator in the Northern Ireland context. If a large number of those operators across Northern Ireland came together, could they be active participants in assisting in the battle of costs? You also said that energy costs will not necessarily spiral downwards.

307. Mr Osborne: That is the main message that I was seeking to deliver this morning. The Executive must do something about fuel poverty.

308. The Chairperson: Farmers want to do something about it: can we equip them for that? Can they become active participants and get a financial reward for their labours? What is your honest opinion?

309. Mr Osborne: One must think about the number of machines to be built, as opposed to the management expertise involved. The costs you read out are for building a large number of machines and having a large amount of grid capacity to connect them. The machines must be built by the most competent and cheapest manufacturers. There is no particular reason why the farming community should have that management expertise, but if it does, that is welcome.

310. Our responsibility is not to decide whether farmers, international power companies or Irish power companies should be involved: our responsibility is to maintain a level playing field and a market open to whoever has a good idea.

311. There is an issue of scale. Some very clever people work for the Ulster Farmers’ Union, and the farming community as a whole may be able to come up with a solution. However, I am deeply sceptical about the proposition that individual farmers could build machines that are cutting-edge. There is a need for co-operation and spreading of best practice to enable people to do things efficiently.

312. If the Government were to create a framework in which people would be given incentives to move into a wholly new market — one in which they do not have much expertise — I would worry about the value obtained for the public money invested, and for those individuals who invest their own money, unless they received a solid framework of support. The energy market is very different from the farming industry.

313. Mr Irwin: How should the DARD support programme be structured in order to contribute to carbon reduction and encourage the use of renewable energy in rural Northern Ireland?

314. Mr Osborne: The authority has no views on how DARD should provide support. My comments just now on what enables people to be successful in an energy market are relevant: knowing what you are doing is important. That might be a lesson for DARD. However, I do not have a point of view beyond that.

315. Mr P J Bradley: The authority has recommended a cross-departmental approach to delivering renewable-energy programmes similar to that adopted in the EREF. Please expand on that recommendation and indicate what role DARD might play.

316. Mr Osborne: As I said to the Enterprise, Trade and Investment Committee this morning, our energy policy needs to be reviewed. If the Executive have a policy objective that farmers should be playing a larger role, it is important that the overall policy framework does not ignore that objective and goes on to create a support mechanism such that the two are working against each other.

317. That comment is made from the high-level perspective: “systems thinking” is needed. The Executive’s objectives, whatever they may be, must be built into the whole set of policy measures. Separate programmes may be contradictory.

318. The Chairperson: Why is it that, when people who produce energy seek to sell it to National Grid, the return offered is minimal, yet the cost of using energy from the grid is charged at a much higher rate?

319. Mr Osborne: There are two factors: first, the price at which electricity is bought by the consumer includes the cost of the electricity and the cost to the network in metering and billing. The price of the electricity that is sold back to the grid does not include those extra costs. Therefore, it is only to be expected that the selling price would be different from the buying price.

320. The second factor is one that we can change and have changed. Historically, the price at which small-scale producers of electricity could sell it back to the grid required them to do a deal with NIE. The bilateral market — with very different prices under the top-up and spill regime — worked strongly against small-scale producers, who were not getting a very good return. Through the SEM, a system has been created whereby people who are getting a good deal from suppliers will continue to work with those suppliers. That, probably, is the future for a great many small-scale producers. However, if they are not happy, they can go directly to the pool and get the same wholesale price that Kilroot and Ballylumford or any of the big generators are getting.

321. Network costs are a fact. However, we have made changes that, I hope, will help small-scale generators obtain a fair price for their power.

322. The Chairperson: Is it true that small-scale producers can only sell electricity back to the grid for power, and not for heat?

323. Mr Osborne: Electricity can only be sold to the pool — I think that is what you are getting at — by the larger generators. Producers who generate less than 10 MW have the choice of selling it to a supplier or to the pool. I hope that that answers your question.

324. Ms Sarah Brady (Northern Ireland Authority for Utility Regulation): I am not sure that I understand the question. We are the regulator for electricity, gas and water. We have been talking about renewable electricity being sold to the grid. I am not quite sure that I understand what you mean. A producer cannot put heat onto the electricity grid. Are you talking about the lack of district heat networks?

325. The Committee Clerk: We are asking about, for example, combined heat and power, whereby the power can be converted into electricity. Is there a way of using the surplus heat generation on a wider grid?

326. Ms S Brady: Most of the heat generated by the CHP process would be used on-site. Mr Osborne has already talked about the difficulties of developing heat networks on, for example, a housing estate. The builders of such a network would want security for their investment, and those connecting to that network would also want security. As Mr Osborne said, to encourage more of that in Northern Ireland would require the same type of attention that was paid to the gas industry in the early days.

327. Mr Osborne: Heat is a local phenomenon, because of the physics involved. There is nowhere in the world that has a national grid for heat. There are city-wide heat grids, such as in Scandinavia, where large city-centre areas are powered by CHP, but that is as big as it gets.

328. The Chairperson: We are still trying to get our minds around some of this, because it is new to many of us. However, we want to ensure that our overall objective is achieved, which I shall quote to you. It is:

“To establish the potential economic benefits Northern Ireland family farm and rural businesses could derive from renewable energy and alternative land uses relative to existing land use and agricultural practices, the potential agricultural and environmental effects of any such changes and to what degree renewable should become a focus of DARD resourcing relative to other agri-rural objectives.”

We have to try to protect the agricultural community, but we also want to ensure that farmers are being directed and encouraged by the Department to go down a particular route that is sustainable and financially viable and profitable.

329. Many encouraging words are forthcoming from the Department. The Committee wants to be sure where, on the graph of profitability, the curves and the straight lines are, so that people will know exactly what they are getting themselves into.

330. Mr Osborne: That is a worthy goal. The energy industry is volatile. Ten or 15 years ago, oil cost $20 per barrel; now it costs almost $120. I have spent much of my career in the GB market. After market reform in 2001, many people entered the market and then, shortly afterwards, the same people exited. You must know what you are doing, and you must be well-capitalised. I am sure that there is space for new-generation investment on the island of Ireland. We have set up the market to create incentives for it and there is great potential for renewables, including for the type of generation that farms might be able to produce. It could well be attractive, but it would have to be done correctly. One can lose as well as gain.

331. The Chairperson: DARD has an action plan, which it intends to implement. However, the Committee is not sure whether actions are being taken. Does the authority work with DARD to point out where the bonuses and pitfalls lie? Is everyone who is essential to the endeavour co-operating?

332. Mr Osborne: Sarah, your team has contacts with DARD. How rich are those contacts?

333. Ms S Brady: We do not have much contact with DARD: we work mostly with DETI and DSD.

334. The Chairperson: DARD is encouraging farmers to go down this road. Surely, the authority’s input is essential? I want to encourage DARD to work with the authority, so that they get it right.

335. Mr Osborne: We would be happy to work with the Department, if it approaches us. However, people who are setting up energy businesses need to source and pay for their advice. We are regulators: we are not a free advice service. It would depend on what kind of discussion DARD wants to have with us. We would be happy to work with the Department to ensure that it understands how the SEM works and to discuss the policy framework. Ultimately, working out what will fly and what will not is a question for DARD.

336. The Chairperson: All the issues that you have pointed out are vital ingredients for the understanding of the industry. If DARD is going to encourage and guide people to get involved in renewable energy, it must provide the best possible advice. It is important to understand the whole issue, not just parts of it.

337. Mr Osborne: Let me be clear: I would be happy to work with DARD. For the Department to be able to put forward an intelligent strategy and guide farmers, it will need commercial advice beyond that which we can give. However, we will give it what help we can.

338. The Chairperson: I would appreciate that. If no one has other questions, we will conclude. I thank the witnesses for coming. The Committee appreciates your presence here and your presentation. I am sure that you will read with interest some of the other matters that have been brought to the Committee’s attention by the Department and by the Ulster Farmers’ Union. If you have comments to make on those presentations, the Committee will be delighted to hear them, whether they add to, commend or challenge that information. If there is something we need to know, please draw it to our attention. We want to understand the issue as best we can.

339. Mr Osborne: We will help where we can. Thank you for the opportunity to talk to the Committee.

340. The Chairperson: I welcome Mr Ian Duff, who is here to make a presentation on coppice biomass. After the presentation, members will be free to ask questions.

341. Mr Ian Duff: Thank you, Chairperson, for the invitation. I am little bit surprised to be here, but if I can help you in any way I will be pleased to do so.

342. I will begin by giving the Committee some information on my background and experience. I qualified as an agricultural engineer and began my working life at the former Loughry College, where I became involved in the initial stages of willow harvester development — a very early attempt at we would now call a “stick” harvester. The concept was to tie bundles of willow, which could be easily picked up by the farmer with an ordinary tractor and buck rake. That was in the days when willow was seen as a crop for marginal land. As you have probably realised, it is now seen as being more of an arable crop.

343. After that, I spent 36 years in the Department of Agriculture and Rural Development (DARD) and retired in 2002. Since then, I have re-engaged with willow, and have organised two or three study tours for farmers, under the Concordia scheme, to see willow biomass being produced in England and Sweden. I will come back to that later. I have also helped to provide technical input into Countryside Services Ltd’s energy biomass infrastructure development scheme (EBIDS), which provides grant aid to farmers who wish to purchase harvesting equipment or build stores and driers for willow chips. That sums up my recent contact with the sector. I am very impressed by the courage and commitment of those pioneers who have gone ahead and done what they have done.

344. I will limit my remarks to the subjects of willow chip, woodchip and biomass, because that is my area of expertise. I have no current commercial interest in the sector, so I hope that I can be objective. The first fundamental principle is that if the production of willow biomass is going to work, it must demonstrate environmental improvement through economics. Unless the production, processing and burning of willow chip is economic, it cannot be sustained. It cannot continue on environmental benefit alone; people have to get an income from it. The second principle is that there must be enough for everyone in the supply chain, right through from the producer to the user. As you know, that has been a problem in the agriculture sector, and I have some views on that.

345. By way of background, as you have probably heard and know already, energy consumption in Ireland comprises 37% electricity, 34% heat and 29% transport. The heat sector has been subject to relatively little regulation compared with electricity, which seems to be the most regulated sector. About 700 hectares of land in Northern Ireland are currently being used for growing short-rotation coppice willow, and only 200 hectares are available for harvest this year, so production is still at its very early stages. Members are probably aware that this crop takes three years to grow before it is available for harvest. After one year it is cut back and then it is allowed two years’ growth.

346. The typical yield is 10 tons of dry matter per hectare per year, which equates to 11·5 tons of chip with 15% moisture content in normal storage conditions. Two and a half tons of chip is roughly equivalent to 1,000 litres of kerosene. On that basis, one hectare of willow will produce the equivalent of 4,500 litres or 1,000 gallons of kerosene or paraffin heating oil. Therefore, the crop can produce quite a lot of energy. It is generally harvested with 50% moisture content, which has to be reduced to 15% if it is going to be stored in chip form. Like any other organic material, such as grain, it must be dried before it can be stored. An added complication of willow chip and woodchip is that it heats very quickly when it is chipped. If it reaches 60°, it develops fungal growth, which, as we all know, is the farmer’s lung organism, and is not something that we want to encourage or allow.

347. It is a bulky product, and therefore not suitable for long-distance transport. No centralised marketing or distribution arrangements currently exist for this material in Northern Ireland. In contrast, in Sweden 1,250 farmers are growing the product on 18,000 hectares, and it is all marketed centrally by a federation of farmers’ co-operatives.

348. The difference is that in Sweden willow is burned when it is green; it is not dried at all. It is harvested and burned in large direct-heating-system boilers to supply power to towns or communities. A high proportion of willow is treated with sewage effluent to help growth and to help to process that material.

349. Looking objectively at where we are, we can grow the crop. We have world-leading expertise at Loughgall, with input from DARD. We can burn the crop; there are many boilers out there, mostly from Scandinavia. The problem area lies in the middle, with the harvesting and storage, and that is where the technical issues arise.

350. There are two types of harvester in Northern Ireland — rod harvesters, which keep the crop intact, and chip harvesters, which chop it into little pieces. We need objective, evaluated figures for the cost of the operation, as that is critical. Figures have been quoted, but we need to know the exact cost, because it is a significant part of the total cost.

351. A further type of harvester is available in England. We offered funding for it under the EBIDS scheme, but no contractors took it up. It is called a billet harvester, which cuts the rod into short lengths, so it does not heat to the same extent. However, it should still dry in the heap in the same way as a bundle of sticks. That system must be evaluated to find out whether the rod will survive and dry, or whether it will rot, in Northern Ireland conditions. The system works in the north of England, but it must be evaluated here. We should also consider the idea of harvesting on more marginal land in areas where willow is not grown at the moment. We would need equipment to harvest in those conditions. Those are the gaps in the harvesting process.

352. With regard to the gaps in the drying process, Countryside Services administered the EBIDS scheme, which was funded under Building Sustainable Prosperity through DARD. It funds 15 stores for farmers, and 11 of those will also dry the crop. We need to get a true picture of the drying costs. Figures of between £8 and £15 a ton have been quoted, but, if you do the theoretical calculations, that does not seem to be achievable. Hopefully, it will be achievable, but that must be validated.

353. Drying is an expensive, capital-intensive operation, with high running costs. Therefore, someone must evaluate and determine whether there are cheaper methods of drying. That must be done scientifically with mathematical modelling, not simply through look-see trials, which get us nowhere.

354. Getting a new sector up and running is like the classic chicken-and-egg scenario. People will not plant the crop unless they know that someone will burn it, and no one will install boilers unless there is a ready supply. To be fair to DARD, its challenge fund stimulated the 700 hectares that we have. The current grant scheme is not as generous, and you could argue that it should be increased, but the Committee should consider that matter carefully. It would be much better to suck material up the supply chain rather than try to push it up from below. If producers plant more crop, we may end up with an oversupply and a drop in price. The emphasis should be on usage. We should ensure that the material is sucked up the supply chain, establish a decent market for the product and make that system work. The other option is helpful in meeting establishment costs, but I would like the emphasis to be placed on sucking material up the supply chain.

355. How can we get more income? There has to be enough money for everyone in the supply chain. Remediation, of which I am sure the Committee has heard, is one way of dealing with that issue, and is widely practiced in Sweden. A couple of very good examples are under trial in Northern Ireland at the moment. Willow is able to clean and use up nutrient applied to it. Those trials offer considerable possibilities.

356. For example, waste from a food factory is being applied to one willow plantation, which will therefore help the nutrient and the growth of the willow. The effluent from the food factory will be treated, and the willow will go back to the boilers in the food factory. Thus, a very good, sustainable cycle is established. That sort of project is exciting and will hopefully develop. For that to happen, the regulators must have an open mind. They must evaluate and try out such projects, rather than always playing totally safe and never letting anything go ahead. We must try new things. Projects must be evaluated, and obviously they must be environmentally sustainable.

357. Let us consider the cost of the material and its value at the minute. To go back to the figures that I quoted earlier, 1,000 litres of kerosene costs £520 today, which is roughly 52p a litre. Some 2·5 tons of willow chip or woodchip could be bought for £85 a ton, which would be £210 in total. That leaves a margin of £310 for that equivalent amount of energy. Therefore, at this point in time, there is an attractive margin.

358. Why then are more people not installing woodchip boilers and getting involved in that type of project? We must accept that there is an increased risk and a high installation cost — as much as four times higher than the cost of oil installation. That quite considerable cost has to be earned back.

359. Another reason is that the product is bulky. There are also issues with specification, and convenience is also a factor. If I want a tank of oil, I simply have to lift the telephone. I can get oil anywhere, but it is not quite so easy to get a load of chip. Many of the good systems that exist on the continent are community-heating systems. People in Northern Ireland are suspicious about community-heating systems because they have had bad experiences in the past. That problem must be overcome.

360. What can be done to encourage such production? The public sector could set targets to generate a certain proportion of its heat from biomass. The private sector could encourage people to install combined heat and power plants by offering enhanced capital allowances and business-rate exemptions. The planning application process could be made easier for developments that use community-heating systems. There could even be some form of heat certificate, which could be traded for electricity.

361. Another idea would be to create an association that could bring suppliers together. For example, I may have a contract with a supplier for woodchip in my area. If that supplier decides to stop farming or whatever, what do I do? It would be good to have an association that could perhaps address such problems, honour commitments made by its various members, and so on.

362. The final and key point that I wish members to note is that farmers and the rural community must maximise their share of the income available in the supply chain. For years, farmers have been what are called “price takers”. Members will be aware of the debate about supermarkets taking the bulk of the margin and the farmers being left with a bit at the bottom. I saw that when I worked in the potato sector; it can be seen everywhere. There is an opportunity for farmers to become involved further up the supply chain, thereby maximising their return. That has been done in Scandinavian countries, such as Sweden and Finland, by what are called “farmer energy groups” or “heat entrepreneurs”. The farmers’ group sells heat to a community development, such as a school or hospital. They sell heat, rather than the woodchip or the fuel; they sell an actual service. I have seen that system working in Sweden. It has exciting possibilities, and it must be encouraged in Northern Ireland, because it has many advantages.

363. We went to a farm energy plant in Lundsbrunn, which is a small community of 15,000 people. It has a nursery, a primary school and sheltered housing together in one location. In 1995, the boilers of those buildings were replaced with a biomass plant and an oil boiler, which are owned and run by five local farmers. The farmers fuel the plant with woodchip, run the boilers, attend any breakdowns and, generally, have an obligation to sell the heat, and the community pays them for it. In the summer they run an oil boiler, rather than the woodchip burner, because woodchip boilers do not work well with low throughput; they need to work hard. The farmers make all the decisions. That plant has a 15-year contract with the community, and it has four years still to run, so it has been running for 11 years. Heat is supplied by burning forest-waste woodchip — not willow chip in this case — which the farmers harvest. Some woodchip is bought from other farmers, and the group pays for it by the load, but most of it is gathered by the group themselves.

364. The second example is a small rural school, where two farmers provided and installed a boiler to provide heat. In that case, they have what they called a “package”, which is a little shed beside the school that contains the boiler that is connected to the school’s pipework. The farmers supply the package unit, fuel it and run it. If there is any problem, they are contacted by mobile phone; it is not the school’s problem. Surprisingly, that boiler was burning grain when we visited it, but, as members know, grain also has an energy value.

365. Those are only two examples, but such farm energy programmes have advantages. They generate a local income stream for the farmers. Farmers, as members know, are competent in looking after equipment — they do so daily — and the work meshes with their abilities. They also have the time in winter to keep up with the peak heat demands, and derive extra income from that. There is also the social integration of farmers and community working together. That also provides protection for both parties, as the farmers know that the contract is unlikely to be broken, or reneged on, because they are part of the local community. The schemes have a lot going for them and seem to work well.

366. In Sweden, such schemes are encouraged by bioenergy partnerships, which provide assistance to farmers to establish an energy group, look at their options, carry out a pilot study, prepare a business plan, develop proposals and negotiate contracts. That is a big issue for farmers. They are being asked to move out of their comfort zones and into unfamiliar territory; they will need support, facilitation and encouragement to adjust. I know from speaking to growers here that there is a nursing home that would be interested in installing a biomass facility, but farmers need to know how to get in touch with the proprietor and how to negotiate a contract.

367. That is my overview of the uses of wood energy and biomass, and the experiences of that in Sweden.

368. The Chairperson: Whose responsibility is it to sell this idea and this product?

369. Mr Duff: The issue is about rural development potential, which is of benefit to communities in those areas. That is where the need should be met and driven from. As you are probably aware, this sector is a difficult one, because DARD is involved with rural communities and the Department of Enterprise, Trade and Investment controls the installation of boilers. There needs to be cross-departmental co-operation, but ultimately the driver is rural community opportunity.

370. The Chairperson: You are convinced of the energy potential of woodchip. You also highlighted the technical challenges of harvesting and drying. How do you see the Government in general, and the Department specifically, helping to resolve those technical problems?

371. Mr Duff: The technical issues clearly relate to, at present, the research and development of harvesting and drying. The Agri-Food and Biosciences Institute (AFBI) and the College of Agriculture, Food and Rural Enterprise (CAFRE) should be working to develop those areas. However, there is much to be said for working with pioneer farmers. This does not have to be ivory-tower research; it is working in the field.

372. Mr Savage: If I heard correctly, you said that there are 700 hectares of willow in Northern Ireland, 200 of which are eligible for harvesting this year?

373. Mr Duff: When they were planted, that was the approximate figure.

374. Mr Savage: One of the things that you said, and which I support 100 per cent, is that farmers should be at the top of the list to be guaranteed returns, with others receiving their share thereafter. In Northern Ireland, at present, woodchip is in big competition with grain. If I owned 500 acres of willow and 500 acres of grain, wheat or barley, people would be watching carefully to see which performed better.

375. We need food, but on the flip side we need heat. Short-rotation coppice willow is economically volatile, and you recommended the use of remediation payments to encourage more planting. What barriers must be overcome before Northern Ireland can move towards the Swedish system, where willow farms are treated with sewage sludge from local authorities?

376. Mr Duff: There are overriding concerns about the risk of pollution. The sewage must be carefully managed to prevent the oversupply of nutrients to the crop. That is what has to be technically and scientifically evaluated and proven in Northern Ireland. If it is proven that that can be done, and the way to do it is established, then it can be done in other areas. It is a non-food crop, so there are not the same health issues. However, the amount of nutrients put in and taken out still has to be balanced, because if more is put in than the crop can use then obviously it is going to go into the water, and that is not acceptable. It is a matter of learning how to manage that, to make it work, and to control it. As you say, the farmer obviously has to get a return; in my opinion everyone in the chain has to get a reasonable return.

377. Mr Savage: Far too often it is the farmer who is at the bottom of the list, and I think that has got to change.

378. Mr Duff: If they sell the heat, they are in a much better position, and are in control of their own destiny. The striking thing about the process of negotiating contracts in Sweden, for example, is that it is totally open; it is agreed by everyone. It has to be beneficial to the old people’s home, it has to be beneficial to the farmer, and there are clauses in the contracts stating that if the world goes up, or whatever happens, that they all know where they are going from the outset. Everyone has to get a return, including the farmer.

379. Mr Irwin: If 200 hectares are available for harvest this year, and there are 700 hectares in Northern Ireland, does that mean that there has been an increase in the product in the last couple of years?

380. Mr Duff: Yes, in the product that has been planted.

381. Mr Irwin: Is there any particular area in Northern Ireland that it is more confined to than others? In the west perhaps?

382. Mr Duff: There are quite a number of crops planted in Derry. North Antrim is probably the one area that does not have many. It is fairly evenly spread throughout the Province. There are some in Fermanagh, some in Armagh, perhaps not so much in Down, but it is reasonably well-spread.

383. Mr Irwin: Two and a half tons of woodchip costs £210, whereas oil is more than £500. Is that £210 the total price of the finished product, delivered to the house?

384. Mr Duff: I checked with one purchaser yesterday, and they were paying £85 delivered. In my opinion, that is not a great deal for the farmer that produced it.

385. Mr W Clarke: During your research, have you come across any Government interventions in the form of awarding tradable heat credits, or other such things, for using biomass?

386. Mr Duff: I have heard it spoken about, but I honestly have not seen it applied anywhere. I can see that it would be difficult. Electricity is easy to meter and so on, but heat is not. I have not seen it work anywhere.

387. Mr W Clarke: Although the use of artificial driers would obviously be more expensive, there would be a faster turnover; the product could be produced in a couple of weeks. Is there a potential to do that on a communal basis? I am thinking of the example you gave of a group of farmers collectively providing energy to a school or to social housing. An additional drying facility could be added to the boiler.

388. Mr Duff: Driers traditionally use proven grain-drying technology — basically, a perforated grain-drying floor. Normally that process takes up to six weeks; considering that it comes in with 50% moisture and has to be reduced to 15%, a huge amount of water has to come off that. It can then be emptied and another crop can be put in, so three loads can be processed through the harvest season, which is normally from January through to March. In my opinion it is essential that the facility be shared, and as many loads as possible processed. It could be done communally. However, none of the applications that were made through the EBIDS scheme were communal; they were all managed by individuals, although some said that they would be drying for neighbours. With the exception of one large co-op — Fane Valley, which has a large scheme in operation —most of the farm-based schemes are all for the use of farmers themselves.

389. Mr W Clarke: In Finland, 20% of energy needs are met by wood. How could such a change be driven in the North?

390. Mr Duff: I do not believe that that level will ever be achieved here, because Northern Ireland does not have the required amount of timber. Northern Irish farmers react positively and quickly to financial incentives. It does not take the Government to drive round bale silage, or whatever, if the benefits can be seen. If there is money to be made, it will happen. It is as simple as that.

391. Mr Bresland: You specifically mentioned elements of the Northern Ireland rural development plan as having the potential to provide targeted support, and you suggested that DARD should compile a specified integrated programme of measures. Can you say a bit more about what needs to be done?

392. Mr Duff: I honestly believe that what the Swedes have done cannot be bettered. They have facilitated a process in which groups come together and are helped to develop contracts, and so on. That process has worked. It seems to be a sensible way to go about it. The Northern Ireland regional development programme contains elements of lots of the things that are required — supply-chain development, diversification, and so on. It would be a matter of pulling various bits of that into a package that could be easily understood by farmers’ groups, rather than their having to do it themselves. I would like the package to be purpose-built. Whether that is possible under the legislation, I do not know.

393. The Chairperson: The Swedes have developed the process to a certain level. You seem to have a clear understanding of that and believe that a competence exists. Are you, therefore, saying that rather than try to reinvent the wheel, it is better to try to replicate the good elements of that system in Northern Ireland?

394. Mr Duff: The system would have to be tailored to Northern Ireland. However, matters such as contracts between heat suppliers and consumers should be sourced, adapted and made available to groups here. In that way, Swedish expertise and knowledge could be applied to our situation.

395. The Chairperson: You said that in Sweden, green willow, which has not been dried, is used. Why can it not be used in Northern Ireland?

396. Mr Duff: It can be used during a short period of the year. It is a matter of supply. A typical Swedish community-heating system burns sawdust, bark, forest waste and willow. The willow is fed into the burner as it becomes available. If a plant were to run totally on green willow, delivery would have to be well controlled. The green willow could not be allowed to sit because it would heat. What would happen if there were a wet week and farmers could not work? The system would become difficult to manage.

397. There is an argument about whether the moisture needs to be reduced to 15%. The exponents of the stick harvester will rightly say that they can reduce it to 25% or 30%. When that wood is chipped, it will last long enough to be burned before it heats. Possibilities that would reduce drying costs need to be tried out. I did not explain the stick harvester, as I assumed that you understood how it works: with the stick harvester the wood is stacked in the open air. The wind blows through it, and it dries naturally down to 25% or 35% moisture. Obviously, that is much more cost-effective.

398. Mr P J Bradley: I am conscious of the questions that the Chairperson, Mr Savage and Mr Irwin have already asked. You, correctly, said that down the years farmers have been price takers, rather than, I suppose, price makers, and that the emerging biomass market provides a unique opportunity for farmers to maximise their share of the product’s value to the final user. Is it not the case that any Government involvement would wipe out the affect of market trends and leave farmers at the mercy of external forces? Do you think that farmers will have a free hand in putting a price on willow? You recommended the establishment of farm energy groups — how can the Government and the Department best facilitate such initiatives?

399. Mr Duff: Facilitating involves using the expertise of rural development staff to identify facilitators who will bring together groups that will work with each other, as part of the rural development process.

400. As for being a price taker, if I were a nursing-home owner I would be comparing this to the price of oil or gas. That would be my bottom line. If the growers get together as a group and make a suitable contract with a nursing home, I cannot see how anyone else could muscle in.

401. Mr P J Bradley: Even if the Government have some level of input?

402. Mr Duff: Restricting Government involvement would be part of the beauty of a deal between the home and the growers’ group — it reduces the risk of a grant being pulled at the last minute. The deal is commercial and largely dependent on market forces. The Committee has already heard that the Government may reduce capital allowances, but most of the money will come from the market.

403. The Chairperson: Who can best take the initiative of bringing together and energising the process to form such groups?

404. Mr Duff: That is a good question. The initiative has to come from the willow growers. Some help is needed to bring together the users and the growers, not least because it takes three years to develop a usable product. That is where the Department, the LEADER groups, or someone used to working with rural communities come in.

405. The Chairperson: The overall vision for renewable energy has to come through Government

406. Mr Duff: OK.

407. The Chairperson: It has to come from Government because, as we said earlier, renewable energy and alternative fuel issues cut across practically every Department. Therefore, someone, or some Government body, must take the initiative and become a driving force. Farmers have suffered and endured so much in the food industry that there is no way that they will get into this otherwise.

408. Mr Duff: The use of wood energy should be sucked from the top of the supply chain, not pushed from the bottom. The driving force has to come from the user of the energy, whichever Department assumes responsibility. That is how to take a lead on encouraging the use of willow chip and other agricultural fuels.

409. Mr Savage: Do you envisage the possible formation of a farmers’ consortium in a scheme that might, for instance, increase the 700 hectares to 1,000 hectares? Could you see a viable, farmer-owned and farmer-controlled business starting up from that? Obviously, other people would want to get involved when it is set up, but it would be controlled by the farming industry.

410. Mr Duff: That could work, but some of the benefits of local involvement would be lost. One of the attractions of the Swedish scheme that I described is that the local community and the local growers are all working together and all trust each other. I would like to see local groups operating as a confederation as the scheme grows, so that if one local group ceases to trade the other groups could honour that commitment, as is done in the travel industry. That would give the investor confidence without the need for a large, controlling bureaucracy.

411. Mr Savage: To put it another way, do you consider a group of farmers coming together on 500 hectares, for example, to be a viable proposition?

412. Mr Duff: Yes, if they can grow that amount. As the Committee is probably aware, there are currently a number of groups working together in smaller areas. Members know as well as I do that the more people there are in a group, the more difficult it is to hold that group together. So there is an attraction in having several smaller groups.

413. Mr Savage: There are so many businesspeople who see it as a viable product and think that the farmers can be pushed aside; however, the farmers are essential.

414. Mr Duff: I agree absolutely. The heat sector is interesting. Most of the opportunities for willow chip range between 250 and 500 kilowatts, so are quite small. It would not be possible to supply power stations; their demand would be too big. There is something to be said for staying small. The co-operative in Sweden that markets all the willow chip has all its growers under contract, and I am aware of one operation in Northern Ireland that is currently growing under contract for a co-operative — I cannot recall what area that operation is based in, but I know that it is quite large. Therefore, it can happen, but, in my opinion, operations can sometimes get too big.

415. The Chairperson: Do you see renewable energy as a genuine way to rescue some farmers, at a time when farm profitability is low?

416. Mr Duff: It is attractive to certain farmers because the crop requires very little input — it is planted and harvested every two or three years, so it is an attractive proposition to someone who is cutting back. We have discussed how arable farmers will probably continue to grow cereals and keep their options open; however, there is a niche for renewable energy. As grain prices have changed over recent times, we have moved to the less-arable area of the country more than we had thought we would.

417. The Chairperson: Thank you, Mr Duff. It has been helpful to speak to you, and we also appreciate the presentation that you sent to the Committee prior to the meeting.

418. Mr Duff: Thank you.

24 April 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Trevor Clarke
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Mr Graham Furey
Mr Michael Harnett
Mr David McIlrea

Ulster Farmers’ Union

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

420. Mr Graham Furey (Ulster Farmers’ Union): I am Graham Furey, deputy president of the Ulster Farmers’ Union.

421. Mr Michael Harnett (Ulster Farmers’ Union): I am Michael Harnett, chairman of the union’s rural enterprise committee.

422. Mr David McIlrea (Ulster Farmers’ Union): I am David McIlrea, vice chairperson of the rural enterprise committee.

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

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

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

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

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

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

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

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

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

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

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

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

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

436. The Chairperson: Just for clarification, are you still using the figures from several years ago?

437. Mr Harnett: The figures come from 2002.

438. The Chairperson: The cost was £1·1 billion?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

453. Mr Furey: It needs to be cross-Departmental; it is very much —

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

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

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

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

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

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

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

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

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

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

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

What would those changes be?

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

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

466. The Chairperson: Who has to make the changes?

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

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

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

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

471. The Chairperson: How are the farmers paid to produce the fuel?

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

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

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

475. The Chairperson: What technologies are used?

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

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

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

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

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

481. Mr McIlrea: Yes. That is DARD’s role. However, the market must exist also.

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

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

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

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

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

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

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

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

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

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

492. The Chairperson: They provide proper co-ordination?

493. Mr McIlrea: Yes.

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

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

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

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

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

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

500. Mr Harnett: There is difficulty with funding.

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

502. The Chairperson: What are they doing with the product?

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

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

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

506. Mr Furey: We keep coming back to that.

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

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

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

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

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

512. The Chairperson: At present there is certainly a big debate about sustainability and food production.

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

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

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

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

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

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

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

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

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

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

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

524. The Chairperson: It is an encouragement.

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

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

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

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

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

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

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

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

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

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

535. Mr Furey: If the price is right. [Laughter.]

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

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

538. Mr McIlrea: People will step up to the mark at that point.

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

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

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

542. Mr Furey: I know what the NIMBY factor is.

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

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

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

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

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

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

549. The Chairperson: Has that recommendation ever been made to the Department?

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

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

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

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

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

555. The Chairperson: Where did DARD stack up in the assessment?

556. Mr Furey: The biodiversity assessment?

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

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

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

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

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

562. Mr Furey: We thank the Committee and appreciate its giving us its time.

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
Mr Terry Waugh

Action Renewables

563. 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.

564. 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.

565. 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.

566. 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.

567. 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.

568. 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.

569. 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.

570. 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.

571. 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.

572. 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.

573. 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’.

574. 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.

575. 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.

576. 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.

577. 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.

578. 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.

579. 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.

580. 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.

581. 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.

582. 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.

583. 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.

584. 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.

585. 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.

586. 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.

587. 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.

588. 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.

589. 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.

590. 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.

591. 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.

592. 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.

593. 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.

594. 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.

595. 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.

596. 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.

597. 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.

598. 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.

599. 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.

600. 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.

601. 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.

602. 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.

603. 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.

604. 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.

605. 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.

606. 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.

607. 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.

608. 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.

609. 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.

610. 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.

611. 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.

612. 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.

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

614. 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?

615. Dr A McCrea: That is a fair question.

616. 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.

617. 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.

618. 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.

619. 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.

620. The Chairperson: Do you have any figures for the level of fuel poverty in the rural areas?

621. 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.

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

623. 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.

624. 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?

625. 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.

626. 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.

627. 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?

628. 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.

629. 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.

630. 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.

631. The Chairperson: The initial costs of some of those technologies are very high.

632. Mr Waugh: They can be, yes.

633. The Chairperson: How can DARD play a role in encouraging farmers to invest in those technologies?

634. 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.

635. 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.

636. 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.

637. 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.

638. 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.

639. 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.

640. 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.

641. 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.

642. 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?

643. 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?

644. 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.

645. 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.

646. 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.

647. 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.

648. 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.

649. 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.

650. 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.

651. 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.

652. 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.

653. 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.

654. 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.

655. 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?

656. 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.

657. 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.

658. 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.

659. 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.

660. 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.

661. 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.

662. 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.

663. 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.

664. 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?

665. 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?

666. 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.

667. 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.

668. 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.

669. 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.

670. 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.

671. 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.

672. 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?

673. 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.

674. 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.

675. 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.

676. 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.

677. Mr Elliott: They should all be put in the Mournes.

678. 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?

679. Dr A McCrea: I absolutely concur with that.

680. 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.

681. Dr A McCrea: I take your point, Chairman.

682. Mr W Clarke: That is the problem, and that is why we are in this situation.

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

684. 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.

685. 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.

686. Mr W Clarke: Can I have an answer to my question on geothermal technology?

687. 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.

688. 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.

689. Mr W Clarke: Do you have an opinion on hydrogen fuel cells?

690. 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.

691. 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?

692. 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.

693. 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.

694. 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.

695. 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?

696. 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.

697. 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.

698. 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.

699. 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 —

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

701. 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.

702. 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.

703. Dr A McCrea: That is the Arklow Bank wind park, which is owned by Airtricity.

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

705. 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.

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

707. 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.

708. 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.

709. 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.

1 May 2008

Witnesses:

Ms Patricia Mackey
Dr Peter Christie
Professor Sue Christie

Northern Ireland Environment Link

710. The Chairperson (Dr W McCrea): The Committee will now hear evidence from Northern Ireland Environment Link. I am delighted to welcome Professor Sue Christie, Patricia Mackey and Dr Peter Christie. It is our pleasure to have you here. I invite you to make your presentation, after which members will have the opportunity to ask questions.

711. Professor Sue Christie (Northern Ireland Environment Link): Thank you, Chairman, for allowing us to address the Committee this morning.

712. Northern Ireland Environment Link is an umbrella networking and forum body for environmental non-governmental organisations (NGOs) in Northern Ireland. We have 50 full members — all NGOs — and they represent, near enough, 100,000 citizens of the Province. Both Action Renewables, who have just given evidence, and WWF, who will address the Committee later, are full members. We support fully their expert testimony. They can provide much greater detail than we can; we will give more of an overview.

713. First of all, I will put this in a strategic context. Climate change offers many threats, both globally and locally, but it also offers many opportunities. Addressing the need to move to a low-carbon economy will, we feel, give Northern Ireland many economic advantages, both in the urban and rural communities, which can be seen not as threats but as opportunities for rural residents. We need to adapt to the inevitable 2° rise, which we are already committed to because of the carbon dioxide that has emitted over the last few hundred years. However, we also need to act to mitigate the emissions in the future in order to avoid more severe problems of rises in global temperature above 3° centigrade.

714. The UK Climate Change Bill [HL] and supporting Northern Ireland legislation should aim to meet the current best estimates of a need for an 80% reduction on 1990 emissions levels. That equates to a 3% reduction in our CO2 emissions per year. To achieve that, we feel that we must have local Northern Ireland targets in order to fulfil our international moral responsibility and to realise the local benefits of a proactive approach for our local population. The switch to a low-carbon economy offers us many opportunities, but it also introduces many costs if we do not address those issues proactively.

715. The rising cost of fuel is already apparent. Just a few months ago, $50 a barrel for oil was unheard of. However, even by the end of 2008, that could rise to $200 a barrel. That will have proportionate and disproportionate impacts on our rural communities where fossil fuels are relied on for the fuelling of transport and farm machinery, heating homes and the manufacturing and production of farm outputs. The delivery and production of many of the chemical fertilisers and pesticides that we rely upon are also based on fossil fuels. Therefore, the rising costs of fossil fuels will have big impacts on rural communities, and we need to act proactively to avoid those.

716. We should not be dragged late into addressing these issues; rather we should develop our resources and industries to take our place in international and local markets to meet local and international needs. We need to increase the diversity and self-sufficiency of our energy supply if we are to do what is best for the rural community.

717. As was said a few moments ago, many Committees — in fact, we would say all Committees — of the Assembly have a real responsibility to address climate-change issues. We welcome the forethought of this Committee in addressing the matter now, but if we are to address it in a way that will benefit all of our rural communities, we need to engage the entire Assembly, all Government Departments, and all local authorities.

718. Agriculture has a special role in greenhouse gas productions. They are present in the chemicals that are used and the production of them, the agricultural machinery and management on the farm, emissions from the animals themselves, and, largely, although less thought of, the waste that we produce on farms and management of that waste.

719. We need to address the impacts of climate change and rising fuel costs now and address them in a more proactive manner, which was one of the main recommendations of the Stern Review. We understand that he has recently revised his figures and is now even more in favour of early action, as opposed to late action, which will incur a much greater cost. We must also think always about the local economic and job benefits to Northern Ireland that moving forward proactively will bring.

720. Managing agricultural waste is, potentially, a large source of alternative fuels that has not, to date, been exploited. Agricultural waste has largely been thought of as a waste product that we dispose of, mainly by spreading it on land, often not in the most productive way. However, slurry, silage, manure, plastics and even food waste are, potentially, an enormous source of energy production, and the transforming of what is now deemed a waste problem into a source of energy could be a possible way forward.

721. Renewable energy has a potential on farms in Northern Ireland as individual installations for the farm; for clusters of farms; for rural communities and also as an alternative land use. I appreciate that we do not want to cover the entire Province with wind farms, but there is a major goal of education to ensure that communities see the advantages in these installations, as well as the disadvantages.

722. Northern Ireland has very good resources that can be exploited in a wide variety of ways. I am sure that Action Renewables will have talked about resources, so I will not go into the details. We have wind, tidal, solar, geothermal, and ground- and air-source resources, which are only beginning to be exploited here and which have great potential.

723. Micro-generation and macro-generation on farms and for agricultural businesses are likely to become increasingly prominent and important as electricity and gas price rises — even in the last few weeks — will encourage the change to local generation, because it will be financially viable. In the past, one of the big arguments against renewable installations for farms, homes or companies was the payback time; it took years to pay back the cost. Given the rapid rise in charges for traditional energy sources, that payback time will rapidly decrease.

724. We can reduce significantly the costs of farming and other rural enterprises through local generation. The situation will get worse. Prices will continue to rise, and we will see, in the near future, the introduction of carbon pricing and other international schemes that will increase energy prices further. If we develop and exploit local sources of energy, not only will we decrease transmission losses, which will mean that we will not need to generate as much energy, but we will diversify the supply, and that will make us more secure and less vulnerable to President Putin turning off the tap.

725. Many crops are, and can be, used as sources of renewable energy. There are two major areas — biomass and biofuels — and we will look at them separately. It is highly likely that the shifts in land-use management that we have seen in recent years, such as the increased growing of oilseed rape and fodder maize, will continue. The common agricultural policy (CAP) is changing. There is consumer pressure for different sorts of products, more local products, and more environmentally and animal-welfare-friendly products. Climate change will allow different crops to be grown, and there will be different financial drivers, and we hope that those drivers will encourage renewable energy.

726. The Committee was talking about biomass crops, such as willow, earlier. Much work has been done to produce the background research that is necessary for willow to become a significant crop in Northern Ireland. The problem about ensuring that we develop markets and supply simultaneously is being tackled, although there are still some issues with that. We must examine those issues coherently before developing particular programmes, so that we do not end up with demand outstripping supply or vice versa. We need stability in order to develop both of those aspects in tandem.

727. Combined heat and power (CHP) is very important on the farm, as well as in local communities, in larger urban areas, in housing, and in large factories. We have not really been involved with combined heat and power in Northern Ireland to date, but we must examine it extensively in the future. We waste about one third of the electricity that is produced, and we waste an even greater percentage of the potential energy in fuel, due to both the transmission of energy from large-scale plants to the user and waste heat. Combined heat and power is one positive way of using that energy. Often, it is also a logical way of using effectively the waste that we produce.

728. For some time, biofuels were thought to be a panacea, especially by the Americans, whose policies promoted their use and brought about large-scale and negative consequences around the world, including in Northern Ireland. However, we did not climb so high on the biofuels bandwagon that we caused the sort of widespread environmental damage that can be seen in other parts of the world, where virgin rainforest has been ripped up to make way for palm oil or soya plantations.

729. We must be very careful about choosing large-scale biofuels and, in particular, be wary of seeing it, or any single technology, as a panacea. It has a role and a place, but it is only one of many. We must look at the lifetime carbon costings of any biofuels — how much it would cost to transport it, how much energy it would use in production, and so on. It has a role but we have to be very careful. In a global climate of food shortage, care must be taken when suggesting the use of food to power our cars and other aspects of a perhaps wasteful lifestyle, as opposed to feeding those who are starving to death, literally, in other parts of the world. It is part of the solution, but only one part of the solution. It is only possible where we have a true lifetime’s savings in carbon or fuel. That applies to primary crops.

730. Another aspect is secondary crops. Secondary biofuels are derived from waste materials —forest brash, straw, waste food, for example. That is a much more promising area, and one in which Northern Ireland could become involved. More research and development is needed. We must learn from elsewhere and develop local waste sources to simultaneously solve a lot of our waste promises and develop new opportunities for energy.

731. None of that can move forward without full and clear impact assessments. We cannot rush into things; we need to understand all of the impacts that are involved. There are dangers to the global environment, the global economy and to local producers if we decide to go all out for one particular technology or solution. That chosen technology, for various reasons, could collapse on the global market. Full impact assessments are needed on the economic, environmental and social impacts.

732. Lifetime carbon costings are certainly one part of that. We need to be very careful that, in changing land use, we do not release more greenhouses gases. The peatlands of Northern Ireland, for example, are a great store of greenhouse gases. Care must be taken that we do not solve one problem by creating others, or that we do not release more carbon dioxide than is being utilised by the alternative use. We must think carefully about those issues before engaging in them.

733. Estimates must be based on realistic financial costings and increasing fossil-fuel prices. The new concepts, taxes and systems being introduced throughout the European community on carbon budgets, fuels and costings will also have to be taken into consideration.

734. To sum up, we feel that a number of actions are necessary. First, new and creative financial packages are needed, including grants. Those should also include allowing payback to producers for the energy that they produce. This is similar to systems that operate in other parts of the EU where people are paid a very favourable rate for introducing renewable technology and for the excess fuel that they generate as well as obviously getting the saving in not having to buy the energy that they use. We need to support rural communities and farmers to develop and use renewables. The success of the European Renewable Energies Federation (EREF) — indeed, it has been over-successful — demonstrates that there is a demand and that that demand is there to be optimised.

735. Secondly, good environmental impact assessments are needed of all proposals, specific and strategic, where we look at alternative land-management regimes. Those need to take into account climate-change impacts on crops that we are going to be able to grow and their possible use for adaptation — woodland can be used to avoid flooding as well as to produce a biofuel — and we should look at how we reduce our waste. We must look at all aspects in moving forward, not just one or two.

736. Thirdly, we have a major resource in the waste products that we produce. There are huge opportunities for mutually beneficial programmes; everything from on-farm, to food production, to sewage, any of which could be developed for renewable energy generation.

737. Fourthly, there is the possibility of reducing greenhouse gas emissions from farm practices — from the animals themselves, through modifying the feed that we are providing them with and the way in which they are housed. Substantial savings could be made in the amount of greenhouse gas emissions produced by the animals and on-farm practices. Those need to be researched, promoted and supported.

738. There is a need for more research and promotion in all of those areas if they are to move forward, so that the rural communities can support them and see the opportunities and are not unwilling to try new ways of doing things. A lot of education is needed.

739. Finally, we need to look at lots of solutions to lots of problems. There is no single magic bullet; there is a very “useful” buckshot approach, and that is what we need to consider in Northern Ireland. A solution that is appropriate for farm A in County Down will not be appropriate for farm B in County Fermanagh. There is a need to develop a number of different solutions to our problems and to work on all of those simultaneously, if we are to meet our requirements for a sustainable rural community that provides livelihoods for local farmers, a place to live for other rural residents, and which plays a part in global, climate-change scenarios. Thank you.

740. The Chairperson: Thank you very much indeed. Your written submission states that small renewable-energy generators have an important role to play in providing a significant proportion of Northern Ireland’s energy needs. Will you perhaps add some detail to that? How can family farms or small rural businesses make that significant contribution?

741. Professor S Christie: Obviously, to start with, they could provide for their own resources on the farm. As I said before, if CHP can be generated on a single farm or farm cluster and fed into local communities, an enormous proportion of the energy that is currently being transmitted to them from major power stations could be saved. That would increase the diversity of supply, as well as the self-sufficiency of those farms, because there would obviously be a decrease in the amount of money that they have to pay directly for energy, and it would allow them to take advantage of their own particular resources. They may have very good wind resources, or they might even have a stream that is big enough to be used for hydropower. They are likely to have a source that could be used for anaerobic, or even aerobic, digestion. The local resources of farms should be taken advantage of, and support should be structured to encourage that sort of local generation to meet local need. That would decrease the reliance on external energy, which at the moment is all generated by fossil fuels, whereas that local generation would be through renewables.

742. The Chairperson: All of the groups that have spoken to us about this subject have referred to the crisis that exists here and now. It is not that we are on the verge of a situation; we are actually in that situation now. All of those groups have indicated in their submissions, as you have done, that there is a need for more research. How long is that research going to take? Are we actually lagging behind other areas where the research is perhaps already done, and is that research relevant to our situation?

743. Professor S Christie: We need to adopt and adapt whatever research has already been done. Dr Andy McCrea has probably mentioned that Queen’s University and the University of Ulster have already got some of the best research reports and research capabilities in renewable energy in Europe, if not the world. We can take advantage of that now. When I refer to research I do not mean that we should engage in a 20-year research program. However, we cannot do what has been done in America and decide that the solution is to simply change to biofuels overnight. We need to be a bit more careful than that. I do not think that there is a need to develop a research program. The Department of Agriculture and Rural Development (DARD) has been considering the opportunities presented by willows for many years. First of all, it was not an option, then it gradually became important, and now it is seen as very important.

744. When I first came here about 30 years ago, I saw that people were attracted to the benefits of anaerobic digestion; they thought it was great. In Portglenone, some of the local farmers were trying to develop a site; the research was done, but perhaps because of costs at the time, it did not get promoted. Those costs might be significantly different now. The will to execute the research did not exist then either; now we need the will to progress. The research need not take years; it can be quick and practical. Some of that research should be implemented in pilot projects. That is already happening in some cases.

745. Dr P Christie: I am sure that you are aware of the work that is being done by the Agri-Food and Biosciences Institute at Hillsborough. Much of the research on renewables has not yet been carried out because the infrastructure is still being developed. However, within the next few years, it should provide some interesting data on the use of those systems under our conditions.

746. There is an analogy between alternative land uses and traditional land uses. For a period of at least 30 years after the Second World War the Government were prepared to provide huge amounts of money to agriculture to maintain production in the UK. That provided farmers with a sustainable business producing a commodity, such as milk or grain. Nowadays and in the future, although producing that commodity may, hopefully, still provide a living for the people who want to continue to do so, it will take an entrepreneur to do something special such as converting potato growers into producers of a new product — some type of mashed potato that is sold in supermarkets nationwide.

747. A similar analogy can be made about a farmer who grows willow biomass for heat production. He may want to make a profit by selling biomass, but the real way he can make a profit is by supplying heat to a local community hall, school or factory. He installs the boilers, grows the biomass, to which neighbouring farmers can also contribute, and sells the heat. Once he has done that he has sold something of added value. Similar analogies can be found in the food industry.

748. The Chairperson: The consistency of supply is important. However, I attended a debate yesterday evening in another place, where concerns about the Energy Bill were discussed. On the one hand, there is the problem of excessive fuel prices, and on the other hand, there is the present concern over food shortages. The discussion was, therefore, about moving the use of agricultural land away from food production and into electricity and fuel production, about which there was major concern. That must be carefully balanced if we are to get it right.

749. Professor S Christie: That is one of the dangers of any move towards biofuels that we would be very concerned about. Northern Ireland has its advantages and disadvantages. Some of the land is not particularly productive for growing grains and crops, but is good for grazing. That could be put to alternative uses.

750. We have already looked at the use of willow, but there are other crops, such as miscanthus, that could be grown in less-favoured areas, as opposed to the best agricultural land. Again, it is horses for courses. We should examine ways to diversify production from our best agricultural land, so that we can meet food needs locally rather than having to rely on imports. In some of the less-favoured areas we should perhaps move away from animal-protein production, which is not always the healthiest option, and use those lands differently. We would not be in favour of diverting significant portions of productive land for the development of renewables.

751. Some of our most productive land has been used for willow growth in the past. It is obvious that better willow growth will occur on that land. However, in the current global food crisis, I would be wary of shirking our international responsibilities.

752. Mr Elliott: Thank you for your presentation. The progress of the proposed climate change Bill will be led by the Department of the Environment (DOE) rather than DARD. How can emissions reductions in the agriculture industry be kept within the “carbon budget”? I hope that you are not going to tell me that we will have to keep all the tractors off the roads and out of the fields.

753. You used an interesting phrase, which was “alternative land-management regimes”. What does that mean? What role will the farmer, as well as DARD and other Departments, play in that? I am not sure whether you are talking about the bigger picture of taking land out of food production and into biofuels or short-rotation coppice crops such as willow or miscanthus. Perhaps you could explain that in broader terms.

754. Professor S Christie: I covered a number of issues in my opening remarks. DARD will have a direct impact on issues related to the reduction of emissions. It can play a part by developing different regimes in order to encourage farmers to get involved in addressing the issues of greenhouse-gas emissions from tractors, the chemicals that are used on the farm, and, of course, animals. That does not mean that the farmer cannot drive his tractor or use chemicals on his land or that he has to enclose his animals in boxes to harvest their methane emissions. There is much that can be done, even around the use of fuel in tractors, which is similar to the steps that are being taken to make private cars more efficient.

755. We have been talking for a long time about reducing the chemical intensity of crops in Northern Ireland, and great strides have been made. Twenty years ago, lots of phosphate was still being used on the land, even though it was not needed. We must make more strides, and we must only apply the levels of chemicals that are necessary to grow crops, and not overproduce.

756. Dr P Christie: The conditions in the west of the Province are completely different from those that pertain in the east. Intensive dairy production was only practised in parts of County Fermanagh, for example, because artificial subsidies were available. The soils of County Fermanagh were not suitable for intensive dairy production. Compared with the east of the Province, the length of the growing season in the west was very short, as was the time available to have cattle outdoors.

757. I am not saying that every area is like that, but there are places where, if you were starting with a blank sheet, you would not introduce intensive dairying. In future, it might be difficult, without subsidies, to maintain dairying in such areas, where the soils and the climate might still be suitable for good growth of willow biomass, for example. By growing biomass and lowering emissions, producers can help to reduce nitrogen problems. Fewer cows producing milk will save on the use of concentrates that are used to feed them.

758. I am not saying that every farmer should be reducing the intensity of production. It would be sensible to have the more intensive production systems in areas in which the climate and the land are suitable for those purposes. In less suitable areas, it would be better to reduce, or have incentives to reduce, such intensive systems. That is where the alternative systems should be sited. Those systems can be integrated and biomass used for several purposes, such as bioremediating sewage sludge or manures. There will be problems related to compliance with the nitrates directive if too much manure is produced. By adopting an integrated approach, less manure is produced, and can be bioremediated in order to create combined heat and power.

759. Mr Elliott: Should alternative land management become Government policy, or should it be implemented by the agriculture industry?

760. Dr P Christie: The Government will have to educate people — that is crucial — and encourage them to adopt new methods. There must also be some form of financial incentive, even if it is only temporary, in order to get things moving.

761. Professor S Christie: It is not about forcing people; it is about providing incentives and encouraging and educating people. People will, remarkably rapidly, do things that are in their financial interest, especially in the current climate of farming, where things are often marginal. We must keep people on the land and managing it. Alternative land management can mean many things, such as less intensive grazing, or alternative crops. The options will be matched to local conditions and future expected climate changes. If the summers become as dry as we expect them to, some of the crops that are being produced now will not be able to grow, and we may need to examine irrigation, among other measures. We must put some thought into all those issues. The incentives that will be offered, either financial or educational, will have to be geared towards the sorts of land management, in a certain area, that are appropriate to that area, just as, in the past, we had less-favoured area schemes.

762. Mr Bresland: You have quoted a useful case study from Germany, which shows how a variety of renewable-energy technologies are being employed on farms. What lessons can be drawn for Northern Ireland in that regard?

763. Professor S Christie: We should learn lessons from all over the world, from places where people are beginning to have to address these issues. Some places are ahead of us, and others have similar climatic and soil conditions. We should examine how they are addressing these issues and adapt them to Northern Ireland. Research must be carried out to determine what is happening. Some research is already being done on what is best practice and what we can implement here.

764. Ms Patricia Mackey (Northern Ireland Environment Link): That ties into what we said earlier about the need for research. It does not necessarily mean that we have to go back to the drawing board, because many schemes are under way in other parts of the world, and we must examine how those schemes can be adapted in Northern Ireland, how the figures that they have come up with can be used to make the schemes worthwhile, and, more importantly, how they have linked into and got buy-in from rural communities.

765. Dr P Christie: There are ways in which we can be quite creative. For example, miscanthus, which is one of the biomass crops, is a grass that is very different from the grass that we are used to growing. However, since farmers here are used to being recognised internationally as experts in producing grass, we can introduce the system to them in a less challenging way, by simply saying that it is a different type of grass, which is true. They will have to use different methods of production to grow it successfully, but if we use that kind of argument, we might be taking some of the fear out of facing these new opportunities. We can still be well known as producers of good grass, but it will be different grass that will be used in a different way.

766. Professor S Christie: There is a huge opportunity for Northern Ireland to be seen as a leader in renewable-energy technology, as well as the good-quality food, good-quality environmental standards for that food, and good-quality animal welfare standards for which we are already known. All of those things work together to ensure that Northern Ireland is a leader and can be positively promoted on the global market.

767. The Chairperson: Farmers were told that the introduction of measures concerning the production of food — quality-assured and, environmentally, produced to the highest standards — would give them great returns. The pig farmers were told that prosperity was looking them in the face. In actual fact, it was bankruptcy that was looking them in the face. Farmers in the rest of Europe were supposed to be complying with those same standards, but they were not doing that at all. They were finding ways around the regulations, while we were actually fulfilling every regulation. The farmers had to bear all the expense, because there were no grants towards that. They were led not only up the garden path, but some were led completely into bankruptcy, and some of them to suicide.

768. Professor S Christie: We need to make sure that we are promoting something that is actually followed through with promotion to consumers, because consumers have a huge role to play. Perhaps the Europeans are not doing it, but if we promote good-quality local produce, and local people buy that local produce, the bad practice — and it is bad practice that is going on elsewhere, in Danish pig farms, for example — will be less important.

769. Ms Mackey: If our rural and farming communities are not encouraged to start adopting those renewable-energy practices, there will be a lot more farms going bankrupt, because of the increasing prices of oil, and the reliance of our farming practices on fossil fuels. Food shortages have been mentioned as a key issue, but if food shortages are considered in isolation and not in relation to energy production and future energy production then, although there may be more food in the very short term, increasing oil prices and decreasing availability, coupled with climate change, will mean that food shortages are going to be much more apparent, in perhaps 10 years or so. There is a need to make sure that all of that is considered strategically.

770. Mr W Clarke: You have answered the question I was going to ask in relation to biofuels, and the possibility that their production might compete with food production. I agree that there has to be an integrated approach to deal with that.

771. On the bigger, global issue, if the will were there it would be possible to produce enough biofuels and enough food cereals as well. If western powers, instead of fighting wars in Iraq and Afghanistan, looked at irrigation in Africa and the Third World countries, I think that we could get all of the food and biofuels that we need.

772. I have not heard anyone talk about hemp as a product in less-favoured areas. Perhaps there is an opportunity to put in vineyards, given the climate change.

773. Ms Mackey: I know that there is someone around Antrim who grows hemp and uses it in sustainable building production. That is the extent of my knowledge of hemp.

774. Dr P Christie: It is a good example of something that grows well under the right conditions, and it could have a niche market. Although not everyone would be involved in it, it is something that someone could choose to specialise in.

775. Mr W Clarke: It is something that I have an interest in, because there was a community group in south Down that grew hemp, so it is viable.

776. Professor S Christie: That is the sort of thing that we are encouraging — lots of solutions.

777. Ms Maskey: Especially when the community can become involved, and there can be community buy-in.

778. Mr Irwin: You say that decentralised electricity production should be a very attractive option for farmers. I have an interest in this because I am a farmer myself. What sort of renewable-energy systems would you suggest are best suited to this scheme in rural Northern Ireland?

779. Ms Mackey: There is no one solution. The solution depends on the locality of the farm, the type of produce and potential by-products from that, and how close the farm is to other communities, farms or industries. There are many solutions.

780. Mr Irwin: In general, farms have grown. Large milk producers and beef producers create a lot of slurry, which is a massive problem.

781. The Chairperson: You have declared an interest?

782. Mr Irwin: Yes, I have. [Laughter.]

783. Ms Mackey: It is good that farmers see those problems as potential solutions. They just need the help to turn those problems into solutions and resources, which is perhaps something that the Committee could help with.

784. Mr Irwin: Yes; there must be advice from the top, from Government.

785. Professor S Christie: Financial assistance does not always have to be through grants; alternatives include loans and support for capital. Financial assistance does not always have to mean giving farmers a certain amount of money.

786. Mr Irwin: Farmers are used to grants.

787. Professor S Christie: Yes; but politicians do not tend to like them as much. [Laughter.]

788. Mr P J Bradley: You mentioned funding schemes from Germany and the Republic of Ireland that are designed to encourage greater use of renewable energy. How could similar schemes best be used to help farmers in Northern Ireland — and, particularly, in Fermanagh? [Laughter.]

789. Professor S Christie: Again, there are grants for installation, and there is the possibility of loans for installation and capital equipment. In Germany, there is a guaranteed price for the electricity that is generated by a micro-generator — in a house or on a farm — which is then sold back into the grid. German research has shown that, if that guaranteed price is high enough, there will be a much better take-up and installation of renewables than if there were just grants available. That is because what really matters to farmers is the long-term cost and benefit; although they have to make an upfront injection of capital, their costs will be decreasing — which is a huge advantage because the prices will go up — and the price that they will get from the grid should be at least as high, and preferably higher, than the cost of any electricity that they would buy from the grid. That would contribute to renewable-energy obligations as well as their on-farm generation.

790. Dr P Christie: If you decide to grow biomass for electricity generation, the European Union will give you about €34 per hectare. That is not enough to induce people to do it. A nearby state has encouraged farmers to produce biomass to put into the large power stations that are burning peat. That Government have added around €80 per hectare to create a total of €120 per hectare, which is just enough to make the scheme viable. As fossil fuels increase in price, such schemes will become more useful. If the cost of the scheme is compared to the cost to the Government of extracting peat, which is a diminishing resource, the scheme seems to be reasonably viable.

791. Professor S Christie: Peat is an intensive carbon source, so mining it is negative and even worse than coal or oil.

792. Dr P Christie: Peat is a good way to lock up carbon, so burning it is not a great idea.

793. Professor S Christie: You lose a lot when it is mined as well as when it is burned, so it is not a good idea.

794. Dr P Christie: That is a simple example of a scheme that changes the economics for the start-up and can make a big difference by encouraging people to invest in a new system. Once the farmer is in that system, hopefully, it is viable. However, it is not the end of the world if it is not viable as the farmer can always change the system. There may be a contract for a specific period to supply biomass and at the end of that period the system can be reviewed and changed to something else.

795. Professor S Christie: Technologies are constantly evolving in this scheme. Those technologies that are viable now and have a 10- or 15-year lifespan will be replaced by amazing technology in the future. They may even harness something like hydrogen. However, we are not there yet.

796. The Chairperson: Bearing in mind the challenges that farmers are facing financially and also in terms of viability and sustainability, there needs to be an assurance that they are investing in something that is going to have a viable, sustainable return.

797. Professor S Christie: That supports my point that we need to have a guaranteed minimum to encourage people into such schemes. I do not mind if it gets higher, that would be great.

798. There is no question that we are going to have a constantly increasing problem with CO2 levels and the increasing cost of fuel. Therefore, any solutions brought in by Europe are going to have to address those factors, and we will have targets to meet.

799. The shorts of shifts that we experienced before when farmers were paid to grub up hedges and then replant are a thing of the past. That sort of reversal is not possible in this scenario. We are dealing with a problem that is going to get worse, not one that is going to get better.

800. The Chairperson: You mentioned that we have to be careful that we are not solving a problem by creating another problem.

801. Professor S Christie: Definitely

802. Mr T Clarke: In the report that you sent to the Committee there is a set of recommendations including the need to promote small-scale local uses of bioenergy, particularly the use of biomass for heat and power. How can the Government help to provide the promotion recommended in your report?

803. Professor S Christie: Certainly the feed-in tariffs would be useful. It is also important to encourage communities to work together and to encourage farmers to take the CHP out of just their own farms, where it is not going to be obviously viable. The Government could also make grants and loans available for the farmers to buy the capital equipment while ensuring that there will not be significant changes in the structures of electricity provision. However, I think that we can be fairly sure that this is not going to happen.

804. Dr P Christie: A problem for micro-generators at the moment is that they have to pay something like 11p per therm for any electricity they use from the grid. However, if they generate and supply the grid they receive only between 3p and 4p per therm from NIE. That is completely ridiculous.

805. I can see why NIE would not want to pay anything like 11p per therm, but we need to make the differential a lot smaller. It would be as simple as forcing NIE to pay a more realistic amount of money for the electricity that is provided by micro-generators. Indeed, farmers could be seen not as micro-generators, but as macrogenerators, as they have greater scope for producing electricity than, say, an individual urban household.

806. Mr T Clarke: How would we pursue that course of action when we only have one energy provider in Northern Ireland? We have no choice of who we sell the electricity to.

807. Professor S Christie: The Northern Ireland Authority for Utility Regulation (NIAUR) can regulate the feed-in tariffs. The feed-in tariffs for micro-generation from renewable sources should not be equal but higher. That can be justified because of the greater need for renewables under the renewables obligation. The regulator has the power to determine the feed-in tariffs that are offered, and therefore Government have the ability to encourage that to happen.

808. Mr Elliott: Encourage or insist on it? There is a big difference.

809. Professor S Christie: I believe that the Government have the power to insist. There is probably a lag time because there are almost certainly agreements in place between NIE, the regulator and the Government. However, in the future we should be moving towards a situation where that has changed.

810. The Chairperson: In the debate yesterday evening, there was much talk about managing agricultural and food waste. That was mentioned in the light of the German experience. What is the German experience?

811. Professor S Christie: I am sorry; I do not know the details of that. The Germans are using both anaerobic and aerobic digestion and different processes, but I do not know the details.

812. Dr P Christie: About 20 or 30 years ago in Europe, the use of small anaerobic-digester systems on individual farms mushroomed. The same did not happen in the UK. As it happened, many of those systems failed and closed down. Over the last five to 10 years there has been a resurgence of small anaerobic digesters in Europe, particularly in Germany and Denmark. I do not know the details about the difference in technology, but, apparently, those digesters are much more efficient and much cheaper to run than the previous ones. Many of the technological problems have been solved, and that has resulted in the digesters becoming much more economically viable. We must examine seriously how the Germans are doing that. Somebody must go and look at the system, because we can definitely learn from their experience.

813. The Chairperson: Will small-scale bioenergy production take off without Government grants?

814. Professor S Christie: That will not happen in the short term; it will need support from Government. I assume that you mean without grants, but with education and encouragement. Northern Ireland’s farmers will probably respond much more positively to grants. The environment and renewable energy fund was a grant, and that certainly worked. We probably need grants, although they may not need to be as large as we might think, given the increasing costs of electricity, peak oil, and so on. However, people need to see that —

815. The Chairperson: There is a need to be realistic.

816. Professor S Christie: The scheme needs to be realistic, but it must be something that the farmer can look at and say, “If I invest now, the installation will have a payback period of five years. I can get a grant to cover half the cost, and I will be able to afford it.” If the cost will be stratospherically high for the farmer — on top of the cost of new slurry tanks, implementing nitrogen directives, etc — he will not invest in the equipment. However, the grant need not be as large as we think, and it might be possible to give loans, rather than an outright gift of money.

817. The Chairperson: What about a mix of both?

818. Professor S Christie: Absolutely; we need a mix of solutions for a mix of problems.

819. Dr P Christie: I know of farms in Denmark where the farmers applied to construct buildings to enable them to raise more pigs, for instance, and the planning permission for that intensification was made conditional on the installation of anaerobic digesters. In many cases, those farms did not have enough land on which to spread the additional manure. The costings showed that it was economically viable for the farmers to comply and introduce anaerobic digestion on their farms, because the profit from rearing additional animals was much greater than the cost of introducing the anaerobic digestion. Therefore, the cost-effectiveness has been proven in some parts of Denmark, in the more intensively farmed areas.

820. Professor S Christie: Such a scheme can tie in with the need to comply with the nitrates directive, etc. We will need to manage such things more sensitively, because they are going to increase costs. However, those costs can be converted into benefits. Those farmers could offer a service to other farmers by disposing of their extra slurry, for example.

821. The Chairperson: That would also be of benefit to the community.

822. Professor S Christie: It certainly would.

823. The Chairperson: Therefore, why should the farmer carry the cost for something that will also be a community benefit?

824. Professor S Christie: Then he should be looking to Government to support him in that.

825. The Chairperson: Professor, Peter, Patricia, thank you for coming. We appreciate your presence very much. It has certainly been very helpful to us in our deliberations.

826. Professor S Christie: Thank you. If you have any further questions, please get in touch.

827. The Chairperson: Thank you. Good afternoon.

1 May 2008

Witnesses:

Mr John Hardy
Ms Paula Keelagher
Ms Ruth McGuigan

Sustainable Energy Association

828. The Chairperson: We will commence the final evidence session for today. The witnesses from the Sustainable Energy Association (SEA) are John Hardy, Ms Paula Keelagher and Ms Ruth McGuigan. Thank you for coming to the Committee, we appreciate your presence. We have a copy of your presentation, and if you would like to take us through that first, we will ask questions afterwards.

829. Ms Ruth McGuigan (Sustainable Energy Association): My name is Ruth McGuigan, and I am the chairperson of the Sustainable Energy Association. My colleagues are John Hardy, the secretary of the association, and Paula Keelagher, who is a member of the association and is representing Balcas today.

830. The Sustainable Energy Association represents small-scale renewable-energy industries throughout the island of Ireland. It encompasses approximately 1,000 businesses and 4,000 employees in the agriculture, manufacturing and service sectors. It includes people who grow energy crops, produce fuels, develop renewable technologies, install renewable systems and assess energy performance. The association offers a wide range of expertise, knowledge and experience, upon which we hope the Committee can rely.

831. Northern Ireland has some of the best wind and tidal resources in Europe, as the Committee will be aware. Arguably, we also have the best conditions in which to grow energy crops. Our natural and renewable resources should be utilised for the benefit of the people of Northern Ireland to create a more self-sufficient and cost-effective economy and energy sector. Energy security, shorter supply chains and carbon-emission reductions can all be achieved through greater use of our natural resources and our farming base.

832. John Hardy will take us through the first of our three points, which is growing the market for heat and hot water. Hopefully, I will then run through the plan for renewable energy on farms, and John will then talk about rural-development opportunities through energy entrepreneurialism.

833. Mr John Hardy (Sustainable Energy Association): I thank the Committee for inviting us to make this presentation. The Committee will be aware of the background to sustainable energy, and I hope that I will be preaching to the converted on that issue. According to the former Department of Trade and Industry, around 30% of the total energy consumed in the UK — excluding transport — is used to heat space and for process heating. Around 1% of that heat is currently generated from renewable sources, and 8% is met by combined heat and power (CHP) systems that are fuelled by fossil fuels or renewables. There are significant opportunities to reduce the UK’s, and, in particular, Northern Ireland’s, carbon emissions by increasing the contribution from renewable energy and CHP to that market. There has been little growth in combined heat and power, although the Government has in place several support mechanisms for CHP.

834. Supply needs to be increased to meet demand. There is also a need to move away from research and towards practical support of a growing market, for example, in wood pellets, which are cost-competitive compared to oil or gas central heating systems, especially after recent price increases in oil and gas. There is a danger that demand will continue to outstrip supply, and wood pellets are increasingly imported into Ireland to meet market demand for pellet-based central heating systems. The domestic and agriculture sectors should not be seen as separate or dichotomous in the application of renewable energy; rather, by providing grant aid or introducing legislative requirements for renewables in private residences, demand for biomass — for example, wood pellets — will increase and have a positive effect on the agriculture sector.

835. Supporting the renewables industry will result in future demand for energy crops. Meanwhile, the agriculture sector must increase production to meet current demand. Large quantities of energy crops are imported, with the potential revenue loss for local farmers as well as creating a larger carbon footprint. Meeting this demand locally would greatly benefit farmers in Northern Ireland, reduce carbon emissions and contribute towards tackling climate change.

836. The Sustainable Energy Association, in its submission, supports several points made by the Ulster Farmers’ Union (UFU) in its submission to the consultation on renewable energy by the Department of Agriculture and Rural Development (DARD). Those include the union’s views on biomass, and the challenge fund for short-rotation willow coppice. In its submission, the UFU said that:

“Research to assist with the development of the sustainable energy crop sector must be a priority, and incorporated fully as such within DARD’s Research and Development strategy.”

However, research should not duplicate work already carried out in other regions, such as by Teagasc in the Republic of Ireland. As the energy market in Ireland operates on an all-island basis, duplication of effort will create unnecessary financial and time burdens.

837. The renewable-energy-crop sector could be sustainable economically and environmentally. Research on energy grasses such as miscanthus, reed canary grass and switchgrass should continue into their merits as not only potential sources of biomass; but in a holistic way by examining their wider properties and to try to translate them into production — for example, starches associated with plastics, fibres, and so on.

838. The Republic of Ireland has already moved beyond the research stage and into the commercialisation of energy grasses such as miscanthus, especially in areas where sugar beet was grown. Close co-operation with the Republic could speed up the prospects of farming in Northern Ireland enjoying the economic benefits of research. Therefore, there is no point in duplicating that which has been done elsewhere.

839. Recent rises in the cost of fossil fuels has resulted in a host of small-scale systems becoming affordable for use on farms. With oil at $120 per barrel last week, most forms of domestic systems are now cost competitive, with fossil-fuel systems having a payback vis à vis oil and gas.

840. Ms McGuigan: I will touch on how planning for renewable energy affects the farming community. At present, draft Planning Policy Statement (PPS) 18 is under review; we have contributed to the review, and will contribute to the wind-energy sector, too. The planning policy statement is ambiguous and parts of it are open to misinterpretation by local planners. There are, therefore, areas where planners are for or against renewables, and each area can implement a policy differently. That is an obstacle to a nationwide implementation of a proper energy policy, which should be consistent and clearly understood.

841. National policy must, in some instances, override local issues. Everyone wants a wind farm, but no one really wants it in their own back garden. Nobody really wants nuclear power everywhere either, but they are happy enough so long as it is built in Scotland to provide power to Northern Ireland. That is the case across the board. There has to be a statement of need, and a national policy, which will deal with the Nimby, or “not in my back yard”, factor. We need energy for the future, and there is a need to take a national stance on that. It is here that that statement of need and that policy can be put together, and implemented through an unambiguous planning policy.

842. An issue of concern about the draft PPS 18 is that it rules out a large area of farmland in Northern Ireland. The advocates of the establishment of a national park in the Mournes, for example, are in favour of having wind turbines in that park; it would be an open and very visible sustainability statement. However, draft PPS 18 provides for the exclusion of areas of outstanding natural beauty (AONBs), such as the Mournes, so that automatically there is no scope for renewables in those areas. A lot of those areas consist of farmland, but some of my customers, who are farmers based in those areas, want renewables on their land. They want to cut down their carbon emissions, and they need to reduce their energy costs in order to stay competitive. Draft PPS 18, as it stands, will wipe out that opportunity for those farmers in 25% of the farmland in Northern Ireland.

843. A mandatory requirement for renewables is needed. Unfortunately the building regulations this year did not bring in any such mandatory requirement, which had been hoped for, to bring us into line with the rest of the UK. Draft PPS 18 represents an opportunity to rectify that a little bit, by including environmental impact in planning policy. That is done in the Republic of Ireland and in most of the boroughs of London, where all buildings must address in some way certain sustainability issues, such as micro-generation, or lowering the carbon footprint in some manner. That is currently not included in building regulations or planning regulations in Northern Ireland. The issue is not being addressed from any side at all, whereas in the majority of the rest of the UK and the Republic of Ireland it is being addressed, either through planning policies or through building regulations. Here in Northern Ireland there is an absence of both, which is obviously leading up to problems in the future.

844. Our organisation suggests copying the approach of those other jurisdictions where possible, rather than going back to the drawing board and reinventing the wheel. Time and finance are both constraints, and every time something has to be researched again, it takes a big chunk of the budget just to achieve what other people have already achieved. For example, in London, for every square metre of a domestic dwelling, a specific number of kilowatt-hours of energy have to be generated on that site through micro-generation, or solar water heating, or a biomass burner. All of those in turn support the local industry: for example, if a biomass burner is installed, a local farmer will then have to provide the wood pellets or willow to feed that burner. That would also mean that all new houses are built to a higher standard.

845. Increasingly, higher energy costs are being felt by rural communities in Northern Ireland. Fuel poverty is on the increase in rural communities, where there is a much heavier dependency on cars, and most dwellings are bungalows, not terraced houses or semi-detached houses, which are inherently more energy efficient. Rural dwellers are probably higher users of energy per head than urban dwellers. My company installs both wind and solar electricity generators, and I know from experience that urban dwellers often use around 7,000 units of electricity per year. Rural dwellers, on the other hand, will use somewhere in the region of 12,000 to 14,000 units. That is simply because of the way that rural households work, but because of that the rural community stands to suffer much more as energy prices increase. They are already suffering from fuel increases just trying to get to and from the grocer’s in their own cars. An attempt to embed more energy efficiency in rural houses, and houses across the whole of Northern Ireland will, in the long term, pay dividends for the rural community, and possibly feed into the agriculture sector to supply those different technologies and fuel crops.

846. Mr Hardy: Thank you, Ruth. I want to talk about rural development and energy entrepreneurialism. Anyone who has viewed John Gilliland’s presentation on farm diversification will understand immediately what is meant. John is the Northern Ireland commissioner on the Sustainable Development Commission (SDC): his examples include short-rotation coppice, disposing of sewage sludge and the sale of energy.

847. Promotion of renewable energy can improve the competitiveness of farm and horticultural businesses in Northern Ireland by creating diversification into viable and sustainable energy production, both in the form of energy crops and in the use of land for the location of wind turbines. Development of viable, stable and sustainable long-term supply chains is possible through creating a greater link between the growth, processing, marketing and use of locally produced biomass and wind energy for Northern Ireland, particularly in rural areas. Production of energy crops or indigenous fuel-producing companies — for example, wood-pellet manufacturers — will add value to agriculture and forestry products and improve marketing capability. Capital expenditure, on new buildings and equipment for the processing, drying and storage of such materials, should be encouraged.

848. A short-rotation coppice scheme will also provide support for farmers who wish to establish coppice crops, diversifying production and income sources. DARD should promote self-sufficiency in energy production in rural areas and on farms, with each individual home or farm producing heat and electricity from renewable sources. That will improve the quality of life, living conditions and welfare in rural areas, as fuel costs are lowered and residents develop a sense of pride in self-sufficiency.

849. Small-scale energy-crop production and processing for on-site use can also create the seeds of expansion and employment opportunities, through promoting entrepreneurship and developing the economic infrastructure in rural areas. Micro-enterprises should also be promoted. The Sustainable Energy Association also supports the Ulster Farmers’ Union by stressing that on-farm combined-heat-and-power technology is already available. We urge DARD to be supportive and imaginative in working with farmers, not only to install such facilities for their own heat and power needs, but also to work on the industry’s behalf, in conjunction with the Department of Enterprise, Trade and Investment, to enable the rural community to develop the infrastructure to sell electricity directly to end-users. The privatisation of the electricity market, which occurred in 2007, challenges DARD to assist the rural and agriculture sector to capture economic benefits through the opening-up of hitherto closed markets.

850. DARD can help support the renewable energy industry through promoting installation of renewable-energy systems by certified installers, and the use, where possible, of locally manufactured systems. That will, in turn, drive the demand for locally produced energy sources, which will benefit the agriculture sector.

851. The SEA is aware of several difficulties that occurred when turbines were installed through the Department’s Wind Energy for Rural Businesses programme, through which poor-quality turbines were incorrectly installed and failed to work. That gave a negative impression of renewable energy technologies. The SEA urges support for UK or Irish turbines of proven reliability and the highest quality of installation. It recommends the use of systems approved, for example, by Action Renewables, or Sustainable Energy Ireland in the Republic, or systems tried and tested in the UK.

852. It is important that energy-crop production does not compete with food production, as the promotion of foodstuffs is crucial to a sustainable future. However, in many cases, energy crops can be grown in areas that would otherwise be unsuitable for foodstuffs.

853. The projected decline in the size of the national herd may result in less-intensive meat farming. That can be coupled with an increase in crop production, in relation to other agricultural sectors, to coincide with the development of energy crops as a viable sector.

854. The Chairperson: Thank you. In the presentation, you tell us that:

“Northern Ireland has some of the best wind and tide resources in Europe and arguably the best conditions for growing energy crops.”

Evidence that we received this morning agrees that, in Northern Ireland, we have the best wind resources. Those witnesses were not so sure about the tidal resources. Can you enlighten us?

855. Ms McGuigan: That work is ongoing. The first tidal-energy system, the biggest in the world, has just been placed in Strangford Lough. Shortly, we may be able to verify that statement. We also have good opportunities for harnessing energy from waves. Energy produced from tides is often confused with that from waves: perhaps we should have referred specifically to wave energy at that point in the submission.

856. The Chairperson: We were told that wave was taken from us by the Republic.

857. Ms McGuigan: The Republic of Ireland has leapfrogged us in a number of areas.

858. The Chairperson: It was suggested that our wind resource is a big bonus for us.

859. Ms McGuigan: Absolutely; we have the second-highest wind resource in Europe with only Scotland — predictably — being higher. We have fantastic wind resources. Wave energy is high all the way down the west coast of Ireland, but we are doing well on tidal energy and we have wave resources in the north-west.

860. The Chairperson: In growing energy crops, John said that we must be careful not to challenge the primary purpose of a farmer, which is to produce food. What do you mean when you say that we have the best conditions for growing energy crops?

861. Mr Hardy: I do not have any evidence with me. Our members have told us that the soil quality, level of rainfall and the climate in Northern Ireland is good, not only for growing wheat and barley or for raising cattle, but also for growing crops like willow, which is a native tree and thrives in the conditions in Northern Ireland.

862. The Chairperson: So, rather than challenging food production by farmers, energy crops could be grown in areas where food production is not —

863. Ms McGuigan: In land that is not as favourable for food production. There should be rotation; grow crops one year and then move on. Energy crops should be an alternative source of income for a farmer.

864. Mr T Clarke: Can you identify an area that is more suitable for growing willow than crops?

865. Ms McGuigan: No; not off hand.

866. Mr T Clarke: I mean in general — what type of area is more suitable?

867. Ms McGuigan: Willows are often grown in bogland and marshland because they require a lot of water.

868. Mr T Clarke: Is there not a biodiversity problem for harvesting on bogland?

869. Ms McGuigan: It depends on our approach — there would be a problem if we grew the crops willy-nilly. However, it will not be a problem if we bring in the correct bodies to examine the areas where there is the potential for growing crops. We are underutilising our land resources that could be used to grow alternative crops.

870. The Chairperson: Which of the renewable technologies offer the best opportunities to the rural economy in Northern Ireland?

871. Ms McGuigan: That is a good question.

872. Mr Hardy: Wind and biomass are the top two. In addition to the prevalence of wind in Northern Ireland, farmers can receive the rental for wind turbines — if things are being done commercially — or they install a wind turbine on their farms to support their high electricity usage. Just as wind keeps energy production local, the same applies to multi-level production of biomass — farmers grow the biomass and companies such as Balcas produce wood pellets in Northern Ireland, which are sold to local homes. Those homes may have wood-pellet boilers that are made by companies in Ireland, such as Gerkros Heating Technology. Biomass has the potential for multi-sector level add-on value.

873. The Chairperson: Pauline, are wood pellets a sustainable product?

874. Ms Keelagher: We harvest all our trees from Forest Stewardship Council managed forests. At present, the Enniskillen site has a 50,000-tonne capacity. We are building a new plant in Scotland, to which we already supply significant amounts of the product. Production for the Irish market will remain in Enniskillen. The process is sustainable and carbon neutral: we use co-product — waste sawdust from sawmills — to make wood pellets and we use woodchip to produce heat and power on site. In that sense it is completely sustainable.

875. Mr Elliott: Thank you for your presentation. My question is about wind turbines. In the point about wind energy for rural businesses in submission, you indicated that poor-quality turbines were incorrectly installed. I know of one specific issue about that in my own constituency.

876. Who was to blame for that? What measures have been taken to ensure that that does not happen again? It was a big issue; some of the turbines gained grant approval, but when they did not work properly, the grant process was held up.

877. Ms McGuigan: We should be asking the Department that question, because it chose or nominated Newell Maher Engineering (NME) consultants, who selected the turbine and specified the installer. During the tendering process something went wrong to allow a substandard turbine to be accepted.

878. Mr Elliott: Was that DARD’s fault?

879. Ms McGuigan: No, I am not apportioning blame. However, during that process, the wrong turbine was selected. Somewhere during the selection process not enough knowledge was applied to select the correct turbine to suit the Northern Irish market.

880. On the plains of America, a turbine that experiences steady winds and rarely feels the effects of blustery north Atlantic winds can survive for 20 years. Install that same turbine on a farm in Donegal or along the north-west coast and it will be blown to smithereens. A turbine must be chosen to suit the conditions in which it must operate. It is horses for courses and, in that instance, the wrong horse was chosen.

881. We must examine that particular process to see where it failed. At present, all turbines installed through the — recently defunct — Reconnect grant scheme, which I am sure you are all familiar with, and the low carbon buildings programme, undergo rigorous testing. Once the turbines are approved, it is the installers that are held liable if anything goes wrong. A scheme such as that ensures that there is more security for the client at the end. Poultry and dairy farmers need a substantial turbine, which must be suitably selected.

882. Mr Elliott: Is the lack of joined-up government a big problem? You will be aware of a case that I was involved in, whereby a certain person could get funding for a turbine, but it had be for 24 m or 25 m high. However, the planners would only permit a 17 m one. Therein lies the difficulty; we could not square the circle.

883. Ms McGuigan: It is a massive problem and one that exists right now. We ran the Reconnect grant scheme for two years, with the idea of building an industry. At present, we have a fabulous, vibrant industry. We have farmers establishing capabilities to grow biomass crops. Now those farmers, who invested in the process and learned about the technology, face a shortfall. Possibly, the last biomass burner has been installed. Where is the market going in the years to come? Farmers have had the carpet pulled out from under their feet.

884. One plan is not feeding into the next. Planning policy indicates that farmers should install only 9 m-high turbines, whereas across the UK we are recommending the installation of turbines that are 15 m or more high. Subsequently, turbines underperform, which makes the industry look bad. However, the industry looks bad only because the policy contradicts industry requirements.

885. Mr Elliott: When the local Adminstation got up and running again, did you assume that that situation would improve?

886. Ms McGuigan: We are still hoping that that is the case. We have delivered the same message to the Environment, Trade and Investment Committee and to this Committee: we need an energy policy that includes everyone.

887. The Chairperson: When Mr Elliott asked you who was to blame for the substandard turbines, I noticed that you were not willing to lay blame, which is one of the biggest problems. No one is willing to accept blame when something goes wrong.

888. Ms McGuigan: I have not been personally responsible, and I do not know the ins and outs of that. I just know that when I mention a wind turbine to anyone in Newcastle, they tell me about the one on Tyrella beach that has not worked for two years. I have had nothing to do with that, and it would be wrong of me to apportion blame.

889. The Chairperson: You are very glad about that.

890. Ms McGuigan: How can we apportion blame? I am sure that an investigation is ongoing.

891. Mr Bresland: Were there initial problems with some turbines? Were some of them faulty?

892. Ms McGuigan: There have been some issues with some turbines. There are substandard products in every walk of life. One cannot expect a high-quality result from a cheap product.

893. Mr Bresland: It is a matter of choice.

894. Ms McGuigan: We warn our customers against it all the time. I could supply you with an all-singing, all-dancing £10,000 turbine, while someone else could charge you £20,000. You do not buy a Ford Fiesta and expect it to perform like a Mercedes. We have to be aware of variations, but we do not have a governing body —

895. The Chairperson: We must be careful. We do not want to be challenged by those car firms.

896. Ms McGuigan: You know what I mean. There is a wide variation, and some of them are not suitable for our market. Others are of low quality and will not last the course. Only a good turbine will survive our high winds and blustery conditions. Not much research has been done on that subject.

897. Mr W Clarke: You are all very welcome. Ruth mentioned the fact that draft PPS 18 will prevent the development of renewable technologies in AONBs. It is my belief that the “clean and green” image of turbines, for example, will complement the tourism product, and that we should be reducing fossil-fuel emissions in those areas. Draft PPS 18 seems to contradict the environmental ethos. Your written submission describes how individuals can produce power, and how communities can develop a communal heating system. Following on from the Reconnect grants, how can such projects be funded? Are they viable? You have just pointed out that a huge gap will be created.

898. Ms McGuigan: That is the case. In most of the rest of Europe, grant schemes for such projects have been replaced by mandatory targets or legislation. Our problem, as you have rightly mentioned, is that we do not have an all-encompassing energy policy. There is no energy vision in Northern Ireland at all. The people who want to be involved in the industry, and all those young entrepreneurs who believe that they can produce fantastic designs, do not have any backing.

899. We do not have a code for sustainable homes, which is a concept that has been accepted throughout the rest of the UK and in the Republic of Ireland. All those regions will be building carbon-zero homes by 2016, but we have opted out of that entirely. We are building bad homes and embedding fuel poverty in every building that is currently being constructed. We are not making any moves to change that situation at all. It is not even on the agenda; it is not being discussed. That is the situation in the housing market.

900. The transport sector is facing similar difficulties. We do not have a policy on improving transport or reducing its effects. The Westlink is being widened, but we are not bringing any more buses onto our roads. The Reconnect grants only served to develop industry. We have those industries now, but we are sitting on out hands, waiting for them to collapse. If we do that we will have to play catch-up with the rest of Europe.

901. The alternative is to have an all-encompassing energy policy. The planners must do the right thing in respect of draft PPS 18. Building control must do the right thing and adopt the code for sustainable homes. The Reconnect grant should be extended until those policies are introduced, so that the market can be sustained.

902. The Chairperson: Is it not true that the code for sustainable homes has been mandatory for social housing here since 1 April 2008?

903. Ms McGuigan: Yes, it has, but for social housing only. That is only a small part of the picture.

904. The Chairperson: You did not mention that.

905. Ms McGuigan: I am sorry.

906. The Chairperson: You said that it was not even on the agenda.

907. Ms McGuigan: It is not on the public agenda. If I build a house in the morning it will make no difference. The Government have adopted it for its own purposes. However, the Housing Executive still refuses to install wood-pellet burners, and continues to install oil burners. An element of the policy has been adopted, but not the entire policy.

908. Mr Bresland: You said that renewable-energy production could have a tourism dimension by attracting visitors to sites, such as wind farms. However, the perceived damage to landscape often causes most objections to wind-farm proposals. Can you give us examples of where renewable-energy schemes have been successful tourist attractions?

909. Mr Hardy: The idea about tourism came from a briefing to the Committee for Enterprise, Trade and Investment by the Climate Change Coalition NI. John Woods of Friends of the Earth mentioned the tourist dimension of wind farms. He happened to mention that research has shown that large wind farms have a degree of attraction for visitors, such as hill walkers.

910. The Chairperson: John, that is easy to say, but what proof do you have? Mr Bresland is asking for proof. You have used good jargon. A person might be in trouble, and many people will sympathise; people’s pockets are full of sympathy, but others are still in poverty.

911. Mr T Clarke: There were recent discussions about an offshore wind farm at Portstewart, which is a tourist area. Local objection to that wind farm was phenomenal, and that contradicts your point.

912. Ms McGuigan: Local objection is standard, to be honest.

913. Mr T Clarke: However, we are looking at it from a tourism point of view. Alan Bresland referred to your submission, which suggested that there was potential for tourism, whereas, at a tourist destination — the Portrush/Portstewart area on the north coast — there was massive objection to a proposed offshore wind farm. That is a total contradiction to your point about tourism.

914. Ms McGuigan: The people who object are not tourists, they are locals. We cannot know what impact such a scheme will have on tourism. There is a growing industry —

915. The Chairperson: Is that true? Sorry to interrupt, but is that fact? For example, tourist officers objected, not only locals. People in the local council, who were involved in promoting tourism there, objected. They did not object purely for the sake of it. Did they object because they felt — as I believe was the case — that such a scheme would destroy tourism potential? I am testing some of the evidence that has been presented.

916. Ms McGuigan: There will always be submissions that will not be approved. Many proposals in England are not being approved. However, there are places where proposals should be approved. No matter where a wind turbine is put, it will be obvious; it will change the aspect of the hill, mountain or landscape on which it is built. If you ask people what they think of it, 50% will say that it is fantastic, and 50% will say that it is awful. People who approve of wind farms generally do not stand on the top of the mountain and scream their approval. The people who disapprove always seem to be louder. We always hear the disapproval and rarely hear the approval. Most people are pro wind turbines. However, most people are pro anything, as long as it is not in their back gardens.

917. That is why we are saying that the national need for energy security must take priority over people’s desire to look at a beautiful landscape. The beautiful landscape will have to be sacrificed by putting pylons, turbines or nuclear power plants on it — or Kilroot will have to expand — because we must have energy, and it must be provided, in some shape or form, somewhere in Northern Ireland. We must address each case on its merits and hope that, if the planning departments put the national requirement for energy to the forefront and take into account the local impact, we will achieve a happy medium somewhere along the line.

918. The Chairperson: I remember fighting one of the first appeals over a wind turbine — the Bessy Bell wind farm one — in County Tyrone, which was in an area of outstanding natural beauty, and I presented the case for it. However, there are people in south Antrim who feel that a particular area is being covered in wind farms, and they are saying, “Enough is enough. We have wind turbines, but we are not going to look at them everywhere.” Fair play to them. To be honest, there is a case for debate about the big wind turbine at Antrim Hospital; it is right in your face.

919. Ms McGuigan: It is absolutely fabulous. It saves the taxpayer a fortune.

920. Mr T Clarke: It saves £150,000 a year.

921. Ms McGuigan: That is all right.

922. Mr T Clarke: Is it worth that saving?

923. The Chairperson: I was not talking about value for money. Beauty is in the eye of the beholder. A lot of folk do not think that it is fabulous looking.

924. Ms McGuigan: You were referring to the visual impact. If a straw poll were conducted among everyone around the table to find out who wanted a new energy plant, such as the one at Kilroot, built on the outskirts of their town, 100% of you would say no. However, such plants are necessary.

925. Mr T Clarke: There might be evidence that wind power will definitely work, but there is a constant emphasis on wind, wind, wind. It looks as though draft PPS 18 will result in presumption in favour of building on areas of outstanding natural beauty, which would be horrendous. Other methods of renewable energy must be developed, such as wood-chip fuel, which would not have the same impact on the visual environment.

926. Ms McGuigan: I agree wholeheartedly; a mix of technologies is needed.

927. Mr T Clarke: More emphasis is currently being placed on wind.

928. Ms McGuigan: No, there is more of an outcry about wind farms because people object loudly to them and the issue is frequently in the newspapers.

929. The Chairperson: Everyone who has given evidence to the Committee today has said that there is no other form of renewable energy other than wind. They have said that it is the main source of renewable energy: wind, wind, wind, wind. That is not an outcry against wind; it is an outcry for wind.

930. Mr T Clarke: Biomass was mentioned.

931. The Chairperson: Compared with wind, biomass has been far down the line in the discussions.

932. Ms McGuigan: Perhaps that is because all of the questions were about wind.

933. The Chairperson: Today’s presentations focused mainly on the use of wind as an energy source.

934. Mr T Clarke: Information on biomass would be useful to the Committee, because we could feed that back into our considerations on farming.

935. Ms McGuigan: Biomass, anaerobic digestion and getting gas from slurry should all be considered.

936. Mr T Clarke: Those options were covered briefly, but we always finish up talking about wind farms.

937. The Chairperson: Is that because they are an easier option?

938. Ms McGuigan: Wind is a natural and abundant resource that should be capitalised on.

939. The Chairperson: Farm waste is also a natural and abundant resource, yet the same emphasis has not been placed on that.

940. Mr Elliott: A development such as that would also result in an outcry. We came across that problem in Fivemiletown. There would be a bigger outcry against energy from waste than there would be against wind farms. I have dealt with both of those issues in my constituency of Fermanagh and South Tyrone.

941. The Chairperson: Are you referring to objections to a massive biomass plant, or to a farmer using biomass?

942. Mr Elliott: The plant in Fivemiletown was relatively small.

943. Ms Keelagher: I am from Fivemiletown.

944. The Chairperson: Which meeting were you at? [Laughter.]

945. Mr Elliott: The plant was to serve around 20 farmers.

946. Ms Keelagher: Those farmers were going to supply waste to the plant.

947. Mr Elliott: The plant was to have been relatively small, compared with the Rose Energy plant.

948. Ms Keelagher: It was to have been minute. A committee was put together, which visited different plants and experienced issues such as the bad smell.

949. Mr Elliott: It was not even possible to move the plant four miles out of the town because of local objections.

950. Ms Keelagher: It was suggested that the plant be built on bogland.

951. Mr Elliott: You will find that objections will be made against biomass plants.

952. The Chairperson: I can assure you that, in my constituency of South Antrim, objections to the Rose Energy site have already begun.

953. Mr Hardy: Wind has a higher profile than other sources of renewable energy. It has taken a while for renewable energies to come to the fore, and wind is at the front of the race. The issue of wind farms has become a stick that is used to beat the idea of renewable energy. People raise questions about the impact of wind because it is the most obvious source of renewable energy. I agree wholeheartedly that there are many other potential sources. Wind is used on a commercial scale to provide energy to a large amount of houses, perhaps in an urban setting. However, if an anaerobic digester were put on every slurry tank on every farm in Northern Ireland, only one house in each case would be providing energy, but a massive load would be reduced from the grid.

954. Urban settings require large, out-of-town, large-scale production, which must come from wind. The Committee should focus on biomass and anaerobic digestion, which enable the rural community to provide energy to urban areas on a large scale.

955. Mr W Clarke: The data that we received from Action Renewables in relation to the Reconnect grant stated biomass and solar power as potentially among the biggest energy providing technologies. Wind turbine take-up was very low. The public will decide what they want, and I think biomass is dissipating

956. Ms McGuigan: The public is so obsessed with the size of oil bills that biomass is coming into their minds. It must also be taken into account — and this is relevant to the Committee — that the production of biomass is made more attractive by the existence of what are called “renewable heat grants” in the South of Ireland for biomass and solar power technologies.

957. Northern Ireland farmers have a major incentive to grow crops for export across the border. The difficulty is that if they do, Northern Ireland risks losing its indigenous fuel supply because it has stopped encouraging the use of biomass burners in homes. That is a backward step. The definite agricultural opportunity to supply biomass under contract to the South also threatens the availability of indigenous supplies in Northern Ireland.

958. Mr T Clarke: The presentation emphasised the community benefit of wind turbines, but the ones recently erected in south Antrim have been for personal gain and provided absolutely no communal benefit. The perception that all these turbines will help communities is wrong.

959. The community got nothing from the turbine at Antrim Hospital. Five miles down the road we have another, even larger, wind turbine serving just one family rather than supplying power to the community, which gets nothing from it.

960. Ms McGuigan: It may not be a community project but it helps reduce Northern Ireland’s carbon footprint because it feeds into the electricity grid. I doubt that 100% of the power being generated is used on that family’s home.

961. Mr T Clarke: The general public gets nothing from that. Fuel prices are the same. In a week when all the talk has been about rising costs, fuel companies announce increases in their profits. That is not because the cost of materials is rising; it is because they want to make more money.

962. Ms McGuigan: I would not disagree with that statement.

963. Mr T Clarke: It is the same for electricity coming from wind turbines and private enterprises. People are doing it to make money, not out of concern over a carbon footprint.

964. Ms McGuigan: A mushroom farmer phoned me yesterday to say he has a substantial energy bill of £1,500 a month, which rises to £3,000 a month during the summer. Every time energy costs rise his competitiveness drops because he faces exporters with lower energy overheads who produce mushrooms more cheaply. The erection of one stand-alone wind turbine on his plant would reduce his energy bills by 50% and stabilise half of those bills at the same level for the next 20 years. That strengthens his position in a very competitive sector of Northern Ireland agriculture.

965. The alternative is to allow him to be consistently hammered by increased fuel prices that will eventually force him out of business and lead to Northern Ireland importing mushrooms, as it does with so many other crops.

966. The Chairperson: That example is balanced because you are speaking about reducing the cost burden of an individual in a valuable enterprise.

967. Ms McGuigan: It helps secure the farmer’s business.

968. The Chairperson: However, the example presented by Trevor Clarke involves a big energy company coming into an area of outstanding natural beauty and erecting a wind turbine simply for its profits.

969. Communities object because they get no benefit and they say their lives, even their television reception, are destroyed. Those concerns have to be taken into account. That is the difference between those two examples.

970. Mr T Clarke: I want to address my point to Paula. When heating oil for homes was first introduced, everybody changed from using coal to using oil because of the price. Perhaps I am directing my point to you because Balcas is probably one of the biggest producers of wood chip —

971. Ms Keelagher: There are now two wood-chip producers in Ireland — we were the only one, now there are two.

972. Mr T Clarke: Balcas was the first such company. I am concerned that the price of this form of fuel may increase once people switch to it, as happened with oil. I researched the cost of wood chip a couple of years ago, but how does the price of wood chip currently compare with that of oil? I assume that wood chip would be cheaper, but is it beginning to follow the same trend?

973. Ms Keelagher: No, at the minute it is not. Using wood pellets is 50% cheaper than using oil. A tonne of wood pellets costs £118. Because we make our wood pellets from our co-product we do not want to put our price up — it is saving us money to use them in that way rather than having to transport them. So we have a set price for our pellets and that would increase only if there were a rise in the cost of transport or inflation. We have set a precedent in the market. We want to sell the wood pellets — we do not want to be left with 50,000 tonnes of wood pellets in the yard that we cannot sell.

974. I joined Balcas 18 months ago when it had 500 customers — it now has 3,000. The grants that are available have helped that greatly. The use of biomass is growing all the time; the price of oil is contributing to that. We have 3,000 domestic customers and about 70 commercial customers; by commercial I mean places like hotels, schools and equestrian centres. Schools are considering using biomass more now because they can make a big saving from it.

975. In relation to tourism, I am not sure whether members are aware of the Share holiday village in Lisnaskea, which has wind turbines, PV and solar panels and four wood-pellet boilers. It is a holiday centre where people with disabilities can get respite care, it organises corporate events and is also a holiday village. The centre is a focal point in Lisnaskea, and Councillor Elliot may agree that a lot of people visit the Share holiday village, where they can see the different renewable resources such as the wind turbines, the solar —

976. The Chairperson: Do they not visit the centre for respite rather than to see all of those things?

977. Ms Keelagher: It is a holiday village situated by a lovely area of the lake and is one of the tourist destinations to visit in Fermanagh — perhaps not so much because of the renewable resources, but that element is there and is growing.

978. In Scandinavian countries there are whole towns that are heated by one biomass boiler. At one point, Fivemiletown was going to use biomass to heat social housing, the swimming pool and the high school. It was a great project, exactly the kind that we wanted, but it has been put on the back burner. We at Balcas are trying to encourage the Housing Executive and developers to consider installing community heating, which would involve having one big boiler and one store where the heat can be metred and then used.

979. The Share holiday village has eight chalets fuelled by one boiler, which is the first mini-district heating system in Northern Ireland. A development of 30 town houses in Enniskillen is going down that route. That will mean that the first such development will be in Fermanagh, which is great for Balcas. We are trying to encourage such developments.

980. As Ruth said, wind power is always being discussed whereas biomass is not spoken about as much, but there is good interest in it, and it has good potential. As John said, lots of different crops that can be grown, and, for example, miscanthus can also be made into pellets although it may require a different kind of boiler. I do not think that biomass is talked about as much as wind power is, perhaps because you can see a wind turbine in a field, but not a biomass boiler in a person’s house.

981. Mr Burns: As you know, the Government estate includes many different buildings — for example, schools, council offices and council leisure centres — and many of those buildings still use oil. Very few of them could be held up as a good example of how a district council is operating its heating scheme. If, as you suggest, you were to have long-term heat contracts to service those buildings, can you explain how such arrangements would work in practice and what sort of organisation would install and maintain the hardware, provide the fuel and manage the process? Do any of your members have such expertise?

982. Ms Keelagher: Do you mean expertise in one technology or in all technologies?

983. Mr Burns: I mean expertise in helping Government buildings to move away from the use of oil burners and find an alternative method of heating, because using oil in those buildings incurs a phenomenal cost for the rate payer. I know that using oil or gas is very handy because you do not need a stoker or someone to be in charge of keeping supplies topped up, but that comes at an awful price.

984. Ms McGuigan: It is a chicken-and-egg situation. People want companies that can do everything, but the market is not there yet. We are getting there, however.

985. I frequently speak to people who tell me that they do not know what to choose: solar, wind, biomass or geothermal. Different companies have different specialisms. Plumbers will install solar water heating, ground-source heat pumps and underfloor heating. Electrical firms are better at installing wind turbines and photovoltaic (PV) systems. Other people produce the good, and there are different manufacturers. Silver-bullet solutions do not exist. In the construction of a new Government building, as with any building, a mechanical and electrical consultant would be employed and he would subcontract to each of the specialists who would find out which systems were most appropriate. Courses are run by the University of Ulster at Jordanstown to train people in the whole gamut of those technologies. That course will produce specialists.

986. The Chairperson: Ruth, is not the problem that there are so many technologies? Is it not time to focus, and take something forward? There is so much choice that we are losing our way.

987. Ms McGuigan: I disagree. We have enough expertise in Northern Ireland to make decisions for people — for example, urban homes should not have wind turbines. It is important to ask who will live in the house; whether it is social housing: whether residents will be able to manage delivery of the wood pellets; and whether they will understand how a solar water-heating system works. In that way, the right system can be chosen for each home, in just the same way that, when a house is being built, there is a choice between oil, gas and Economy 7. The decision is made by the house builder to suit the residents. There is enough expertise in Northern Ireland to supply that information, if we really want it.

988. Mr Hardy: The renewable-energy industry has sufficient capacity. If the whole Crown estate wanted to switch to wood-pellet systems, there are sufficient people to install, maintain and supply them — and that supply would be adequate.

989. Mr Burns: Someone has to put the wood pellets into the hopper that feeds the burner.

990. Ms Keelagher: The Committee may not be aware that Hillsborough Castle uses a wood-pellet system. We worked with consultant throughout that installation, because a room was being converted into a store. We transport wood pellets to the castle every two weeks and simply fill up the store. No one has to order: we just do it. Such an arrangement depends on how willing the organisation is to work it. Other companies, with which we have worked, have an energy-service contract with the customer. They install the boiler and storage unit, carry out the maintenance and order the fuel; the customer never sees them. The customer pays for the kilowatt-hours — for the heat, not for the installation. That service is charged at a premium, however.

991. Ms McGuigan: In the same way that you would phone the oil company when you run out of oil, you phone the wood-pellet company, and it makes the delivery.

992. Ms Keelagher: With bigger customers in particular, we have little contact. We drop off the pellets, and they do not have to worry about it. If we see an issue, we will draw it to their attention.

993. Mr Hardy: There is one other important matter. We have a problem with current changes in building regulations. They were supposed to require micro-generation for all newbuilds, but Crown buildings are exempt. There is no requirement in law for installation of renewable-energy systems in new Crown buildings.

994. Furthermore, many Crown buildings are obtained through public finance initiatives so they will eventually pass into private hands. Crown buildings are supposed to be the first, under the Code for Sustainable Homes, to have mandatory micro-generation, yet they are exempt by law from any such mandatory requirement. The building is already complete when it passes into private hands and the Government may well have installed, for example, an oil-burning system. The likelihood is that the private owner will continue with the existing system. If the building regulations were framed differently, to require new Crown buildings to have micro-generation systems, those renewable systems would pass to private owners who would continue to use renewable-energy sources.

995. Ms McGuigan: There is no silver bullet; there is no single renewable energy system that will provide the solution on its own. Rather, there is a wide range of renewables. Those offer the various sectors of the Northern Ireland community opportunities to establish new companies, and develop an energy sector that supplies the people and reduces their insecurity about fuel and energy. If we search for a one-size-fits-all solution — such as wind energy — we risk missing those other business opportunities.

996. Those opportunities may be small but 80% of Northern Ireland businesses are small and medium-sized enterprises (SMEs). If there is a diverse and competitive market, and if we support a cohesive energy policy across the board, it will naturally fall into place. We must determine what we are going to do, put the necessary policies in place, and go ahead and do it. When that happens, we will reap the benefits across the board, rather than just in one area.

997. Mr W Clarke: Is it costly to maintain wood-pellet and wood-chip burners, or do costs vary?

998. Ms Keelagher: There are good ones and bad ones. You pay for what you get; you can have a Mini Cooper or a Rolls-Royce, depending on the level of hassle that you are prepared to endure. It is the same as oil systems, in which boilers are serviced once a year.

999. Mr W Clarke: Is there a wood-burning system that takes just logs?

1000. Ms Keelagher: Yes, there are multi-fuel systems.

1001. Mr Bresland: Can wood chip be burned in a smokeless area?

1002. Ms Keelagher: Yes, as far as I know.

1003. The Chairperson: Our main aim in this is to enable members of the farming community to gain financial returns for making alternative use of their land. Development of the renewable energy industry should not compete with farmers’ major function of providing food, but a balance can be struck.

1004. Thank you very much. We like to tease out answers but we deeply appreciate your presentation. Good afternoon.

1 May 2008

Witnesses:

Mr Campbell
Dr McGarel

World Wildlife Fund Northern Ireland (WWF NI)

1005. 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.

1006. 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.

1007. 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.

1008. 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?

1009. Dr Alex McGarel (World Wildlife Fund Northern Ireland): I will expand on that, Chairman.

1010. 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.”

1011. 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.

1012. 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.

1013. 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.

1014. 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.

1015. 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.

1016. I will now hand over to Alex, who will deal with the rural development programme and spending.

1017. Dr McGarel: WWF firmly believes that the Northern Ireland rural development programme can provide a range of opportunities to encourage increased use of renewables.

1018. 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.

1019. 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.

1020. WWF is keen to prioritise the gamut of opportunities that exist with renewables. Projects should be prioritised in order to help 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.

1021. 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.

1022. 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.

1023. 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.

1024. 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.

1025. 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.

1026. 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.

1027. 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.

1028. 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.

1029. 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.

1030. 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.

1031. 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.

1032. 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.

1033. 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.

1034. 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.

1035. Do you consider that plan to have been successful so far?

1036. 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.

1037. 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.

1038. 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.

1039. 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.

1040. 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?

1041. 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?

1042. 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.

1043. 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.

1044. 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.

1045. 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.

1046. 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.

1047. 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.

1048. 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.

1049. 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.

1050. 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.

1051. The Chairperson: Those people could come together naturally rather than being forced together.

1052. Mr W Clarke: Will you explain why feed-in tariffs should be introduced in the North?

1053. 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.

1054. 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.

1055. The Chairperson: I think that the introduction of feed-in tariffs was rejected last night at Westminster.

1056. 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.

1057. 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?

1058. 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.

1059. Mr T Clarke: If that were the case, is it likely that small farmers could be discouraged from growing bioenergy crops?

1060. 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.

1061. 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.

1062. 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?

1063. 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.

1064. 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.

1065. 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.

1066. 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.

1067. 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.

1068. 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.

1069. 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?

1070. 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.

1071. 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.

1072. 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.

1073. 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.

1074. 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?

1075. 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.

1076. 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?

1077. 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.

1078. 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.

1079. The Chairperson: The Department has told us that a considerable amount of the money should be going back to farmers and their families.

1080. Dr McGarel: That is exactly how it should be happening.

1081. The Chairperson: Is that, therefore, not a way in which to ensure that the programme will help rural communities?

1082. 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.

1083. The Chairperson: You say that there should be such recognition, but is that what is planned?

1084. 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.

1085. 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.

1086. 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.

1087. 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.

1088. 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.

1089. 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.

1090. Mr M Campbell: Thank you.

22 May 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Thomas Burns
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Dr Lindsay Easson
Dr Peter Frost
Dr Alastair McCracken

Agri-Food and Biosciences Institute

1091. The Chairperson (Dr W McCrea): We begin today’s final evidence session. I ask the witnesses, Dr Lindsay Easson, Dr Peter Frost and Dr Alastair McCracken, from the Agri-Food and Biosciences Institute (AFBI), which has been treating the Committee royally today, to make their presentation. I remind Members that the session is being recorded by Hansard, and, therefore, mobile phones and similar equipment must be turned off.

1092. I wish to thank AFBI. It has been the Committee’s pleasure to come here. I found the first evidence sessions very profitable, and I trust that the final evidence session will also be profitable.

1093. Dr Lindsay Easson (Agri-Food and Biosciences Institute): Thank you very much. AFBI welcomes the opportunity to make a presentation in support of our written submission on the issue of renewable energy and alternative crop or land uses.

1094. In that document, we detailed AFBI’s past research and present work on renewables. We described the development of the environmental and renewable energy centre at Hillsborough. That centre was one of the key targets in strategic objective 2 of the sustainable development strategy for Northern Ireland, published by the Office of the First Minister and deputy First Minister. We are, therefore, hitting one of the key targets that have been set.

1095. We also discussed the important contribution that research plays in delivering solutions on renewable energy and alternative crops to Government, industry and the community. I will not repeat what has been submitted in writing, but I will explore in more depth how research can help future development.

1096. The welter of material on renewables that we hear in the news and debates, read in newspapers, or watch on television, creates confusion about what is happening, what is possible, what impacts there may be and where we can go. That confusion has arisen because there are many widely differing interpretations of the limited scientific data that is available. Information comes from a range of sources. Not all of it is relevant to Northern Ireland. It has been developed in, and come from, other countries and places with different scenarios and stories. Therefore, we must have locally based information that is relevant to our situation, which is where AFBI has a key role.

1097. There are two fundamental reasons for turning to renewable energy. The first is to reduce greenhouse gas emissions, which are responsible for global warming. The second is to replace dwindling fossil-fuel resources, which has been discussed in earlier sessions. However, producing renewable energy has a business role for Northern Ireland’s farming industry. Prospective new enterprises provide business opportunities for agriculture. That is a third reason for Northern Ireland agriculture to be interested in renewable energy and alternative crop production. As well as the big issues of global warming and fuel supplies, there is the question of how agriculture can tap into the business opportunities. The potential income must be considered in relation to the current structure of agriculture, and the worldwide issue of food production. AFBI recognises that food and energy production from our own resources are key challenges for the agri-food industry internationally. In future, food and energy must be produced hand-in-hand.

1098. The scientific understanding of whole-life carbon emissions, not just CO2, informs us that agriculture is responsible for 25% of carbon emissions and, therefore, greenhouse warming. That is a high proportion and must be taken on board when thinking about how to reduce carbon emissions. We must have a community-wide, holistic approach.

1099. Any changes in agriculture will have knock-on effects. As we have seen, rising grain prices in America have had knock-on effects in Brazil and Argentina — let alone on Northern Ireland’s food industry. Research is needed in those areas to evaluate the wider impacts. We do not necessarily need studies on the ground, but we need economic, carbon-footprint and carbon-economy studies. Those are areas in which AFBI has skills, and it can play a valuable role in contributing to our understanding of them.

1100. If agriculture is to be able to justify its place in developing renewable energy strategies, it must have a strong evidence base to take to Government and to industry. It must have evidence that the work can be done sustainably, economically, justifiably and on a sound scientific base.

1101. There are two key areas in which our research has a particular role. The first function of our research is to provide an evidence base for policy-makers at whatever level. As we have seen, renewable energy production from land, in itself, is rarely economically viable. One can produce willow, biogas, other renewable crops and materials, and liquid biofuels through various processes, but if one can add value to such processes — for example, by adding bioremediation, by adding value to the biogas or by adding other streams into the process to give higher yields — they are more likely to become economical. We are involved, therefore, in seeking ways to make such enterprises viable.

1102. There is a misconception that farmers are reluctant to take up new ideas. History has shown that when enterprises are economically viable or profitable, farmers will move quickly into those areas. There have been huge changes in agriculture. We heard earlier that about 7,000 hectares of willow would be needed to produce 1% of the electricity that we require. However, potato crops been reduced by about four times that amount in recent years. Changes take place in agriculture all the time. Therefore, new schemes and systems can be adopted. Farmers will readily take up new opportunities if they are economically viable.

1103. Government intervention and schemes are currently necessary to enable farmers to take forward renewable projects, which are not, in themselves, viable. That is why our research can feed through the policy areas to guide Government and show where incentives, obligations and targets can play a valuable role. AFBI can provide the science base for justifying that sort of investment of time, effort and resources. Government, regional authorities and Administrations will have to achieve their targets, and they must know how to do so.

1104. Northern Ireland has patterns of land use, topography and structure of industry that differ widely from those in other regions of the UK, let alone Europe. Northern Ireland requires very different approaches to achieving its obligations and renewable energy targets. That is why AFBI’s locally based research is necessary: to provide relevant information that will assist our industry to take on board the opportunities. We can provide information on the yields that we can achieve, on husbandry systems and the management of crops such as willow or miscanthus, and on the yields that biogas can produce from manures from our animal systems. For example, we have different animal feeding systems, and the manure might have different properties and achieve different results. Our research will investigate that sort of issue.

1105. We require appropriate-scale renewable energy projects that tie in with arrangements here, and we must understand the markets and their potential to contribute to targets. Apparently, the Department of Enterprise, Trade and Investment (DETI) is funding reports, but which data is going into those reports? On what basis is the Department reaching its conclusions? Are they based on real, locally-derived information? We are interested in reading those reports, and our comments about them will reflect the information that we have.

1106. We are keen to consider the impact of renewable energy projects on other agriculture sectors; for example, on employment in the agrifood industry and in the food processing, dairy and beef sectors. Although we wish to support the whole industry, at the same time we wish to encourage change and look at the impacts of that.

1107. The carbon cycle is important to any enterprise’s life cycle, and, considering the whole process — from ground level to utilisation — we must determine whether the carbon savings are genuine. AFBI has the required breadth of expertise to monitor complete cycles — from planting through to harvesting, storage, drying, utilisation and energy production. We are able to examine the whole carbon life cycle — few organisations possess such a capability.

1108. Hence, our first role is to provide policy-makers with the required depth of locally based source information. The second key research role that we perceive is to prepare, and think about, the way ahead. When new ideas come along, we must already be working in the field and immediately be capable of identifying problems and providing answers, or at least partial answers.

1109. I shall illustrate that point using an example that is not related to renewable energy, but which, nevertheless, is important for the agriculture industry. When Northern Ireland agriculture was faced with the nitrates directive, we were able to go to Brussels armed with data from the research that ABFI had been conducting for many years into the effects of nitrate excretion by ruminant cattle, and that resulted in more favourable regulations for the industry in Northern Ireland compared to GB and the Republic of Ireland — we had the evidence base. That research did not start when the nitrates directive was issued; we had been doing it for years and the data was available. That is why research is vital and why we must conduct the sort of research that I have been describing. Consequently, when new challenges — and opportunities — come along, we will have the evidence to argue that we are capable of producing the required carbon-emission reductions. If asked, I can give other examples of the value of research.

1110. There are many areas in which ABFI has scientific expertise, and, by investing in research now, we can be ready to help the industry to avail itself of new opportunities and to face new problems. Anaerobic digestion, biomass utilisation and biomass crops are rapidly changing scenarios, and, through the resources that we are employing, we are creating multiple levels of expertise. For instance, we will have practical information of immediate value on subjects such as biomass drying, because farmers want to know now whether that works and how much it costs.

1111. We are also undertaking medium-term research into biogas outputs, which will feed through to developing new opportunities. We are investigating miscanthus crop management and attempting to produce best-practice guidelines, similar to those produced for willows in a linked project in Loughgall. Strategic research is required on carbon footprints, and we are considering even more far-reaching research — although it may be rather too much to call that blue-sky research — into areas such as grass biofractionation. We have heard about wood being a lignocellulosic source, but grass is also a lignocellulosic source that can be used for biofuel production. Therefore, opportunities exist to take crops that we are familiar with and use them for biofuels in a way that other countries are not interested in, but that we should be. That is an area in which we want to make progress.

1112. AFBI’s strength is based on our breadth of experience from plant sciences; animal sciences; veterinary practices; sustainable animal production; microbiology; soil science; environmental science; economics; and years of research in biomass and industrial crops. I have not said much about industrial crops, but we have been working on alternative uses for flax since the 1980s. It is no longer active, but it was our work from 1996 on hemp that resulted in farmers’ currently growing hemp.

1113. Another of AFBI’s strengths is our international and national links. We are currently working with Queen’s University Belfast and the University of Ulster to develop more projects. We are considering gasification possibilities with the University of Ulster. We have international links with North Carolina State University, and we are trying to start a joint project on anaerobic digestion, which would be funded by the United States Department of Agriculture. We are hopeful that that will happen.

1114. EU projects have helped to us to form links in Europe. Dr McCracken’s work on the renewable energy networks for environmental welfare project has involved a number of collaborators across Europe. We have been successful in obtaining research stimulus funding in the Republic of Ireland for work on anaerobic digestion. We also have strong links with the Central Science Laboratory, and with the former Institute of Grassland and Environmental Research in north Wales, which has now been restructured but still works in the area of biomass, and with the Rothamsted and Teagasc centres. Furthermore, we have links with the Forest Service, and we are currently developing links with the further education sector. Therefore, there are many international collaborations and national links.

1115. Through the unique facilities that are developing across AFBI, our research can embrace the complete production cycle from raw materials, and also consider added aspects such as nutrient management in relation to anaerobic digestion. We can perhaps handle those nutrients through bioremediation as well, and there are many links in that area.

1116. The advantage of what we can produce is that is not a desk study. We will be producing results from the ground up. Many reports, such as those that DETI may be commissioning, will come from desk studies. We hope to produce our results from real data. We will be well positioned to consider second-generation biofuels as the opportunities arise to consider those from lignocellulosic sources.

1117. Our current position has been described in our submission. We are committed to the further development of the environment and renewable energy centre, and to the development of our work across AFBI. We have secured funding of a further £1·8 million over the next three years through the innovation fund for Northern Ireland, which will provide resources for the research programme. To a large extent, our technology transfer will be in conjunction with the Department of Agriculture and Rural Development (DARD) and the College of Agriculture, Food and Rural Enterprise (CAFRE), although we will be happy to have many groups visit our centre. Our commitment is to work with DARD; our projects are approved through DARD in line with its renewable energy strategy. That strategy has also resulted from the sustainable development programme.

1118. In summary, our vision is that AFBI can provide a strong stimulus to support the local agrifood industry, which will enable Northern Ireland to meet the challenge of food and energy production together from land. We consider that to be a major challenge globally over the next decade and beyond.

1119. Our research programme will provide a solid base for the formulation of policies on renewables centred on locally appropriate information, which may be significantly different from that of other areas and regions of the world. Secondly, it will provide an insight into development of the next generation of renewable-energy solutions; we are looking to the future, with schemes tailored for the needs and opportunities Northern Ireland presents, such as grass. Thirdly, it will develop international links with leading research centres across the world, so that we can rapidly introduce worldwide developments into Northern Ireland.

1120. Finally, we will provide the essential information that Government, the industry, businesses, and the country need to ensure that agriculture plays a sustainable, economically viable and constructive role in addressing the issues of renewable energy, carbon emissions and secure food supplies.

1121. The Chairperson: Thank you very much. We appreciate that.

1122. As we have been taking evidence, I have sensed tension between the idea of food production and the provision of energy. There is a concern that one comes at the expense of the other. That does not have to be the case. Food production creates waste products that can be used to provide energy solutions. That issue is of interest to me. Evidence-based research is vital. This place provides a lot of that evidence, which is essential to deal with the subject effectively.

1123. You mentioned farmers; they are not reluctant to adopt new schemes, but they are reluctant to go into the unknown. Farmers trying to get out of an unviable position feel that they are trapped in a pit of darkness, which causes them to be careful what they get into, lest they descend deeper into darkness.

1124. The Committee has heard evidence that short-rotation coppice willow is often unattractive to farm businesses, because it requires a long-term commitment and has limited market outlets and price structures. Do you agree with that?

1125. Dr Alistair McCracken (Agri-Food and Biosciences Institute): It takes four years to get the first returns from short-rotation coppice. We talk about keeping it in the ground for up to 20 years, which is a long-term commitment. If farmers simply grow willow to produce woodchip as a commodity, then the opportunities are not all that attractive. In my work, I have tried to encourage farmers to link up with other parts of the community that they perhaps do not normally talk to.

1126. I cite the example of a group of farmers from Cookstown, who secured a long-term contract with their district council. That is an important part of business development. Farmers need those long-term contracts to give them the confidence to grow a crop over a prolonged period of time. That example demonstrates how farmers can work with the community. Farmers should also consider end use: to whom will they sell their woodchip? Unless they have thought that out, I would encourage them to rethink their business plan. Growing willow to produce a commodity is not the way to go.

1127. Dr Easson: Development of energy supply companies is a key area, and there are groups operating as such companies. The group producing the willow also installs the boiler and stocks it so that all it does is sell heat. They add more value to the product by selling heat.

1128. Mr W Clarke: An element that changed the economics of willow farming was introduction of payment for the bioremediation role for which the crop can be used. Can you expand on the research, or tell us its conclusions or recommendations?

1129. Dr McCracken: We are involved in two types of research and we have held a number of trials. We are investigating liquid effluents, and sewage effluents in particular. Northern Ireland Water has a large number of inefficient water-treatment works and small water-treatment works, including septic tanks. The research that has been done so far indicates that willow copes with large volumes of high-nutrient, particularly high-nitrogen, effluents. It is not as effective on phosphorous, although it will take some up. A trial that we are pushing to the absolute limit — and we are now working at a level far in excess of commercial usage — is to test whether nitrogen will leak out of the system, and so far, that has not happened. Scientists are never absolutely dogmatic, and I should like to complete a few more tests before declaring myself satisfied. There are also one or two examples of the commercialisation of this, using food-industry effluents, which tend to have less phosphorous in them and are lower in concentrations of nitrogen and lower in volume. That will work effectively.

1130. The second area where willow can be used is in the treatment of sludge. We have monitored a sludge trial on the land of Mr John Gilliland in Derry. Again, results tell us that willow copes with that and utilises it. There is no indication that nitrogen is escaping into the groundwater, which is the main concern.

1131. Mr W Clarke: Does the willow-grower get an income from taking that sludge? Is there a guarantee for that?

1132. Dr McCracken: John Gilliland has had a contract with Northern Ireland Water, in which sludge has been taken from the local treatment works. That has been an important source of income for him. He lost that contract, and the sludge then went to conventional forestry. There are issues around that. I am not biased, but the science on the use of sludge in conventional forestry does not stack up, because very high volumes are applied at one go. The issues there need to be seriously addressed. Willow is not regarded as a forest crop; it is an agricultural crop and, therefore, is dealt with differently. It can be an important source of income to the farmer.

1133. Mr W Clarke: I agree that there is great potential for the use of willow with foul water. NI Water is currently considering several drainage plants throughout the North, where the problem is how to deal with contaminated water. For example, storm water has been contaminated by sewage and that overflows into waterways. Is any long-term work being done on the use of willow with foul water, instead of building holding tanks?

1134. Dr McCracken: We are negotiating with Northern Ireland Water for one of the treatment works on the Ards Peninsula. If we could take even a small percentage of the effluent that NI Water produces, many water treatment works would come into compliance with EU regulations. We do not want to take all of the effluent. However, if even 10% was taken, compliance would be achieved.

1135. The other issue is that this is not a 365-day-a-year solution — willow will only work effectively during the summer. We are examining ways of putting on a reduced amount during the winter. However, that depends on site location and local soil conditions. Nevertheless, one of the issues that must be addressed is what to do during the winter. The solution might lie in storage or by using another conventional method of treatment. One suggestion has been to use reed beds, which function much more effectively during the winter than during the summer, and it might be possible to use both approaches. Technologies exist that need to be examined. However, that is certainly as issue as far as short-rotation coppice willow and liquid effluent are concerned.

1136. Mr Irwin: I have a few more questions: may I ask them at the end?

1137. The Chairperson: We will come back to them, because there are four other members who want to speak, and we are to be taken on another tour of the institute.

1138. Mr Irwin: This inquiry is principally interested in determining the potential of rural businesses to play a part in delivering a renewable energy programme that helps to meet Government targets while at the same time contributing to the sustainability of the businesses themselves. Which of the technologies that have been tested here offers the greatest potential to achieve that?

1139. Dr Easson: We are an early stage in developing many of these technologies. Our aim is to provide data. We are not in a position to tell businesses which option is best for them. However, we expect to provide increasingly firm data, and we have had strong evidence from short-rotation coppice willow research over a number of years. AFBI is about to submit a report on miscanthus, an area in which there is potential and on which we have done research, at least at desk-study level. We are currently doing fieldwork, which, after one year, is already showing interesting results. Research is continuing on anaerobic digestion, which is also at an early stage. Therefore, I respectfully say that we are not yet in a position to provide relevant information, but we hope soon to be able to do so in order to help the industry to make progress.

1140. Dr McCracken: There is no single solution to the problem of producing renewable energy on a community level or at a national level. Communities and countries must examine a mix of approaches and technologies. A combination of willow and wind, for example, might suit one group but not another.

1141. Mr Bresland: Your research has evaluated the potential of different biomass crops in Northern Ireland. What conclusions have you drawn?

1142. Dr Easson: Willow is a crop that has great potential. However, as Alistair explained, willow chip on its own is unlikely to be attractive unless value can be added through bioremediation or by being part of an energy services company that sells heat.

1143. We have evaluated miscanthus, and we feel that it deserves more consideration than it has had in the past. We are also examining novel crops. We have not taken you into the field to see what we are doing, but we have a novel crop, which no one else in the British Isles is considering as a biomass crop. If any of you are involved in farming you will know that one of the biggest weed problems that we have is the dock weed. As part of a review undertaken by our global research unit, it was discovered that a species of dock weed has been developed in Romania as a highly productive crop that produces a great deal of biomass on an annual basis. We have planted a small area of that crop, but the farm manager is not very pleased, because he does not like to see dock weed on the farm. Nevertheless, that is the sort of novel approach that we are trying to take in order to push the boundaries and make new discoveries. There are well-established crops, and there are crops that we believe have potential, and which we would like to try out. We are becoming actively involved in developing those crops. That is all that I have to say about biomass. Perhaps Peter will go further and talk about other ways of going forward.

1144. Dr Peter Frost (Agri-Food and Biosciences Institute): I will simply reiterate what Lindsay has said. We are at an early stage of our work: I do not think that we are in a position to give the answers that the Committee has asked for. We are at the embryo stage; in five years’ time we will be able to give a straight answer.

1145. Mr Savage: You have also undertaken research into the potential of liquid biofuels in Northern Ireland. Our inquiry is examining the relative importance of heat, electricity and fuel from renewable sources. What are your thoughts on the importance of biofuels to the Northern Ireland economy?

1146. Dr Easson: Three years ago, AFBI was asked to carry out a review of liquid biofuels — biodiesel and bioethanol — in the form of a desk study. That review indicated that there was potential for small-scale production of those fuels, but the economics were not particularly attractive. We approached the Department of Agriculture and Rural Development in order to undertake some other research on that subject, but the Department turned down those research applications and advised us that it would not support the development of the current generation of biofuels. We have not begun any research on liquid biofuels here, although we may use some.

1147. I agree that first-generation biofuels are not an attractive proposition. The current price of cereals and oil seeds, even with the fossil fuel price rises, mean that small-scale production will not be viable. However, we are very interested in the next generation of biofuels. We have not initiated any projects in that area, but we are seeking to establish links and partnerships that will enable us to get involved, as information becomes available.

1148. Dr McCracken: We normally say that our energy use comprises one third heat, one third electricity and one third transport fuels. The technologies for heat conversion are the simple ones, certainly with regard to willow. We examined combined heat and power and electricity production a few years back, but we are concentrating on the heat market. With a good boiler, we can produce efficiencies in energy recovery of up to 85%, which is impressive. Much of the initial application of the work that we are doing at the moment is towards the heat market. As Lindsay said, in the medium and long term we are examining electricity and, perhaps, transport, but heat is the one element of the market in which we can make a significant impact.

1149. Mr Burns: You anticipate that AFBI is well placed to become a centre of excellence in renewable energy research related to agriculture. In what practical ways is your research helping to establish the application of renewable energy in Northern Ireland’s farm businesses?

1150. Dr Easson: The willow industry is in place because of what AFBI has done over the years. We have already made a significant contribution to taking the matter forward in Northern Ireland. Today, the Committee has seen the facility that we will have to enable us to take forward work on drying and storage. The industry has planted a lot of willows but is not sure how that will be handled. We need research tomorrow — or today — and, hopefully, results can be produced quickly, which will help the industry to go forward.

1151. We are moving forward on a number of levels with some immediate issues and some strategic issues. However, there are medium-term and other issues that will take longer to play out. Our facilities will, primarily, serve for research, but also as demonstration. It is important for the industry to see working examples of schemes that are viable and of an appropriate scale. The on-farm scale digester is a key component, and Dr Frost may wish to comment on that.

1152. Dr Frost: With regard to what we are doing, practically, to ensure that renewable energy is adopted on farms, I can relate to the track record of willow. However, this is a start. Historically, AFBI — particularly here at Hillsborough — has had close links with many aspects of agriculture to ensure adoption at farm level. If that is taken as a track record, this embryo of research into renewables will follow the same pattern. I am referring to dairy cows, silage making, pig research, crop research and industrial fibre. All of the work that we have been involved in has been linked with farmers, many thousands of whom have been through the doors of this AFBI centre.

1153. Dr Easson: We have 10 farmers growing hemp in Limavady because we grew the first crop of hemp in Northern Ireland here in 1996. We asked the Department of Health for a licence and went through all the hassle of putting the procedures in place so that we could grow cannabis — and I could tell a few funny stories about that. We went thought the hassle to make it easy for the farmers. We worked in collaboration with University College Dublin to development the system for forage maize that can be seen across the country. Those are the areas that I have been involved in.

1154. However, there are many other areas, and Hillsborough has led the way in technologies that the industry has taken up. We have the track record; we have the relationship with the Greenmount campus and CAFRE; we have groups visiting us here all the time, and we have strong links with industry and research. The Committee can see what we do echoed and reflected and taken up by the industry.

1155. The Chairperson: I am smiling, Dr Easson, because there are things that you may want to claim and there are other things that you may not want to claim.

1156. Mr W Clarke: We discussed the bioenergy study group earlier. Have the consultants visited this site or have they requested a meeting with you?

1157. Dr Easson: I attended the seminar with representatives of the industry, and I spoke to some people individually. However, they have not requested a meeting with us.

1158. Mr W Clarke: I am alarmed by that. There is a Government programme underway, and consultants have been employed on a cross-cutting Government exercise to look into renewable energy sources. One has to ask whether the Department is serious about developing renewables as a way forward. I am thinking about that in relation to the communal biomass heating systems in the housing sector; for example, anaerobic digestion, the nitrates directive, and so on. Are you not alarmed as well?

1159. Dr Easson: It is not our job to tell them to come and talk to us. We gave them our details and invited them to do that. Their report will be issued for public consultation and we will consider that in great detail. If we do not agree with the conclusions of the report, we will produce a very thorough response to it.

1160. Mr W Clarke: I am just putting that on record.

1161. The Chairperson: Thank you very much for your hospitality in hosting the Committee here in Hillsborough.

1162. Before we finish, I thank the staff here for their excellent preparation of the meal and the presentation. I thank Jim Kitchen, the Committee’s special advisor, for his help over the last few weeks. I also thank David Batty, the Committee’s researcher, and the various officers from the Assembly Broadcasting and Official Report staff who are with us today; not forgetting the Committee’s own staff, who are readily available and are by our side.

1163. I thank those who have done great deal of work in preparing for this Committee meeting. Thank you very much indeed.

1164. The Committee will produce a draft report. It is hoped that that will be completed by the middle of June. Following consideration and approval by the Committee, the report will be submitted to the Business Office for debate in a plenary session of the Assembly. It is intended that that process will be completed before the summer recess. I hope that the Committee can keep to its timetable, as we often give others quite a bit of heat when they do not keep to theirs. The Committee will therefore try to lead by example on this matter.

22 May 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Mr Geoff Smyth

Carbon Trust

1165. The Chairperson (Dr W McCrea): I welcome Geoff Smyth, who will make a presentation on behalf of the Carbon Trust, after which, we will come to the questions that members want to put. Thank you very much for coming.

1166. Mr Geoff Smyth (Carbon Trust): Thank you Chairman, and good morning everyone. The Carbon Trust is an independent but Government-funded company, set up as part of the UK’s climate change programme in 2001. Our mission is to accelerate the move toward a low-carbon economy, and we are doing this by commercialising low-carbon technologies and by helping organisations to reduce their carbon emissions. Locally, we are funded through Invest NI and the Department of Enterprise, Trade and Investment — and Invest NI is represented on the board of the Carbon Trust in a non-executive capacity.

1167. Since 2002, the Carbon Trust has worked with several hundred local businesses and public-sector organisations to deliver substantial cost-effective carbon savings. For example, our work has realised annual energy-cost savings to local businesses in excess of £50 million a year, and that will deliver lifetime cost savings to those businesses of over £250 million pounds.

1168. Concurrent with that are the carbon savings: we have saved local businesses in excess of 450,000 tons of CO2 per annum, with lifetime savings in excess of 2∙2 million tons. We have also catalysed investment by those businesses in low-carbon technologies, energy efficiency, and renewable energy, in excess of £70 million. Our interest-free loans scheme has made available in excess of £6∙5 million to local companies to implement carbon-reduction measures, many of which relate to the use of biomass.

1169. There are increasing numbers of policies and regulations relating to the imperative for carbon reduction. At an international level, we have the United Nations framework convention on climate change, which gave rise to the Kyoto protocol, and put pressure, at an international level, on nations to reduce their carbon emissions. At the European level, we have the EU’s declaration for reducing emissions by 20% by 2020, possibly rising to 30%. At the UK level, we have the Climate Change Bill, which sets mandatory targets for a 60% cut in carbon emissions by 2050. That figure may be reviewed to become as high as 80%.

1170. Locally there are some very challenging targets within DETI’s strategic energy framework of June 2004, and more recently, the Office of the First Minister and deputy First Minister’s sustainable development strategy, which is setting a target of a 30% reduction in Northern Ireland’s carbon emissions by 2025. The strategy also outlines some very challenging targets relating to renewable energy. Some 40% of electricity should come from indigenous renewable energy sources by 2025 — 25% of that from non-wind sources; that will be addressed principally through the use of biomass. These are very challenging targets.

1171. The move to a low-carbon economy presents plenty of opportunities. If managed properly, as borne out in the Stern Review, it can provide an economic benefit to nations that are decarbonising. The earlier action is taken, the better and more advantageous it will be — the longer it is delayed, the more costly it will become. Intelligent management is required to ensure that the move happens in a cost-optimal way. That requires careful policy implementation and a focus on making the transition at the lowest cost.

1172. I am happy to take questions.

1173. The Chairperson: You sent the Committee a copy of the annexe to the ‘Northern Ireland Vision Study’, which examines the prospects of bioenergy up to 2050. The first section deals with the opportunity for fuels from forestry operations and timber processing. Will you summarise the importance of that sector and the future of bioenergy in Northern Ireland?

1174. Mr Smyth: At the moment, because the bioenergy market in Northern Ireland is quite immature, arisings from sawmill conversion and forestry residue are quite significant in the whole bioenergy envelope. Those arisings could amount to around 250,000 tons per annum, and that would be against the backdrop of 500,000 tons in total; so proportionally, it is very significant.

1175. Our study looked forward to 2025 and 2050, and over that time the importance of forest residue and sawmill arisings diminishes as energy crops increase and come online. It is possible to go from a situation today, where those account for around 50% of the bioenergy resource — for clarification, I am excluding waste-wood resources in that — to the position in which they become minority players by 2025 and 2050. The aspiration and challenge must be to ensure that energy crops come on stream at volume within that timeframe.

1176. The technical potential from sawmill and forestry residue is limited as regards how much wood can be processed locally, and the arisings from forestry management. However, energy crops should dominate in the future if there is going to be a viable bioenergy market in Northern Ireland.

1177. The Chairperson: In your presentation you said that the whole issue will take careful, intelligent management. Who do you think is best placed to provide that?

1178. Mr Smyth: That is a very good question. One of my frustrations, and one of the key challenges for all Administrations, is the recognition of the cross-cutting nature of the climate change problem/ opportunity. It impacts across all Government Departments; and to deliver an optimal solution for carbon reductions is going to require very careful co-ordination across Departments to ensure that there are no conflicts in the end objectives.

1179. The Chairperson: Whenever the responsibility is spread across all Departments; that is often a good reason to do nothing.

1180. Mr Smyth: Perhaps that has informed some action, or inaction, in the past.

1181. The Chairperson: So, what do we do? Someone must take the lead.

1182. Mr Smyth: I agree. If I were to pin my hopes on anything, it would be on the outworking of the sustainable development strategy. If OFMDFM — the Ministry at the centre — is to take ownership of, and deliver on, the sustainable development strategy, it must take the opportunity to work constructively with other Departments to deliver on that common objective.

1183. OFMDFM has specified that there should be a 30% cut in CO2 emissions by 2025. That will not happen by accident, and it will not happen in a business-as-usual scenario. It will only happen if all Departments are aligned to achieve the objective and if they formulate and climate-proof their policies to that end.

1184. Mr Bresland: Your study addresses the potential of anaerobic digestion to deal with farm waste and, at the same time, generate useful bioenergy. What are the relative benefits of farm-scale digesters and centralised facilities? Which option is better for Northern Ireland?

1185. Mr Smyth: It is worth making clear that delivering carbon reductions comes at various costs. Implementing some measures can be cost-negative as they will save money. Other measures to reduce carbon emissions will require significant investment. Typically, for immature or early-stage technologies, benefits can be gained from delivering plant at scale. The capital cost of small farm-scale anaerobic digestion plants is significantly higher than that of a centralised plant.

1186. A few years ago, the Carbon Trust carried out research on waste arising from the agricultural sector and the potential for using that material to generate clean electricity — green energy. We concluded that it was more cost-effective to have several larger, strategically-located, plants to address farm waste, rather than numerous small farm-level plants. Centralised plants also have the benefit of being able to take other waste in the locality, specifically, and importantly, the high-calorific waste that is generated by food businesses, hotels and restaurants, etc. Such waste can be valuable in improving gas yields from anaerobic digestion plants.

1187. At present, our view is that a small number of centralised anaerobic digestion plants — about 10 — strategically located across Northern Ireland would offer a better solution with regard to the cost of carbon than individual or small farm-scale plants.

1188. The Chairperson: Would people operating such plants not need the skills and knowledge to do so? Such skills would not necessarily be available across the whole country. Trailing waste products around the country is not necessarily a good idea either.

1189. Mr Smyth: You make two very good points. There is a capacity constraint as regards the knowledge and skills required to design, construct and operate anaerobic digester plants. Trucking waste great distances would defeat the purpose of trying to minimise carbon emissions. Our analysis suggested that, if there were 10 plants strategically located around Northern Ireland, the transportation distances would make sense as regards the overall carbon footprint of the operation.

1190. One of the Carbon Trust’s businesses is hoping to deliver Northern Ireland’s first commercial central anaerobic digestion plant at Omagh Meats. We hope that that will catalyse the marketplace and give people confidence to start rolling out such plants across Northern Ireland.

1191. The Chairperson: When will that happen?

1192. Mr Smyth: We are awaiting the conclusion of DETI’s processes to obtain some grant funding from the environment and renewable energy fund (EREF). When that funding is in place, we envisage a construction period of around 18 months.

1193. Mr W Clarke: Given the high cost of fossil fuels, we will never be in a better position to introduce renewable energy, and the market is dictating that we move in that direction. Part of our inquiry concerns the relative importance of heat, electricity and liquid fuels from renewable sources. However, the debate in Europe — and probably the world — is the contrast between food shortages and the production of cereal crops for ethanol, and how we can introduce biofuels. What are your thoughts on that?

1194. Mr Smyth: There are a lot of issues around that. You are absolutely right to point out the competing pressures for land resource — the concerns about the scarcity of food and the move towards energy crops. As regards the hierarchy of value from a carbon perspective, we looked at the issue a couple of years back and carried out a significant study into bioenergy across the UK.

1195. At that point, which was in 2005, we firmly concluded that the best use of available biomass in the UK would be towards displacing the use of oil for heating applications. The next cost-effective measure would be the generation of electricity using biomass through combined heat and power systems and using the waste heat associated with that. Firmly at the bottom of the hierarchy was the use of biomaterial for the generation of liquid fuels for road transportation purposes.

1196. Using the existing generation of biofuel technology — bioethanol and biodiesel — one would be talking about a carbon cost of 10 times that of using bioenergy to displace oil for heating applications. We do not think that there will be a sustainable industry using the existing conversion technologies to generate liquid fuels. We are focused on the next generation — the more advanced bioenergy for road transportation fuels.

1197. Recently, we issued a call to UK industry for expressions of interest in coming up with ideas to deliver the pyrolysis challenge, which is to take woody biomass material and convert it into an oil feedstock that can be fed into existing refinery infrastructure. The advanced biofuels have the opportunity to deliver cost-effective carbon and compete with the incumbent petroleum products.

1198. At this stage, producing heat locally would be the best use of the material, as regards cost-effectiveness and carbon, followed by combined heat and power systems, electricity-only schemes and biofuels.

1199. It is also worth giving a sense of what the opportunity is. Because energy crops are low-energy density, we will never have enough land — or we will never be able to plant enough material — to deliver significant amounts of energy in Northern Ireland, and that fact must be recognised. It is likely to be a minority player, but a significant player. We can derive substantial economic value and significant cost savings from it, but it will never give us energy independence.

1200. Mr W Clarke: The European Parliament’s energy from renewable sources directive mentions reducing the use of petroleum products by 10% and introducing biofuels, and there has been much debate about that. However, I see the production of biogas as having the potential to fill that gap through biomethane, which is similar to what Allan Bresland was talking about when he mentioned anaerobic digestion. There is also an opportunity to go a step further, break that down and introduce hydrogen fuel cells.

1201. There is potential to be self-sufficient on the island of Ireland, although I do not believe that we have sufficient capability in the North to sustain wind-turbine technology and anaerobic digestion. A spatial strategy is needed to deal with the matter on an all-island basis. What are your views on that?

1202. Mr Smyth: We have not considered the matter from an all-island perspective, but I would be surprised if enough land would be available to allow the island to achieve energy independence.

1203. Mr W Clarke: That is why I suggest throwing everything into the mix — for example, wind power and hydro energy.

1204. Mr Smyth: Given the existing technologies at our disposal, I do not believe that it is doable. It may become achievable with the new technologies that are becoming available — for example, fuel cells and the emerging hydrogen economy — but it would be at a cost. We must ensure that the move to a low-carbon future is done in the most cost-advantageous manner possible.

1205. Historically, energy prices in Northern Ireland have been high compared to those in the UK and Europe. Attempting to solve the problem with elaborate, expensive and immature technologies will simply force the price of energy higher. Already, some businesses in Northern Ireland are struggling as a result of high energy costs, so we would not advocate that route.

1206. Taking carbon out of the system involves a cost; therefore, all cost-effective technologies should be deployed first, and we should be vigilant for emerging low-carbon technologies. The Carbon Trust is playing a leading role in developing many such technologies — for example, we have made significant advances and investments in fuel-cell technology, which uses hydrogen as an energy vector, as well as with centralised anaerobic digestion, that is used for combined heat and power systems. It is all achievable technically, but currently there is a cost involved.

1207. It is true that the fact that high energy prices are providing more opportunities to develop renewable technologies. The best value will be achieved by displacing oil-fired, fossil-fuel systems with bioenergy systems, so that should be the focus of any policy.

1208. Mr W Clarke: I agree with you entirely on that, but my point is that oil is running out and oil-producing countries are going to keep whatever oil reserves that they have for themselves by making it so expensive that no other country will be able to afford it. If we do not have fossil fuels and we do not start investing in renewable technology now, how will we run our cars? That is what the people in the street are asking. How are we going to be self-sustainable on the island of Ireland? The number of people in fuel poverty is going through the roof — I anticipate that, last year the number of people suffering from fuel poverty in the North has doubled. How are we going to run our cars if we do not invest in renewable technology now? I apologise for labouring the point.

1209. Mr Smyth: Some existing technologies can, and do, take carbon out, but I must stress that there is a cost implication. Fuel poverty is not unrelated to this matter. Throwing expensive technologies and solutions at the problem will cause the cost of energy to increase, and someone will have to pay for that. Energy businesses are not philanthropic or altruistic organisations — they want to generate a profit. Therefore, setting the wrong policy objectives and forcing the use of immature and costly technologies will mean that we will all end up paying for that, which will result in more fuel poverty.

1210. I have not seen any study that indicates that Northern Ireland or the island of Ireland could become energy self-sufficient. A couple of years ago, the Carbon Trust did a study to see whether it is possible to achieve the objective of removing 60% of the carbon in our systems in a cost-effective manner. We concluded that it is achievable technically and economically.

1211. Typically, energy-efficiency interventions — improving the efficiency with which we use or conserve energy; better energy management, using modern, efficient lighting, heating and refrigeration systems — have a net positive value. That means that they result in a cost saving and that businesses and public sector that invest in energy-efficiency measures enjoy an economic benefit, as it saves them money.

1212. The other extreme of technologies, includes, for example, the current generation of solar photovoltaic and solar panels that can be seen on some roofs, which have been grant assisted in Northern Ireland and elsewhere. The cost of abating one tonne of carbon going into the atmosphere using that technology is approximately £18,000. The economic payback of such systems using existing technologies is non-existent. The design life of the kit is approximately 20 to 25 years, and the economic payback period is in excess of 80 years. That illustrates the significant cost of deploying such technologies, and the fact that they achieve limited carbon savings.

1213. Mr W Clarke: Surely, just like the low-energy light bulb, the technology for solar panels will improve.

1214. Mr Smyth: Absolutely, and that has to be the focus: innovative research and development. We have spent close to £10 million on a project that is aimed at delivering the next generation of photovoltaic technology. That is an area of possible interest to the Agri-Food and Biosciences Institute, and to the Department of Agriculture and Rural Development more generally.

1215. Third generation photovoltaic, as it is called, is based on organic systems. We are attempting to replicate what plants are good at: converting sunlight, through photosynthesis, into chemical energy. A significant amount of funding has been invested into commercialising that next generation technology. The aim is to reduce costs, and the policy objective is to reduce carbon emissions in a cost-effective manner.

1216. Mr Irwin: How important is bioenergy in contributing to the reduction of Northern Ireland’s carbon footprint?

1217. Mr Smyth: As I said earlier, bioenergy will be a minority player. Annually, Northern Ireland consumes approximately a total of 40 terawatt hours of energy — and I apologise for the use of horrible units. By excluding the energy that is used for road transportation and for electricity generation, the figure is reduced to approximately 21 terawatt hours of direct energy requirements, which is principally provided by coal, oil and gas. That is the incumbent technologies that biomass would be competing against.

1218. If just 1% of that energy requirement were delivered through bioenergy, for example, wood chip from short-rotation coppice, it would require approximately 70,000 tons of wood chip per annum, which would mean, at 10 tons per hectare, approximately 7,000 hectares in plantation, producing wood chip every year. We do not have that capacity at the moment. A few years ago, DARD’s short-rotation coppice challenge fund probably established approximately 800 hectares.

1219. To deliver just 1% of Northern Ireland’s direct end-use requirement to displace fossil fuels, approximately 7,000 hectares will be required. If we extrapolate that into delivering 5%, 10% or 50%, we would run out of land mass very quickly.

1220. Energy crops are a minority player, and contribute well under 1% of Northern Ireland’s energy requirement. Our vision study, which looks ahead to 2050, indicates that an aggressive carbon-reduction-focused policy, utilising all available land resource to grow, for example, short-rotation coppice willow, will require approximately 70,000 hectares in plantation, which would generate approximately 1 million tons per annum. That would equate to approximately 15% of Northern Ireland’s energy requirement by 2050.

1221. That assumes that the energy requirement remains static against the increase in population. If that were coupled with an aggressive policy on energy efficiency to reduce carbon, it would become proportionately more significant. However, the technical resource will always be limited because it depends on how much land is available and what yield can be achieved from that land. Energy crops are currently a minority player, but they could be significant, and there are genuine opportunities to stimulate, catalyse and encourage the development of a sustainable bioenergy market. The public sector has a leadership role to play in helping to achieve that.

1222. Mr P J Bradley: I thank the Carbon Trust for its report, and I welcome Mr Smyth’s informative comments. Much work is going on behind the scenes that we were not aware of. I welcome the recognition that food production should not be sidelined. On day one of the inquiry I expressed concern that we might get carried away on the biomass swell and that food production would be forgotten about. I am still concerned about that, but the report makes some recommendations for policies to stimulate growth in Northern Ireland. You mentioned three recommendations in particular: more capital grants; a presumption for renewable energy in public-sector purchasing; and more support for energy crops. Can you develop that point?

1223. Mr Smyth: When the initial piece of work was carried out in 2004 and 2005, one of the key obstacles to the development of bioenergy markets was the capital cost of the plant, which is significantly more expensive than the incumbent technologies. In order to encourage end-users, businesses and public-sector organisations to move away from fossil-fuel boiler plants and install, for example, biomass boiler plants, the capital-cost difference must be managed or bridged in some way, shape or form. When we carried out that initial work, we felt that the use of capital grants to pump-prime the market would be a sensible policy intervention.

1224. Since then, our thinking has developed. Through our biomass heat accelerator, we studied quite a few bioenergy projects across the UK, and we sense a correlation between the availability of capital grants for such projects and the end cost of those projects. It appears that, where capital grants are available, they simply get latched on to the cost of the project. That has the opposite effect to what is desired. Instead of pump-priming the market and encouraging some scale and volume and therefore pulling costs down, short-term thinking in some quarters of the industry may lead to profit being taken from that capital grant.

1225. We would like to revisit that. Any intervention should be focused on the outcome and on challenging the industry to engineer value and cut the costs of deployment. For the industry to be sustainable, it must compete with incumbent technologies at minimum cost to the public purse. Capital grants may have a short-term role to play, but probably not in the long term.

1226. One key area of policy intervention that we advocate is the role of the public sector, which is a significant energy user in Northern Ireland. Fossil-fuel usage by the public sector in Northern Ireland is around 1·34 terawatt hours a year. That equates to in excess of 400,000 tons per annum of biomass, or over 40,000 hectares in plantation. One can see a very easy win there, and it would address a number of objectives that are part of the sustainable development strategy, which aims to make the Government estate carbon-neutral by 2015. The strategy has objectives to encourage and foster an indigenous renewable energy industry.

1227. Through its procurement policies, the public sector in Northern Ireland could pull through a supply of bioenergy and deliver on multiple objectives. That would help Northern Ireland to move towards a carbon-neutral estate and it would provide confidence to the farmers and growers, which would enable them to make informed choices about what to use their land for — food crops, energy crops, or a mix of the two. Currently, there are significant economic incentives for farm businesses to plant energy crops, due to high energy prices. However, the cost of food has also increased recently, which is good news for that sector of the industry.

1228. If the public sector in Northern Ireland set out its stall and indicated that energy would be procured from carbon-neutral or low-carbon sources, farmers would start investing and planting energy crops, because they would see that there was an end use for those crops. A big barrier that consistently occurs is the chicken-and-egg scenario — farmers do not grow those crops because there are no end markets, and end users will not invest in the technology because there are concerns over the security of supply. The public sector could demonstrate leadership by aligning its procurement policies with its stated climate change and broader environmental policies.

1229. The Chairperson: You mentioned support for those who grow energy crops — surely the bottom line for farmers is that those crops will make them money?

1230. Mr Smyth: Absolutely.

1231. The Chairperson: How can we ensure that the farmers who grow those crops do not find themselves in the position in which they have been on past occasions — when they produced something that did not provide a financial return?

1232. Mr Smyth: That is the absolute nub of the issue. If the public sector — in totality, or a large swathe of it — announced that it would procure bioenergy for the foreseeable future, that would send a signal to farmers to grow those crops. You are correct to highlight the economics of the situation. Currently, against oil at $130 per barrel —

1233. The Chairperson: Let us be frank about that. The general public wants cheaper fuel. Therefore, they want somebody to produce that cheaper fuel. If we are referring to crops, that somebody will be the farmer. The farmers have been producing food and selling it at a price below what it costs to rear stock. Most of the general public will want them to do this as well, so that they can have cheaper energy and fuel. As long as the public is getting cheap fuel, it does not really matter that farmers lose money. How can you ensure that farmers get a return on their investments?

1234. Mr Smyth: A number of mechanisms could be deployed through procurement. I am sorry for harping back to the public sector, but if the public sector was to procure its energy with the aspiration of it being carbon-neutral or low-carbon, that would deliver on what we are trying to achieve. The current price of oil is approximately 50p per litre. The break point for growing woodchip energy crops is approximately 22p per litre.

1235. If the market price for that energy is 50p per litre, there is a huge profit margin if the farmer can produce it at the equivalent of 22p per litre. It could be index-linked to fossil-fuel prices; the farmer could sell the energy at 10% below spot market oil prices. That allows for a healthy margin, and there are not many people suggesting that oil will bottom out any time soon, anywhere close to 20p per litre. The growers should take confidence from that. In addition, there would be a cost saving to the public sector if it procured bioenergy from clean energy sources at a lower cost than the incumbent fossil-fuel sources. It is a win all round.

1236. Mr P J Bradley: It is OK talking about the 50p in comparison to the 21p or 22p that the farmer might receive. However, from other farming enterprises, we know how much the farmers receive compared to what consumers pay. How much of that 22p would be carried through to the farmers? Would they receive that 22p before it is consumed?

1237. Mr Smyth: It depends on the business model for delivering that fuel to the end-user. Co-operatives growing energy crops, investing in equipment to harvest, dry, and transport the crops may deal directly with end-users or go through an intermediary. The shorter the supply chain, the better the value to the farmer. Nothing prevents farmers from contracting bilaterally with large energy end-users, or collectively, through a co-operative, and selling into the marketplace.

1238. Mr P J Bradley: What about processors, supermarkets and so on?

1239. Mr Smyth: On the food side, when it goes through an intermediary, the value to the farmer is going to be eroded. We are not talking here about materials that farmers would have problems producing. If they are growing, harvesting and chipping willow, then baling, transporting or storing it, not much is needed to ensure that the bulk of that value is returned to the primary producer. The same applies to other energy crops.

1240. Mr Savage: Do you have any specific policy recommendations for DARD that would encourage the adoption of renewables on family farms and rural businesses?

1241. Mr Smyth: If DARD is already doing so, I urge it to continue. However, any policy intervention should be costed and optimised. A lot of technologies deliver carbon savings and renewable energy, but at a prime cost. I encourage a focus on the main aim. If the end objective is reducing carbon emissions and cutting energy costs, it should work with the College of Food, Agriculture and Rural Enterprise (CAFRE) — an organisation with which we have engaged — in order to ensure that energy use is kept to an essential level.

1242. Businesses must consider whether focusing on energy efficiency will save them money and then look at cost-effective renewable energy technologies, which are most likely to include bio-energy for heat applications and the use of large-scale wind energy on their land. It is unlikely to involve more exotic technologies such as solar energy or ground-source heat pumps. Therefore, coming back to the energy hierarchy; businesses should minimise the energy they need, optimise its use, and then search out cost-effective renewable technologies.

1243. Mr Savage: You mentioned anaerobic digestion earlier. I know of one that was working successfully and solving a lot of problems, but caused a smell problem. Therefore, solving one problem created another. Is there any way around that?

1244. Mr Smyth: A modern, well-designed, central anaerobic or anaerobic digestion plant will not cause odour problems. Technology has moved on. There should not be an odour problem with any of those plants. Hopefully, that will be tested when the Omagh Renewable Energy plant becomes operational and passes the “sniffer” test.

1245. Mr W Clarke: The whole idea of anaerobic digestion is to collect the gas — the methane. You are hardly likely to let it escape.

1246. Mr Smyth: You are correct; the value is the gas yield from the digestate. It has other virtues that we have not yet touched upon. They include adding value to the rural economy though the end product of anaerobic systems. Waste is put in, clean energy is generated, carbon and methane emissions are reduced, and valuable soil fertilisers and nutrients are produced that can go back to the farmers.

1247. Mr Savage: That installation was working well, but the community objected and the planners denied it permission to operate. That problem appears to be insurmountable. It works very well in England, but it does not seem to work here. A fortune was spent on it, but the planners turned it down and nearly put those people out of business.

1248. The Chairperson: Thank you for your presentation, which has certainly provided the inquiry with considerably more helpful information. Do you have anything more that you wish to say?

1249. Mr Smyth: Thank you for the opportunity to address the Committee, and I hope that my presentation has been helpful. If there are any follow-up questions, please do not hesitate to contact me.

22 May 2008

Members present for all or part of the proceedings:
Dr William McCrea (Chairperson)
Mr P J Bradley
Mr Allan Bresland
Mr Thomas Burns
Mr Willie Clarke
Mr William Irwin
Mr George Savage

Witnesses:

Mrs Olivia Martin
Mr David Sterling
Mrs Barbara Swann

Department of Enterprise, Trade and Investment

1250. The Chairperson (Dr W McCrea): It is nice to welcome David Sterling, Olivia Martin and Barbara Swann this morning; we appreciate your presence and look forward to hearing what you have to say. You will be allowed to make a statement, after which we will ask questions — which are never too hard, so you need not worry.

1251. Mr David Sterling (Department of Enterprise, Trade and Investment): We are pleased to have this opportunity to set out what DETI does and to contribute our ideas to your work. Our discussion should take about 15 or 20 minutes.

1252. I do not wish to sound as though I am getting my excuses in early, but I should say that I have only been with the Department for a couple of months, and I have learned quickly that energy is an extremely complex topic. Therefore, I will be relying heavily on Mrs Martin and Mrs Swann concerning matters of detail.

1253. The Chairperson: You are in the post and, therefore, you must take the heat.

1254. Mr Sterling: Absolutely.

1255. By way of input to your study, the Department has provided the Committee with a paper, and we will touch on some of the issues that are raised in that. Energy is a transferred matter about which the Executive are free to set policy. The principal objective, for the Department and for the Utility Regulator, is to protect the consumer. DETI’s role is to develop and maintain a policy and legislative framework that is designed to protect all consumers.

1256. A broad policy on energy was set out and framed in the strategic energy framework for Northern Ireland, which was published in June 2004. The framework document states that:

“The primary objective is: to achieve a competitive, sustainable, reliable energy market, at the minimum cost necessary in an all-island, UK and European context.”

Flowing from that are four specific goals that inform what we do:

“reduce energy costs relative to other UK/EU regions; build competitive energy markets; protect our future by enhancing the sustainability of our energy supply and consumption; and maintain the reliability of energy supplies.”

We promote a framework that keeps costs low, ensures that reliable and dependable energy supplies are provided, and balances competing goals.

1257. Since that document was published we have made, what we regard as, significant progress. One of the highlights was the creation of the single electricity market (SEM) on 1 November 2007. Since then, £1·3 billion of wholesale electricity has been traded through the SEM. The retail and wholesale markets have been fully open since then.

1258. Considerable progress has been made on alternatives to coal. Phoenix Natural Gas now has 113,000 customers, largely in the greater Belfast area, and Firmus Energy has around 3,000 customers in the north-west, after securing a contract to serve that region. The use of natural gas for home heating makes significant contributions to the reduction of carbon emissions. In that respect, we should not underestimate the impact of natural gas.

1259. Progress on renewable energy has been made on several fronts. The Northern Ireland renewables obligation (NIRO) has been introduced; Action Renewables has delivered a programme of work; and the environment and renewable energy fund, which plans to invest in excess of £50 million over a period of years, has been established.

1260. By 2012, we want 12% of Northern Ireland’s electricity to be produced from renewable sources, of which 15% should be from non-wind sources. At present, around 5% of electricity is produced from renewable sources. We have some way to go, but we are confident that we can achieve that target through existing plans that are with the Planning Service.

1261. In recent years, funding for energy efficiency has been increased. One major, topical concern is the cost of energy. Recently, it was announced that the cost of natural gas will increase, and it is anticipated that a similar announcement will be made shortly in relation to electricity costs. Before that, domestic electricity prices here had come closer in line with those in Great Britain. For some time, domestic customers here had been paying much more, but now we pay roughly the same as people in Great Britain. Businesses probably pay slightly more. I think that costs are lower in the Republic.

1262. Our challenge is to address the global rise in energy prices and to focus on sustainability and the desire to reduce emissions. We must work with customers, people with environmental interests, and people in the energy industry to do that. There is still much to be done to achieve the four goals of reducing prices, having a competitive market, enhancing sustainability, and maintaining reliable supplies.

1263. We are still heavily reliant on imports and fossil-based fuels. Some 99·9% of Northern Ireland’s primary energy requirement — electricity, heat and fuel — is imported and of fossil-based origin. Northern Ireland has 725,000 domestic electricity customers and 65,000 non-domestic or business electricity customers.

1264. Northern Ireland has three main power stations: Coolkeeragh in the north-west is a combined-cycle gas turbine; Ballylumford is a combined-cycle gas turbine that uses a small amount of gas oil; and Kilroot is both coal- and heavy-oil-fired and uses a small amount of gas oil. The Moyle interconnector provides a means of trading electricity with Great Britain. There is also a North/South interconnector which allows for North/South electricity trade through the single electricity market. As you will be aware, there are plans for a second North/South interconnector, which would be situated further to the west. We also have a growing number of wind farms, which are mostly situated in the west where there is more wind.

1265. The Department has a range of renewable energy policy drivers. Much of the Western World’s desire to increase sustainable energy and use renewable energy is based on reducing carbon emissions. We, too, consider that to be important, but using renewable energy in Northern Ireland will also lessen our dependency on imported fuels and provide a more secure supply for the future. Therefore, using renewable energy addresses two important policy goals.

1266. A considerable number of European directives impinge on our work, such as the renewable energy directive of 2001, the biofuels directive of 2003, and the biomass action plan of 2005. EU directives on nitrates, water, waste management, and pollution prevention and control are also relevant.

1267. The Northern Ireland renewables obligation is the main support mechanism to increase the use of electricity from renewable energy sources and legally obliges suppliers to source a specified, and increasing, amount of electricity from indigenous renewable sources, particularly wind. Mrs Swann will say more about that. We want to amend that obligation to reduce administration. There is also a renewable transport fuel obligation, which was introduced in April 2008 and provides an opportunity to increase the use of fuels from renewable sources for transport.

1268. The strategic energy framework that I mentioned is due to be updated — we hope to have a new framework published for consultation later in 2008-09, which will address the issue of energy from renewable sources. That framework will be set the context of planned new EU targets on the use of such energy. The renewable energy directive proposes that 20% of EU energy — for electricity, heat and transport — will be generated from renewable sources by 2020. That will be exceedingly challenging because although we have made good progress on the use of renewable sources to generate electricity, there is much more to do on their use for heat and transport. The UK target in the draft renewable energy directive is 15% by 2020; at present, renewable sources generate 1·5% of our electricity, heat and transport — so there is considerable work to do.

1269. We are consulting on the Northern Ireland renewable obligation with a view to refining it, making it more efficient and, perhaps, extending it to newer technologies that the Committee may be particularly interested in, such as dedicated regular biomass, dedicated biomass burning energy crops and anaerobic digestion. There is also a proposal for micro-generators to get double the renewable-obligation certificates.

1270. We are also looking at ways of increasing the range of renewable technologies, which may benefit rural-based people who generate energy from renewable sources. Taking the lead in that area is the bioenergy interdepartmental group, which we head and which includes the Department of the Environment, the Department of Agriculture and Rural Development, the Department of Finance and Personnel, the Department for Regional Development and Invest NI. We are working with consultants with a view to producing proposals for bioenergy and hope that there will be a document for consultation later this year. At this point, I will hand over to Mrs Martin who will go into more detail and give the Committee a flavour of how our Department can contribute to the terms of reference of the Committee’s inquiry.

1271. Mrs Olivia Martin (Department of Enterprise, Trade and Investment): I will describe the range of technologies that represent opportunities for farmers and local communities to generate electricity and heat. Other people may have more to say on that subject later this afternoon.

1272. As Mr Sterling mentioned, Northern Ireland’s main renewable source of energy is wind, which can provide farmers or landowners with a small opportunity to receive payment for the use of their land by the electricity generator. There is also scope for farmers to erect wind turbines for their own use, of which there have been a lot of examples. Technologies such as solar hot water panels and photovoltaic cells can provide a useful opportunity for farmers, and geothermal heat pumps can be a useful source of heat for small farms, as they can be for domestic consumers.

1273. The area of most interest for rural communities in the development of renewable energy sources is bioenergy. Earlier, Geoff Smyth from the Carbon Trust mentioned the main technologies involved, such as energy crops, biomass, forestry and energy-from-waste, including anaerobic digestion. Those opportunities are being assessed through the bioenergy study, which we referred to in our written evidence and which Mr Sterling touched on just now. Mrs Swann will cover the study in more detail, but those are the main technologies involved.

1274. I will now discuss the importance of electricity, heat and fuel to Government targets. We expect to meet the targets for electricity from renewable sources that have been set for 2012, and we are considering how to meet future renewable energy targets up to 2020, and the importance of electricity, heat and transport in our meeting those targets.

1275. Mr Sterling mentioned the draft renewable energy directive, which, for the first time, includes targets for heat and transport. To date, the focus has been on generation of electricity from renewable sources, and at UK level it is around 5%, which is roughly the same level as that in Northern Ireland. However, as Geoff Smyth said, half of the final energy that is consumed in the UK is in the form of heat, and that produces around half of the UK’s carbon dioxide emissions. However, there is no real market for heat from renewable sources at the moment, and it is estimated that the level of heat produced from such sources is less than 1%. Northern Ireland presents good economic conditions for such heat due to a high proportion of the current heat demand that remains off the gas network. Therefore, we agree with the regulator’s comments that all Departments should examine the issue on a cross-cutting basis. The Department of Enterprise, Trade and Investment will definitely be seeking to address the issue in the coming years.

1276. The UK renewable transport fuel figure is around 1% and the renewable transport fuel obligation will increase that figure. However, that matter is dealt with at national level. Therefore, DETI will be looking to the Department for Transport to cover the issue, because Northern Ireland imports all its fuel.

1277. The UK renewable energy figure is currently around 1·5% — against a likely target of 15%. Some scenario planning has been carried out for meeting the target, and it has been suggested that electricity from renewable sources might need to increase to around 35% to 40% of consumption, if transport contributes around 10% and heat contributes around 10%. Alternatively, if transport remains at 10%, heat might increase to 15%, and renewable electricity would have to reach 30% to 35%. Those are merely scenarios at the moment, but they represent challenging figures, and any shortfalls in heat or fuel would need to be made up with an even higher contribution by electricity. As we have said, electricity from renewable sources is likely to be the primary focus because it will deliver most cheaply and easily towards meeting the targets. However, new work will need to be carried out on heat. As the EU directive sets national targets, a national response will be required. With that in mind, the Department for Business, Enterprise and Regulatory Reform in GB is drawing up a draft UK renewable energy strategy, setting out proposals on meeting those ambitious targets, and there will be consultation on the strategy this summer. We will have to ask the Executive for permission for that consultation to cover Northern Ireland because we believe that many of the issues are similar here.

1278. With regard to Northern Ireland meeting the challenge of the EU directive, the Minister of Enterprise, Trade and Investment wrote to his Executive colleagues telling them about the directive and its implications and securing their engagement in cross-departmental work in advance of EU agreement. Implementation of the directive will facilitate the creation of a more enabling and supportive environment for renewable energy in Northern Ireland and Europe, and we are keen to secure cross-departmental support for the work. However, as Mr Sterling said, it is very much in our interests to produce as much indigenous energy from renewable sources as possible, regardless of whether the directive is adopted in its current form.

1279. The Department of Enterprise, Trade and Investment, in co-operation with the Department of Communications, Energy and Natural Resources in the Republic, has undertaken a major study into the potential for the grid, which could be a barrier to further development to take on more electricity from renewable sources and accommodate different technologies. The results were published in January and confirmed that onshore wind was still the most economic and technically available source of renewable energy, and that the grid could accommodate up to 42% of electricity generated principally from wind.

1280. However, in addition to the significant costs that would be required to reinforce the grid, it would also require long-term planning considerations in relation to grid strengthening, mainly in the west of Northern Ireland. Therefore, there are quite significant planning implications involved, and our Department will be working with the Department of the Environment on planning policy statement 18, which is on renewable energy, and on which consultation recently took place, to ensure that electricity from renewable energy sources can be accommodated. My colleague will now speak further about that.

1281. Mrs Barbara Swann (Department of Enterprise, Trade and Investment): The grid study has identified wind as the cheapest large-scale renewable source of electricity, and it is likely to be our primary focus. However, there is a need to broaden the range of renewable energy sources, as wind is intermittent and presents particular challenges when balancing the electricity grid. When the regulator spoke to the Committee recently, I am sure he stressed the importance of a readily dispatchable conventional and renewable electricity generation, which is needed to balance the intermittency of wind.

1282. In that context, the grid study looked at wind and other types of renewable energy sources — including bioenergy, which is the one renewable energy technology that can contribute to all three sectors and to different markets. The Department recognised that potential last year when it set up the bioenergy interdepartmental group, and involved colleagues from the Department of Agriculture and Rural Development, the Department of the Environment, Invest NI, the Department for Regional Development and the Department of Finance and Personnel. That was the first co-ordinated approach to bioenergy and will enable the potential benefits of bioenergy to be utilised across a number of Government initiatives in the energy, agriculture, enterprise, transport and environmental sectors. It will also allow us to meet our renewable energy targets, as well as the targets for greenhouse gas emissions. However, it is important to make sure that that development is sustainable and is to the longer-term benefit of Northern Ireland.

1283. Our group undertook an internal scoping study, and the terms of reference for an external study were submitted to the Committee as part of our evidence at the start of the inquiry. On behalf of the interdepartmental group, we appointed consultants to assess the potential for bioenergy. The results of the study are intended to inform a cross-departmental approach, on which consultation will take place during 2008-09. As the Committee has been given the terms of reference for the study, I will not go into details at this point. In essence, the study sets out to answer a number of questions: what is the current range of feed stocks; what are they currently being used for; could they be better used as sources of renewable energy; what resources could sustainably be increased, and at what cost? Economics are obviously a factor.

1284. In parallel to the provision of feed stocks, we needed to identify the energy sectors — electricity, heat or transport — that would make use of bioenergy, and which markets, whether domestic and embedded, commercial or industrial, would be open to bioenergy. Bioenergy can contribute to a number of energy markets, but the issue is complex. There is no straight link between a bioenergy resource and what it can be used for; there are a variety of mixes. The presentation pack that we provided to the Committee contains several detailed diagrams showing that there is a range of feed stocks, supply chains, technologies and end-uses. It is not an easy fix along the way.

1285. Given that range of variables, the study has proven to be quite complex, and work is ongoing with the consultants. However, it is hoped that the study will be available for the bioenergy interdepartmental group and our Minister’s consideration in June. The recommendations will help inform a cross-departmental approach, and consultation will take place later this year. At that stage, the results of this Committee’s inquiry will feed into that cross-departmental approach. Therefore, although the grid study identified wind as the main renewable energy source for Northern Ireland, there is also a more modest contribution from bioenergy.

1286. The Committee also wanted to examine the range of support mechanisms for energy from renewable sources. At the local level, as has been mentioned, there is the Northern Ireland renewables obligation (NIRO), which obliges electricity producers to increase the level of electricity from renewable sources in their supplies. The NIRO offers one renewable obligation certificate (ROC) per megawatt hour. ROCs are a tradable commodity, valued at approximately £40 per megawatt hour. That system has offered long-term stability and has proved attractive in ensuring an increase in electricity generation from wind in Northern Ireland.

1287. The Department has co-ordinated and administered the environment and renewable energy fund (EREF) — a two-year direct-rule initiative that is drawing to a successful conclusion. The project was instigated by former Secretary of State Peter Hain to enhance and accelerate the production of energy from renewable sources, and made available £59 million over two years to March 2008. The Department of Enterprise, Trade and Investment, the Department of Agriculture and Rural Development and the Department of Finance and Personnel are committed to the completion of several EREF projects beyond the EREF period and have secured additional Government funding for those projects.

1288. Key projects included interest-free loans to renewable energy projects through the Carbon Trust and Invest NI; the Reconnect programme for householders; renewable energy projects in the public sector; a small biomass boiler at Stormont; significant work by the Housing Executive on insulation; the installation of solar panels and the warm homes scheme; a renewable energy centre of excellence here at the Agri-Food and Biosciences Institute, and energy-from-waste flagship projects.

1289. Invest NI has played a key role in supporting renewable energy technologies — not through grants, but through technical and advisory support. Furthermore, Invest NI established a biomass group of approximately 30 companies, some from the farming communities, biomass suppliers and biomass boiler suppliers, who worked together to identify potential supply-chain issues. Invest NI also appointed the centre for competitiveness to conduct research on the bioenergy market and other emerging markets. That research aims to identify market opportunities and the sector’s capabilities in order to ensure best value and operation. Those projects will be included in the bioenergy strategy.

1290. I am sure that the Carbon Trust outlined the range of UK-wide grant schemes during the previous session. As David Sterling mentioned, there is the review and reform of the Northern Ireland renewables obligation, which is likely to offer double ROCs for several technologies that could be used by rural communities, and — regardless of the technologies used — for micro-generation.

1291. As Mrs Martin said, the UK heat market is small. Earlier this year, the Department for Business, Enterprise and Regulatory Reform (BERR) issued a call for evidence on heat. That Department will be developing a UK-wide heat strategy during 2008-09, and has been considering potential support mechanisms, including capital grants, feed-in tariffs and a renewable heat obligation. We want to work with BERR to develop potential for a heat market in Northern Ireland: Action Renewables has already conducted work on the matter.

1292. Work on renewable energy would be funded by resources secured under the comprehensive spending review, which runs from 2008 to 2011. We secured approximately £28 million to supplement existing work on sustainables such as renewable energy, energy efficiency and sustainable energy, both in relation to research projects and capital projects. Therefore, this is a positive opportunity. Although the programme is still under development, bioenergy and heat will be included.

1293. The Committee also wanted to consider fiscal and other incentives elsewhere. Members will know that fiscal policy is a reserved matter; however, studies have been undertaken at international level throughout the EU to examine the methods that different countries use to stimulate energy from renewable sources. Those methods include measures such as grants, interest-free loans, feed-in tariffs, tendering processes, the use of obligations and tax credits.

1294. A couple of years ago, an EU study examined the different support mechanisms. It indicated that addressing the barriers to energy from renewable sources was equally important. Those barriers include lack of co-ordination; lengthy planning processes and poor access to the grid. Approaches to bioenergy differed, mainly because of the various types of feed stocks and different technologies used. A long tradition of biomass, stable planning conditions and a combination for heat development were considered important.

1295. Undoubtedly, there is potential for farmers and rural communities to contribute towards increasing the levels of renewable energy sources not only to increase their own profitability but that of the wider community. Renewable energy sources are important at farm level to meet farmers’ own needs or to sell to the grid as surplus. There is an opportunity for farmers to work co-operatively in order to produce biomass for heating — adding greater value to their own produce — or to provide and sell heat through what is deemed to be called an energy-services company.

1296. However, it will be important to ensure that the most economic use is made of the finite land resources in Northern Ireland. Research has shown that biomass is one of the most land-greedy energy sources; using almost three times the amount of land as other potential types of renewable energy. It is also essential that opportunities are of long-term sustainable benefit to farmers and rural communities, and do not upset the ecological or biodiversity balance. That is why colleagues in the Department of Agriculture and Rural Development and the Department of the Environment are working with us, and why our Minister has sought their co-operation, as we take forward a range of cross-cutting issues.

1297. Mr Sterling: That is a broad outline of the work in which the Department is involved, and how it seeks to provide the lead on the development of renewable energy. We have probably taken up more of the Committee’s time than we had planned. For that, I apologise. I will, therefore, not labour the conclusion, other than to point out that our Department is keen to take the lead in the area. We look forward to the Committee’s deliberations, and we envisage that its report will feed into policy development that will be undertaken in 2008 on the new strategic framework and the Department’s work on bioenergy. We are happy to take questions.

1298. The Chairperson: Thank you very much. We appreciate your attendance and presentation. Wind provides 97% of the renewable energy in Northern Ireland. Your written response indicates that you expect to meet the Government’s 12% target for electricity from indigenous renewable sources from mostly large-scale wind projects. That target includes a component for non-wind technologies. How will that component be realised?

1299. Mrs Swann: Small quantities of hydro-energy and biomass energy are generated, and they make up the difference between what is generated by wind and 100%. To date, the focus has been on wind, and that has been supported through the NIRO, which has been particularly successful. That is why we have turned our minds to considering how we could support other renewable energy technologies to deliver more towards meeting the overall targets.

1300. The NIRO will assist the development of non-wind renewable energy technologies — it is not solely related to wind. We have used different mechanisms through the EREF to support some of the small forms of micro-generation. However, we look to NIRO to be the main supporting mechanism. It is being reviewed and reformed so that it can offer greater levels of support to other technologies; some on the biomass side, others on the marine and tidal side, which could offer greater incentives.

1301. Mrs Martin: If some of the energy-from-waste projects that are not yet in the planning stream were to come on-line, that would pretty much meet 15% of the 12% target.

1302. The Chairperson: Some of those technologies are not necessarily ready and must go through a planning process. In your presentation, you said that you will assist by taking actions, which are of equal importance, to remove barriers to planning and access to the grid. Will you clarify your written submission, in which the terms of reference for the study that was mentioned indicate that the report would be available from 7 March 2008?

1303. Mrs Swann: After the original tender documents were issued, we expected consultants to be appointed before Christmas. However, they were not appointed until January. As I have said, they have had to deal with a complex issue and are slightly behind schedule. We are working with them to finalise the report and get it moving. It has proved to be a more complex issue than anticipated for them to tackle.

1304. We held a seminar in February in which the consultants sought information from a range of key players regarding feed stocks, various sources of supply and possible markets. We have continued to work with them on that as they have been gathering information over the last month.

1305. The Chairperson: It has not been a short delay; we are talking about three months from the original date of 7 February, to the new date, 7 June. There are always wonderful ways of going backward, but very little is ever done by way of coming forward.

1306. Mrs Swann: That period of delay is not as long as it looks as that process did not start until January.

1307. The Chairperson: That is a delay of a month, but that period has been extended again.

1308. Mrs Swann: The issue is complex and there is more involved than was envisaged. The consultants have been researching further work on our behalf, and we want to allow extra time for that. This is the first piece of evidence-based work that the Government has undertaken on bioenergy. Rather than try to rush it and produce something that is not sufficiently grounded, we are working with the consultants in completing their work.

1309. The Chairperson: The report was due to be made available from 7 March. Have you any idea when it is going to be available or will it be put on the long finger?

1310. Mrs Swann: It is certainly not on the long finger. As I said in the presentation, we expect to get the report in the next few weeks so that the bioenergy interdepartmental group will be able to consider it during June. The report’s findings will then feed into the broader cross-departmental approach that is envisaged to be issued for consultation later this year.

1311. The Chairperson: In response to an Assembly Question, the Minister of Enterprise, Trade and Investment, stated that the Department was considering options to increase its budgetary provision to maximize the number of applications for Reconnect grants. What stage is that at?

1312. Mr Sterling: That budget has been increased by around £1∙5 million to £4 million, and we hope to be able to fund in excess of 4,000 of those who have applied for support through the Reconnect scheme.

1313. The Chairperson: The Minister’s response was:

“There were adequate funds available to meet the demand for Reconnect grant claims up to 31 March 2008. DETI is considering options to increase its budgetary provision in 08/09 to maximise the number of applications supported, through reprioritisation of the Department’s capital budget.”

1314. Mrs Swann: Since its launch, Reconnect has received more than 9,000 applications. In its last four days, over 2,000 applications were received — there has been a lot of interest at the end of scheme.

1315. The original budget from 2006-08 was £8 million. The Department has increased its provision from £1∙5 million to £4 million during 2008-09 through reprioritising its budget. That will allow approximately 2,000 further Reconnect claims to be paid.

1316. The Chairperson: Has the Minister secured that funding?

1317. Mrs Swann: Yes; the funding has been secured and has been increased from £1∙5 million to £4 million through reprioritisation. Colleagues are currently working through the applications.

1318. Mr Sterling: We have re-profiled expenditure on other programmes so that we can put more money into this area without compromising the delivery of other important programmes by the Department. It just means that some other things will take longer to do.

1319. The Chairperson: It is nice to see promises that were made be fulfilled, that is important.

1320. Mr Savage: Thank you for your comprehensive presentation. I have got answers that I have spent a long time looking for. In your submission, you list the terms of reference of your bioenergy study, which was due to report in March 2008. We are interested in hearing the top-line results and recommendations from that research. What assessment does it make of the economic viability of the bioenergy sector in Northern Ireland?

1321. Mr Sterling: As Mrs Swann mentioned, the consultants were appointed a month or so later than originally planned. That work is going to take a bit longer because of its complexity, so it is a little early for us to be discussing that study. We do not have the emerging findings — they are still very much in the analytical phase.

1322. Mrs Swann: We know, from the terms of reference, what the consultants are working towards. However, there are a number of complex issues that are still being considered and examined, such as whether the biomass that is available in Northern Ireland should be used for heat, or whether it should be used for heat and electricity generation, or whether we should be growing biofuels. The recommendations could range across supply-chain issues, or further research into a changing model with regard to bioenergy. It is still early days for that. The findings from the study are expected by June, and they will be shared with the interdepartmental group, the Minister of Enterprise, Trade and Investment, and the Committee for Enterprise, Trade and Investment. We will be happy to share the findings with the Agriculture Committee in due course.

1323. The Chairperson: All our questions were based around the study. Unfortunately, it seems that the answer to all of them will be that the study has not concluded.

1324. Mrs Swann: It is a work in progress, so it would be difficult to give answers to specific questions. The consultants have not finalised what they would feel to be recommendations for the interdepartmental group to consider.

1325. The Chairperson: In that case, the Committee will forward its questions to the Department. The Committee felt that there were certain questions that were vital to have on record. Unfortunately, we will not be able to get those questions on record today. However, they will be formally sent to the Department and the Committee will be grateful for your response. In the meantime, however, members may have questions of their own.

1326. Mr Sterling: It would be very useful if the Committee sent its questions to the Department. By feeding them to the consultants, the Department could ensure that the ongoing study addressed the concerns of the Committee.

1327. Mrs Swann: The recommendations from the study will be considered with those from this group, as well as work by Action Renewables on heat. Those strands will then be drawn together so that when DETI produces a draft cross-departmental strategy for bioenergy, it has the benefit of the informed considerations that have been taking place as part of your study and other studies.

1328. The Chairperson: Some of the Committee’s questions might not have been considered by the group. Therefore, if those questions are fed into the study while the group is still undertaking its work, everyone can benefit.

1329. Mr P J Bradley: What advice does the Department have for rural communities? Does the Department have procedures for going out to address rural communities that want to come together for particular projects? Do you see that as part of your role?

1330. Mr Sterling: The Department has to take account of the interests of all consumers, and, obviously, has a particular interest in the rural community. The bioenergy study, for example, is looking to identify ways in which the farming community can benefit from the increasing drive to use more renewables. I am not in a position at present to advise a rural group on any particular course of action. However, when the bioenergy study and the strategic energy framework are completed and have gone out for consultation, the rural community will see how it can embrace renewable technology, not just to reduce carbon emissions but to gain other benefits.

1331. Mrs Swann: Many of those issues have a cross-departmental impact. We have joined up with colleagues in the Department of Agriculture and Rural Development (DARD), the Agri-Food and Biosciences Institute (AFBI), and the College of Agriculture, Food and Rural Enterprise (CAFRE) to avail ourselves of their advice and guidance. They know the sector better than we do, and they are able to give direct advice. Organisations such as Invest NI have given technical advice to the farming community about biomass and biofuels. The Reconnect scheme and the environment and renewable energy fund were as open to the rural and farming communities as they were to others.

1332. We look to DARD, AFBI and CAFRE to give further advice and guidance, but we are confident enough to say that opportunities exist in renewable energy for the rural and farming communities. However, there are a number of technologies and opportunities, and those must be researched to ensure that the best technologies and the best forms of renewable energy in individual circumstances are used, rather than a one-size-fits-all solution for the rural community.

1333. The Chairperson: The Chairperson of the Committee for Enterprise, Trade and Investment objected indignantly to our initiation of this study. However, our purpose is to determine the potential role for farmers and the rural community. The farming community has been facing a large dip in income over a period of time, and we want to find out whether there is something that the farming community could do to assist in the production of energy.

1334. You mentioned DETI’s lead role in developing energy policy, based on the 2004 strategic energy framework. Your first point was about reducing energy costs. I wonder when that happened; maybe I missed it, or it passed over very quickly. Our purpose is to find capable people, who have land available, to assist in an important project which affects everyone. Farmers, the farmers’ unions and the industry in general approached us to determine whether there was anything that we could do. We want to be ready participants in the challenge that will have an impact on the whole community.

1335. Mr Sterling: We can understand the frustration in the rural community and among farmers. There is an opportunity there; why can they not just get on with it? It is important, however, to ensure that we do not encourage people to take projects on until we are sure that they are sustainable and viable in the long term. There are plenty of examples of people who have taken up new technologies that proved not to be viable in the long term. That is why this work is important, and why the Committee and DARD officials are heavily engaged in it.

1336. Mr W Clarke: The 15% target for renewables may be a case of picking the low fruit from the trees. That 15% is there for you: the private companies are setting up the wind farms. You have talked about waste management. What is the Department doing to lead the way? I do not see it leading the way in that regard. I am not blaming you personally, as you are new to the position.

1337. Secondly, I have not heard any mention of transport. Fuel costs are escalating, but we are waiting for a report that will not be published until June. Can you give me a flavour of what the Department intends to do with regard to transport?

1338. Mr Sterling: The 15% target is set out in a draft EU directive as being the target for electricity, fuel and heat by 2020. That is to be the UK’s contribution towards an overall EU target of 20% use of renewables. At the moment, the UK figure is only 1·5%. By 2012, we should be delivering 12% renewables for electricity.

1339. There is virtually no contribution from renewables to heat, and very little in road fuel. There is some biofuel about. I agree that we are starting from a very low base. With respect to heat and road fuel, I am not sure that there are low-hanging fruit. We work with other Departments: we have to. We will be unable to deliver, for example, the commitment on road fuel, unless we work with colleagues.

1340. Mrs Martin: With respect to low-hanging fruit, I repeat what Geoff Smyth said earlier: it has to be delivered at the lowest possible cost. If wind is that lowest cost —

1341. Mr W Clarke: But someone else is doing that; the Department is not taking a lead.

1342. Mrs Martin: We have the Northern Ireland renewables obligation (NIRO), which is the main incentive to change. Wind generation is still not competitive with fossil-fuel generation, although it is getting there. The NIRO is there to support wind generation. That is what the Department does to incentivise all types of renewable electricity generation — but primarily wind generation.

1343. The grid study has shown that wind generation will be the most economic form of renewable electricity generation up to 2020. If, by then, we are to have 42% of electricity produced from renewable sources we will have to look away from wind, to other renewable technologies, to increase further the proportion of electricity generated from renewable sources.

1344. Mr Sterling and the Committee are correct: much work remains to be done on heat. As biofuels are so deeply connected with fiscal policy and tax, strategy is organised on a national basis. We have researched Northern Ireland aspects of it, but it is the Department for Transport, with its renewable transport fuel obligation, that drives the increase in renewable fuels.

1345. Mr Sterling: One of the practical things that the Department does is work with the regulator to enhance the grid so that we can use what wind power can deliver. We will not maximise the potential of wind power without enhancing the grid.

1346. Mr W Clarke: Sorry, I want to return to transport. You say that the Assembly can set policy, but at the same time you are waiting to see what will be done across the water.

1347. Mrs Martin: The Department for Transport has completed its work, and the Assembly has agreed that similar measures will be taken in Northern Ireland through the renewable transport fuel obligation.

1348. Mrs Swann: That obligation has been introduced across the whole of the United Kingdom. Like the NIRO, it puts an obligation on transport fuel suppliers to increase the amount of renewable biofuels that they use. The obligation is set at a UK-wide level, as a member state contributing to targets set by EU directive. The target is set at 5% by 2010-11.

1349. Mrs Martin: There are no companies in Northern Ireland large enough to be bound by the obligation.

1350. Mrs Swann: The obligation applies where fuel tax is paid, and the bulk of the tax is already paid before oil reaches Northern Ireland. Therefore, the Department for Transport, and HM Revenue and Customs, consider that there are no obligated companies in Northern Ireland. The Department’s contribution will be to ensure that more biodiesel is available on the forecourts of petrol stations in Northern Ireland.

1351. Northern Ireland is a small country. Some biofuels are produced here, though only on a small scale. At the moment, production is quite uneconomic. Biofuel may be produced from rapeseed oil; from imported and processed palm oil; or from used cooking oil. Used cooking oil is mostly collected, shipped out of Northern Ireland and sold in European countries where import duty on fuels is lower. It makes better economic sense, therefore, to ship it out of Northern Ireland than to keep it and process it here.

1352. Mr W Clarke: Why is that?

1353. Mrs Swann: Some European countries have introduced a higher incentive for biodiesel.

1354. Mr W Clarke: What is the Department doing about that?

1355. Mrs Swann: It is a UK taxation measure. The UK incentivises the use of biofuels through a 20% reduction in road fuel tax — from 48p to 28p — but other European countries offer a higher level of incentive. Therefore, the more attractive option for producers is to ship it out.

1356. Mr W Clarke: Throughout Europe, countries that have embraced renewable technologies are still going that extra mile. Is there not a lesson to be learnt from that? Should the Assembly not be pushing Alistair Darling for more incentives?

1357. Mrs Swann: Other countries use a different mix of incentives.

1358. Mr W Clarke: Obviously, ours are not right.

1359. The Chairperson: Taxation is not a matter for the Committee.

1360. Mr W Clarke: I have argued that the Assembly should have fiscal powers.

1361. The Chairperson: Unfortunately, taxation is not a transferred matter, so the Committee cannot consider it. I appreciate the point, but DETI cannot do anything about it.

1362. Mr W Clarke: It is an obstacle that has to be discussed.

1363. We should be looking at effective public transport. The cost of public transport must be reduced to make it a more viable option. The way to do that is by introducing biodiesel and sourcing cheaper fossil fuel from somewhere such as Venezuela. Ken Livingstone reduced fares by 20% in London by doing that. Has the Department considered any similar initiatives?

1364. Mr Sterling: That is in the remit of my former Department, the Department for Regional Development (DRD).

1365. The Chairperson: Members, bear in mind that when we started this process we were ordered to restrict our discussions to matters that are the responsibility of DARD. This is the responsibility of a different Department, with a different Minister, and we must wait for him to act. The Committee is strictly commissioned, and the Assembly has ordered that we keep within the bounds of the inquiry, which relates to DARD.

1366. Mr W Clarke: That is fair enough, but I was simply asking the DETI officials what they think about that initiative.

1367. The Chairperson: Yes; but I must also say to the officials that it is not for them to comment on the responsibilities of another Minister or Department. I would have to rule out any such comments, because we must keep within the bounds of our inquiry.

1368. Mr W Clarke: I appreciate that, but if we approached DRD about it, the response would be that it is a DETI issue.

1369. The Chairperson: We are here to discuss a DARD issue.

1370. Mr W Clarke: We can ask questions, but where will we find the answers?

1371. Mrs Martin: This is not really an answer to your question, but our Minister has written to Ministers in relevant Departments who have an interest in the renewable energy directive, with a view to working together. Transport is definitely the responsibility of DRD, but DETI is in contact with DRD and we are starting the process of working together on renewable and sustainable energy, including how it can be used in public transport.

1372. Mr Savage: I have listened to all the witnesses this morning, and I find the subject very challenging because it is highly scientific and technical. Whoever can crack the nut will solve the energy problem. Your written submission refers to interest-free loans for people to work on renewable energy. Are those available?

1373. Mr Sterling: The loans came out of the environment and renewable energy fund, but I am not sure whether they are still available.

1374. Mrs Swann: That process is now complete. The loans were made available through the Carbon Trust and Invest NI. There were a range of interest-free loans for renewable energy projects within the industry. That has already closed; it was part of a particular scheme which has been completed. The only ongoing element of the environment and renewable energy fund relates to the Reconnect scheme that was discussed earlier, and the taking forward of a number of energy-from-waste projects.

1375. Mr Savage: In the agriculture world, there is an old saying: “Where there’s muck, there’s money”. There are people out there who can crack this nut if they have the chance and the opportunity. That is why I asked about interest-free loans — people are tied. A lot of them are tied because they cannot afford to take it to extremes. I know of two schemes going on which are very nearly there, but help and finance are needed to finish the job.

1376. I have listened to the presentations very carefully this morning, and I think that the work that is ongoing between DETI and other people — and I include Mr Smyth from the Carbon Trust — if everyone can work together, this can be achieved in a very short time.

1377. The Chairperson: Would people from the farming community apply for those interest-free loans and grants to the Department of Agriculture and Rural Development, or would they apply to Invest NI?

1378. Mrs Swann: Those particular grants, if my knowledge serves me correctly, are related to industry — the Carbon Trust and Invest NI in particular. DARD has an existing array of grants, and is looking at other forms of assistance and support to be introduced through its next EU programme. I do not know the details of that, but if the applications are coming from the rural community, they would be more likely to go to DARD. If they are coming forward as a business where the farmer is adding value as a result of production, then that might be an eligible project within Invest NI’s remit.

1379. The Chairperson: It is a business — it is an agriculture business. I have quite an argument with other folks; farming is called an industry when it suits, and is not called an industry when it does not suit. It is an industry and it needs help, because in many ways, it has the answer to a lot of problems. If it did not have a plethora of hoops and barricades in its way, I think the farming industry could have a vital role to play in this whole issue.

1380. Mr Savage: Straight talk is needed here — we need to be black and white. The farmers do not need to be chased about, because there are many people living off the farmers’ backs. It is time that the farmers stood up for themselves. They are not going to be pushed about any more. We have arrived at a stage where we need a bit of straight talk and straight figures — what is achievable and what is not? There are big opportunities out there for the farming community. I have every confidence in it — that community can go a long way to help solve this problem.

1381. The Chairperson: Well, here is some straight talk — we have two minutes before these folks are finished.

1382. Mr W Clarke: How fuel-efficient are the power stations, and what are you doing to improve that? If I can squeeze in one more quick question, is the renewables industry happy with the extra £2∙5 million? I have been speaking with people in South Down, where a number of businesses have been set up, and they are concerned that there is not enough money there to pump-prime their industries.

1383. Mrs Martin: I cannot give specific efficiency data for the power stations. However, in general, a coal-fired power station is between 30% and 40% efficient, and combined-cycle gas turbines are around 50% efficient. That is standard for the age and model of our plants in Northern Ireland.

1384. Mr W Clarke: What are we doing to improve that?

1385. Mrs Martin: I will have to phrase my answer carefully. It is a market — the Utility Regulator may have said something along those lines. It is a market, so we look to the market to provide the most efficient and economic form of electricity generation for Northern Ireland. It is not within the Department’s remit to interfere with the market to that extent.

1386. The Chairperson: What about the second part of the question?

1387. Mrs Martin: I am sorry; I have forgotten what it was.

1388. Mr W Clarke: Is the renewable industry happy with the extra £2·5 million? Is that sufficient?

1389. Mrs Swann: The £2·5 million is the additional —

1390. The Chairperson: Mrs Swann had been talking about the extra money.

1391. Mrs Swann: The extension to the Reconnect programme.

1392. Mr W Clarke: The people that I have talked to in the industry —

1393. Mrs Swann: As opposed to the domestic users?

1394. Mr W Clarke: People who are actually trained to install —

1395. Mrs Swann: The installers?

1396. Mr W Clarke: They say that it is not enough.

1397. Mr Sterling: There is an issue there. The Reconnect programme was time-limited with a limited budget, which we actually increased. However, we will not be in a position to extend the scheme any further until it has been evaluated. We must, through an evaluation, determine whether the money that was spent was giving us a good return in terms of reducing emissions. Was it being targeted at the right people? We have huge problems with fuel poverty and other issues in Northern Ireland, and we must look at all the issues together to ensure that if there is to be any future investment, it will go to the right people and deliver the right sort of benefits. The evaluation will be conducted this year.

1398. Mr W Clarke: Is that the bioenergy study? Are they looking at —

1399. Mrs Swann: No. That will be a separate piece of work.

1400. The Chairperson: Will you write to us and tell us when that will happen, please? We have a strict timetable this morning, and other people are waiting to come in. Thank you very much.

Appendix 3

Written Submissions

Action Renewables

Contact: Dr Andy McCrea, Director, The Innovation Centre, NI Science Park, Queens Road, Belfast BT3 9DT. Tel: 028 90737856 e-mail: andy.mccrea@actionrenewables.co.uk

Action Renewables Background

1.1 Action Renewables was established in July 2003 and since then it has been supported by the Department of Enterprise, Trade and Investment (DETI). It was created in response to European, National and Northern Ireland government commitment to renewable energy as one strand of the policy to combat climate change, environmental pollution and to increase fuel diversity.

1.2 The objectives of Action Renewables are to significantly raise awareness of the impending threat from climate change, the depletion of resources and the security of our energy supplies. Action Renewables’ aim to increase understanding of the issues associated with conventional energy use and to promote renewables generally in the context of a possible solution. In meeting these objectives we hope to win the hearts and minds of makers and opinion formers.

1.3 Action Renewables is established as a private company, limited by guarantee with charitable status.

Submission based on the Terms of Reference:

(a) The recent and current policy framework for the development of renewable energy in Northern Ireland, focussing on but not limited to those policies developed and implemented by the Department of Agriculture and Rural Development.

2.1 There is a range of policies and targets affecting decision-making in Northern Ireland which directly, or indirectly, promote the use of renewable energy generating technologies (Table 1).

Table 1: Selected Policies and Targets promoting AD in Northern Ireland

Policy	Target	Period
Kyoto Protocol – UK Target	Reduce CO2 emissions by 12.5% below 1990 levels	2008 - 2012
UK domestic target	Reduce CO2 emissions by 20% below 1990 levels	2010
UK domestic target	Reduce carbon emissions by 60%	2050
Nitrates Action Programme	Spreading organic manure only within a designated period	Closed period – 15th Oct to 31st Jan
Nitrates Action Programme	Maximum of 170 kg total N per hectare per year from livestock manures applied to the land, including by the animals themselves	Outside closed period
European Council Statement on 9th March 2007	20% of total EU energy mix to come from renewable sources	2020
Strategic Energy Framework	12% of all electricity consumed in Northern Ireland is obtained from indigenous renewable energy sources	2012
Strategic Energy Framework	15% of the renewables mix should be generated from renewable resources other than wind	2012
Northern Ireland Renewables Obligation	Electricity supply companies in Northern Ireland obliged to supply up to 6.3% of their electricity from renewable resources	Up to 2012
Waste Management Strategy	Reduce the quantity of biodegradable municipal waste being landfilled to 35% of the 1995 level	2020
Waste Management Strategy	Compost or recycle 45% of household waste	2020
Northern Ireland Sustainable Development (NI SD) Strategy	Reduce greenhouse gas emissions by 25% below 1990 levels	2025
NI SD Strategy	Make the Government estate carbon neutral	2015
NI SD Strategy	Establish a renewables centre of excellence at AFBI Hillsborough	2008

2.2 In Northern Ireland, the total greenhouse gas emissions in 2005 were 5.5% below 1990 levels. Overall, however, the UK showed a 15.8% reduction on 1990 emissions of greenhouse gases. Northern Ireland’s performance is poor when compared to the UK total, and indeed, emissions from the industrial and transport sectors in Northern Ireland continue to rise. In particular, emissions associated with the production of energy have risen from 14.8 Mt CO2 equivalent in 2002, to 15.4 Mt CO2 equivalent in 2005.

2.3 Emissions of greenhouse gases from the agricultural sector are also higher per head of population in Northern Ireland than in the UK as a whole, accounting for 9.7% of UK agricultural emissions in 2005 yet being home to only 3% of the population. This reflects the importance of agriculture to the economy of Northern Ireland, but also provides opportunities to improve Northern Ireland’s record on reducing greenhouse gas emissions (Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990 - 2005).

(b) The range of renewable technologies currently in operation or planned in rural communities, taking into account, as appropriate, similar projects elsewhere.

3.1 Northern Ireland currently has a range of operational and planned renewable energy projects:

3.2 Large scale wind > 100kW

There is approximately 180 MW of installed large-scale wind turbines. These are mostly found in wind farms but there are several individual large wind turbines owned and operated privately by rural businesses and farms.

3.3 Small scale wind < 100kW

Utilised by over 100 households and businesses in Northern Ireland to supplement electricity demand.

3.4 Biomass CHP

Provides heat and electricity from biomass, typically woodchips. Gasification units have been installed, but have yet to see widespread uptake. Some large examples exist, such as the sewage sludge incinerator which is 1 MW.

3.4.1 Anaerobic Digestion

A form of biomass power which converts organic material to biogas – a mix of methane and CO2 – by methanogenic bacteria in the absence of oxygen. Some examples are being developed.

3.5 Biomass boilers (woodchip / wood pellet)

A popular heating technology which can directly replace traditional oil-fired boilers in homes and businesses. Comes is a variety of sizes from small room heaters to large industrial boilers used to provide heat and hot water for offices, hotels, schools and government buildings.

3.6 Large scale hydroelectric > 100kW

3.7 Small scale hydroelectric < 100kW

3.8 Photovoltaic Panels

A popular electricity generating technology for householders, which requires little or no maintenance.

3.9 Heat Pumps (Ground, Air, Water)

A heating technology which is commonly incorporated into new developments as disparate as a single large rural dwelling, the apartments being built in Titanic Quarter, Randalstown Heath Centre.

3.10 Biofuels

Several trials and some commercial operations in existence.

3.10.1 Miscanthus

3.10.2 Willow

Pioneered by John Gilliland, there are now numerous willow growers across Northern Ireland.

3.10.3 Biodiesel

3.11 Solar Water Heating

A very popular renewable energy technology used mostly in domestic installations to supply hot water and reduce heating bills, but which is also being used to supplement farm hot water requirements.

(c) The relative importance in terms of contributing to Governments renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable sources, and how relevant each could be to the NI economy.

4.1 There is a current level of microgeneration in Northern Ireland of approximately 15,000kW. This compares to an installed capacity of wind farms of approximately 180,000kW. Microgeneration, therefore, currently represents about 8% of Northern Ireland’s renewable electricity generation in 2007, with the remainder coming from wind farms. Renewable electricity generators in Northern Ireland provide about 4% of electricity consumed in Northern Ireland, meaning that microgeneration supplies just 0.32% of Northern Ireland’s electricity.

4.2 Heat is a different matter. 81.4% of energy consumed in Northern Ireland, excluding transport, is used for space heating and hot water in buildings and for commercial and industrial uses. The domestic heat sector alone accounts for half of the energy consumed in Northern Ireland, excluding transport. The current level of installed capacity of renewable generation of heat is in the rough ballpark of 59,000 kW, providing an estimated output of about 1.3% of Northern Ireland’s heat demand.

4.3 Shown graphically, it is clear that there is much work to be done.

4.4 Note: Action Renewables were commissioned by DETI to produce reports on:

(1) Renewable heat potential in Northern Ireland – A Scoping assessment

(2) Research into the creation of renewable based Energy Supply Companies (ESCO’s) in Northern Ireland.

These reports are currently with DETI for evaluation.

Figure 1. Total Electricity and Heat Consumed in Northern Ireland by Source.

(d) The range of support available to renewable initiatives at local, national and European levels.

5.1 The information below covers Householders, Businesses, and Not-For-Profit Organisations

5.1.1 Grant Information for Householders – Renewable Energy

Scheme name & Funding Organisation	What is it?	What’s on offer?	Eligibility	Further Information
Reconnect Grant Scheme - Action Renewables & DETI	Grants for Renewable Energy Technologies	Range of grants available for installing micro-generation technologies in domestic-households.	If you are a home owner living in Northern Ireland and willing to use an accredited installer, you are entitled to the grants. Please note that the grants must be applied for before the technologies are installed - they are not retrospective.	Reconnect Programme, Action Renewables Tel: 08000234077 Email: reconnect@detini.gov.uk Website: www.reconnect.org.uk
Low Carbon Buildings Programme – Phase 1 (UK)	Grants for Renewable Energy Technologies	Range of grants available for micro- generation technologies for the home.	If you are a home owner living in the UK you are entitled to the grants.	Low Carbon Buildings Programme Tel:08009150990 Email: info@lowcarbonbuildings.org.uk www.lowcarbonbuildings.org.uk
‘PV Top-Up Grant’ NIE Energy	Grants for Renewable Energy Technologies	It has been agreed that NIE will top up both the Reconnect grant and the Low Carbon Buildings grant for Photovoltaics (PV). NIE will now top this up with an additional 15% (or £900 per kWp, whichever is less, capped at £10,000).	The grant is available to Householder PV schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively.	NIE Energy Website: www.nie-yourenergy.co.uk/renewablegrants.php
‘Help with Hydro – Small Scale Hydro Programme’ NIE Energy	Grants for Renewable Energy Technologies	This programme is to help encourage the development of small-scale hydro schemes in Northern Ireland. Support is offered to help develop micro hydro in the form of: Householders - Grant for 0.5kWe to 5kWe system is £1,000 per kWe, up to a maximum of £5,000, (whichever is smaller).	The grant is only available to hydro schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively. Grants must be claimed within 12 months of a grant offer being made by NIE.	NIE Energy Website: www.nie-yourenergy.co.uk/renewablegrants.php
Phoenix ‘Solar Warmth’ Scheme in partnership with Action Renewables	Cashback of £400 for solar panels	Solar Warmth will offer new Phoenix Natural Gas customers and Reconnect applicants a £400 top-up grant to help with the installation of a high efficiency natural gas boiler alongside a Reconnect solar water heating panel.	This grant is in addition to the Reconnect grant of £1,125 You can only avail of this grant if you live in the Phoenix Natural Gas area	Telephone 08454 55 55 55 and select option 1. Please quote Solar Warmth Offer when you ring. This grant ends on the 31st January 2008

5.1.2 Grant & Loan Information for Businesses – Renewable Energy

Scheme name & Funding Org	What is it?	What’s on offer?	Eligibility	Further Information
‘PV Top-Up Grant’ NIE Energy	Grants for Renewable Energy Technologies	It has been agreed that NIE will top up both the Reconnect grant and the Low Carbon Buildings grant for Photovoltaics (PV). NIE will now top this up with an additional 15% (or £900 per kWp, whichever is less, capped at £10,000).	The grant is only available to Householder/Community Group/Business PV schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively.	NIE Energy Website: www.nie-yourenergy.co.uk/renewablegrants.php
‘Help with Hydro – Small Scale Hydro Programme’ NIE Energy	Grants for Renewable Energy Technologies	This programme is to help encourage the development of small-scale hydro schemes in Northern Ireland. Support is offered to help communities and other organisations develop micro hydro: - Grant applied for is a maximum of 25% of total capital and installation costs, or £10,000, (whichever is smaller).	The grant is only available to hydro schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively. Grants must be claimed within 12 months of a grant offer being made by NIE.	NIE Energy Website: www.nie-yourenergy.co.uk/renewablegrants.php

Scheme name & Funding Org

What is it?

What’s on offer?

Eligibility

Further Information

‘PV Top-Up Grant’

NIE Energy

Grants for Renewable Energy Technologies

It has been agreed that NIE will top up both the Reconnect grant and the Low Carbon Buildings grant for Photovoltaics (PV). NIE will now top this up with an additional 15% (or £900 per kWp, whichever is less, capped at £10,000).

The grant is only available to Householder/Community Group/Business PV schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively.

NIE Energy

Website: www.nie-yourenergy.co.uk/renewablegrants.php

‘Help with Hydro – Small Scale Hydro Programme’

NIE Energy

Grants for Renewable Energy Technologies

This programme is to help encourage the development of small-scale hydro schemes in Northern Ireland.

Support is offered to help communities and other organisations develop micro hydro:

- Grant applied for is a maximum of 25% of total capital and installation costs, or £10,000, (whichever is smaller).

The grant is only available to hydro schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively. Grants must be claimed within 12 months of a grant offer being made by NIE.

NIE Energy

Website: www.nie-yourenergy.co.uk/renewablegrants.php

5.1.3 Grant & Loan Information for Not-for-profit Organisations – Renewable Energy

Scheme name & Funding Organisation	What is it?	What’s on offer?	Eligibility	Further Information
Low Carbon Buildings Programme (Phase 2) grant scheme	Grants for Renewable Energy Technologies	Grants are available for the installation of micro-generation technologies covering between 30%- 50% of project costs up to a maximum of £1 million.	Grants are available to public sector buildings (inc. schools, hospitals, housing associations and local authorities) and charitable bodies, wishing to install renewable technologies.	Low Carbon Buildings Programme Tel:08704232313 Email:info@lcbpphase2.org.uk Website: www.lowcarbonbuildingsphase2.org.uk
Community Low Carbon Buildings Programme Phase 2 top-up – NIE Energy	Grants for Renewable Energy Technologies	LCBP grant levels vary for PV, SWH, Wind & Biomass, so NIE will top-up the grant to an overall 65% of the installed cost (capped at £5,000 for each technology).	Community groups in Northern Ireland who have applied to and are receiving LCBP (Phase 2) funding to install renewables in a community project.	Contact Action Renewables on 02890 737868 or freephone: 08000234077
Eco-Schools Grant Scheme	Grants for Renewable Energy Technologies	Grants of up to £4000 are available to enable registered Eco-Schools in Northern Ireland to carry out building work and cover the cost of new equipment which supports the development of the school’s Eco-Schools programme.	Primary and Secondary schools in Northern Ireland registered in the Eco-Schools Programme who have achieved a minimum of a Bronze Award and are working towards their green flag are eligible to apply.	Tidy Northern Ireland, Tel:0282768434, ecoschools@tidynorthernireland.org
The Green Energy Trust – Scottish Power	Grants for Renewable Energy Technologies	Projects are supported that promote renewable energy and the installation of renewable energy technologies. The Trust can provide up to 50% of the project costs, up to a maximum of £25,000.	The Green Energy trust supports not-for-profit organisations in the development of new renewable energy sources in the UK. Potential projects must support communities through education and public involvement.	Scottish Power Green Energy Trust Tel:0141 568 3492 Email: greenenergytrust@scottishpower.com Website: www.scottishpower.co.uk/green
‘PV Top-Up Grant’ NIE Energy	Grants for Renewable Energy Technologies	It has been agreed that NIE will top up the Low Carbon Buildings grant for Photovoltaics (PV). NIE will now top this up with an additional 15% (or £900 per kWp, whichever is less, capped at £5,000).	The grant is only available to Householder/Community Group/Business PV schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively.	NIE Energy Website: www.nie-yourenergy.co.uk/renewablegrants.php
‘Help with Hydro – Small Scale Hydro Programme’ NIE Energy	Grants for Renewable Energy Technologies	This programme is to help encourage the development of small-scale hydro schemes in Northern Ireland. Support is offered to help communities and other organisations develop micro hydro: - Grant applied for is a maximum of 25% of total capital and installation costs, or £10,000, (whichever is smaller).	The grant is only available to hydro schemes in Northern Ireland, and is only for new schemes - it will not be paid retrospectively. Grants must be claimed within 12 months of a grant offer being made by NIE.	NIE Energy Website: www.nie-yourenergy.co.uk/renewablegrants.php

5.1.4 Useful Contacts for Householders

Name of Organisation	Service Offered	How can they help?	Who do they help?	Further Information
Action Renewables	Advice & Information	Action Renewables provides free impartial advice on sustainability including transport, energy efficiency and renewable energy, renewable technologies, accredited installers and grants in Northern Ireland.	Action Renewables provides free impartial advice and support services for Householders, Community groups, Not-for-profit organisations and SME’s in Northern Ireland.	For further information contact Action Renewables on freephone 0808 141 2020 or log on to www.actionrenewables.org or email info@actionrenewables.org
Northern Ireland Environment Link (NIEL)	Advice & Information	NIEL is the forum and networking body for organisations interested in the environment of Northern Ireland. It aims to facilitate understanding of environmental issues and enhances the capacity of groups and individuals to speak and act in a co-ordinated way in the interests of the natural and built environment.	Who can join? Full membership is open to voluntary organisations whose aims include promoting the conservation of the environment of Northern Ireland. Statutory organisations, companies or individuals with environmental interests are eligible for Associate Membership.	For further information contact NIEL via Tel: 02890 455770 Email: info@nienvironmentlink.org Website: www.nienvironmentlink.org
Heatsmart -NIHE	Advice & Information	The service offers free impartial information on heating and includes a home visit providing advice on the heating system, timers, controls etc.	This service is for Housing Executive tenants only.	Contact Action Renewables on 02890 737868 for more information.
Energy Savings Trust	Advice and Information	The service offers free impartial advice on energy efficiency and transport	EST works with householders and community groups	Freephone 0800 512 012

5.1.5 Useful Contacts for Businesses

Name of Organisation	Service Offered	How can they help?	Who do they help?	Further Information
Action Renewables	Advice & Information	Free impartial advice on renewable energy, renewable technologies, accredited installers and grants in Northern Ireland.	Action Renewables provides free impartial advice and support services for Householders, Community groups, Not-for-profit organisations and SME’s in Northern Ireland.	For further information contact Action Renewables on freephone 0808 141 2020 or log on to www.actionrenewables.org or email info@actionrenewables.org
Northern Ireland Environment Link (NIEL)	Advice & Information	NIEL is the forum and networking body for organisations interested in the environment of Northern Ireland. It aims to facilitate understanding of environmental issues and enhances the capacity of groups and individuals to speak and act in a co-ordinated way in the interests of the natural and built environment.	Who can join? Full membership is open to voluntary organisations whose aims include promoting the conservation of the environment of Northern Ireland. Statutory organisations, companies or individuals with environmental interests are eligible for Associate Membership.	For further information contact NIEL via Tel: 02890 455770 Email: info@nienvironmentlink.org Website: www.nienvironmentlink.org
Carbon Trust	Advice & Information	The Carbon Trust supports the development of low carbon technologies and provides free advice and information on how to reduce your carbon footprint and help cut carbon emissions.	Mainly offers support to businesses and the public sector.	The Carbon Trust Tel: 0800 085 2005 Email: customercentre@carbontrust.co.uk Website: www.carbontrust.co.uk
STEM (Sustainable Together through Environmental Management) Project - SGEHC	Advice & Information	The STEM project aims to assist businesses in implementing an Environmental Management System (EMS) within their organisation and help them work towards achieving ISO 14001. The STEM Team delivers the EMS through a combination of workshops and on site visits, at a pace that suits the individual businesses needs.	If you are a small-to-medium sized enterprise operating in any of the nine participating council areas (listed below), you are eligible to register. Ards Borough council Armagh City & District Council Banbridge District Council Craigavon Borough Council Down District Council Dungannon & South Tyrone - Borough Council Louth County Council Monaghan County Council Newry & Mourn District Council.	STEM Project Tel: 02837 515810 Email: stem@sgehc.com Website: www.stemproject.com
Envirowise	Advice & Information	Envirowise seeks to improve environmental performance whilst increasing the competitiveness of UK industry by encouraging the take-up of good practice technology and techniques. The main themes of the Programme are the promotion of waste minimisation and the adoption of cost-effective cleaner technology.	Envirowise is mainly aimed at those in industry and commerce. It organises and supports workshops, seminars, exhibitions and Waste minimisation clubs throughout the UK and provides on-site consultancy for SME’s.	The Environment & Energy Helpline: 0800585794 Website: www.envirowise.gov.uk
Northern Lights Carbon Reduction Programme – ARENA Network, Northern Ireland	Advice & Information	ARENA Network is offering free Carbon Footprint audits to Northern Ireland based companies. Specially trained representatives will work with businesses to develop a strategic approach to energy management and to adopt simple cost saving measures.	Grant assistance is available for Northern Ireland businesses that are interested in implementing renewable technologies to reduce their carbon consumption. To be eligible businesses must have an annual energy spend of less than £50,000.	Michael Schwartzentruber Tel:02890 460606 Email: Michael.Schwartzentruber@bitcni.org.uk Website: www.arenani.org.uk

5.1.6 Useful Contacts for Not-for-profit Organisations

Name of Organisation	Service Offered	How can they help?	Who do they help?	Further Information
Action Renewables	Advice & Information	Free impartial advice on renewable energy, renewable technologies, accredited installers and grants in Northern Ireland.	Action Renewables provides free impartial advice and support services for Householders, Community groups, Not-for-profit organisations and SME’s in NI.	For further information contact Action Renewables on freephone 0808 141 2020 or log on to www.actionrenewables.org or email info@actionrenewables.org
Northern Ireland Environment Link (NIEL)	Advice & Information	NIEL is the forum and networking body for organisations interested in the environment of Northern Ireland. It aims to facilitate understanding of environmental issues and enhances the capacity of groups and individuals to speak and act in a co-ordinated way in the interests of the natural and built environment.	Who can join? Full membership is open to voluntary organisations whose aims include promoting the conservation of the environment of Northern Ireland. Statutory organisations, companies or individuals with environmental interests are eligible for Associate Membership.	For further information contact NIEL via Tel: 02890 455770 Email: info@nienvironmentlink.org Website: www.nienvironmentlink.org
Energy Savings Trust	Advice and Information	The service offers free impartial advice on energy efficiency and transport	EST works with householders and community groups	Freephone 0800 512 012

Name of Organisation

Service Offered

How can they help?

Who do they help?

Further Information

Action Renewables

Advice & Information

Free impartial advice on renewable energy, renewable technologies, accredited installers and grants in Northern Ireland.

Action Renewables provides free impartial advice and support services for Householders, Community groups, Not-for-profit organisations and SME’s in NI.

For further information contact Action Renewables on freephone 0808 141 2020 or log on to www.actionrenewables.org or email info@actionrenewables.org

Northern Ireland Environment Link (NIEL)

Advice & Information

NIEL is the forum and networking body for organisations interested in the environment of Northern Ireland. It aims to facilitate understanding of environmental issues and enhances the capacity of groups and individuals to speak and act in a co-ordinated way in the interests of the natural and built environment.

Who can join?

Full membership is open to voluntary organisations whose aims include promoting the conservation of the environment of Northern Ireland.

Statutory organisations, companies or individuals with environmental interests are eligible for Associate Membership.

For further information contact NIEL via

Tel: 02890 455770

Email: info@nienvironmentlink.org

Website: www.nienvironmentlink.org

Energy Savings Trust

Advice and Information

The service offers free impartial advice on energy efficiency and transport

EST works with householders and community groups

Freephone 0800 512 012

5.1.7 EU Funds – Normally on a rolling call basis

“ALTENER”, which concerns the promotion of new and renewable energy sources for centralized and decentralised production of electricity and heat and their integration into the local environment and energy systems, including the preparation of legislative measures and their application;

“STEER”, which concerns support for initiatives relating to all energy aspects of transport, the diversification of fuels such as through new developing and renewable energy sources and the promotion of renewable fuels and energy efficiency in transport, including the preparation of legislative measures and their application.

(e) To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it.

Grants Support Programme

Lennox & Wyfold Foundation

Grants range from £5,000 to £10,000
One grant category is Environment/Conservation
Match funding optional
Must be a registered UK charity
Contact Trust with regards your eligibility
Applications may be submitted at any time.

Steel Charitable Trust

Offers one off grants ranging from £500 to £25,000. The Trust distributes grants totalling approximately £1 million each year.
Match funding optional
Must be a registered UK charity
‘Environment & Culture’ is one of their funding priority areas.
Rolling Programme (applications may be submitted any time)

The Polden-Puckham Charitable Foundation

One of the Foundations main areas of interest is ‘Ecological Sustainability – The Foundation aims to address the causes of global ecological damage rather than its symptoms. It particularly supports organisations which are tackling the underlying pressures leading to environmental damage. Fundamental to its approach, is the realisation that in order to meet targets for containing global warming, as well as minimise other environmental problems, people in the developed countries have to alter their way of living to live more sustainably.
Grants are normally available between £1,000 and £10,000 and funding can be provided for up to three years.
Applicants are expected to show what other sources of funding have been sought and secured.
Since resources are limited and such a huge range of work needs to be supported, the charity has often chosen to fund projects which promote policy change and which encourage environmental understanding amongst opinion-formers and other leaders.
The funders meet twice a year to consider applications: 15th February & 15th September each year.

Green Energy Trust

Aims to assist in the creation of new renewable electricity sources and to promote education in the community regarding new renewable energy generation.
The Trust can provide up to 50% of the project costs up to a maximum of £25,000.
Applications are invited from not-for-profit organisations or groups to carry out community-based renewable energy and educational products within the UK.
Triannual funding.

Alcan Community Investment Programme

No minimum or maximum donation amount is stipulated
Organisations that have already received direct or indirect donations are not eligible to apply.
Alcan donates to projects that contribute to four key themes:
Environmental contribution – Priority is given to projects that

(1) Promote recycling

(2) Promote the conservation of natural resources

(3) Enhance the knowledge among young people of the interdependence of sound environmental practices and sound business practices

(4) Sustain or foster relationships between Alcan and non-governmental organisations (NGOs)

(5) Sustain or foster relationships between Alcan and institutions involved in environmental science and research.

(6) Include opportunities to involve Alcan employees and their families.

Applications accepted from registered charities within the UK
Rolling programme…applications can be submitted at any time.

Oak Foundation

Support is offered through various programmes and areas of priority interest.
Priority area: ‘Climate Change’- addressing global climate change by advocating for renewable energy and energy efficiency in the power and transport sectors through education, research and policy change.
The Foundation will provide grants of no less than USD $25,000. No maximum grant is defined in the guidelines.
Projects are required to show financial commitment from other sources has been obtained.
Rolling programme - applications can be made any time.

Esmee Fairbairn Foundation

Four programme areas under which applications are accepted…one of which is the Environment Programme (part of this includes projects which aim to produce a ‘reduction in carbon emissions, together with ell-planned, sustainable urban and rural developments, offering a good quality of life to all.
There is no minimum or maximum grant size although in 2005 the average grant awarded was £52, 795.
Grants may be for one year or a longer period although they are not generally made for longer than three years.
Grants are made towards projects and core costs, including running costs such as staff salaries and overheads.
Within the broad objectives stated, the programme supports three interrelated themes: UK biodiversity, a Low Carbon Economy and Sustainable Food Systems.
LOW CARBON ECONOMY… ‘Applications promoting the more rapid adoption, on a nationwide basis, of renewable energy, from a variety of sources, and of energy efficiency.
Applications may be made at any time for consideration by the Trustees at meetings held four times a year.

Renewable Energy Installers Academy

The objective of the REIA pilot project was to develop structures for training, registration and quality control of installers in the INTERREG region, which is Northern Ireland and the six border counties, namely Cavan, Donegal, Leitrim, Louth, Monaghan and Sligo.

During the pilot phase of the project, REIA developed training courses and a laboratory specification for training facilities, and facilitated the establishment of training facilities for Solar Water Heating, Heat Pumps and Biomass in four training centres in the INTERREG region.

The curriculum in each technology was developed in accordance with best practice in Europe with the support of European experts in the relevant technologies.

It is now planned to build upon the success of the pilot project and to develop REIA into a sustainable association for renewable energy installers to promote and ensure quality renewable energy installations. A key function of REIA will be the accreditation of training facilities to deliver the required competence in renewable energy installers and the registration of installers.

The establishment of sufficient capacity in training institutes to deliver training will be essential to meeting the training needs and ensuring the competence of renewable installers. The training courses and learning outcomes have been registered with FETAC in RoI and BPEC in NI and in order to provide training, training providers must be nationally accredited (eg by FETAC/BPEC) and by REIA.

(f) The potential role of farm and rural business and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community.

One potential role in this area would be the creation of rural ESCO’s.

The concept behind ESCOs is not new with the market in Europe and the US having been in existence since the 1970’s, when firms attempted to establish energy performance contracting as a viable, self sustaining business activity aimed at energy efficiency measures, following the OPEC oil crises. Within the EU, the ESCO model has been developed and promoted by the European Commission since 1988, with early initiatives aimed at promoting the ESCO concept, and the use of third party financing.

Experience throughout the UK and elsewhere has shown that ESCOs are organisations that can make a significant contribution to the achievement of both energy efficiency and renewable energy targets as part of the EU and UK Climate Change Programmes. With specific regard to Renewable Energy, the ESCO concept should help to alleviate some of the barriers in the uptake of these “new” technologies. They do this by transferring some of the risk (technology and/or financial) of the project from the end user/consumer.

Succinctly, an ESCO is an organisation that delivers energy services and/or energy efficiency improvement measures in a user’s facility or premises, and accepts some degree of (financial) risk in so doing. The payment for the services delivered can be based (either wholly or in part) on the achievement of energy savings and/or on the meeting of other agreed performance criteria.

The development of a renewable energy based ESCO market in the UK is still in its early stages and in particular for Northern Ireland. In terms of renewable energy technologies the following offer the greatest potential for ESCO participation:

biomass heat
solar active/thermal heating
ground source heat pumps
stand alone wind turbines

The following types of sites / end-uses, offer the greatest potential for consistent off take loads and therefore present the ESCO with the best opportunity for achieving required profitability and return on capital employed:

process heat users, including food processing, dairies etc
horticulture (glasshouses)
rural estates and farms

The diagram below details the various operational functions of a renewable energy based ESCO (delivering, in this case, a wood fuel based energy service). The operational mode for a non-fuel based ESCO will be obviously be simpler (i.e. minus the fuel sourcing, processing delivering etc.).

Action Renewables Chart 02.ai

Specifically then an ESCO can offer a range of benefits to customers:

Comprehensive service package (one face to the customer for their needs)
Guarantees for the energy costs
No (or reduced) investment risk to the customer (with the ESCO bearing the financing risk of the project)
No (or reduced) problems with operation and maintenance of the technology
Fuel supply co-ordination (where required)

An established renewable energy based ESCO industry in Northern Ireland will provide an integrated package of goods and services to energy consumers, selling energy and therefore helping to overcome some of the obstacles in the implementation of renewable energy technology.

As a result, the ultimate benefit of a successful Renewable Energy based ESCO industry in Northern Ireland will be an increase in the uptake of renewable energy technologies.

(g) The ways by which the Department of Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to the sustainability of the agricultural/rural sector and contributes to Northern Ireland’s renewable energy targets.

6.1 The key driver should be “to maximise the agricultural, environmental and economic benefits of renewable energy through its integration into mainstream policy and practice at all levels within the rural sector.”

A strategy should be employed with a regional focus:

Deploying renewable energy on the ground
Developing skills and awareness
Grant support and the setting of targets.

The strategy should incorporate a practical action plan for each of these areas including timescales, suggestions for target audiences and indicators for measuring success.

Deploying renewable energy on the ground – ensuring that the appropriate policy climate exists for more renewable energy projects to be deployed in Northern Ireland.

This action plan would aim to remove the barriers that prevent more renewable power projects being set up in rural environment; to support the wider use of renewable heat;; and to encourage a more transparent and consistent approach to planning decisions.

Developing skills and awareness – changing attitudes towards renewable energy in order to mainstream its development

This action plan would aim to increase awareness of the need and potential for renewable energy; increase skills available to the industry (the Renewable Energy Installer Academy has already been identified in the respect); and increase understanding of renewable energy amongst decision makers.

Grant support and the setting of Targets - This action plan would aim to - increase the availability of finance incentives for renewable energy in the rural environment; set challenging but achievable targets; devise performance indicators for measuring success.

Agri-Food and Biosciences Institute

AFBI Logo.ai

Agriculture Branch,
Hillsborough,
Northern Ireland
BT26 6DR
United Kingdom
Telephone 028 92682484

1. AFBI is a Non-Departmental Public Body, sponsored by DARD, which conducts research and provides statutory services in support of the agriculture, food, forestry and fisheries in Northern Ireland, providing technology transfer of its research findings to the industry and providing scientific advice to DARD.

2. AFBI also receives external funding from levy bodies, other government departments, EU contracts, industry sponsors and a range of other sources in support of its activities.

3. Renewable Energy

3.1 AFBI Loughgall

Short rotation coppice willow is now a well established source of renewable energy. AFBI has been involved in research into short rotation coppice willows for over 30 years and has pioneered the development of the crop, working closely with industry as SRC willows have moved from research to commercial development. Significant aspects in which AFBI has been active and in which it continues to play a leading European research role are: -

Evaluation of willow clones best suited to Northern Ireland conditions
SRC crop management and harvesting regimes
Research into rust diseases and planting strategies to minimise rust damage
Harvesting and storage techniques for willows
The use of SRC willows for bioremediation of wastes
Environmental impacts of SRC willow growing

Active DARD funded research projects continue in most of these areas. AFBI staff have recently contributed to the publication of an authoritative guide “Short rotation coppice willow Best Practice Guidelines” by the EU funded RENEW project.

3.2 The Environment and Renewable Energy Centre, AFBI Hillsborough

AFBI has set up an Environment and Renewable Energy Centre (EREC) at Hillsborough through funding from the Environment and renewable Energy Fund (2006 to 2008). A wide range of renewable energy schemes are being incorporated into the infrastructure of the site providing facilities for an extensive research programme into aspects of renewable energy relevant to the agriculture industry.

The key components of the EREC currently being constructed and installed are:-

Biomass heating system (500 kW) utilising SRC willow partly grown on site and partly purchased from local suppliers and also forest brash from on-site forestry operations.
Multi-fuel biomass boiler (120 kW) capable of utilising a wide range of biomass fuels
District heating system distributing heat across the AFBI Hillsborough complex.
Anaerobic Digester (600 cubic metre, mesophilic) mainly utilising dairy cow manure, but also pig manure and crop materials.
Biogas combined heat and power unit (23kW electrical output)
Solar panels providing hot water to the dairy parlour
Solar photo-voltaic panels providing electrical output
Biomass store with on-floor drying system for wood-chip and other biomass materials

The research programme being undertaken through the EREC is fully integrated with the continuing research at AFBI Loughgall. A number of the research projects have been agreed by DARD while others have either been submitted for approval or are in preparation. External funding is being sought for research in a number of areas.

The research projects currently approved, submitted or in preparation are:-

The utilisation of SRC willows for the bioremediation of farm dirty water
Maximising the output of biogas from the anaerobic digestion of animal manures
Improving the agronomy of Miscanthus to achieve higher DM yields
The utilisation of forest brash for biomass heating systems
Harvesting and drying systems for SRC willows
The effect of the incorporation of renewable energy schemes on the carbon footprint of the AFBI Hillsborough site
The biodiversity of tall biomass crop headlands

3.3 AFBI-Economics

Agricultural and Food Economics is seeking external funding for a strategic study of the full economic and environmental impacts within the regional food chain and wider economy of changing energy prices, including the impacts of greater uptake of different forms of renewable energy.

4. Other related projects

In addition to the specific renewable energy research projects listed above other research groups within AFBI are actively involved in research related to renewable energy and to issues related to green house gas emissions, and in the production of reports related to these topics. For example:

Global Research Unit

New biomass crops with potential in Northern Ireland (Field work)
The potential for liquid biofuels from Northern Ireland (Report -2004)
Nitrification inhibitors (Report -2004)
A evaluation of manure treatment systems designed to improve nutrient management (Report - 2005)
Miscanthus as an energy crop and its potential for Northern Ireland (Report – In Press)

Agriculture Branch: The reduction of methane emissions from ruminant livestock

Agri-Environment Branch:

Evaluating Irish grassland as a source for bioenergy: Environmental impacts and long-term sustainability.
The reduction of nitrous oxide (N2O) emissions from agricultural soils

Applied Plant Science Division: Bio-fraction of ensiled grass (including the production of bio-fuels)

5. AFBI has made the commitment to develop this research programme into aspects of renewable energy related to production agriculture to provide rigorous evidence of the extent to which agriculture can develop enterprises which produce biomass and biofuel resources which contribute to government targets for the generation of electricity and heat from indigenous renewable resources.

6. However, AFBI believes that the development of renewable energy schemes must be based on sound scientific and socio-economic evidence and justified in terms of carbon emission benefits, sustainability, economic return and environmental impact. AFBI aims therefore from its research and in-depth reviews to provide objective data to government and the public on renewable energy schemes and to provide scientific advice to government on which to base effective renewable energy.

7. It is clear that there is much debate currently around issues such as food vs fuel production and the benefits or otherwise of first generation biofuels. AFBI believes that future research will need to look beyond this debate to provide research into the next generation of renewable energy opportunities which will lead to the most efficient production of biofuels from biomass through new fermentation, refinement and combustion technologies as clearly highlighted in the Royal Society Report (Jan 2008). Renewable energy resources which are derived from animal manures, forest brash and waste materials will not complete with other land uses and are therefore also potentially valuable resources.

8. AFBI is confident that, given the range of research into renewable energy being developed at its centres and the links it is developing with other research centres both nationally and internationally, it is uniquely placed to become a centre of excellence in renewable energy research related to agriculture. This provides the local agricultural industry and the wider commercial sector with access to scientific findings which will strengthen its hand in developing economically viable renewable energy enterprises.

Alternative land uses: The AFBI research programme in over the last 10 years has encompassed both flax and hemp and AFBI have provided technical support both through CAFRE and directly to those seeking to set up enterprises based on flax and hemp processing for both fibre and oil.

This submission has been prepared by

Dr Lindsay Easson
Environment and Renewable Energy Centre Project Leader
AFBI Hillsborough
Large Park
Hillsborough
BT26 6DR
028 92682484

31/1/08

Allied Biodiesel Industries

The Trade Organisation for British SME Biodiesel Producers

T L de Winne MF

6, Coyle’s Lane, Ballyrobert, Bangor, Co. Down BT19 1UF

028 91 853318
0788 157 3269

Response to NIA Committee for Agriculture and Rural Development Consultation –

Renewable Energy and Alternative Land Use

The ABI(UK) is the representative trade organisation for SME biodiesel producers in the UK. It was set up by the above individual, who has had eight years experience of transport biofuels and over 30 years association with renewable energy.

Aim

It is suggested that the Committee refer to the document “Renewable Energy in the Millennium”[1] to re-establish the economic benefits of renewable energy production to the agricultural economy, and then to enquire of DETINI (via the inter-departmental group set up for this purpose) their current activities in this area – namely, further consultation.

Reference may also be made to “Renewable Energy Resources in Ireland for 2010 and 2020”[2] and figures that may be extrapolated to Northern Ireland.

It would have been quite helpful if up-to-date statistics had been supplied as part of the consultation in order that evaluation be made regarding progress of DARDNI in achieving its oft-stated aspirations.

Unfortunately, statistics regarding the use of biomass for renewable electricity[3] are only available for the 2005-06 period, the 2006-07 Ofgem report not being due until February. It is therefore not possible to quantify the effects of any DARDNI policy implemented within the past two years.

NI Renewable Obligation Certificates issued (one per MWh) for 2005-06 amounted to –

Biomass – 6,783; Co-firing – 5,905; Hydro – 6,860; On-shore wind – 253,889.

The primary barrier to the effective introduction of agricultural renewable energy in Northern Ireland has been the lack of infrastructure to utilise any biomass produced. With a few micro-generation exceptions, there is virtually no Northern Ireland market for energy biomass. This is witnessed by the deplorable export of thousands of tonnes (allegedly[4]) of wood pellets from the publicly-funded Balcas operation to generators in England – costly, both financially and in transport carbon emissions, carrying a bulky fuel.

It is noted that the AES Kilroot power station appears to be a non-obligated generator and therefore not subject to the NI Renewables Obligation legislation. However, despite the pronouncement by Mr Shane Lynch[5] that “Substituting about 10% of coal with biomass would achieve 25% of the (NI 2012) renewable energy targets,” the generator has since contributed virtually zero carbon savings. Discuss.

There has been recent news of a GB-based power company – Scottish and Southern Energy – wishing to possibly build a new power station in Northern Ireland. This should be offered public funding (and DARDNI and DETINI should discuss the source), on the condition that it is primarily a biomass generator.

The same scenario applies to the introduction of the RTFO.[6] Whilst it is viable for farmers to grow oilseed rape – area increased from 200 ha in 2000 to 300 ha in 2005[7] - the oilseed has to be exported to England.

for pressing, thereby losing not only the cost of transportation but also the benefit of the residual cattle cake. Additional land has therefore to be dedicated to producing cattle fodder – an illogical and wasteful procedure, for the want of capital investment and focussed government support. Consideration must be given to promoting (by DETINI or Invest NI?) the installation of an oilseed press in the province.

The 2005 NI oilseed rape yield per hectare exceeded the national average, but the tiny crop (1100 tonnes of seed) would only have been capable of producing 300 tonnes of biodiesel, replacing just 0.075% of the amount of diesel used per annum. The 2008-09 RTFO target is 2.5% aggregate biofuels.

The use of used cooking oil is more productive, having ten times this potential. Unfortunately, the only biodiesel plant capable of producing this amount has now been closed down due to lack of both government support and interest.[8] Meanwhile, DoENI had an outstanding offer under the Community Waste Innovation Fund – subsequently withdrawn through lack of matching funding - that could have saved the inward (Republic of Ireland) investment and avoided six employee redundancies. The basic cause of this was ill-advised funding targeting and lack of inter-departmental co-operation.[9]

The logical conclusion is that it is futile for DARDNI to implement another paper renewable energy programme without the assistance of DETINI Energy Branch and other government funding departments to be both pro-active and cohesive in the renewable energy field, supporting means of utilising the crops that are grown. Given a stable local produce demand, there is no doubt that the increased value of crops – for both biomass and biofuels – will be to the advantage of the agricultural economy.

A further aspect that requires scrutiny is the barrier to adoption caused by the high cost of connection of renewable energy generation plants to the grid. Consideration should be given to subsidising this cost for micro-generators.

It is further suggested that the Committee establish the reason why, since 1939, the area of Northern Ireland under crops has fallen from 1.26925M ha to 1.0145M ha – a loss of 254,750 ha.

Finally, it must be noted that tourism is not a sustainable activity and should not be subsidised from public funds – it is damaging to the environment in terms of transport carbon emissions. An Environmental Impact Assessment should be carried out in respect of every proposal.

T L de Winne
31 January 2008

[1] NIE/DEDNI, June 1999; Consultants - ETSU (now UKAEA) and WREAN

[2]Updating the Renewable Energy Resources in Ireland; Sustainable Energy Ireland/ESB; Report No 4P305A-R5, November 2004

[3] Ofgem Annual Report, per pro the NI Authority for Utility Regulation

[4] Renewable Energy Action Plan; DARDNI; January 2007

[5] Managing Director, AES Kilroot, vide press release on 19th August 2004

[6] Renewable Transport Fuels Obligation Order 2007, due implementation 15th April 2008.

[7] DARDNI 2007 statistics publication has omitted to include essential crop production figures.

[8] With the notable exception of DRD Water Service, who carried out a two year trial before losing interest, and the Environment Agency of England & Wales, who are currently undertaking a four year B22 trial. The writer is on the Board of Management of same as technical adviser.

[9] Invest Northern Ireland were not involved in the DRD procedure.

B9 Organic Energy

AD is a natural process and describes the biological digestion or decomposition of organic materials into biogas and a stable fibrous material. This biogas is a mixture of circa 60% methane and 40% carbon dioxide. In Northern Ireland this naturally occurring process is commonly found at landfill sites and is responsible for the biogas given off from the breakdown of organic waste deposited in the sites. This biogas can be used as fuel to generate power.

B9 have won the first contract (with Down District Council) to do this at a landfill site in NI.

Aerobic Digestion - when this natural process occurs in air (i.e. the compost heap in the back garden), this process is called aerobic digestion more commonly known as composting. The gas emitting from the compost pile is a mixture of carbon dioxide and water vapour.

Anaerobic Digestion - when this natural process occurs in the absence of air (i.e. in a landfill site) the process is called Anaerobic Digestion.

The key difference is that AD gives methane which can be used as a fuel and is therefore preferable.

Where is the technology now?

This natural process can be replicated in processing plants called Anaerobic Digestors and is a very efficient way of capturing the biogas (energy) available from organic wastes and using it as a fuel.

AD technology is widely available and has been used for power generation throughout the world most notably in China and India, for many years.

AD is also widely used throughout Europe with the exception of the UK and Ireland. This is primarily because up until recently both (fossil fuel) energy, and landfill costs were relatively cheap, and organic waste was not recognised as a significant source of renewable energy, thefore historically AD had no market incentive in the UK or Ireland.

NB. There are still no targets to produce/encourage renewable energy produced from organic waste in the UK.

This is in direct contrast for example with Germany and Scandinavia whose governments recognised the significant benefits of using AD; which are -

Treat organic wastes in compliance with legislation
Generate renewable energy – (biogas is a renewable supply of fuel)
Reduce greenhouse emissions – (biogas can substitute for fossil fuel)
Create more sustainable jobs and investment – AD development is currently just beginning and offers huge potential for sustainable development.

To achieve these benefits, the German Government introduced several measures to kick-start their AD industry some years ago such as;

1. Capital grants for plant construction

2. Long term high value contracts for the production of ‘renewable energy’ from AD

3. and statutory rights to grid connection.

This kick-start has resulted in excess of 3,000 AD plants now operating in Germany today.

How much of our energy is provided through the technology now?

None of these or any other strategic mechanisms of support currently exist in the UK and the writer is unaware of any AD sites currently operating in NI.

The government support that is strategically required to ‘kick-start’ the benefits available from AD should reflect the success of the German model, and be applied for a number of years to give confidence to the financial sector to support such investment. This is no different to the ‘kick-start’ needed and provide to the wind industry in the UK some 12 years ago via NFFO contracts (the Non Fossil Fuel Obligation)

In the past several months there has been greater recognition of the benefits of AD, vested in for example, the Governments Energy white paper which is proposing that energy produced from AD plants would qualify for double the financial incentive currently available to other renewables such as wind generation. While this is to be welcomed it is unlikely on its own to ‘kick-start’ the scale of investment in AD infrastructure which would make a significant difference to renewable energy production in NI.

NB. B9 awaits the result of a ‘one-off’ DETI sponsored ‘kick-start’ energy from waste fund regarding their proposed development of a large-scale AD project in NI.

What is the potential using existing AD technology, and what are the likely innovations?

- Recent Quotation from the Royal Institution of Chartered Surveyors

“NI (Northern Ireland) has an 18 million tonnes reserve (annually) of good quality biomass (otherwise described as biodegradable waste) that when digested in the absence of air (Anaerobic Digestion) in a biogas plant can yield in excess of 30% of its vehicle fuel demand, or 16% of its heat and power consumption.

As yet this ubiquitous resource is virtually unexploited.”

These figures illustrate clearly the enormous potential available from using AD, but as yet unsupported and undeveloped.

B9 as a renewable energy company involved in generating power from wind, and water began researching the possibilities of generating renewable energy from waste some time ago.

This research concluded that the most environmentally sensible way to deal with organic waste is not to dispose of it at all, but to treat it using the natural processes of AD to fully recover the methane (renewable energy), generated during the process.

The by-product of this is the production of soil improver or fertiliser – the remaining fibre.

This represents a real ‘closed loop’ system where the organics and nutrients (which originated from the soil) are returned in a useable way to repeat the cycle, having given up some of the energy (the methane) they took from the sun in photosynthesis. The process of AD can currently provide both;

1. the most energy efficient conversion of organic wastes to energy available

2. and productive use of the remaining material as a soil improver

Our environmental preference for AD is entirely to do with the production of methane (a fossil fuel substitute), as opposed to the production of carbon dioxide which is a greenhouse gas.

The following graph illustrates the Energy Balance – the amount of energy both used and generated by;

1. Aerobic digestion (in vessel composting) compared with

2. Anaerobic digestion AD

- to treat one tonne of household waste to Landfill Directive standards.

It shows clearly the;

1. net energy used by in-vessel composting, compared to the

2. net energy available produced by AD.

Technology Energy Balance to treat 1 tonne of MSW or household waste.

Chart 1a.eps

Given our current dependence on fossil fuels and the need to create more renewable energy locally, the evidence is now insurmountable for the rationale of using our organic wastes as a source of renewable energy. To do this efficiently we need to use AD and coincidentally we are fully complying with Landfill Diversion targets.

Likely innovations in AD

The innovation in AD is targeted at improving the quantity of (methane) gas that is given off from any given tonne of waste, and B9 are directly involved in a research project which shows significant potential for improvement.

Conclusion

Most organic wastes are in fact ‘wet’, highly volatile, and degrade easily (as illustrated under in the yellow zone) i.e. are naturally suitable for the AD process. This contrasts with incineration where much energy is needed to ‘burn’ off the water content to get the wastes dry enough to burn them - and that’s not efficient (compared to AD) but it works! To achieve energy efficiency Thermal treatment should only be used on wastes that are not ‘wet’ (as illustrated under in the orange zone)

Historically waste management policy has ignored the ‘energy balance’ of waste treatment options. The rising cost of fossil fuels coupled with concern over energy security means it is no longer tenable to limit waste management options to compliance issues alone. The energy issue associated with waste management must be properly accounted for. When this is done the net energy available from AD is the key decision maker in choosing this technology in preference to ‘energy using technologies for the treatment of organic waste.

Organic Fraction of Waste Streams

Chart 2a.eps

Carbon Trust

carbon trust-1.psd
carbon trust-2.psd
carbon trust-3.psd
carbon trust-4.psd
carbon trust-5.psd
carbon trust-6.psd
carbon trust-7.psd
carbon trust-8.psd
carbon trust-9.psd
carbon trust-10.psd
carbon trust-11.psd
carbon trust-12.psd
carbon trust-13.psd
carbon trust-14.psd
carbon trust-15.psd
carbon trust-16.psd
carbon trust-17.psd
carbon trust-18.psd
carbon trust-19.psd
carbon trust-20.psd
carbon trust-21.psd
carbon trust-22.psd
carbon trust-23.psd
carbon trust-24.psd
carbon trust-25.psd
carbon trust-26.psd
carbon trust-27.psd
carbon trust-28.psd
carbon trust-29.psd
carbon trust-30.psd
carbon trust-31.psd
carbon trust-32.psd
carbon trust-33.psd
carbon trust-34.psd
carbon trust-35.psd
carbon trust-36.psd
carbon trust-37.psd
carbon trust-38.psd
carbon trust-39.psd
carbon trust-40.psd
carbon trust-41.psd
carbon trust-42.psd
carbon trust-43.psd
carbon trust-44.psd
carbon trust-45.psd
carbon trust-46.psd
carbon trust-47.psd
carbon trust-48.psd
carbon trust-49.psd
carbon trust-50.psd
carbon trust-51.psd
carbon trust-52.psd
carbon trust-53.psd
carbon trust-54.psd
CT Biomass Sector_FINAL.pdf

CT Biomass Sector_FINAL.pdf

CT Renewable Energy Policy Jul07 CTC610.pdf

CT Renewable Energy Policy Jul07 CTC610.pdf

Committee of Culture, Arts and Leisure

Dr Wm McCrea MP MLP
Committee for Agriculture and Rural Development
Room 284
Parliament Buildings
Stormont
Belfast
BT4 3XX

Dear

Thank you for your letter of 8 January 2008, forwarded to me by Barry McElduff MLA, inviting a response to the Agriculture and Rural Development (ARD) Committee’s inquiry into Renewable Energy/ Alternative Land Use.

The ARD Committee may wish to be aware that low head hydro-electric facilities on rivers may, if inappropriately designed, impact upon fish migrations.

This issue was identified in the Culture, Arts and Leisure Committee Inquiry into Inland Fisheries in October 2001. The submissions received with regard to this matter at that time may be of interest to the ARD Committee. My Department has prepared a handbook ‘Protecting Fish: Guidelines for Water Abstractors’ and continues to use Sections 58 and 59 of the 1966 Fisheries Act to monitor water abstractors. DCAL also works closely with the Environment and Heritage Service to enforce abstraction and impoundment regulations.

Department of
Agriculture and Rural Development

Foreword

I am delighted to endorse the publication of the DARD Renewable Energy Action Plan. The Plan seeks to ensure that the schemes and services provided by DARD will enable farmers, landowners and the wider rural community to capitalise on the opportunities presented by renewable energy within the broader strategic context of energy policy, tackling climate change, waste management and sustainable development.

This Action Plan provides a sound platform to take forward an exciting new agenda. It expands on the principles set out in DARD’s Strategic Plan 2006-2011 published last year and will help guide the work of the Department in this significant and challenging area.

Its development has involved a lengthy and broadly based consultative process which reflects DARD’s desire to work with stakeholders to address current issues and future challenges in the most effective way. The key objective in this process has been to create opportunities for the land-based and rural sector which will realise the potential of renewable energy in a balanced and sustainable way.

I hope that this Action Plan can be taken forward and implemented by a local Minister on the basis of an inclusive approach to sustainable development and the linking of policies across Government. Its success will depend on leadership, active engagement and sustained, integrated effort across the public sector and the broad sweep of stakeholder interests.

This initial Action Plan represents a major initiative and a commitment to future development in an area that is evolving rapidly in terms of technology and the underlying policy framework. Some of its proposed measures are subject to EU approval of the new Northern Ireland Rural Development Programme and final decisions on the content of the EU Competitiveness Structural Funds Programme. It is, therefore, a work in progress that will need to be reviewed and updated to take account of all of these issues and to reflect the priorities and aspirations of an incoming Executive.

With that in mind, an early review date of April 2008 has been fixed. However, by launching this initial Action Plan now, I am seeking to inject and maintain momentum in this important new area of opportunity.

David Cairns, MP

Minister for Agriculture and Rural Development

Introduction x

Context x

Changes in Agriculture x

Climate Change x

EU Policy Context x

United Kingdom Policy Context x

Northern Ireland Policy Context x

Dard Work to Date on Renewable Energy x

Driving The Renewables Market in Northern Ireland x

The Scope of the Dard Renewable Energy Action Plan x

Actions to Support the Exploitation of Opportunities for Alternative Land Uses
and Sustainable Management of Agri- Food Waste Linked to Renewable Energy x

Actions to Underpin Knowledge and Increase Awareness of Renewable Energy Technologies x

Conclusion x

Appendix: Responses to Recommendations and General Comments x

Copies of this document can be made available, on request, in alternative formats e.g. in large print, Braille, disc, audiocassette (for those with vision difficulties), and other languages. For copies please contact:

Fiona Browne on (028) 9052 4725,
via e-mail - fiona.browne@dardni.gov.uk ; or
by using the Department’s Textphone (028) 9052 4420

Introduction

1. The 2002 report, ‘Vision for the Future of the Agri-food Industry’, recommended that the Department of Agriculture and Rural Development (DARD), along with the Department of Enterprise, Trade and Investment (DETI), and the Department of the Environment (DOE), should take a ‘strategic approach to the development of sustainable energy systems at rural community level’. The Government’s response to the report, the Vision Action Plan, gave a commitment to review DARD’s policy in this area.

2. Therefore, an interdepartmental steering group was brought together to oversee the creation of a needs-based policy for the use of agriculture and forestry resources to assist the competitive and sustainable development of land-based renewable energy sources. To inform the development of a policy for renewable energy, a study was undertaken to investigate the potential for, and economic sustainability of, small scale embedded heat and power and heat-only systems in the rural economy. The potential of cropping for biofuels for transportation was also addressed. The study was completed in June 2004 and based on its findings, the steering group developed a set of recommendations for DARD to take forward. These were issued for public consultation in October 2005.

3. This initial Action Plan represents DARD’s response to those recommendations, including the feedback received from the public consultation. The development of renewable energy is, of course, a broadly based agenda that impinges on several important issues, such as climate change, diversity of energy supply, waste management and sustainable development. In drawing up this Action Plan, DARD recognises that DETI has lead responsibility for energy issues in Northern Ireland. More broadly, the Office of the First Minister and Deputy First Minister (OFMDFM) has lead responsibility for the implementation of the Northern Ireland Sustainable Development Strategy and the DOE for addressing climate change and waste management issues.

4. From DARD’s perspective, the DARD Strategic Plan 2006-2011, published in March 2006, provides the overarching framework that will guide the development of DARD’s evolving work programme in relation to the agri-food industry, animal health and welfare, the environment and broader rural development for the coming five years. Consequently, the Action Plan must sit within this overall framework and accord with the direction and principles stated in the Strategic Plan.

5. In developing a Renewable Energy Action Plan, DARD’s objective has been to shape a coherent support framework that will enable the land-based and rural sector to realise the potential of renewable energy and contribute to the delivery of targets for renewable energy production at a regional, national and EU level in a balanced and sustainable way.

6. DARD also wishes to promote efficient energy utilisation within primary agriculture which will reduce energy input costs as well as help meet carbon reduction targets and have a relevance right across the industry.

7. This Action Plan promotes “the opportunities afforded by the sustainable development of renewable energy in the agri-food and forestry sectors and wider rural economy” by exploiting existing technologies and by expanding the knowledge base within Northern Ireland through appropriately targeted research and development and technology transfer activities.

8. However, with the rapid evolution of the broader policy framework at EU, national and regional level, plus the evolution of technologies and the market, it is recognised that this Action Plan must be reviewed at an early stage in order to maintain its relevance. Therefore, a review date of April 2008 has been set for this purpose.

Context

Changes in Agriculture

9. Farming communities are facing continuing change, with fewer farms remaining economically sustainable in the absence of an additional external source of income and a continuing downward pressure on agriculture’s level of employment. Meeting the challenges that this creates requires diversification out of traditional agricultural activities and the growth of a stronger, more broadly based rural economy.

10. The agricultural industry is currently in the process of adapting to a fundamental change in the system of EU support, which has radically altered the economics of agricultural production and the viability of specific agricultural enterprises. The full implications of this in terms of land use, particularly in the more marginal areas, are not yet clear. However, these changes are beginning to impact in a period when the possibilities for alternative land use are gaining greater prominence, not least in terms of energy production.

11. A move into energy crops could provide a new income stream for agriculture and help broaden its economic base. Agriculture in Northern Ireland today is dominated by grass-based enterprises, but this dominance has not always been so marked. For example, at the beginning of the Twentieth century, the cropped area was six times larger than it is at present.

12. This specialisation in grass-based enterprises was driven by economic forces. If viable markets emerge for energy crops and profit margins compare favourably with those of existing agricultural enterprises, then a move to a more diverse mix of land-based enterprises will emerge. In the early stages of such a change at least, farmers currently involved in the production of conventional arable crops are more likely to make this transition as they will have both the suitable land and husbandry skills needed to grow energy crops.

13. However, renewable energy technologies will also create opportunities for livestock farmers. With an increasing emphasis on sustainable waste management and minimising the environmental footprint of agriculture, the use of technologies such as anaerobic digestion may enable livestock farmers to convert what are now largely regarded as costly waste streams into a possible source of revenue (or, at a minimum, to reduce the cost of sustainable waste management).

Climate Change

14. Climate change, brought about by increasing atmospheric concentrations of carbon dioxide and other heat-trapping greenhouse gases, has been described as “the most severe problem that we are facing today”[1]. The burning of fossil fuels is the primary cause of increased atmospheric carbon dioxide concentrations - thought to be responsible for up to 80% of annual global carbon dioxide emissions.

15. International recognition of the global impact of increasing carbon dioxide emissions has come in the form of the Kyoto Protocol. At the United Nations Framework Convention on Climate Change in December 1997, a significant number of industrial countries committed to cut combined emissions to 5% below 1990 levels by 2008-2012. EU countries committed to an 8% reduction in emissions.

16. In responding to this challenge, the UK Government has made a commitment to reduce greenhouse gas emissions by 12.5% by 2008-2012 and to move towards a target of a 20% reduction of carbon dioxide by 2010.

17. It has been suggested that climate change in Northern Ireland could see average temperatures rising by between 2°C and 4°C by 2080, with summers being 50% drier and winters 25% wetter. Other possible effects include a lengthening of the growing season, a reduction in the number of snow days and a greater likelihood of extreme weather events, e.g. floods and drought.

18. The potential impact on the rural economy may include changes in crops and cropping patterns, increased pressures from pests and diseases and more weather-related damage.

19. Alternative, carbon reducing or neutral energy technologies will be key to lowering greenhouse gas emissions. Allied to the need to cut emissions of greenhouse gases is the need to ensure a sustainable energy supply in the future. Renewable energy resources will help form part of a portfolio of technologies that will provide the means of responding to these challenges. A number of these technologies offer the Northern Ireland agri-food industry the potential to play its part in this process.

EU Policy Context

20. A number of policy initiatives at EU level are proactively driving the renewable energy agenda:

The EU Renewables Directive aims to encourage the promotion of electricity from renewable sources so that the overall EU target of 12% of energy from renewables (22% of electricity consumption) is met by 2010.
The EU recently launched its Biomass Action Plan to increase the development of biomass energy from wood, waste and agricultural crops.
The establishment of the European Union Emissions Trading Scheme (ETS) has also created a market mechanism by which carbon dioxide emissions can be traded, thereby providing a strong economic instrument to support the production of renewable energy, including that from biomass.
EU Directive 2003/30/EC (the ‘Biofuels Directive’) set minimum indicative percentages (2% by the end of 2005, rising to 5.75% by the end of 2010) of petrol and diesel for transport to be replaced by biofuels in all Member States.

21. More recently, the EU Commission, in its ‘energy for Europe’ package, has made proposals to reduce greenhouse gas emissions at least 20% below 1990 figures by 2020. To help meet the new targets, the Commission has proposed that 20% of the EU’s energy should come from renewable sources, and biofuels should account for at least 10% of all transport fuel.

22. A number of other EU policy initiatives are also indirectly driving the renewables agenda. For example, the reform of the Common Agricultural Policy (CAP) has decoupled payments of subsidies to livestock and crops in favour of the Single Farm Payment Scheme. This allows farmers greater flexibility in terms of the crops they choose to grow, including energy crops. This may help facilitate realisation of the Biomass Action Plan goals. However, a central principle in the move to decoupled support was that future production decisions on the part of farmers would be driven by market forces alone. Therefore, the commercial viability of energy crops at farm level will be a key factor in the evolution of this sector. The reformed CAP includes a special payment for energy crops and the possibility of growing energy crops on set-aside land.

23. Apart from the CAP, a number of environmental Directives will also have an indirect bearing on the development of renewable technologies within the agri-food sector, specifically with regard to the sustainable management of waste:

The Integrated Pollution Prevention & Control Directive employs an integrated approach to control the environmental impacts of certain industrial activities. The requirements of the Directive are similar in many ways to the requirements on processes subject to integrated central control under the Industrial Pollution Control (NI) Order 1997. However, there are two important differences:
The Directive applies an integrated approach to a wider range of issues; and
It requires that a wider range of environmental issues are taken into account, such as noise, energy efficiency, etc.
The Water Framework Directive establishes an integrated approach to the protection, improvement and sustainable use of rivers, lakes, estuaries, coastal waters and groundwater within Europe. It impacts on the management of water quality and water resources and affects conservation, fisheries, flood defence, planning and environmental monitoring. It requires a control of all impacts - physical, polluting or otherwise - on water resources.
The Nitrates Directive aims to reduce and prevent the pollution of water caused by nitrates from agricultural sources. It is designed both to safeguard current and future drinking water resources and to prevent wider ecological damage in the form of eutrophication (over-enrichment of nutrients in water).

All of these Directives will drive a greater focus on the sustainable management of waste streams. Some renewable energy technologies have the potential to play a part in addressing this issue, thereby offering an integrated approach to waste management and renewable energy production.

United Kingdom Policy Context

24. On a UK level, several initiatives are in place to promote the development of biomass energy systems, including the Department of Trade and Industry (DTI) sponsored Bioenergy Capital Grants Scheme.

25. The UK Renewable Transport Fuel Obligation (RTFO), which Government proposes to introduce with effect from April 2008, is intended to help deliver the objectives of the EU Biofuels Directive. Under this Obligation, 5% of transport fuel sold in the UK will have to come from renewable sources by 2010. It is expected that biofuels will be mixed in a 5% biofuel/95% fossil fuel blend to meet this target. Clearly, this initiative will create a sustained demand for biofuels (biodiesel and bioethanol) from the transport fuel industry.

26. The UK Biomass Task Force Report made a series of recommendations for the development of the biomass sector in England and Wales. The UK Government published a response to the Task Force Report in April 2006 in which it outlined the actions already, and still to be, taken to meet the recommendations set out in the report. Although the Biomass Task Force was aimed at England and Wales, the Government response included an Annex outlining the action being taken to develop and support the biomass industry in Northern Ireland. Work is now in hand to develop a UK Biomass Action Plan.

Northern Ireland Policy Context

27. There is a number of existing Northern Ireland strategies and policies which have a direct bearing on the future development of the local renewable energy sector.

28. Published in May 2006, the Sustainable Development Strategy for Northern Ireland: First Steps Towards Sustainability outlines Government’s commitment to tackling the challenges of sustainable development, thereby securing a better future for the present generation and protecting the interests of generations to come. It commits Northern Ireland to becoming more resource efficient, both in its production and consumption, to reducing waste and to looking more critically and imaginatively at how it generates and uses energy. It emphasises the need to build sustainable communities founded on economic prosperity and attractive, healthy and high quality environments, with greater community engagement and civic leadership.

29. It addresses 6 priority areas for action:

climate change and energy
sustainable consumption and production
natural resource protection and environmental enhancement
sustainable communities
governance for sustainable development
communication & learning

30. It is well recognised that, as well as reducing greenhouse gas emissions, energy efficiency will help to improve the competitiveness of businesses. In Northern Ireland, the Carbon Trust estimates that businesses and public sector organisations could save around £100 million per annum through the deployment of existing energy efficient technologies and practices. Clearly, improvements in energy efficiency represent a key step in the process of meeting Northern Ireland’s energy needs in a sustainable manner, and this applies as much to the agri-food sector as to other parts of the economy.

31. This Renewable Energy Action Plan is firmly rooted in the principles of sustainable development, and DARD-specific actions relating to the encouragement of renewable energy production have been included in “A Positive Step – Northern Ireland - A Sustainable Development Implementation Plan”, published in November 2006.

32. The DARD Strategic Plan 2006-2011 sets out a vision of a thriving and sustainable rural community. In order to achieve this vision, DARD has acknowledged that sustainable development will be a key driver of change over the next five years.

33. Within the context of the DARD Strategic Plan, the support framework described in this Renewable Energy Action Plan will help enable the Department to address some of the issues and challenges specific to rural areas and the land-based economy.

34. The Regional Development Strategy ‘Shaping our Future’ provides a comprehensive policy framework for the development of Northern Ireland to 2025, and dedicates a chapter to caring for the environment. An objective of the Strategy is to contribute to reducing the impact of global warming, both locally and globally, and to emphasise the importance of cutting environmental costs generally, by reducing the consumption of natural resources and energy from non-renewable sources.

35. Targeted demand reduction and the development of renewable energy sources is at the centre of Northern Ireland’s energy policy. This is also recognised as a major factor in environmental policy in terms of mitigating climate change and carbon reduction. In line with the overall climate change agenda and the Northern Ireland Sustainable Development Strategy, the Strategic Energy Framework, published in June 2004, places a firm emphasis on renewable energy generation and reduced environmental impact. The Environment and Renewable Energy Fund, announced in February 2006, committed resources specifically to realise the aims of the Strategic Energy Framework.

36. The DOE’s Towards Resource Management: The Northern Ireland Waste Management Strategy 2006-2020 sets out a clear vision for the development of renewable energy from waste facilities as part of the development of an integrated network of waste treatment and disposal facilities in Northern Ireland. This involves using material resources in a way that reduces the quantities of waste produced and, where waste is generated, to manage it in a way that minimises its impact on the environment and public health and contributes positively to economic and social development.

37. The above description of the policy context at EU, national and regional level illustrates the broad and complex policy arena in which the renewable energy sector is evolving. In developing this Action Plan, DARD has sought to create a support framework that will help deliver against the targets and objectives already specified, rather than create an additional layer of unnecessary complexity or duplication. Consequently, its central focus is to help the land-based sector and broader rural economy capitalise on the opportunities that are emerging in this area.

Dard Work to Date on Renewable Energy

38. DARD (and more recently the Agri-Food and Biosciences Institute - AFBI) already has a significant research base in renewable energy technologies extending back over many years and this is likely to remain an important element of DARD’s new research and development strategy (to be finalised in 2007). Research and development work has been undertaken locally on short rotation coppice willow (SRC) since the mid-1970’s. This has focused on the following five main areas to ensure that commercial developments are founded on a reliable knowledge base:

Willow nutrition – studies have investigated the effect of fertiliser applications and the use of the coppice as a bioremediation system;
Genotype evaluation - new genotypes are evaluated prior to their commercial release;
Disease control - research has identified husbandry techniques to reduce the incidence of rusts, including the configuration of varietal mixtures in reducing disease impact;
Willow pest control - work has investigated the biology of willow beetle and black willow aphid and appropriate methods of control, including the use of varietal mixtures; and
Utilisation – research includes the co-ordination of production and conversion of short rotation coppice willow in a managed supply chain.

39. Specialist advice in a number of areas, including short rotation coppice, biogas and industrial crops, is provided to the agricultural industry, local councils, community groups etc. by the College of Agriculture Food and Rural Enterprise (CAFRE) and AFBI.

40. In 2004, DARD’s Forest Service established the three year Challenge Fund for SRC to increase the amount of willow grown for energy use in Northern Ireland. Energy crops received a special grant within the Woodland Grant Scheme, under the Northern Ireland Rural Development Regulation Plan 2000-2006. The Challenge Fund operated as a competitive mechanism under which applicants were required to bid for the support they needed to establish SRC for an energy end use.

41. During the first two application phases, agreements between DARD and private landowners were put in place to convert nearly 400 ha of high quality agricultural land to SRC by 2007. Provisional indications show that approximately 410 hectares will be planted in 2007 as part of the third and final application phase.

42. As a result of the support provided by the SRC Challenge Fund (£1.5 million committed), it is expected that by 2012, land in agreements will have the potential to produce around 8,000 tonnes of willow biomass annually for the energy sector.

43. A recent review of the SRC Challenge Fund by DARD’s Forest Service concluded that the Fund:

Has contributed positively to wood fuel production and marketing in Northern Ireland through the development of grower and marketing clusters, and has provided the ‘springboard’ from which the sector’s growth may continue;
Provided assurance to ‘early adopters’ by presenting a structured business path;
Has been extremely effective in contributing to forest expansion in Northern Ireland;
Provided the opportunity to understand the practical mechanisms of a specialist operation and to evaluate costs critically; and
Opened up opportunities to link this sector with complementary technologies such as bio-filtration and bioremediation.

44. DARD’s Forest Service has also been working with wood processors to create stability in the wood supply chain and promote long-term business planning. In response to this initiative, a major sawmill has invested in facilities to produce 2 megawatts (MW) of electrical energy and 10 MW of heat using wood chips and sawdust produced on site, as well as producing about 50,000 tonnes of wood pellets for combustion off site. Most of the pellets are currently being exported to power stations in England. However, the demand for wood pellets from the local domestic sector is expected to increase rapidly. The economic contribution from this wood-based energy operation is serving both to strengthen the financial performance of the sawmill operator and to underpin the demand for home-grown timber.

45. Forest Service is also working with wood processors to investigate ways of improving the recovery of low value wood residues from forest harvesting sites for an energy end use.

46. DARD’s Rural Connect Branch has the remit to ‘connect’ farming families to DARD services and public funding programmes and services. Rural Connect Advisers have provided advice and guidance to individuals considering diversifying into and/or investing in renewable energy crops and technologies.

47. Advisers have also worked with groups taking forward different types of renewable energy projects. Several farmers’ groups across Northern Ireland have been researching options around waste management and energy generation. Some of these have had funding approved through various programmes under DARD’s Rural Development Programme 2000-2006.

48. DARD’s Rural Development Division manages the overall delivery and implementation of the Rural Development Programme 2000-2006. The main elements of this programme comprise capacity building, local regeneration projects and programmes, sectoral and area-based development programmes and microbusiness development. Renewable energy produced locally offers the potential to increase business competitiveness and stimulate diversification in rural communities. Renewable energy projects can be embraced within each of the elements of the Rural Development Programme and, currently, Rural Development Division is actively involved in a number of renewable energy projects.

49. Since 2003, DARD has committed a total of some £4 million in grant assistance to a range of renewable energy projects and technologies (including SRC) across Northern Ireland.

50. Under the Rural Development Programme, several projects have been awarded funding to erect wind turbines to provide wind energy for rural businesses. These schemes will enhance the viability of rural businesses and promote the concept of a sustainable renewable energy source. The most notable of these is a project being delivered by the Western Regional Energy Agency & Network (WREAN), which has provided grant aid to 26 rural businesses, most of whom are farmers, for the installation of 20kW wind turbines. The objective of these turbines is to replace some of the NIE sourced power and to spill any excess electricity back into the grid. Several rural community groups have been awarded funding to install various renewable energy technologies, including wind turbines, biomass boilers and water turbines. Funding has also been awarded for the installation of renewable energy technologies in rural schools.

51. CAFRE is in the process of installing a range of renewable energy technologies which will assist it to meet its energy targets and also provide demonstration projects for the benefit of farmers, landowners and rural communities. These renewable energy technologies will be developed, installed and demonstrated in partnership with a range of public and private sector organisations.

Driving the Renewables Market in Northern Ireland

52. Government has introduced (or will be introducing) a number of measures to incentivise the development and deployment of renewable sources of energy in Northern Ireland. These initiatives will help create sustainable markets in renewable energy supply that can link to a local supply base, thereby providing significant commercial opportunities for the Northern Ireland land-based sector.

Environment and Renewable Energy Fund (EREF)

53. The DETI led £59 million Environment and Renewable Energy Fund (EREF), launched in February 2006, seeks to enhance and accelerate the deployment of renewable energy technologies in Northern Ireland, thereby contributing to a reduction in the level of environmentally harmful emissions and helping to establish Northern Ireland as an exemplar region in renewable energy development.

54. The Fund supports action in four programmes: Research and Demonstration; Building Market Capacity through the Provision of Infrastructure and Supply Chain Development; Accelerated Deployment; and Underpinning Knowledge and Raising Awareness. Initiatives within these areas are focused on both the supply and demand sides and are targeted at all sectors, including agriculture and the public sector.

55. In July 2006, the Household Programme was launched to provide £8 million of support for the installation of renewable energy technologies, such as solar heat and power, biomass, geothermal and wind, in the domestic sector.

56. The Fund has added a very significant stimulus to the development of the renewable energy market in Northern Ireland and provides major opportunities for the agri-food industry to contribute to its sustainable development.

Energy Management in the Public Sector

57. The public sector estate in Northern Ireland currently comprises some 3,500 buildings. On the basis that the public sector should lead by example, a range of “greening” Government policies are currently being implemented in the management of this estate.

58. Northern Ireland Government Departments, with Ministers’ agreement, have been working to meet national targets set out in the Sustainable Development Framework for the Government Estate. As a consequence, the Northern Ireland Sustainable Development Strategy includes a target for the Government Estate to be carbon neutral by 2015. This target can be met only by the widespread adoption of renewable energy technologies.

59. The Department of Finance and Personnel (DFP), which has a central role within Government to promote sustainability in the procurement, operation and maintenance of buildings, has adopted the targets set under the Climate Change Programme published in 2000 to give effect to obligations arising from the 1997 Kyoto Summit, and the further objectives in the 2003 Government White Paper “Our Energy Future – towards a low carbon economy”. The latter outlines far-reaching changes in energy use, leading towards a national reduction in the level of carbon dioxide emissions of about 60% against current levels by about 2050, with further targets specifically for Government bodies.

60. In pursuit of these objectives, DFP monitors and reports on energy usage by all Northern Ireland public sector bodies. It also administers the Central Energy Efficiency Fund (CEEF), supporting specific projects to improve energy performance and the utilisation of renewable energy technologies (such as wind turbines, solar panels and biomass boilers) throughout the public sector. Since 1993, the Fund has invested over £35 million in schemes of this nature. The Fund has also supported significant investments in the installation of combined heat and power (CHP) plants, which are now operational in over 20 District Council leisure centres, in seven hospitals and in Northern Ireland’s two universities.

61. In 2006/07 and 2007/08, an injection of additional resources from the EREF has enabled the CEEF to support an increased number of energy efficiency and renewable energy projects across the public sector. This includes support for 14 separate renewable energy projects. It will also support the conversion of heating plants on the Stormont Estate to use biomass rather than fossil fuels – planning for this is now at an advanced stage.

Northern Ireland Building Regulations

62. DFP is also responsible for the Northern Ireland Building Regulations, and has recently completed an amendment to Part F: Conservation of Fuel and Power, which came into effect in November 2006. This amendment requires adherence to higher thermal standards in building design, the effect of which will be to reduce carbon emissions by up to 40% in the buildings to which the new Regulations will apply. Although the amendment does not include a specific requirement to include renewable energy systems in buildings, the achievement of the required reductions without deploying renewable energy technologies will be technically and financially challenging. If these technologies are not included, equivalent energy savings will have to be achieved through other energy efficiency measures. Therefore, whilst not mandatory, developers could consider the installation of renewable energy technologies to be the path of least cost/resistance.

63. Looking ahead, DFP is in the process of amending the Building Regulations (Northern Ireland) Order 1979 to provide enabling powers so that future regulations may be made regarding sustainable development, the protection of the environment and the deployment of microgeneration technologies. DFP will be assessing the scope for including a mandatory requirement for all new buildings to incorporate microgeneration facilities from April 2008.

Northern Ireland Renewables Obligation (NIRO)

64. In April 2005, DETI introduced the Northern Ireland Renewables Obligation (NIRO) as the main mechanism for incentivising renewable energy deployment in Northern Ireland. The NIRO places a legal requirement on electricity suppliers to provide evidence that a specified and annually increasing proportion of their electricity supplied to final customers has been generated from renewable sources, or to pay a buy-out fee that is proportionate to any shortfall. A 60% increase in the number of applications to the Planning Service for projects linked to the NIRO in its first year of operation is indicative of its success. By March 2006, 3% of Northern Ireland’s electricity consumption was derived from indigenous, renewable energy sources. Wind is currently the predominant renewable source under the NIRO and will continue to be so until alternative renewable energy technologies become more cost competitive. Nevertheless, non-wind sources of renewable energy for electricity generation are emerging. For example, the major biomass CHP plant opened by Balcas in Enniskillen in November 2005 produces both electricity and heat as well as a biomass energy product and, as such, is a world class sustainable energy example. The EREF has a particular focus on supporting the development of non-wind renewable energy sources, such as energy from waste, and will support the further development of this market.

Renewable Transport Fuel Obligation

65. The Renewable Transport Fuel Obligation (RTFO) is being developed on a UK-wide basis by the Department for Transport (DfT) in Whitehall in liaison with the Devolved Administrations. The RTFO is proposed as the key mechanism in support of the UK target for biofuels to account for 5% of all road fuels by 2010. The Government has made it clear that it is committed to increasing the level of the RTFO beyond 5% after 2010/2011, but only if certain conditions are met, including stringent sustainability criteria.

66. DETI, as the Northern Ireland Department with responsibility for overall energy policy, acts as the lead contact with DfT in the development of the RTFO, with other relevant Northern Ireland Departments inputting as appropriate.

67. The RTFO will certainly create a significant market for biofuels across the UK as a whole. The particular implications of this for the land-based sector in Northern Ireland are not yet clear.

Planning Policy and Renewable Energy

68. Planning Service is responsible for the formulation of the land use planning policies in Northern Ireland which regulate and facilitate new energy development. It is currently in the process of bringing forward a revised planning policy for renewable energy projects. This will be set out in Planning Policy Statement 18, which is to be published in 2007.

Renewable Energy Installer Academy

69. Action Renewables, founded in 2003, is a joint initiative between DETI and Viridian Plc dedicated to increasing the awareness and uptake of renewable energy throughout Northern Ireland. Key among its activities is the development, in partnership with Sustainable Energy Ireland (SEI) in the Republic of Ireland, of a state-of-the-art training infrastructure for designers, specifiers and installers of renewable technologies - the Renewable Energy Installer Academy (REIA).

70. The Academy is an initiative grant-aided under the Renewable Energy/Energy Efficiency Measure of the Interreg IIIA Programme (administered jointly by DETI and the Department of Communications, Marine and Natural Resources (DCMNR) in ROI). In 2004, the lack of trained installers, specifiers and designers of renewable energy technologies was identified as one of the key market barriers to the widespread adoption of renewable energy systems on the island of Ireland. The establishment of the REIA as a regionally accessible infrastructure for training, certification and accreditation of priority renewable energy system specifiers and installers to harmonised standards is serving to remove that barrier.

71. In keeping with the targets and objectives for the Academy, training laboratories have been completed in the North West Institute in Londonderry and Dundalk Institute of Technology (DKIT) for solar water heating, Lisburn and DKIT for heat pumps and East Down Institute (Downpatrick) and DKIT for biomass.

72. Substantial investment has been made in the establishment of the Academy, the development of training materials, training the trainers and testing and revising training courses. The project has attained the key objectives of giving renewable energy installers in the border region access to dedicated training opportunities in this field and increasing the number of professional installers and engineers who can undertake the design, installation and maintenance of renewable technologies.

73. During 2006/7 and 2007/8, up to 4,000 private households will receive grant aid from the Household Programme of the EREF to deploy these technologies and the Installer Academy will be the main source of accredited professionals to install these systems in Northern Ireland.

The Scope of The Dard Renewable Energy Action Plan

74. Within the context of the strategic and policy background outlined above and DARD’s existing work in support of renewable energy opportunities, the Department used the 35 recommendations of the Interdepartmental Steering Group as the initial point of reference for the creation of this DARD Renewable Energy Action Plan.

75. The Department consulted publicly on these recommendations and received comments from a range of interested individuals and organisations. The recommendations of the Steering Group and a summary of consultees’ views are detailed in Appendix 1, together with DARD’s response. The 2004 study on the potential for, and economic sustainability of, small scale embedded heat and power and heat-only systems in the rural economy (referred to in Paragraph 2), along with the Steering Group recommendations and individual responses to the consultation, are available on the consultation archive section of the DARD website at www.dardni.gov.uk.

76. In the period since the recommendations were first made to DARD by the Steering Group, a number has been taken forward by other Departments/bodies. There is also a number of recommendations which the Department believes would be more appropriately addressed by other bodies and organisations.

77. In drawing up this Action Plan, DARD has sought to ensure that the support and services provided by the Department will enable farmers, landowners and rural communities to capitalise on the opportunities presented by renewable energy within the broader strategic context of energy policy, tackling climate change, waste management and sustainable development. Given the linkages with and between these strategic drivers, which cross a number of Government Departments, it is essential that DARD works closely with other Government Departments in Northern Ireland in furtherance of renewable energy opportunities for the land-based sector and wider rural economy. This is a key priority.

78. Given this complex set of relationships, DARD will explore options to create a specific policy unit to drive forward and co-ordinate the renewables agenda and to ensure that this is fully integrated with the policies and initiatives being taken forward by other Government Departments in Northern Ireland and, as appropriate, in GB and the ROI.

79. It is also important that there is close stakeholder involvement to ensure an orderly and sustainable development of the sector. Therefore, DARD will seek to introduce appropriate structures to engage stakeholders in this process.

80. Under an overall theme of “promoting the opportunities afforded by the sustainable development of renewable energy in the agri-food and forestry sectors and wider rural economy” the Action Plan has two broad objectives:

(i) To support the exploitation of opportunities for alternative land uses and sustainable management of agri-food waste linked to renewable energy; and

(ii) To underpin knowledge and increase awareness of renewable energy technologies.

Actions to Support the Exploitation of Opportunities for Alternative Land Uses and Sustainable Management of Agri-Food Waste Linked to Renewable Energy

1. Exploiting Opportunities in Profitable Energy Crop Production

Energy crops are renewable materials which can substitute for fossil fuels. Such crops are generally classed as ‘carbon-neutral’ because the carbon dioxide released during the generation of energy is balanced by that absorbed by plants during their growth.

Farmers will move to energy crop production only if the financial rewards and associated risks make it more attractive than existing agricultural enterprises. Thereafter, the on-going development of the energy crop sector will depend heavily on the actions of key actors within the industry itself and their ability to recognise and seize opportunities, including those arising from wider Government efforts to develop the renewable energy markets in Northern Ireland, as outlined above. However, pump-priming support will hasten this process and is available through a number of Departmental schemes.

(i) Support for energy crops

Short Rotation Coppice (SRC)

SRC is a specialised form of forestry plantation and involves growing willow at close spacing and harvesting at regular intervals (normally every second or third year). A number of approaches to willow harvesting and chipping exist. The end product - willow chips at a moisture content of circa 20% - is used primarily as fuel to generate heat in biomass boilers.

In 2004, DARD’s Forest Service introduced a three year Challenge Fund for SRC energy crops to encourage the establishment of short rotation willow coppice for renewable energy generation. The Challenge Fund operated under the umbrella of the Northern Ireland Rural Development Regulation Plan 2000-2006 and has now closed to new applicants. To date, approximately 400 hectares have been planted or approved for planting under the Scheme and a further 410 hectares have been approved for the 2007 planting year. The average rate of assistance provided for plantings under the Scheme to date is approximately £1,920 per ha. Therefore, the SRC Challenge Fund represents a considerable investment by DARD in the establishment of this new sector.

At present, the economics of SRC for heat production, without a planting grant, suggest that it could represent a viable alternative enterprise for growers when the price of domestic heating oil is in excess of 35 pence per litre. The attractiveness of SRC as a crop is, however, significantly improved if it can also be used for bioremediation purposes and where the latter activity can either generate an additional income stream (through gate fees) or reduce costs elsewhere on the holding.

The biggest long term constraint on the production of SRC in Northern Ireland is the availability of a local end user (the bulky, low value nature of chipped willow mean that it is necessary to keep transport distances and costs to a minimum). Other constraints have also been identified - proximity to drying equipment, the availability of suitable land in terms of soil type, topography and road access to planting sites.

The three year SRC Challenge Fund has now closed to further applications and has been subject to an initial internal review. Drawing on the findings of this process, DARD is seeking to develop a successor programme of support for the continued development of SRC under the auspices of the new Northern Ireland Rural Development Programme 2007-2013. DARD Forest Service will make an announcement concerning such a measure later in 2007.

Support for other energy crops

Under the EU Aid for Energy Crops Scheme, aid of €45 per hectare is payable for all crops used for the production of energy products, with the exception of crops grown on set-aside land. Crops eligible for support under the Scheme include short rotation coppice willow, hemp, sugar beet, oilseed rape and other cereals grown for energy production. Uptake under the Scheme in Northern Ireland has been limited - approximately 600 ha in 2006 (primarily SRC). Nevertheless, the Scheme, although modest in terms of its rate of payment, does represent an additional incentive and income stream for those growers contemplating renewable energy crops.

The Scheme is currently under review by the EU Commission. However, it is believed that this is unlikely to produce significant changes (apart from perhaps a degree of simplification in terms of its operation).

Biofuels

Agriculture in Northern Ireland is predominantly grass-based, with only a small percentage (circa 3% in 2006) devoted to cereal and oilseed crops. These enterprises are found on just over 3,000 farms, with specialist cereal growing confined to less than 750 farm businesses. In the absence of a very significant change in land-use patterns, the quantities of cereals and oilseeds grown in Northern Ireland could not support significant biodiesel/bioethanol production and certainly not processing plants of the scale currently being contemplated in other parts of the UK. To put this in context, there are reports of several bioethanol plants being planned in GB which will depend on wheat as their primary source of raw material. Their combined annual intake of wheat will be in excess of 1 million tonnes. Total wheat production in Northern Ireland in 2006 was only 66,000 tonnes. Total production of all cereals in Northern Ireland in 2006 was just over 190,000 tonnes.

The UK biofuels sector is currently driven primarily by Government fiscal policy. The proposed RTFO should add significant impetus to this growing sector. It will drive demand for biofuels from the petrochemical industry, though this may well be centred on large scale production facilities and arable regions of the United Kingdom. Given this context and the level of arable production in Northern Ireland, there appears to be limited scope for a large scale biofuels sector to develop locally, and the current economic viability of small-scale biodiesel plants using oilseed rape as a feedstock is, at best, marginal. At the time of writing, limited direct support is available for projects in this sector. However, technological advances and second generation biofuels may provide scope in the future for Northern Ireland to be more significantly involved, though commercial viability will be a key driver. The final detailed design of the RTFO will also be an important factor influencing this sector’s development and hence, the opportunities for biofuel production in Northern Ireland must be kept under review.

An important point worth noting is the fact that increasing EU and global demand for cereals and oilseeds from biofuel producers is leading to rising prices for these crops. Therefore, the Northern Ireland arable sector will benefit from this effect even if it is not directly engaged in supplying the biofuels sector. In other words, because of wider demand and supply effects, allied to open EU trade in cereals and global trade in oilseeds, Northern Ireland arable producers will capture many if not all of the benefits of the emerging biofuels sector without incurring the costs or risks of developing a local processing capacity.

(ii) Supporting uptake of renewable energy production via the Financial Assistance for Young Farmers Scheme

Young farmers will play a key role in the future development of rural areas. DARD’s Financial Assistance for Young Farmers Scheme provides assistance to facilitate the establishment of young farmers (under 40 years old) who possess adequate skills and competence and are setting up as head of holding for the first time.

Assistance under this Scheme, in the form of an interest rate subsidy, is available for an agricultural purpose on the holding for which the loan is obtained. The Scheme aims to promote additional farm investment which will generate new activities or add value to existing activities in farming in Northern Ireland. Therefore, it offers the potential to support suitable renewable energy projects that meet the conditions of the Scheme.

Applicants are required to submit a business development plan, including a specific project proposal, and a personal development plan indicating how competence requirements under the Scheme will be met (if unable to be demonstrated at the outset) when seeking the loan.

The Scheme will close for applications on Thursday 5 June 2008 or when all available funds (£4.5 million) have been committed, whichever is sooner.

2. Supply Chain Development

A key requirement for the orderly evolution of a biomass-based renewable energy sector is the development of sustainable supply chains. Under the Sectoral element of the 2000-2006 Programme for Building Sustainable Prosperity (PBSP), DARD has awarded significant funding (£0.5million) for investment in the infrastructure associated with the processing of SRC. This will provide grant assistance (up to 44% of total project costs) for the provision of storage and drying facilities and for harvesting equipment. The scheme will close for applications on 30th March 2007.

Under the proposed new Northern Ireland Rural Development Programme (NIRDP) 2007-2013, marketing support will be available which will help individuals and groups to capitalise on the market opportunities that are opening up in the renewables sector. The NIRDP Measure 1.2 has an objective of supporting actions aimed at improving the application of technology in the forestry sector, encouraging greater integration and collaboration between producers, processors and others in the wood supply and renewable energy chains and improving the marketing capability of businesses.

Under Measure 1.2, the Agricultural and Forestry Processing and Marketing Grant Scheme will provide support towards capital expenditure and new equipment to encourage innovation and investment in wood and other renewable energy markets.

In addition, the Agricultural and Forestry Marketing Development Grant Scheme will support the development of new outlets for existing agricultural, forestry and renewable energy products.

Under Measure 1.4 of the NIRDP, the Supply Chain Development measure will assist new collaborative initiatives to create more effective and sustainable supply chains.

Taken together, this suite of measures will provide the necessary support and incentives for the development of stable and sustainable supply chains, enabling entrepreneurial individuals and groups to grasp the opportunities that are emerging for the market-led development of the renewable energy sector based on indigenous biomass production.

3. Forestry Products and By-Products

“NI Forestry: A Strategy for Sustainability and Growth”, published in March 2006, proposes an approach to the future development of the Northern Ireland forestry sector which seeks to strike a balance between the provision of timber, which accounts for up to 1,000 rural jobs, the protection of the environment and forest-based recreation. The Strategy aims to double the current 6% forest area in Northern Ireland, largely through the transfer of land from agriculture to forestry and the sustainable management of existing forests.

In addition to growing more trees, there is scope to promote the harvesting of forestry residues as a renewable energy source. Forest residues are those parts of trees left on the forest floor after harvesting and not recovered for commercial purposes. Currently the potentially exploitable resource of forest residues in Northern Ireland is estimated to be 8,000 dry tonnes per year.

Sawmill co-products (estimated at 100,000 tonnes of woodchip per year) also have the potential to be used as a cost-effective wood fuel for energy generation.

Exploitation of both resources will depend on commercial viability. Therefore the Forest Service and forest industry stakeholders are investigating the use of forest harvesting residues for renewable energy purposes, thereby improving the economic performance of timber production and realising wider benefits.

4. Using Agri-food Waste for Energy

In Northern Ireland, approximately 9.7 million tonnes of manure are produced from housed livestock each year (88% cattle, 7% pigs and 5% poultry). These manures can be a valuable nutrient resource for crop production. However, they can also represent a significant waste disposal problem as their land application cannot easily be matched to crop nutrient requirements.

The implementation of the EU Nitrates Directive, the Water Framework Directive, the Integrated Pollution Prevention and Control Directive and the Waste Management Regulations (NI) 2005 will impose restrictions on the farming industry and the way it deals with its waste streams. The Action Programme required under the Nitrates Directive includes a closed period when the land spreading of animal slurry will not be permitted, together with a limit on the amount of organic manure that can be spread on the land. These restrictions will result in the need for additional slurry storage capacity on many farms and a greater focus on soil nutrient loading. This will create difficult issues to address for intensive livestock holdings in particular. However, sustainable alternative uses for manure could provide farmers with a viable outlet for animal wastes that does not rely on land spreading.

The report of the Expert Group on Alternative Uses for Manures (EGAUM) published in March 2006 described the potential of anaerobic digestion (AD) as a technical solution to the sustainable disposal of farm organic wastes, as well as providing a possible disposal option for food chain and municipal organic wastes.

Anaerobic digestion of organic wastes involves the bacteriological breakdown of organic matter to produce biogas and digested effluent. The biogas can be utilised by combustion in a combined heat and power unit, thereby creating a renewable energy resource from a waste stream. The technology is well tried and tested. The inclusion of a proportion of agri-food by-products other than animal slurry in the intake stream to the digester unit will enhance gas quality, production and economic viability. Crops can also be used as a feedstock, with several European plants currently contracting farmers to grow crops such as maize as a feedstock for AD (though the viability of this particular practice depends crucially on the high returns that are available from the resulting energy sales).

Dry organic waste, especially poultry litter, can be burnt directly to generate heat and/or power, again representing an opportunity to address a waste disposal problem in a sustainable way and creating a renewable energy resource.

The economic viability of AD systems is influenced by a range of factors, including scale, the cost of existing waste treatment processes, the cost of the conventional energy source being replaced and transportation costs of the waste intake. However, economic analysis indicates that centralised anaerobic digestion (CAD) schemes for combined heat and power production can be feasible, providing a market for the surplus heat is realised, gate fees for treating approved organic waste are available and the electricity generated gives rise to Renewable Obligation Certificates (ROCs). A critical element of such schemes is the availability of a means for the use or sustainable disposal of the digestate emerging from the AD plant.

Given the potential of waste combustion and AD technologies both to address significant waste disposal issues for the agri-food sector and contribute to broader renewable energy targets for Northern Ireland, DARD is proposing to establish an Energy from Agri-food Waste Challenge Fund, co-financed under the EU Competitiveness Structural Funds Programme 2007-2013, to encourage the livestock and food processing sectors to develop a range of sustainable technologies which will utilise agricultural manures and food processing wastes to produce renewable energy.

The proposed fund will support a range of full scale technologies and approaches to managing manures and waste from the agri-food industry, with the purpose of:

Reducing the nitrate and phosphate inputs to soils and waterways;
Exploring and demonstrating cost-effective and sustainable methods of dealing with agri-food wastes;
Promoting alternative energy sources to the rural communities; and
Broadening the energy supply base in Northern Ireland.

At the time of writing, this proposal remains to be assessed as part of the wider range of proposals under the draft EU Competitiveness Structural Funds Programme 2007-2013, which is currently the subject of a public consultation exercise. It will also be subject to the usual Government expenditure approvals process. Therefore, a commitment to proceed with this proposal cannot yet be given.

5. Promoting Opportunities to Deploy Renewable Energy Technologies within the Rural Economy.

In addition to the opportunities afforded to landowners, renewable energy also offers opportunities for rural communities in terms of diversification, business competitiveness, employment and wealth creation. Under the existing PBSP, various renewable energy projects have been supported involving farmers, rural businesses, rural community groups and rural schools.

The proposed NIRDP 2007-2013 recognises that there is a need for an integrated approach to assist rural communities to develop plans to regenerate villages and their surrounding areas. With the development of these strategies and action plans, opportunities exist to develop initiatives to invest in renewable energy technologies and to play a role in the achievement of national targets for energy generation from renewable sources.

As the Programme is designed to address needs identified by the rural population through a bottom-up approach, it is not possible to predict a definitive list of possible activities that may be supported. However, financial assistance may be provided to support small-scale infrastructure projects which could include renewable energy activities.

6. Energy Efficiency

Although energy efficiency is a separate issue from renewable energy production, it is an area of investment that can yield significant dividends and should be the first consideration for any farm or business contemplating its energy profile. DARD will be represented on the DETI-led cross-departmental group addressing the need for a coherent approach to the delivery of energy efficiency across all sectors.

CAFRE, in partnership with the Carbon Trust, will lead a programme to improve efficient energy use on farms. As part of this initiative, the Carbon Trust initially will undertake energy audits on a number of farm businesses across Northern Ireland to establish benchmark energy data for different types of farming enterprises. Following the analysis of these data, CAFRE will increase energy efficiency awareness through the development and delivery of training programmes.

Actions to Underpin Knowledge and Increase Awareness of Renewable Energy Technologies

DARD considers that in order to enable farmers, rural communities and rural businesses to exploit fully the opportunities presented by renewable energy technologies, there is a need to promote understanding and to provide advice and information on the range of technologies available. DARD will, therefore, take forward a technology transfer programme to address this need. This will also be underpinned by a targeted research and development programme to explore new and emerging opportunities.

1. Pro-active Investment in Renewable Technology in the DARD Estate

DARD is committed to showing leadership in the use of renewable energy technologies and energy efficiency measures on its own estate. Work has already begun to install a range of different technologies at CAFRE and at AFBI

CAFRE

During 2006 and 2007, the following demonstration technologies, financed from the Environment and Renewable Energy Fund, are being installed on the CAFRE campuses:

Wind turbines
Biomass heating systems
Air source and ground source heat pumps;
Photovoltaic/solar power; and
Development and demonstration of a range of energy crops.

All future renovations and new buildings within the CAFRE Estate will evaluate the potential of renewable energy technologies to be incorporated at the design phase of the project.

AFBI

Work has commenced on developing a new, purpose built Renewable Energy Centre (REC) at AFBI’s Hillsborough site. The Centre, which is also financed by the Environment and Renewable Energy Fund, will incorporate a visitor centre and an energy laboratory equipped to enable appropriate data to be collected from all aspects of the work on renewable energy. The Centre is expected to open in 2008.

Biomass boilers will be installed to supply energy to the new infrastructure buildings and to meet other on-site demands. It is likely that two or three boilers of different designs will be used for experimental work on a range of biomass materials. Storage and drying facilities for willow chip, and other materials required to fuel the system will be constructed on site. A farm-scale anaerobic digestor and combined heat and power unit will also be installed, along with solar panels to meet the hot water requirement of the dairy parlour washing system.

The overall energy scheme at AFBI’s Hillsborough site will be installed and managed as a small district heating system. With so many diverse sources of energy and a wide range of buildings requiring heat at different times and in different quantities, a major developmental aspect of the project will be related to the management of the system as a whole to achieve a reliable system providing the greatest benefits in terms of energy efficiency, carbon saving and cost saving.

2. Investment in Research and Development

The longer term renewable energy research agenda funded by DARD will be set in the context of its forthcoming Research and Development Strategy and will seek to address knowledge gaps and opportunities to support the continued development of renewable energy options appropriate to the land-based sector in Northern Ireland.

The Renewable Energy Centre at AFBI’s Hillsborough site is being established as a centre of scientific excellence to provide a sound research base and knowledge resource for the ongoing development of the renewables sector in Northern Ireland. It will continue and expand DARD’s previous research efforts into renewable energy technologies and in this context, the Centre will initially take forward research on:

The effects of different harvesting, storage and drying methods on the quality, economics and performance of SRC willow; and
The identification of optimal management regimes for anaerobic digestion systems based on farm wastes.

3. Education and Knowledge Transfer

Based on AFBI work and other research findings, CAFRE will take forward a technology transfer programme on renewable energy programmes that will seek to increase awareness and knowledge of renewable energy issues among the farming and broader rural communities and enhance their capacity to exploit current and future opportunities.

CAFRE will deliver tailored education, training and technology transfer programmes to those entering and within the industry in the areas of energy efficiency and renewable energy deployment. This will be assisted by the adoption and demonstration of best practice within the CAFRE Estate, combined with dissemination of information through courses at the College and other local training events.

CAFRE will develop industry benchmarks on energy use for the various agricultural sectors in partnership with the Carbon Trust and assist farm businesses to improve their energy efficiency/utilisation.

Conclusion

The renewables energy sector is in its infancy in Northern Ireland. Although many of the basic technologies currently available have been in existence for some time and have been deployed elsewhere, they continue to improve and evolve. In some cases, their economic viability is marginal and in all cases, is critically dependent on the level of fossil fuel prices. Nevertheless, in the expectation of rising fossil fuel costs, improvements in technology and reductions in technology costs, it is appropriate for Northern Ireland to position itself so that it can capitalise on the potential opportunities in renewable energy production. It is important to establish awareness within the industry that in the medium term fossil fuel will become less available and more expensive.

The land-based sector is uniquely placed to grasp this opportunity. However, a key factor in the successful development of this new sector will be the balanced and orderly expansion of both the supply of, and demand for, sustainable renewable energy solutions. Government has a significant role to play in this respect, particularly in the early stages of this evolution. Through this Action Plan and its on-going commitment to engage with other Government Departments, DARD will seek to play its part in the development of a sustainable and profitable land-based renewable energy sector in Northern Ireland.

[1] 2006 UK Climate Change Programme

Department of Education

Department for Employment and Learning

Annex A

Dard Committee Inquiry into Renewable Energy/Alternative Land Use

Evidence from Department for Employment and Learning

Summary of the Department’s aim, strategic objectives and key areas of activity

Summary of key business areas

The context of the Department’s work

The relevance of the Department’s work to the issue of renewable energy/alternative land use

Department for Employment and Learning

1 Departmental Aim

To promote learning and skills, to prepare people for work and to support the economy.
Strategic Objectives
To promote economic, social and personal development through high quality learning , research and skills training: and
To help people into employment and promote good employment practices

2 Department’s key areas of activity

Enhancing the provision of learning and skills, including entrepreneurship, enterprise, management and leadership.
Increasing the level of research and development, creativity and innovation in the Northern Ireland Economy.
Helping individuals to acquire jobs, including self employment, and improving the linkages between employment programmes and skills development; and
the development and maintenance of the framework of employment rights and responsibilities.

3 Key Business Areas in DEL

Corporate Services: Minister’s Private Office/ Office of the Permanent Secretary/Central Management, Press Office, personnel, staff welfare, staff training, departmental records, statistics / research and evaluation.

Strategy and Employment Relations: Strategy and Equality covering compliance with S75 statutory duties, Co-ordination Unit and in particular the Department’s linkages with interdepartmental strategies; Employment and Industrial Relations, Including responsibility for relevant legislation and sponsorship of the Labour Relations Agency; the NI Certification Office; the administration of the Office of Industrial and Fair Employment Tribunals; the Industrial Court; and the Redundancy Payments Service; Migrant Workers Unit (facilitating the interdepartmental strategy)

Higher Education: Development of policy for the planning, funding and administration of higher education. Also, policy for student loans and awards, education maintenance allowances and for the payment of postgraduate awards.

Further Education: Development of policy for the planning, funding and administration of further education, including the reconfiguration of the Further Education Sector in line with the FE Means Business Review. Also responsible jointly with the Department of Education for the policy and curriculum for the 14-19 age group.

Skills and Industry : Responsibility for the NI Skills Strategy that sets out a vision for skills in Northern Ireland in 2015 and focuses on raising the skills levels of the workforce, enhancing the quality of those entering the workforce, and addressing the employability of those not in employment. This includes Careers and Information, Advice and Guidance policy and delivery and the policy and administration of Training for Success (Professional and Technical Provision replaced Jobskills from September 2007), Bridge to Employment and Management Leadership programmes and also for sector development and the associated Sector Skills Councils.

Preparation for Work: Responsibility for the administration and delivery of the New Deal programmes; Steps to Work initiatives; the Disablement Advisory Service; Pathways to Work targeted at Incapacity Benefit recipients; Progress2Work (NI) to assist with overcoming major barriers to employment resulting from problems associated with homelessness and substance misuse, an offending background, and other community based employability initiatives such as LEMIS (Local Employment Intermediary Service) designed specifically to engage with unemployed and economically inactive people in Northern Ireland’s most disadvantaged areas, and help them equip themselves for work.

Employment Service (part of Preparation for Work Division): the delivery of the public employment service through frontline teams in the network of 35 Jobs & Benefit Offices and JobCentres . A pivotal function of the Service is its local engagement with employers and the availability of “online” vacancy filling services to assist business and jobseekers alike.

4 Context of DEL’s work

DEL’s Contribution to the Programme for Government is summarized as follows:

PRIORITY: Growing A Dynamic, Innovative Economy

Actions: Increase by 300 the number of PhD research students at local universities by 2010

Introduce a new programme to increase the commercialisation of university and college research by 2010.

Goals: Increasing the employment rate from 70% to 75% by 2020

Ensuring by 2015 that 80% of the working age population is qualified to at least GCSE level or equivalent.

Increasing the number of adult learners achieving a qualification in literacy, numeracy and ICT skills by 90,000 by 2015.

Increasing by 25% the numbers of students, especially those from disadvantaged communities, at graduate and postgraduate level studying Science, Technology, Engineering and Mathematics (STEM subjects) by 2015.

PRIORITY: Promote Tolerance, Inclusion And Health And Well-Being

Actions: Introduce in 2008 a new Employment and Support Allowance to enable those unemployed due to ill-health or disability to return to work.

Put in place by 2010 a careers advice service to meet the needs of people with disabilities.

In carrying out its business DEL will contribute to the following Public Service Agreements (PSAs):

Productivity Growth - Improve Northern Ireland’s manufacturing and private services productivity
Skills for Prosperity - Ensure our people have the right skills to deliver economic prosperity now and in the future and increase skills and career choices in STEM subjects
Increasing Employment - Increase employment levels and reduce economic inactivity by addressing the barriers to employment and providing effective careers advice at all levels
Children and Family - To ensure that children are cared for, live in safety, are protected from abuse, receive the support they need to achieve their full potential, become more independent and grow into well adjusted adults, taking their place in the community
Helping our Children and Young People to Achieve Through Education - Encourage all our children to realise their potential by improving access to formal and non formal education and provision tailored to the needs of disadvantaged children and young people.
Housing, Urban Regeneration and Community Development - Promote decent, energy efficient, affordable housing and regenerate disadvantaged areas and towns and city centres, and support community development to create environments which enhance quality of life and contribute to well-being
Investing in The Health and Education Estates Take forward a programme of investment to provide a modern fit-for-purpose health and education estate in line with best practice and ensuring value for money

5 Relevance of DEL’s work to the issue of the eradication of renewable energy/alternative land use

DEL has indicated its commitment to the principles underpinning the Sustainable Development Strategy and the associated targets, including those relating to renewable energy. DEL’s core business of skills and employment has greatest relevance to the actions and targets for Sustainable Communities. Also, DEL’s ability to exert influence over its delivery partners is limited to that of encouraging good practice in matters such as Sustainable Development. Further and Higher Education Institutions are autonomous bodies responsible for the conduct of their own affairs.

As part of the Government estate, DEL does not procure energy in its own right. This is centrally procured by the Department of Finance and Personnel (DFP), however, any decisions that would have cost implications for other Departments would be subject to their agreement. As part of this process, DEL has committed to a Framework Tender by Engineering Services and Energy Unit of DFP. It is understood that currently 25% of total consumption is “Green” energy.

5 Delivery partners

As indicated previously, Further and Higher Education Institutions are autonomous bodies responsible for the conduct of their own affairs. However, DEL is aware of a number of initiatives and activities within FE and HE that are relevant to the issue of renewable energy. The following information on these may be of interest to the Committee in the context of its enquiry.

Higher Education

The Department encourages the Higher Education institutions to adopt best practice policy and guidance in relation to Sustainable Development, including renewable energy. This includes promoting sustainable development as a key criteria in capital funding rounds and encouraging the institutions to avail of alternative funding sources, such as the annual Energy Efficiency call by the Department of Finance and Personnel.

By way of example Stranmillis University College recently incorporated a biomass boiler into the new build Orchard Project, which was funded by the Department. The inclusion of the biomass boiler as an alternative heating source, supported by innovative design features incorporating the principles of sustainable development, ensured that the project was awarded a ‘Very High’ rating in the Building Research Establishment Environmental Assessment Model (BREEAM). BREEAM is the world’s most widely used environmental assessment method for buildings and is used to assesses buildings against a set criteria and provides an overall score which will fall within a band providing either a pass, good, very good or excellent rating.

Queens University Belfast incorporated into the design of its new library complex a process to recover waste energy from the computer suite to use to heat the remainder of the building.

Research

Publicly funded university research in the UK is funded under a system of dual support. The four devolved funding bodies[1] provide grant to maintain the infrastructure necessary to conduct research, including staff salaries, premises, equipment, central computing and library costs, as well as funding for the training of postgraduate researchers and for the university to conduct its own directed — or ‘blue skies’ — research. This infrastructural funding is known as Quality-related Research (QR) funding, and is paid as part of the annual block grant. It is up to the recipient university, as an autonomous institution, to distribute this funding according to its own priorities – there is no requirement to distribute funds along the same lines as the allocation process.

The second leg of the system consists in the public sphere of the Research Councils[2]. Researchers submit proposals to these bodies for specific research projects, which are subjected to a peer review process. In addition to these funds, researchers bid competitively for contracts advertised by charities, industry, government and the EU.

The Northern Ireland Universities are frequently commissioned to undertake projects on behalf of a variety of partners unrelated to the Department for Employment and Learning (DEL) or its work, renewable energy would be one example.

In addition to mainstream QR funding DEL funds a variety of “special” research initiatives such as the Support Programme for University Research (SPUR) and the Science Research Investment Fund (SRIF).

Within these DEL has funded the two Universities to carry out a variety of research projects, some of which have links into the renewable energy agenda - e.g. - Coastal Science & Engineering at QUB and Built Environment & Sustainable Energy Engineering at UU.

Further Education

FE colleges have embraced environmental studies within their curriculum and increasingly are incorporating renewable energy schemes into Public Private Partenrship (PPP) procurement for their estates. Recent innovations have included the installation of a biomass boiler in the Omagh Campus of South West College (see below). Initial performance figures are very promising and the college is now proposing to upgrade the system; also a number of colleges with capital projects at the design stage are investigating and benchmarking South West College’s renewable energy system in Omagh. The Omagh facility is also used to demonstrate the benefits of using renewable and low carbon emission energy, both to their students and the wider business community. The proposed new PPP Belfast Metropolitan College in the Titanic Quarter project is also seeking to use innovative and imaginative geo-thermal energy sources to reduce the ‘carbon footprint’ of the facility.

Although a developing subject area, Further Education (FE) colleges offer training on the installation of energy saving devices and equipment for domestic use. The FE sector recognises that the rural community should be encouraged to consider the potential for renewable energy including alternative land use. However, colleges detect a lack of confidence on the part of the rural community to invest in this area. FE colleges are happy to explore with farming and rural communities the training and education required to promote renewable energy and alternative land use.

The leading college in the development of renewable energy is South West College, which comprises of a merger of the former Omagh, Fermanagh and East Tyrone colleges.

South West College

South West College recognises that the renewable energy industry must be an integral element of other interdependent industries such as construction, engineering and electronics. The college is actively involved in the support, design, delivery and management of innovative and sustainable activities within the rural sector.

The College, through its Omagh Campus, has implemented a number of environmental projects, with industry support, in renewable energy applications, diversified land use and environmental management. These include:

development of a renewables farm (40 hectare);
installation of wood biomass heating and renewable energy demonstration technology at the College campus, providing 30% of the college’s current heating requirement. This will shortly be increased to 70% of the colleges heating requirement with the installation of a new bio-mass boiler;
research into use of short rotation coppice willow supply chain management and energy from farm waste applications;
energy and waste management applications from a 35 hectare farm;
the Renewable Energy Installer Academy; and
curriculum development to reflect renewable energy technology.

Camphill Community

In addition, South West College is a leading partner in the Renewables Project at Camphill Community, Omagh, which was set up by the Omagh Environmental & Energy Consortium.

This facility is a land based demonstration resource where renewable energy technologies and sustainable farming practices can be seen in action. Key renewable energy technologies which have been developed and installed on the site include:

20 kW wind turbine for electricity generation;
ground Source Heat Pump;
biomass (woodchip) fuelled district heating system;
solar water heating; and
2kW photovoltaic array for electricity generation.

Renewable Energy Installer Academy

The Renewable Energy Installer Academy (REIA), a pilot project funded

under the INTERREG programme as a joint initiative of ”Action Renewables” in NI and “Sustainable Energy Ireland” in ROI, was developed in response to the recognition that the lack of trained installers and specifiers is one of the critical barriers to the development of a sustainable renewable energy market.

A number of FE colleges have assisted REIA in developing training courses for the installation and servicing of solar water, heat pumps, biomass, wind, photovoltaic and hydro equipment. The colleges involved are North West Regional College, South Eastern Regional College and South West College.

Department for Employment and Learning
February 2008

[1] The Department for Employment and Learning (DEL), the Higher Education Funding Council for England (HEFCE), the Higher Education Funding Council for Wales (HEFCW) and the Scottish Funding Council (SFC).

[2] The Arts and Humanities Research Council (AHRC), the Biotechnology and Biological Sciences Research Council (BBSRC), the Engineering and Physical Sciences Research Council (EPSRC), the Economic and Social Research Council (ESRC), the Medical Research Council (MRC), the Natural Environment Research Council (NERC) and the Science and Technology Facilities Council (STFC). The Research Councils are part of the Department for Innovation, Universities and Skills (DIUS).

Department of Enterprise,
Trade and Investment

Department of Enterprise, Trade and Investment.ai

From the Office of the Minister

Netherleigh
Massey Avenue
Belfast
BT4 2JP
Tel: 028 90 529452
Fax: 028 90 529545
E Mail:private.office@detini.gov.uk

Our Ref: DETI COR 022/2008

Dr William McCrea MP MLA
Chairperson ARD Committee
Room 284
Parliament Buildings
Belfast
BT4 3XX

08 February 2008

Dear William,

ARD Committee Inquiry into Renewable Energy /Alternative Land Use

Your letter of 8th January 2008, which came into my Private Office at the end of January via the ETI Committee, invited me to submit evidence on the above issue.

My Department has overall responsibility for energy policy, including renewable energy, in Northern Ireland. In carrying out this role, DETI officials actively work with other Departments, including DARD, on a range of policy and operational issues to promote and develop renewable energy.

Northern Ireland currently has a renewable energy target of 12% of total electricity consumption to be met from indigenous renewable energy resources by 2012 ; of that 12%, 15% to be met from non-wind sources. Indigenous renewables, primarily in the form of large scale wind, currently account for just under 4% of electricity consumption. On the basis of existing installed capacity and projects which have received planning approval and are at different stages of development, it is expected that the 2012 target will be met.

The Northern Ireland Renewable Obligation (NIRO) is the main support mechanism for promoting renewable energy generation and it has been successful in encouraging renewable projects to date, particularly wind farms.

It is important, however, to encourage the growth of non-wind renewables to broaden the range of technologies commercially deployed in Northern Ireland to increase the use of renewables in energy for heat and transport, as well as electricity, and to assist towards meeting current and future renewable energy targets.

In this context, bioenergy can be expected to make an important contribution and, as I replied to Tom Elliott in a recent AQ, my Department established a Bioenergy Inter Departmental group ( IDG ) last year, to co-ordinate a more integrated and strategic approach to the development of bioenergy in Northern Ireland. The IDG comprises representatives from DARD, DOE, Invest NI, DRD and DFP. This co-ordinated approach will enable Northern Ireland to optimise the potential benefits across energy, agriculture, enterprise, transport and environmental sectors and contribute to renewable targets and greenhouse gas emissions targets.

On behalf of the IDG, DETI has appointed AEA Energy &Environment to assess the potential for the sustainable development of bioenergy in Northern Ireland - the Terms of Reference for this work are attached. The results of this study are intended to inform the development by the Bioenergy IDG in 2008-09 of a Cross Departmental Strategy for the sector. The outcome of the ARD Committee inquiry will also be considered by the IDG.

I am copying this response to Mark Durkan as Chair of the ETI Committee.

Nigel Dodds.ai

Nigel Dodds OBE MP MLA

DETI - Assessment of the potential for Bioenergy development in Northern Ireland

Terms of Reference

Background

1. The Department of Enterprise Trade and Investment (DETI) is responsible for the development and maintenance of an appropriate legislative and policy framework for energy in Northern Ireland and published “Energy – a Strategic Framework“ in June 2004. The vision is for a competitive, sustainable, reliable energy market at the minimum cost necessary. Four key policy goals were identified to support this vision as follows

Reducing energy costs
Building competitive markets
Enhancing sustainability in energy and
Reliable energy supplies.

2. The agenda for developing renewable energy solutions and securing real reductions in energy consumption to enhance sustainability is driven by environmental policy, aimed at reducing harmful emissions. However, pursuing sustainability in energy also offers opportunities to enhance security of energy supply by introducing alternative generation sources, which are not subject to the price volatility of imported fossil fuels. Furthermore, development of indigenous sources offers opportunities for diversification and alternative sources of income within the agricultural and rural communities.

3. To date the renewables emphasis has been on replacing fossil fuel-generated electricity with renewable sources and this is being met primarily from wind which is currently the most readily available and commercially exploitable resource. However, the increasing international focus on addressing climate change and, in particular, the new EU 2020 targets for renewable energy DETI is therefore seeking to promote the sustainable development of all forms of renewable energy sources and, specifically, now wishes to assess the potential of the bioenergy sector in Northern Ireland.

Bioenergy

4. Bioenergy is a form of energy that includes biomass - plant and animal matter and organic waste; biofuels – biodiesel from oil crops or waste oil and bioethanol from wheat or sugar crops, and biogas from anaerobic digestion. It is renewable, sustainable and considered “carbon neutral” as greenhouse gases emitted in its use are balanced by the absorption of such gases during the growth of the organic source material.

5. Energy can be divided into three separate market sectors i.e. electricity, heat and transport – each representing about one third of UK energy consumption. Bioenergy technologies can be used as a fuel source in each of the three sectors to contribute to energy security and diversity, a reduction in greenhouse gases, long term replacement of fossil fuels and opportunities for increased diversification and employment in the agricultural sector.

Cross Departmental approach

6. The range of sources and potential uses of bioenergy as well as the sectors’ potential economic implications give it a significance beyond DETI’s energy remit. Chaired by DETI, the Bioenergy Inter Departmental Group was established to co-ordinate, across Departments/Agencies/NDPBs, a more integrated and strategic approach to the development of the Bioenergy sector in Northern Ireland. Membership includes Department of Agricultural and Rural Development, Invest NI, Department of Regional Development, Department of the Environment and Department of Finance and Personnel. This approach will enable NI to optimise potential benefits of bioenergy across energy, agriculture, enterprise, transport and environment sectors and also contribute to the relevant EU and UK legislations and targets on renewable energy.

7. An internal scoping exercise across Departments, undertaken by the IDG, into current roles and actions in relation to the sector has identified the need for further work to assess the potential for future sustainable growth and development of the bioenergy sector in Northern Ireland. A resume of the key issues arising from that study is attached at Annex A.

Aim

8. DETI, on behalf of IDG, wishes to appoint a consultant to;

a. undertake an independent assessment to identify and quantify the current scale, future sustainable growth potential and optimum size and scale of the bioenergy sector in Northern Ireland and

b. make recommendations to inform the development of an action orientated cross departmental Bioenergy Strategy. While the focus will be on identifying actions to be undertaken within the first 3-5 years, attention should also be given to longer term ( 5-10 years) planning.

Contract Requirements

9. The assignment will address the following key objectives:

An assessment of the current and future financial/economic viability of the NI bioenergy sector and the scale of such a sector including its separate constituents (eg biomass, biofuels, biogas) and in terms of employment, sales, etc.
An assessment of the existing and potential market for NI produced bioenergy products and byproducts in NI, RoI and GB (with a sectoral analysis across the energy markets of electricity, heat and transport in private and public sectors).
An analysis of supply chain implications including the existing and potential availability of all raw materials, capability and technology infrastructure, processing capacity, as well as distribution to storage issues.
An assessment of current R&D activity and innovation within the NI sector, including that undertaken by Universities/Research Institutions, and the scope for future developmental activity.
An assessment of the potential for development of the sector to make a contribution to the proposed EC Energy targets for 2020 - 20% of all energy from renewable sources and 20% Green House Gas savings.
An examination of Bioenergy Strategies/policies in place in rest of UK, ROI to benchmark/identify best practice, case studies and opportunities for read across to NI.
A review and assessment of existing government measures to promote bioenergy development and identification and consideration of additional, if any, measures, including potential costs based on benchmark data, needed to enhance that development.

10. Full details of the methodology for carrying out the project, a timetable outlining the key activities and timescales involved in the project with the names and responsibilities of the staff involved in each key activity. Tenderers should also demonstrate their capability to complete the exercise within the stated deadlines and identify contingency plans should any proposed member of the team for reasons of illness or otherwise be unable to complete this project.

11. The submission must include the relevant experience and qualifications of the nominated staff together with specific examples of their experience in similar projects within the last three years. The proposed team must include nominated staff having energy experience relevant to the requirements of this project. Rather than providing exhaustive lists of previous experience, tenderers are asked to give their reasons why they believe the experience of the nominated staff to be relevant to this particular project. Concise CV’s must also be included.

Project Management and Timetable

12. The Project will be managed by a DETI –led Project Steering Group and the consultant will be asked to liaise closely with the Steering Group and submit regular reports ( frequency of written reports and meetings to be agreed ) to enable the review of progress. It is anticipated that full payment will be made upon satisfactory completion of the evaluation.

13. It is anticipated that the appointed consultant will be available to commence work w/c 17 December 2007 and provide a draft report, including recommendations, by 22 February 2008, with a final report available by 7 March 2008. Draft and final reports to be available electronically and in hard copy (25 hard copies of final report required).

Additional Information

14. A Bibliography has been provided below to enable consultants to familiarise themselves with the issues and existing research/strategies. The successful tenderer will also receive a copy of the internal IDG scoping study and a list of IDG/Departmental and sectoral contacts. The consultants will be responsible for delivering all other aspects of the assignment.

Equality Considerations

15. DETI is committed to achieving a successful economy in Northern Ireland which will provide equal opportunities for all. To this end, Section 75 of the Northern Ireland Act 1998 sets out a number of obligations relating to the nine ‘Section 75’ categories as follows:-

Religious belief;
Political opinion;
Racial group;
Gender;
Marital status;
Age;
Persons with disability
Persons with dependents; and
Sexual orientation.

DETI as a recognised public authority has an obligation under Section 75 as detailed in its Equality Scheme which can be accessed on the Department’s website at www.detini.gov.uk/Equality scheme .

16. The assessment must therefore consider equality aspects relating to the nine ‘Section 75’ categories by considering available data, identifying any adverse impacts that may be present and proposing alternative measures/policies which might better achieve the promotion of equality of opportunity.

17. The assessment must also consider the accessibility of the Strategy for all in line with the Disability Discrimination Act 1995.

Bibliography

EU Renewable Energy Road Map www.europa.eu
Renewable Transport Fuel Obligation Department for Transport www.dft.gov.uk
UK Biomass Action Plan Department for Environment, Food and Rural Affairs www.defra.gov.uk
Biomass Action Plan for Scotland Scottish Executive www.Scotland.gov.uk
Welsh Renewable Road Map Welsh Assembly Government www.Wales.gov.uk
Energy A Strategic Framework DETI June 2004 www.detini.gov.uk
Renewable Energy Action Plan DARD January 2007 www.dardni.gov.uk
NI Sustainable Development Strategy OFMDFM November 2006 www.ofmdfmni.gov.uk
Bioenergy Action Plan for Ireland ROI February 2007 www.dcenr.gov.ie
Northern Vision Study including prospects for bioenergy in NI to 2050. Carbon Trust
www.carbontrust.co.uk

Bioenergy IDG Scoping Exercise

Annex A

In order to develop a more integrated approach, a scoping exercise was undertaken in the summer of 2007 to obtain a more comprehensive picture across Departments of their current role and actions in relation to the bioenergy sector as well as possible opportunities/barriers to further development.

Responses were sought and received from the IDG members -DETI, Invest NI, DFP, DARD, DOE and DRD and also from other departments as follows - DSD in respect of the Housing Executive; from DHSSPS, DEL and DE in respect of their specialised Estates ie Trusts, Health Boards, Hospitals and FE colleges and Schools.

The main results of the scoping exercise can be briefly summarised as follows.

Key Drivers for current involvement with the sector

Departments noted a range of EU Directives and National Strategies as the main drivers – Kyoto Protocol, EU Energy and Environmental Strategies , Landfill and Nitrates Directives, Renewable Transport Fuel Obligation , Renewables Obligation, UK Biomass Action Plan, Waste Management Strategies, NI Sustainable Development Strategy and Planning and Environmental Regulations
More specifically at Departmental level – DETI’s Strategic Energy Framework, DARD’s Renewable Energy Action Plan , PPS12 and 18, Carbon Neutral Government Estate and Fuel Poverty issues.

With which part of the sector are departments involved?

All responses noted involvement with the biomass sector - for those with responsibility for property/specialised estates (DFP, DHSSPS, DE and DEL), this related to the installation of biomass boilers for heating.
DETI, DARD, Invest NI and DOE noted involvement with biomass (including animal and plant waste), biofuels and biogas in relation to both policy and operational (grant/support/planning) aspects.

Support programmes

By far the largest and broadest range of financial support for the sector is available from DARD/Agri Food and Biosciences Institute (AFBI ) both in terms of financial support for individual projects and research for the benefit of the sector as a whole.
Invest NI has supported the biomass and biofuels sectors with technical assistance and some limited financial support. Bioenergy projects would be eligible for Invest NI’s mainstream support where they meet standard eligibility criteria.
DETI’s Environmental and Renewable Energy Fund (EREF) and DFP’s Central Energy Efficiency Fund (CEEF), while not directly supporting the sector, have offered financial support to public and private sector to use bioenergy technology, mainly biomass for heating.
Through the NIRO, electricity generated from biomass is eligible for Renewables Obligation Certificates ( ROCs) which have a value and can be traded.
On a UK basis, biofuels producers are entitled to a fuel tax reduction and from April 2008, the introduction of the Renewable Transport Fuel Obligation on UK transport fuel suppliers is aimed at encouraging the production of biofuels to meet increasing demand and the requirements of the EC Biofuels Directive.

Opportunities

The sector represents a renewable, carbon neutral addition to NI’s energy needs across electricity, heat and transport sectors.
It can make a contribution to reduction in CO2 levels to address Government targets but should not be seen as the sole solution to CO2 emissions.
It can contribute to employment and diversification opportunities for the rural economy.
It can contribute to other Government policies in particular a number of policies/actions drawn together within the NI Sustainable Development Strategy eg Waste Management Strategy, Carbon Neutral Government Estate.

Barriers/Issues

Economics/costs – small operations/ peripherality leading to marginal businesses; absence of oil refineries in Ireland; high capital costs; lack of financial incentives for biomass heating unlike renewable electricity; costs of biomass boilers not taken over whole life; potentially higher running and maintenance costs;
Technology issues – lack of understanding /knowledge of the technology; quality/reliability issues ( biomass and biofuels) ; vehicle manufacturers’ guarantees ( biofuels )
Supply issues – lack of knowledge of the size and scale of the sector; supply chain problems; reliability and continuity of supplies ( feedstocks and finished product ) both for producers and customers for biomass and biofuels ; too many small operations with limited marketing and services; need for greater reliability/improved and consistent standards;.
Sustainability issues – possible negative impact on biodiversity/environment; land use concerns ie availability and suitability; overall sustainability of energy crops; energy v food concerns.
Planning/regulatory issues – time taken to gain planning approval; potential difficulties in meeting regulatory regimes.

Department of Environment

NIA Logo (Black).ai

Mr William Long
Assistant Clerk
Room 247
Parliament Buildings
Stormont Estate
BELFAST
BT4 3XX

Tel: (0)28 9052 1240
Fax: (0)28 9052 1795
Email: william.long@niassembly.gov.uk

Paul Carlisle
Clerk
Committee for Agriculture and Rural Development
Room 284
Parliament Buildings
Stormont
22 January 2008

Dear Paul

Inquiry into Renewable Energy/Alternative Land Use

The Committee for the Environment considered your correspondence dated 8 January 2008 and the attached letter to Arlene Foster, Minister of the Environment has been passed to her as requested.

The Committee also advises that it has no comments to make on the above Inquiry at this moment but that it may wish to input at a later date.

The Committee for the Environment has asked to be kept informed of the progress of the inquiry into renewable energy within the farming and rural community.

Yours sincerely

William Long
Assistant Clerk to the Committee for the Environment

Department of Finance and Personnel

Written Evidence to the Committee for Agriculture and Rural Development on Renewable Energy/Alternative Land Use

1. The recent and current policy framework for the development of renewable energy in Northern Ireland, focussing on but not limited to those policies developed and implemented by the Department of Agriculture and Rural Development.

1.1 The Department of Finance and Personnel (DFP) through its public sector procurement and property management remit is taking forward a number of policy initiatives that will have positive implications for renewable technologies within Northern Ireland. In turn it is likely these measures may open opportunities for the agricultural industry within Northern Ireland through alternative land use for biomass materials.

1.2 The Central Energy Efficiency Fund (CEEF), which is administered by Properties Division within DFP, was set up in 1993 to provide financial support for measures to improve the energy efficiency of buildings occupied by Northern Ireland public bodies which could not be funded from existing budgets. In 1996, its scope was extended to include support for projects to reduce the emission of carbon dioxide, the main greenhouse gas.

1.3 The Fund provides support for projects in all areas of the NI public sector, including District Council properties, E&L Boards, Health and Social Services facilities and related NDPBs as well as Government offices. However, resources are limited, with £2million available for projects in 2008/09 and applications to fund exceeding £10million. Proposals are therefore ranked in merit order based on benefits/costs ratio and payback basis with funding awarded to the most effective schemes.

1.4 Recent years have seen an increase in the number of proposals for renewable energy technologies across the public sector. For example in 2004/05, the Central Fund awarded £114,000 to renewable energy projects; however this had grown to more than £1.1 million in 2007/08.

1.5 In November 2006, an amendment to the Building Regulations (NI) 2000 came into operation. This included an amendment to Part F (Conservation of fuel and power) that has improved standards by approximately 40%, with a corresponding reduction in carbon dioxide emissions. The methodology introduced by the amendment allows designers to meet the new standards in a manner best suited to the specific circumstances of each building, which may include the use of low or zero carbon technologies. Although the Minister, Peter Robinson recently decided not to require renewable technologies in all new buildings the targets set by the building regulations are deliberately onerous and encourage the use of such technologies. The supporting documents to the regulations provide solutions that encourage and facilitate the integration of microgeneration in buildings.

1.6 The Central Procurement Directorate (CPD) in DFP is currently working with the Centres of Procurement Expertise (CoPE), through the Sustainable Construction Group (SCG), to develop practical guidance on sustainable construction design which incorporates low carbon and low energy design. The use of Renewable Energy Technologies (RET) will be an important systems strategy in implementing low carbon sustainable design. CoPEs will advise their clients on the feasibility and benefits of implementing RET on specific public sector construction projects.

2. The range of renewable technologies currently in operation or planned in rural communities, taking into account, as appropriate, similar projects elsewhere.

2.1 DFP, through Properties Division is primarily responsible for promoting energy efficiency within the public sector. Regarding renewable technologies, the Central Energy Efficiency Fund (CEEF) has funded a number of projects including wind turbines, hydro electric schemes and biomass systems throughout Northern Ireland. In relation to the DARD estate, the CEEF has provided financial assistance to 9 energy efficiency projects since 2001 at a total value of £231,226.

2.2 DFP’s Central Procurement Directorate (CPD) has advised DARD on the use of renewable energy technologies within the DARD estate and is currently managing the procurement of a £2.35m Environment and Renewable Energy Centre (EREC) at AFBI Hillsborough. The EREC will incorporate an anaerobic digester and biomass boilers. Some of the biomass fuel will be obtained from chipped willow and miscanthus grass grown within the AFBI estate and forest brash collected from the adjoining forest. One of the main objectives for the EREC, as a pathfinder project, is to provide practical demonstration of the potential applications of RET in farm and rural businesses and rural communities. Solar thermal and photo voltaic RETs will be installed in other AFBI buildings at Hillsborough and will reduce the sites overall carbon footprint.

2.3 In addition CPD and Properties Division have provided guidance and project management support on a number of renewable technology projects financed through the Environment and Renewable Energy Fund (EREF) directly to DARD, summarised below:

Greenmount Wind Turbine – Properties Division installed a 5kw wind turbine.
Loughry Biomass Boiler – Properties Division installed a 150kw biomass boiler.
Loughry Wind Turbine – Properties Division currently on site to install a 15kw wind turbine.
Greenmount multi fuel boiler – project currently with CPD.
Enniskillen equine waste boiler – project currently with CPD.

3. The relative importance in terms of contributing to Governments renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable sources, and how relevant each could be to the NI economy.

In relation to the Government Estate the Department has set the following targets:

To make the Government Estate carbon neutral by 2015;
To source at lease 10% of its electricity requirements from renewable sources by 31 March 2008;
To reduce absolute carbon emissions from fuel and electricity used in buildings by 12.5% by 2010/11 relative to 1999/2000;
To increase the energy efficiency of the buildings (measured in kilowatt-hours of fuel and electricity used per square metre of floor area) by 15% by 2010/11 relative to 1999/2000;
To reduce water consumption by 3% by the end of 2011/12 relative to 2008/09.

4. The range of support available to renewable initiatives at local, national and European levels.

4.1 DFP has a permissive power to promote energy efficiency across the public sector. One of the major ways this is done is through the Central Energy Efficiency Fund (CEEF). This is a scheme which supports energy efficiency schemes submitted to it from across the public sector by means of financial support in the form of a grant. This fund is however limited and applications are heavily over-subscribed year-on-year. For example 188 applications have been made to the 2008 fund at a total value in excess of £10million for a total available fund of £2million.

4.2 Bids are invited each autumn for implementation the following financial year and must meet certain eligibility criteria including minimum capital cost and payback. All other forms of funding must have been explored before a Central Fund bid can be accepted. All projects are considered by an Energy Working Group made up of Departmental representatives and independent advisers. There is no quota system for Departments or other bodies and allocations are awarded on a competitive basis with projects demonstrating the most effective benefit cost ratio offered funding up to the limit of funds available.

5. To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it.

DFP has no evidence to provide to this term of reference.

6. The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community.

DFP has no evidence to provide to this term of reference.

7. The ways by which the Department of Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to the sustainability of the agricultural/rural sector and contributes to Northern Ireland’s renewable energy targets.

7.1 Government within Northern Ireland has a duty to serve as an exemplar to the wider community in sustainable development and renewable technologies. As a major occupier within the Government Estate, DARD has an opportunity to promote a renewable energy programme within its own managed estate and contribute to the achievement of a carbon neutral estate; however this will require a financial commitment by DARD.

7.2 In 2006/07, DFP secured funding from the Environment and Renewable Energy Fund to install a biomass heating system on the Stormont Estate and photovoltaic panels and other renewable technologies within the Government Office Estate. As there were limited possibilities of installing these technologies in the office estate the proposal was extended to include the Veterinary Services buildings on Stoney Road and other buildings across the DARD estate. As DARD was unable to commit the revenue to fund the cost of capital for the grant the project was subsequently downscaled to a much smaller biomass system and the installation of renewables in DFP managed buildings only.

Farm Woodlands

Inquiry into Renewable Energy & Alternative Land Uses

1. Introduction

1.1. Our company, Farm Woodlands Ltd, is primarily involved in the establishment and management of private woodlands for farmers and landowners. Since our inception in 1992, we have been based in Co. Tyrone and have extended our client base from initially operating in Tyrone, Fermanagh & Armagh to now operating throughout all counties of Northern Ireland.

1.2. We operate as an intermediary between the Forest Service and landowners in the operation of the Woodland Grant Scheme (WGS) & Farm Woodland Premium Scheme (FWPS) providing practical expertise in the development of private woodlands. The WGS provides a fixed rate grant for the initial establishment of new woodland. The FWPS is an annual payment to landowners (for a maximum of 15 years) to compensate for the loss of income from the land planted under the WGS.

1.3. Our company plants on average 200 Ha of new woodland per year, in Northern Ireland on agricultural land, thereby helping the Forest Service to achieve its current stated target of 450 Ha new woodland per year.

1.4. Given the extent of our experience, we welcome this opportunity to comment on the development of renewable energy within the rural economy and alternative land uses. Obviously we have particular interest in the potential of the forestry sector to meet the stated objectives of this inquiry and have some suggestions as to how the industry might be further developed to achieve this.

2. Wood Energy & Farm Forestry

2.1. It is our belief that wood from forestry, more than any other renewable energy source, will play a major role in our climate change strategy and contribute significantly to the creation of sustainable employment.

2.2. Farm forestry private woodland, is a growth industry in every sense of the word. With the implementation of the Single Farm Payment, the dependency of the farming community on the subsidy system is quickly being replaced with an eagerness to embrace the new opportunities being presented, particularly in relation to timber products and the wood energy market. However, the willingness of landowners to adapt must be matched by a meaningful national development plan that is committed to this rural-based industry and the new wood energy market that is rapidly emerging.

3. Private Forestry Sector Funding

3.1. Our Devolved Administration must lead the way by adopting the best practices in forestry that have been successful in Scotland and in the Republic of Ireland. We have an all-island electricity market in place; the natural extension is an all-island renewable energy policy, whereby the forestry sector is centre stage.

3.2. The success of the private sector’s contribution in this respect, is directly related to the grant structures which are necessary to maintain security of wood supply. A simple comparison of the woodland grant rates in these three regions is shown below. It highlights the gap in funding that exists in the private forestry sector, particularly between both regions of this island.

Woodland Grants - Comparison

Region	Establishment Grants	Annual Payments
Northern Ireland	Broadleaves: £1,850 / Ha Conifers: £1,250 / Ha 1st Instalment 70% 2nd Instalment 30% after 5 years No future management	£160 - £270 / Ha Paid for either 10 or 15 years Taxable income
Scotland	Broadleaves: £1,470 / Ha - £1,575 / Ha plus £770 / Ha - £805 / Ha maintenance Conifers: £840 / Ha - £980 / Ha Plus £560 / Ha - £665 / Ha maintenance Additional funding for fencing, weed control, pruning, thinning & felling	£160 - £300 / Ha Paid for either 10 or 15 years Taxable income
Republic of Ireland	Broadleaves: £3,713 / Ha - £5,431 / Ha stg Conifers: £2,438 / Ha - £2,805 / Ha stg (€ to £ stg conversion 1.4) 1st Instalment 75% 2nd Instalment 25% after 4 years Additional funding for fencing, pruning, thinning & road construction	Broadleaves: £362 / Ha - £410 / Ha stg Conifers: £172 / Ha - £362 / Ha stg (€ to £ stg conversion 1.4) Paid for 20 years Non - taxable income

Region

Establishment Grants

Annual Payments

Northern Ireland

Broadleaves: £1,850 / Ha

Conifers: £1,250 / Ha

1st Instalment 70%

2nd Instalment 30% after 5 years

No future management

£160 - £270 / Ha

Paid for either 10 or 15 years

Taxable income

Scotland

Broadleaves: £1,470 / Ha - £1,575 / Ha plus £770 / Ha - £805 / Ha maintenance

Conifers: £840 / Ha - £980 / Ha

Plus £560 / Ha - £665 / Ha maintenance

Additional funding for fencing, weed control, pruning, thinning & felling

£160 - £300 / Ha

Paid for either 10 or 15 years

Taxable income

Republic of Ireland

Broadleaves: £3,713 / Ha - £5,431 / Ha stg

Conifers: £2,438 / Ha - £2,805 / Ha stg (€ to £ stg conversion 1.4)

1st Instalment 75%

2nd Instalment 25% after 4 years

Additional funding for fencing, pruning, thinning & road construction

Broadleaves: £362 / Ha - £410 / Ha stg

Conifers: £172 / Ha - £362 / Ha stg (€ to £ stg conversion 1.4)

Paid for 20 years

Non - taxable income

3.3. It is of no surprise therefore, that the Republic of Ireland with its forestry budget of £86 million stg, (announced in December ’07) leads the way in terms of a structured approach to this rural industry; one which is currently worth £1.2 billion stg annually to the Irish economy (Farming Life 15/12/07). Perhaps this is something the various North-South Intergovernmental bodies should seriously consider.

3.4. Currently, funding for the forestry sector in NI is compared with traditional agricultural income, which has remained relatively static in the region. Instead forestry, especially private forestry, needs to be recognised as a separate, rapidly growing industry with immense potential both economically and environmentally.

3.5. Our countryside needs cattle, sheep and people, but properly planned tree planting, is one of the most environmentally friendly uses to which we can put our land and which at the same time, directly increases the sequestration of carbon from the atmosphere.

3.6. The Forest Service in its various Annual Reports has stated that expansion of state-owned forestry is limited due to land prices. The logic should therefore be, to encourage expansion of privately owned woodlands where land purchase is not an issue.

3.7. In NI there are extensive areas in the lowland (LL), disadvantaged (DA) and severely disadvantaged (SDA) land categories that are suitable for private planting. These areas remain unplanted because the current rates of woodland grants, do not adequately compensate landowners for the long-term commitment they make, when planting trees on their land. To achieve this, grants need to be increased substantially. The much-hyped Forest Service review in 2007 only succeeded in fudging some figures. In reality, establishment grants (WGS) in NI have not changed at all in the last 10 years. Annual payments to landowners (FWPS) for income foregone on the planted land have only increased by £10 in the same time.

3.8. If annual payments cannot be tax-free, then landowners need to be reimbursed for the carbon sequestration of their plantation. Governments are talking about climate change strategies – woodland owners are currently doing it.

4. The Future

4.1. The rural community is pivotal in the development of all aspects of a renewable energy programme. Historically, farmer owned co-operatives and various producer groups have been a feature of the agricultural industry. That expertise can now be harnessed in the expanding wood energy market to establish supply chains for various building developments both in rural and urban locations. To this end, there needs to be a commitment from the development sector, perhaps backed by planning changes, making incorporation of renewable technologies into private and public building design compulsory.

4.2. In conjunction with this, there needs to be an updated inventory of woodland cover in NI. This inventory needs to determine the amount of state forestry, private forestry, semi-natural woodland and scrubland with potential for wood production. Once completed, timber production forecasts can be made, which are necessary to keep the indigenous energy market sustainable. The role then, of short rotation coppice (SRC) plantations such as Willow or Miscanthus can be, to quickly supplement the main wood energy market in times of potential shortfall. SRC plantations, by their nature are better suited to the drier, fertile farmland areas below 100m ASL. This results in much of NI farmland being unsuitable for its production. Therefore, while SRC does have some role in the wood energy market, it will predominantly be the private broadleaf and conifer plantations that will drive and sustain our wood energy market.

5. Additional Landuses

5.1. Although the expanding wood energy market is the main focus of our submission, being a rural-based company we are very much aware of other land uses that could potentially play an important role in the NI renewable energy programme. For example, there are vast areas of exposed, hilly farmland that could support clusters of small-scale windfarms. It is neither necessary nor desirable to locate windfarms in upland blanket bogland due to the sensitivity of that habitat. Instead, an appropriate programme could be formulated that would encourage landowners to diversify into windfarming.

5.2. Similarly, the use of anaerobic digesters for the treatment of various animal slurries, both on an individual farm and on an industrial scale, is a renewable technology which has not received enough consideration or promotion. There are various successful working examples of this technology in both the Republic of Ireland and on the mainland. Again as stated previously, our system of farmer co-operatives is ideally suited for such enterprises to be successful and to contribute enormously to the Governments target for electricity generation from such renewable sources. A more widespread use of anaerobic digesters throughout NI would be a more sustainable means for landowners to meet their obligations under the Nitrates Directive and help reduce the continuing pollution of our waterways.

6. Concluding Remarks

6.1. In conclusion, renewable energy, particularly the wood energy industry in NI is at a crossroads. Where it goes from here will largely be determined by the Assembly’s willingness to seize the new opportunities of contributing to the sustainability of the agricultural and rural community, for the benefit of the entire region and its economy. Failure to grasp the importance of these exciting times will force existing woodland owners to look south of the border to market their produce and the loss to the NI economy will undoubtedly be self inflicted.

Farm Woodlands Ltd is willing to explore the ideas and discuss the points expressed in this submission further, if invited to do so.

Mr Willie Mc Kenna BSc, MBiol, MSIF
Mr Cathal Woods BSc,
Dr Kathleen Mc Kenna BSc, PhD

30th January 2008

Green Energy Ltd

Version 1
22/02/2008

Background.

When asked by others what I do for a living, I still reply that I am a farmer. Not so much in the usual aspects of animal husbandry or cereal production, but in a new farming enterprise – energy crop production.

When faced with a general decline in agriculture and falling income levels, I decided to adapt a new approach to the one most important element a farmer has, his land.

With concerns over global warming and high fuel prices, I decided to enter the energy crop production field (excuse the pun !)

Since 2004 I have diversified from dairy and cereal production and have planted short rotation willow coppice and miscanthus grass as the main crops. These crops will supply fuel for heating and electricity production locally.

To help increase market awareness to renewable technologies and fuels, myself and a business partner, formed a new company called Green Energy Solutions Ltd. We aim to help bring together the growers of energy crops with the end users, i.e. industry, commercial, domestic, schools, churches etc. We also provide a range of equipment which can utilise locally produced fuel.

Introduction.

Miscanthus grass as an alternative land use and a fuel source.

1. What is miscanthus grass ?

2. What are the main benefits ?

3. How well suited is it to local climate ?

4. Can local farmers grow this crop ?

5. Economic benefits.

6. Report.

1. What is miscanthus grass ?

Miscanthus species are woody, perennial, rhizomatous grasses, originating from Asia which has the potential for very high rates of growth. Miscanthus may be familiar to many as a flowering garden ornamental, but it is the non-flowering forms that are of interest agriculturally.

Miscanthus is planted in spring and canes produced during the summer are harvested in winter. This growth pattern is repeated every year for the lifetime of the crop, which will be at least 15 years. Miscanthus differs from short rotation willow coppice in that it gives an annual harvest and thus an annual income to the farmer.

Miscanthus spreads naturally by means of underground storage organs (rhizomes). However, their spread is slow and there will not be any uncontrolled invasion of hedges or fields. These rhizomes can be split and the pieces re-planted to produce new plants. All propagation, maintenance and harvest operations can be done with conventional farm machinery. In the UK, long-term average harvestable yields from mature crops have exceeded 13 dry tonnes per hectare per year (t/ha/yr). These high yields suggest that the crop has the potential to make an important contribution to the UK’s commitments to energy generation from renewable sources.

2. Benefits of Miscanthus grass.

Being classed as CO2 neutral, this means the plant absorbs, during the growing cycle, most of the harmful emissions it produces when burnt as a fuel. In terms of energy value, it has a net calorific value, on a dry matter basis, of 17 MJ/kg, with a 2.7% ash content. The energy value of 20 tonnes of dry miscanthus would be equivalent to that of 12 tonnes of coal.

Two studies comparing miscanthus grass with cereals, indicated that miscanthus seemed to provide a habitat which encourages a greater diversity of species than winter sown cereal crops. In these studies three times as many earthworms and spiders were found in the miscanthus crop and five times more mammal species and four times more bird species than a crop of wheat.

3. How well suited is it to local climate ?

Most lowland agricultural sites should be suitable for miscanthus cropping, with the highest yields coming from deep, moisture retentive soils. Miscanthus has been reported growing, and producing high or reasonable yields on a wide range of soils – from sands to high organic matter soils. It is also tolerant of a wide range of pH, but the optimum is between pH 5.5 and 7.5. The potential cropping zones for miscanthus are quite widespread.

4. Can local farmers grow miscanthus ?

Although it is a new crop to Northern Ireland, no specialist knowledge or management skills are needed in the production of miscanthus. Basic cereal crop husbandry is used to prepare the site for planting, and general crop husbandry is used in the regular maintenance of the crop.

Conventional farm machinery can be used for all harvesting and maintenance requirements. As the crop has a life expectancy of at least 15-20 years, it only has to be planted once, unlike cereals which require a planting every year. Also miscanthus requires little or no artificial fertilizer, and virtually no chemical sprays. Both measures mean less labour input and lower economic input costs.

5. Economic benefits.

After the initial planting a miscanthus crop has virtually no other costs. With rising fuel prices worldwide, a good financial return can be made from this crop. As large industries are seeking to lower their carbon footprints, farmers have the option to secure long-term supply contracts (5 or 10 year). This can give stability to the energy crop farming sector, compared to most other farming enterprises. Also the farmer can control his market, by supplying directly to the end user and not working through a middle man.

6. Report.

To prove the suitability of miscanthus grass in Northern Ireland, I planted 1.0 hectares (2.5 acres) in May 2007. The crop has successfully established and looks set to provide a substantial yield. Already there has been a lot of interest in the local farming community with orders for this spring planting. Last year in the Republic of Ireland over 400 hectares ( 1000 acres) were planted. This states just how far Northern Ireland has fallen behind in the energy crop area.

Trials are currently undergoing at AFBI Hillsborough, by Dr Lyndsay Easson on miscanthus grass production. If this crop is to succeed, planting grants must be made available to farmers. There are many large industries and government departments expressing an interest in converting to renewable/biomass heating and power, but only if there is a secure fuel supply chain. On the other hand there are many farmers looking for an alternative land use, and are willing to grow energy crops, but only if there is a secure market for these crops.

It is a case of getting the crops in the ground as soon as possible, so that farmers can start to supply the local demand. We need to think ahead. If a crop is planted this spring 2008, it will not be fully established and yielding high tonnage of fuel until the year 2011.

Conclusion and invitation.

I am convinced that miscanthus offers a viable alternative to conventional farming practices. It is widely grown in mainland UK and the Republic of Ireland, where both governments are assisting growers with establishment grants, to help encourage the uptake of energy crop production.

The UK government identifies biomass-derived energy as one of the ways that it can achieve its obligations to the Kyoto Climate Change Protocol of reducing greenhouse gas emissions by 12.5%. It has a target to generate 10% of the nation’s electricity from renewables by 2010, and aims to reduce CO2 output by 20% relative to 1990 levels. These targets could mean the generation of 500 – 1000 MWe from biomass by the year 2010, an undertaking that would require as much as 125,000 hectares (310,000 acres) of energy cropping.

Pictures of miscanthus grass are available on our web site at www.greenenergyltd.com under products/energy crops.

Any interested persons or parties are invited to come and see the crop for themselves, and also see the benefits to local agriculture, economy and the environment.

John Martin
‘Clare House’
30 Ballynabraggett Road
Waringstown
Co. Armagh
BT66 7SH

T: 028 3888 1228
F: 028 3888 2445
E: john@greenenergyltd.com

The Housing Executive as
Home Energy Conservation Authority

Introduction

The Housing Executive as Home Energy Conservation Authority has an interest in renewable energy as a means of delivering energy efficiency within the domestic sector. Under the guidance to the Home Energy Conservation Act (1995) the Housing Executive was encouraged to consider the use of energy from renewable sources in meeting its energy efficiency targets. The Housing Executive has since carried out a number of pilot schemes and larger scale programmes involving renewable energy. The list of alternative energy sources installed in NIHE stock to date is;

Solar water heating panels – 1,500 dwellings (programme ongoing to 31/3/08)
Solar Photovoltaic panels (generate electricity) – 32 dwellings
Solar Ventilation systems – 56 dwellings
Micro-CHP systems (provide heat and electricity) – 10 dwellings
Wood pellet boilers – 4 dwellings
Ground Source Heat Pump – 1 dwelling
2.5Kw wind turbine – 1 dwelling

As Home Energy Conservation Authority for Northern Ireland, the Housing Executive feels that the farming community could contribute to the development of a renewable energy market involving;

Biogas (slurry and other farm wastes)
Biomass (wood chips and wood pellets)
Wind
Energy Crops

In particular the Housing Executive is convinced that there is a viable and sustainable role for farmers to produce energy crops in Northern Ireland. One successful model that a member of the Housing Executive’s staff has witnessed at first hand is that which is used in Austria. There, the use of biomass for the production of heat, hot water and electricity has;

Provided an alternative income stream for the agricultural community
Aided economic development in rural communities not only by assisting farmers but by providing a low cost alternative form of energy for local businesses and householders
Aided economic development generally to the point where Austria is now a world leader in the development, manufacture and supply of biomass plant and equipment.
Reduced Austria’s total reliance on imported oil and gas – this contributes to Austria’s security of supply for primary energy sources
Environmental benefits which assist Austria in meeting its targets for the reduction of harmful emissions produced by other fossil fuels
Alleviated fuel poverty by providing a lower cost alternative energy source

It is not being suggested that Northern Ireland is similar to Austria in terms of its geography or climate. However, it is the ideas and concepts which have been successfully developed in Austria that could equally apply in Northern Ireland. Although Northern Ireland, relative to Austria has little coverage in terms of forest acreage, by growing willow and other energy crops, the ideas developed in Austria could be implemented here for energy purposes.

Experience in Austria

The Austrians have created an entire industry around wood as a heating fuel within the last 20 years. Around 40% of Austria is covered in forestry. Biomass projects began in villages within mountain areas using wood chips to fuel central heating in the local school, civic buildings and houses – effectively mini district heating grids. The motivation was to do something for the environment and to provide an income stream for local farmers. The concept spread from village to village and the regional government then, observing the success of this concept, stepped in and provided subsidies to accelerate the development of further biomass installations. Austria is now a leader in the field of biomass and the production of the technology associated with it. It also has strategic benefits in that it reduces Austria’s dependence on oil and gas imports, as well as environmental and economic benefits. What has been achieved in Austria in a few short years in both biomass and solar thermal heating is very impressive.

Potential Application in Northern Ireland

In terms of replication in Northern Ireland, in the short term, the development of biomass as a realistic alternative to oil and gas may, like Austria, require Government subsidies to nurture the process, i.e. a strategic energy policy decision (by DETI) or an economic development decision to create an alternative market for the agricultural sector (DARD). Whilst the technology has been proven for some time, the local building industry did not embrace biomass in the past due to the relatively lower capital cost and convenience of oil and gas heating systems compared to higher capital costs associated with biomass boilers. Oil and gas heating systems were, in the past, relatively cheap to run for both businesses and households. Investors don’t tend to factor in the environmental and economic benefits but tend to assess schemes purely in financial terms. However, at todays much higher prices both for gas and oil, there is a growing interest in alternative fuels such as biomass and the capital costs associated with biomass boilers are now comparable to oil installations.

There are already a number of existing and potential major biomass projects within both parts of Ireland. Apart from Rural Generation’s biomass project in Brook Hall, Derry, and the Balcas project in Fermanagh, there is also a project involving 3 schools in Fermanagh. Similarly there are some existing and potential medium to large projects in the Republic of Ireland including one involving a hospital where an Energy Services Company will provide heating and hot water from a biomass plant. There is also an existing biomass project in Powys (Wales) where, in a small village, the school, community centre and 19 houses are heated from wood chips with an oil boiler as back up.

Another option for market development is local community groups who want to do something for the local environment and local economic development. Similar groups in Austria developed biomass schemes for local community or civic buildings. One successful project in Austria seemed to lead to the creation of many more in neighbouring villages. The Housing Executive for its part is carrying out field trials using single house boilers in small pilot schemes in Fermanagh and Ballymena with a view to establishing if they are a viable alternative to oil heating. This will test the performance of the systems over a complete heating season, the tenants’ reactions to them and issues around pricing and the supply chain. There are already plans for an extended field trial involving 30 Housing Executive dwellings. There are major opportunities for both existing Housing Association sheltered schemes and future newbuild schemes in social housing to provide biomass heating on either a district heating scale or using individual boilers. If the Austrian model was followed local farming co-operatives would not only supply the wood chips or pellets but would be responsible for operating and maintaining the District Heating boiler houses and for collecting revenue from users. Effectively farming co-operatives become Energy Services Companies (ESCOs). Alternatively, farmers could simply supply others who would operate the system.

Austrian Case Studies

Site 1 Wood Chip District Heating Plant. Like most Austrian projects it was a Design, Build, Own and Manage scheme by a Farmers’ Co-operative. Supplies heat and hot water to church, hall, pub, school, houses (most of village). When asked about bad debt the answer was that 98% of customers pay so it wasn’t a major problem. Ash is removed by farmer and used as fertilizer.

Site 2 Local community (village) wanted to do something for environment (cut down CO2 emissions). Local farmers set up a co-operative to supply wood chips and now they run a village District Heating Scheme. The idea came from community. The farmers main income comes from logging with the waste wood processed into wood chips for boilers.

Site 3 Forestry School. 1st Boiler lasted 20 years. The school wanted to do something for the environment and at the same time demonstrate to students how to use forest waste as an alternative energy source.

The ideas for the above came from the local community wanting to do something for environment whilst helping local farmers to supplement their income. Regional government supported this idea with subsidies. Local technology managers were appointed to help with filling in forms to apply for grants.

Potential problems and solutions

Whilst the Austrian experience has been one of considerable success in developing a thriving industry around both the manufacture of wood pellet boilers and the supply of fuel, there were initial problems. Other countries including, Northern Ireland, can learn from these and take on board the solutions recommended by the Austrians to ensure a smoother introduction of this technology. These problems and solutions are outlined below.

Community wide schemes

Problems

lack of quality of planning, grid design and construction – (leaks)
lack of expertise and know-how of operators
lack of monitoring and quality control
operators were farmers – not energy engineers and technicians.

Solutions

development of technical standards
training for planners and plant operators
continuous monitoring and benchmarking of plants

Single family boilers (automatic feeding, ignition and ash removal. Over 90% efficient and very low emissions – use pellets rather than chips).

Problems

lack of knowledge and initial resistance among installers (plumbers)
quality problems with boilers and pellets
pellet supply infrastructure
boiler service infrastructure

Solutions

installer training by boiler producers and biomass association
sales always via installers
boiler and pellet quality – standards set for both including storage and delivery
infrastructures – existing transport companies and fuel dealers

General Problems & Solutions

Dust among pellets affects performance of boilers. Dust emerges when pellets break up – pellets must not break up. Tracking system set up to identify which suppliers’ pellets were causing problems.
Care must be taken by delivery man when delivering pellets either to store or boiler to prevent them from breaking up, e.g. if dumped onto concrete floor. Delivery person must be trained in how to properly offload and store the product.
Technology was opposed by oil producers and suppliers – however independent suppliers see it as just another fuel to supply.

Solar

Many wood pellet projects are combined with solar power (water heating). The building industry was very conservative. Grants and subsidies for new housing were tied to use of renewals. Grants only given for new housing if they used solar and wood technology. New buildings – 60% of new buildings now combine these renewables. DSD would need to consider this, e.g. (Housing Associations).

General Feedback in Austria

There was lots of opposition to initial biomass projects from rival fuel suppliers. However, it uses local materials protecting the local environment and creating local jobs. It does not depend on imports of fossil fuels from thousands of miles away.
It was also initially opposed by housing developers who felt they would be “too expensive and too noisy”. Both of these potential problems did not materialise.
Housing developments were mainly built by non-profit private sector developers – similar to the Housing Association concept. However, this would explain why biomass is so popular in Austria as developers received subsidies and the more renewables used the greater the subsidy. Houses built by these non-profit developers are both for sale or rental. The tenure breakdown in Austria is about 50% owner-occupied and 50% rented.
To help biomass schemes develop, a company funded by Provincial Govt. was set up to help farmers and developers to establish projects.
Many of the projects are flats and apartments which are supplied with heat and hot water from a central boiler. However, there are many thousands of single dwelling boilers installed throughout Austria. There are various models from external boilers to stoves within dwellings including stoves that feed the central heating system.
Wood chips have to be dry. In wetter climates they are stored to keep dry and covered if left outside the main building.
In 2004 there are well over 100 major Biomass projects in Austria, 60 are public building/public sector housing, 45 residential blocks and 24 other commercial type buildings.

JW (Ian) Duff BAgr.,
MSc., MIAgrE., FRagS.

Introduction.

1. I make this submission as an individual with experience of the agricultural industry in general and in particular experience of recent activities to develop Short Rotation Coppice Biomass production and use in Northern Ireland.

2 I qualified as an Agricultural Engineer and retired from DARD in 2002 as Deputy Chief Agricultural Officer following 36 years work in various technical areas, including the early stages of development of SRC Willow harvesting equipment and Crop Production and Mechanisation advice.

3 Since “retirement” I have continued my involvement with the industry as a Partner in Ultimo Consulting. This involvement has included working with Countryside Services Ltd. on the technical aspects of the Energy Biomass Infrastructure Development Scheme (EBIDS) funded through the Programme for Building Sustainable Prosperity, and leading study tours sponsored under the Concordia Programme, to consider Biomass and particularly SRC Willow Biomass production and use, in Great Britain and Sweden.

4 I have no direct commercial interest in the sector at present but make the submission in the interest of the constructive development of the biomass energy sector and in particular the need to maximise the financial benefits to rural businesses and communities.

Scope of the Submission.

5. The substance of this submission is restricted solely to biomass in the form of wood chip for energy. The energy is mostly used for heat but has the potential for electricity generation through combined heat and power installations.

Present Situation.

Northern Ireland

6. Approximately 700 hectares of SRC Willow are now being grown in NI with an annual production potential of 7000 tonnes dry matter per year. This equates to something like 35 Mwhr of energy or 3,500,000 litres of heating oil -- considerable energy input to the local economy. Although overall the production of SRC willow is “carbon neutral” there is however a significant energy cost associated with this production for operations such as harvesting and wood chip drying.

Sweden.

7. This NI area is small compared to Sweden where some 18,000 ha of willow is grown by around 1250 farmers. All this material, is burnt as harvested, without any artificial drying.

8. A high proportion of the salix (willow) crop in Sweden is treated with sewage sludge from local authority treatment works – the resulting product (wood chip) being sold back to the municipality for use in district heating systems. These District Heating Systems provide over 50% of all heat use in Sweden and 23% of all Sweden’s heat requirements come for bioenergy sources, including sawdust, bark, forest thinnings / waste and willow chip.

Gap Analysis and Challenges -- Technical Development

Production.

9. Due to excellent work by DARD / AFBI at Loughgall, production systems are now well understood and documented. The excellent “Short Rotation Coppice Willow Best Practice Guidelines” compiled by Malcolm Dawson within the Interreg III “Renew” Project summarises the state of knowledge on this subject.

Utilisation.

10. Austria and Scandinavia have huge experience of boiler and fuelling systems for wood biomass. There is no doubt that the biomass material can be burnt efficiently and without pollution.

11. While SRC willow can be burnt as it is harvested (without treatment) in the right type of boiler, in the climate of NI, undried willow chip heats rapidly in store. This has two effects – firstly a loss of energy and secondly and more importantly the growth of thermophilic organisms such as the actinomycetes which cause “farmers lung” disease. The presence of such organisms within a commercially product to be used in amenity facilities, rural schools etc. is unacceptable from a health and safety perspective.

12. The critical technical challenges to the sector are found in the parts of the supply chain between production and use – and in particular, within harvesting and drying.

Harvesting.

13. Direct Chip Harvesting as pioneered by Rural Generation Ltd in NI, works well in crops grown on arable land but requires product to be dried immediately after harvest.

Whole stick harvesting as offered by Northern Bio Energy Ltd allows the crop to dry naturally in its own time and is well suited to small scale operations and more marginal land. Billet Harvesting is a compromise between the first two systems, in that a self propelled harvester cuts the willow sticks into 200 - 250 mm long billets. This system is used by Renewable Energy Growers in North-East England and in their conditions allows natural drying in heaps. It is not however currently available or tested in NI.

14. With harvesting forming a significant component of production costs, identifying the true field performance and costs of harvesting are critical. Recording of information was a requirement of the recent Energy Biomass Infrastructure Development Scheme (EBIDS) funding and so evaluation of existing practical systems, should be a priority for DARD / CAFRE / AFBI.

15. In addition, as the relative economics of arable and grassland production have shifted so the centre of SRC willow production seems likely to move away from arable land and to more marginal land. Work needs to be carried out on the production, and particularly, harvesting methods appropriate for such land.

Drying.

16. This applies primarily to direct chip harvesting but currently has an extremely high capital requirement ( at least £1850 per hectare grown) and significant running costs.

As part of the EBIDS programme supported by EU and DARD through the BSP programme,12 growers have been offered funding (up to 44% grant) to construct or adapt driers for willow chip.

17. With chip drying forming a significant component of production costs, identifying the true costs of different storage and drying systems is critical. Recording of information was a requirement of EBIDS funding and so evaluation of existing practical systems, and the innovation within these, should be a priority for DARD / CAFRE / AFBI.

18. Crop drying follows well proven thermodynamic and engineering principles. Any scientific study should involve rigorous mathematical modelling based on these principles, rather than time consuming and expensive replicated trials. There is scope for useful cooperation between the agricultural expertise and facilities at AFBI and the engineering expertise within Teagasc Oak Park Engineering Department.

Gap Analysis and Recommendations – Supply Chain Development

19. In my opinion, while there are still some technical challenges remaining, by and large these should be able to be overcome quite quickly through focused development. The major challenges overall, relate to development of supply chains and in particular stimulating sustained demand for the biomass produced, at a price which will provide adequate returns to producers and encourage growth of the sector.

20. DARD was very pro-active in stimulating planting of SRC Willow crops through the introduction of the Challenge Fund for Short Rotation Coppice Energy Crops. This was successful in achieving the existing area of SRC willow in NI and the requirement, within the Challenge Funding Scheme, to show where the crop would be used, encouraged market focus.

21. Unfortunately there is less evidence of equivalent effective action in other areas of Government to stimulate demand through encouraging the use of biomass energy in the government estate and commercial buildings, social housing etc.. The supply chain development is therefore largely being pushed from the supply side at some risk to producers, rather than pulled from the demand side. This situation is inherently unstable and the priority must now be to develop this sector by stimulating demand

22. Farmers are quick to react to commercial incentives, whether from government grants or the marketplace. They just require evidence of clear commercial benefits and confidence in the future, to adapt their business and make the necessary investment.

23. The new Short Rotation Coppice Scheme launched by DARD in 2007 provides much lower payments and less incentive to establish new biomass crops than the earlier Challenge fund. The grant rate is £1000 per hectare. This compares to the 2007 establishment costs quoted in the Short Rotation Coppice Willow Best Practice Guidelines, produced under the Renew programme, of 2730 euro (£1820) excluding any rabbit fencing which may be required. While the payment therefore helps offset the considerable costs involved, it will not encourage speculative production. Further stimulation of planting will have to (and should) come from the marketplace – the value of the product sold.

24. The “Short Rotation Coppice Willow Best Practice Guidelines” analyses the potential gross margin achievable from producing SRC willow as being euro 330 – 350 per hectare ( £90 to £95 per acre) , including the benefits of planting grants and the EU energy crop payment. This assumes a value for the biomass of euro 75 per tonne dry matter (£50 per tonne)

25. While it can be argued that increasing the establishment grant would help reduce costs; this is only of short term benefit over the 20 – 25 year life of the coppice crop. It also runs the risk of stimulating supply ahead of demand.

How can the income per unit area for farmers be increased?

26. There are effectively three ways in which this can be achieved;

Use of SRC willow plantations for bioremediation; and
Increasing the overall market value of the product; and
Maximising the proportion of the market value retained by the producer at farm rural community level.

27. Bioremediation is the use of willow crop’s exceptional ability to extract nutrient and non-nutrient elements from potential polluting waste, such as dewatered sludge cake from waste water treatment plants or dilute liquid wastes from farms and food factories. Such applications need to be carefully controlled and monitored but provide additional income which transforms the production economics. Some pioneering work is ongoing in NI and this approach needs to be encouraged and built on – provided of course that it meets relevant statutory requirements.

28. The market value of the product is naturally linked to the cost of alternative energy supplies, which on simplistic analysis with present high fossil fuel prices would justify wood chip prices considerably above the normally quoted figures of £50 to £60 per tonne DM. There are however significant barriers to government and private sector organisations installing biomass boilers; including conservative thinking, higher capital cost, concern about security of supply, and past experience of district heating systems. These barriers are such that risks will only be taken for short payback periods, which is in turn keeping the market price low. Government needs to incentivise biomass use for heat in the private sector through some means such as tradable heat credits (equivalent to Renewable Obligation Certificates or ROCs for electricity generation) and / or reduced industrial rates where biomass heat is used. At the same time it should impose mandatory use in appropriate situations within the public sector

29. Farmers have from time immemorial been “price takers” forced to share the value of their produce with the middle men, merchants, processors or supermarkets further up the supply chain and on whom they depend to supply the product to the ultimate customer or consumer.

30. The emerging biomass market provides a unique opportunity for farmers to maximise their share of the product’s value to the final user. To do this they need to move from selling wood chip or other biomass to selling heat, thus maximising returns for the whole supply chain; from production to use.

31. In so doing they will not only maximise their “added value” income but provide confidence to the users, who will naturally be conservative and concerned about the unfamiliar technology.

32. In moving from biomass producer to “heat entrepreneur” farmers will however be extending their business outside their existing experience and assuming risks and rewards beyond those associated with farming. They will be providing a service to customers and need to adopt a strong commercial approach – not unlike that required for diversification projects such as childcare, farm shops etc. For example it may at times be cheaper to use fossil fuels ( when heat demand is low during summer) and they may well have to source other biomass to supplement their own supply (whether from other farmers, waste recyclers, sawmills, or forest harvesting contractors). In many cases it will be appropriate to form Energy Supply Companies (ESCOs) with other growers and / or boiler supply companies).

33. This whole process of moving to “Heat Entrepreneurs” as they are called in Finland or establishing “Farm Energy Groups” as has been done in Sweden will require sustained support from Government, and not necessarily grant support. Assistance could include facilitation of group / company formation, training, business planning, contract negotiation expertise etc.

34. There appears to me to be an urgent need to grasp this opportunity opening up for farmers to maximise their position in the supply chain. This will increase their income but also provide work for others in rural communities during the winter period when seasonal work is limited. There will only be one opportunity to do this and delay will mean that the opportunity is lost or the initiative handed to others.

35. It is suggested that a programme be drawn together by the NI Executive Departments working together to facilitate and support the formation of heat entrepreneur or farm energy groups. These ESCOs can then supply biomass generated energy to local businesses and facilities such as schools and community centres.

In doing this the Departments will build on the work already done by DARD in developing the productions systems, and can draw on experience of similar initiatives in Scandinavia.

36.. The NIRDP appears to contain many elements of the initiatives required e.g diversification ( Measure 3.1),vocational training(Measure 1.1) , adding value and improving market capability ( Measire 1.2), supply chain development (Measure 1.4). To facilitate the process of farm energy group formation it would be helpful if DARD could pull together a specific integrated programme from within these measures, rather than expecting groups to each assemble unique programmes from within the various individual components.

Ian Duff.
30 January 2008.

Northern Ireland
Authority for Utility Regulator

Mr Paul Carlisle
Committee Clerk
Committee for Agriculture and Rural Development
Room 284
Parliament Buildings
Belfast
BT4 3XX

29 January 2008

Dear Mr Carlisle

Inquiry into Renewable Energy and Alternative Land Uses

1. Thank you for your invitation to submit evidence to the Committee for Agriculture and Rural Development. The Northern Ireland Authority For Utility Regulation, (the Utility Regulator) has a keen interest in the promotion of renewable energy and welcomes this opportunity to offer comments.

2. The Northern Ireland Authority for Utility Regulation (the Utility Regulator) is a non-Ministerial Government Department. We are responsible for regulating the electricity and gas industries, and water and sewerage services in Northern Ireland. Our duties are set out in the Energy (Northern Ireland) Order 2003 and the Water and Sewerage Services (Northern Ireland) Order 2006.

3. We are not a policy-making department of Government and make sure that the utility industries in Northern Ireland are regulated and developed within policy guidelines set out by the Minister for Regional Development and the Minister for Enterprise, Trade and Investment. The Utility Regulator is accountable to the NI Assembly through financial and annual reporting obligations.

4. The Utility Regulator works to protect the interests of electricity, gas and water consumers in Northern Ireland by:

(a) issuing licenses for utility companies to operate in Northern Ireland, and regularly monitoring and reviewing these;

(b) making sure that utility companies comply with the relevant legislation in carrying out their work;

(d) working to encourage competition in utility markets where appropriate;

(e) acting as an adjudicator on customer complaints, disputes and appeals.

(f) in carrying out our work we also aim to take account of the needs of vulnerable consumers. We also have due regard for the environment and we are also considering how we may contribute to the promotion of sustainable development in exercising our regulatory duties.

Utility Regulator’s response to the issues identified in the Committee’s Terms of Reference

5. The Utility Regulator would offer the following comments in response to the points raised in the Committee’s terms of reference.

6. The recent and current policy framework for the development of renewable energy in Northern Ireland, focusing on but not limited to those policies developed and implemented by the Department of Agriculture and Rural Development.

(a) See point 8 below

7. The range of renewable technologies currently in operation or planned in rural communities taking into account similar projects elsewhere.

(a) The Renewables Obligation Annual Report, which is a requirement under the Renewables Obligation Order (Northern Ireland) 2006, is due to be completed in February 2008 (see point 8 b below). This report will contain information on the number of generation stations accredited for Renewable Obligation Certificates by technology type. The information is shown separately for England, Scotland, Wales and Northern Ireland. The following table is likely to be included in the report. However it should be noted that the final report will not be completed until February and the figures shown below are currently undergoing final checks

Technology Type	England	Scotland	Wales	Northern Ireland	Total
Biomass and waste using ACT [Advanced Conversion Technology]	8	1	0	0	9
Biomass	18	3	0	1	22
Co-firing of biomass with fossil fuel	26	2	1	1	30
Hydro <20 MW DNC	37	98	25	10	170
Landfill gas	321	32	14	0	367
Micro Hydro	33	45	12	6	96
On-shore wind	151	81	40	50	322
Off-shore Wind	5	0	1	0	6
PV	180	7	12	18	217
Sewage Gas	106	3	7	0	116
Wave	0	2	0	0	2
Total	885	274	112	86	1,357

8. The relative importance in terms of contributing to Governments renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable source, and how relevant each could be to the NI economy.

(a) The Utility Regulator believes that heat from renewable sources could make a more significant contribution to the Government’s renewable energy targets if there was a more robust legal framework governing the distribution and supply of heat from renewable sources. More information on the potential for electricity from renewable sources can be obtained in “The Grid Study,” which was published by the Department of Enterprise Trade and Investment in January 2008 and can be found at www.detini.gov.uk/energy.

9. The range of support available to renewable initiatives at local, national and European levels.

(a) The Utility Regulator is responsible for the administration of two of the main support mechanisms for renewable energy in Northern Ireland. We are responsible for the administration of the Renewables Obligation, under the Renewables Obligation Order (Northern Ireland) 2006, and we are also responsible issuing Climate Change Levy Exemption Certificates under the Finance Act 2000.

(b) The Renewables Obligation is an obligation on all electricity suppliers in Northern Ireland to source a given percentage of their electricity from eligible renewable sources. Where electricity suppliers cannot fulfil their obligation by providing evidence of in the form of Renewable Obligation Certificates, they may make payment in the form of a buy out. The buy out price is set at £34.30 per MWh for the period from 1 April 07 to 31 March 08.

(c) The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom. The aim is to provide an incentive to increase energy efficiency and reduce carbon emissions and it is part of the UK’s overall Climate Change Programme. It was introduced on April 2001 under the Finance Act 2000. Currently the levy is charged at a rate of £4.41 MWh of electricity. Qualifying renewable technologies such as wind are exempt from the levy. The Utility Regulator is responsible for the administration of Levy Exemption Certificates (LECs), which can be issued to accredited generators.

(d) In addition the Utility Regulator works with Department of Enterprise Trade and Investment (DETI) and NIE in relation to the Non Fossil Fuel Obligation (NFFO). NFFO is a provision in legislation which requires NIE to make arrangements in relation to generating capacity from non-fossil fuel generating stations. The first NFFO order in 1992 was for 16MW (declared net capacity), rising to 45MWs by 2005. There will be no further rounds of NFFO as the Renewable Obligation is now the main support.

(e) The Utility Regulator also has duties in relation to sustainability as set out in the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007. The single wholesale market for electricity or SEM, has been developed to implicitly accommodate a range of mechanism that have been introduced to help promote renewable technologies.

(f) The Utility Regulator also oversees initiatives undertaken by the utilities as part of the price control process.

10. To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it.

(a) See above in relation to the Climate Change Levy and the Renewable Obligation.

(b) The Utility Regulator would encourage Government to carry out a value for money review of support mechanisms in Northern Ireland compared to other European countries. Specifically comparing feed in tariffs to a certificate based approach (such as the Renewables Obligation). The Utility Regulator would also encourage government to look at value for money, in terms of carbon reduction, that could be gained from other measures such as energy efficiency and gas promotion.

11. The potential role of farm and rural businesses and rural communities in the delivery of a renewable programme which contributes to the sustainability of those business and the wider community.

(a) The Utility Regulator would encourage the Department for Agriculture and Rural Development to consider the importance of energy efficiency as well as renewable energy. Particularly in respect of rural and vulnerable customers.

12. The ways by which the Department of Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to the sustainability of the agriculture/rural sector and contributes to Northern Ireland’s renewable energy targets.

(a) The Utility Regulator would encourage a cross departmental approach to the delivery of renewable energy programmes and was encouraged by the approach in respect of the Environment and Renewable Energy Fund (EREF), which was led by the Department of Enterprise Trade and Investment working in conjunction with the Department of Agriculture and Rural Development, Department of Social Development, Department of the Environment the Department of Finance and Personnel and other organizations.

13. The Utility Regulator would welcome the opportunity to provide any further information that the Committee requires in the context of its inquiry.

Yours sincerely

Iain Osborne
Chief Executive

Northern Bio Energy Ltd

Table of Contents

1 Introduction

2 The Company -- Northern Bio Enrgy

3 Willow Harvesting Prior To 2007

4 Whole Stem Harvesting

5 Objective

6 Technology

7 Our Aims

8 Sugested Aims For Dard

9 Conclusion

10 Appendixes

Northern Bio Energy Ltd

Chairman
James Cowan
Annahavil House
Tullyboy Road
Moneymore
BT 45 7XW

028 867 62599
annahavil@hotmail.com

Assembly Committee Submission on Energy

By Northern Bio Energy Ltd, Cookstown 28/01/08

1. Introduction

1.a Figures suggest that grass-based farmers occupy over 90% of farm-land in Northern Ireland. Other than those in dairying, farm businesses have been in economic decline for many years. Since the introduction of the Single Farm Payment last year, many long standing farmers are abandoning their land which in some cases is reverting to rushes.

1.b The growing of willow on a scale to produce quantities of renewable energy at a promising affordable cost is to be welcomed. This alternative form of energy production, with the delivery of local fuel for local communities is ideal for sustainable development and business opportunities in rural areas, and also for keeping people on the land.

1.c Most of the agricultural land in Northern Ireland not being used for growing arable crops can grow willow. Additional benefits of growing willow for the local environment is that wild-life, in the grass margins, rides and roadways within the plantations increases.

1.d Willow has a long period when harvesting can take place, unlike most of the other energy crops. Willow is also least dependant on weather conditions during harvest. Oil seed rape, for example, which is used to replace diesel oil, can be devastated prior to harvest just by heavy rain.

1.e The climate in Northern Ireland is ideal for the growing of willow, and the new varieties are yielding crops in excess of 13 tons of Dry Matter /Hectare/Year.

1.f Willow plantations require no inputs of either fertilizer or sprays to continue their production of energy for up to 30 years. This can suit part-time farmers as well as farmers who wish to diversify into an alternative enterprise.

1.g When comparing willows to other renewable energy sources such as wind turbines,,tidal, solar and photovoltaics etc. the initial investment is minimal. Maintenance costs which can be a problem with these technologies do not occur with willow and the capital cost to establish willow is negligible and is borne by many individual businesses.

1.h With this Submission we wish to make it plain that the target areas for growing willow is on marginal land and farms that previously had been un-economic. These are the areas which can NOW produce much needed energy.

2. The Company - Northern Bio Energy

2.a A group of Mid-Ulster farmers joined together in 2005 with an innovative idea. The aim was to grow willows for wood-chip fuel and supply a new boiler in Cookstown heating the swimming pool at the Leisure Centre.

2.b In the production of renewable energy, the primary concern for farmers is, how economically viable is this for me? Previously the only method available for harvesting willow required the removal of 30% of unwanted moisture by immediate artificial drying.

2.c The catalyst for forming the company occurred when the five farmers realised that there could be another more economical way of harvesting and drying the willow rods.

2.d They initiated Northern Bio Energy Ltd. and sourced a revolutionary whole stem willow harvester from Denmark which allows natural air drying. With grant aid from the Department of Environment, Food and Rural Affairs (DEFRA) through the Bio-Energy Infrastructure Scheme, they purchased the “Stemster” whole stem willow harvester in February 2007, the only one in the British Isles.

2.e Starting in March 2007, the “Stemster” harvested in Loughgall for AFBI on their experimental willow plots. The machine then moved to commercial plantations in Louth, Kilkenny and Tipperary before crossing to demonstrate and harvest in Brittany for the Association D’Initiaves Locales pour L’Energie de L’Enviroenment (AILE). It is interesting to note that AILE were so impressed with the way the machine handled willow of up to 4 years old that they have since acquired a “Stemster” themselves.

3. Willow Harvesting Prior to 2007

3.a Until the arrival of the “Stemster” in 2007 into the British Isles, the major method of successful mechanically harvesting willow was by adapted self-propelled forage harvesters. These machines, with little modification and a special cutting head, are able to cut and chip the willow before blowing the material into trailers in the normal way of grass silage making.

3.b The loaded trailers then transport the chip to a central point for artificial drying. It is imperative that once harvested, the willow chip (with a moisture content of 50%) is dried to arrest de-composition and the formation of dangerous moulds.

3.c Ventilated grain floors are normally used for the drying. The drying of willow chip in this way requires clearing out the drier for subsequent batches and the safe storage of the dried product.

3.d The long-term storage of willow chip requires moisture contents of 15% which can take up to 6 weeks of drying to achieve, which is both expensive and energy inefficient.

4. Whole Stem Harvesting

4.a As mentioned previously, a whole stem harvester which is called - the “Stemster” – was introduced into Northern Ireland by Northern Bio Energy Ltd who offer a country-wide contract harvesting service. Because willow is harvested after leaf-fall, there is a large window of opportunity to harvest which can extend into early summer if necessary, although this is not to be recommended[1]

4.b The area of willow harvested per day by the “Stemster” depends on the yield and age of the crop. With the modern varieties being harvested at 2 years of age, it is estimated that outputs of 4-6 Ha per day can be achieved.

4.c The ”Stemster”, which is tractor driven, cuts the willow as a whole rod and deposits the load in large piles at the field’s perimeter to allow natural air drying. The harvester requires no other ancillary equipment and operates on its own within the field or plantation until the harvesting is completed.

4.d It is advisable when off-loading the piles to keep them raised above ground level to let air flow under them and assist the drying process.

The willow piles can be left in the field until autumn to dry naturally without any additional cost to the farmer, or can be transported to the farm-yard at any time during the summer months.

4.e AFBI at Loughgall carried out a drying experiment on willow rods harvested by the Stemster in March 2007. The trials were in conjunction with the RENEW Project, as part of the INTERREG 111A Programme and part funded by the European Union. Details of this trial are on Page 7 of RENEW Final Report (November 2007) available from AFBI Headquarters, New Forge, Belfast.

4.f The willow piles at Loughgall dried down to above 20% moisture by late August which is quite adequate for chipping and short-term storage prior to burning. The same drop in moisture occurred in the willows harvested at the commercial plantations in ROI over the exceptionally wet summer of 2007. The majority of this willow was chipped in the autumn using commercial forestry chippers and immediately sold locally for fuel.

4.g If the dry willow is not being chipped at the field, it is recommended that the rods are moved undercover in the farmyard by the end of the summer. The reason is to prevent moisture being reabsorbed over the winter. Ordinary farm trailers, with open sides are suitable for transport and can be loaded by tractor or farm handler.

4.h When stored under a simple roof, the rods will continue to dry out, and most importantly, they can then be chipped on demand for end use.

4.i There is huge flexibility as well as cost saving with this method of harvesting willow using natural air drying. Another added bonus for farmers using this method is, the use of ordinary farm machinery at times suitable to the individual farmer.

5. Objectives

5.a The first objective is to replace heating oil in medium sized buildings and work places. Such examples we have identified are: hotels; government and council buildings; schools; hospitals; health centres; office buildings; medium sized factories; and district heating systems in both private and public housing developments.

5.b After achieving the above, attention can be turned to Combined Heat and Power Plants (CHP) to produce Electricity as well as Heat.

6. Technology

6.a The technologies to produce Heat (and Energy) at an economic cost from willow chip ARE NOW in place in Northern Ireland.

(i) Wood- chip fuelled heaters and boilers are readily available off the shelf from numerous firms and have been proven on the Continent for many years.

(ii) The newest willow varieties are available to plant from Rural Generation ,

(iii) Advise on all aspects of planting and establishment of willow is available from AFBI, DARD, Forestry Service and Rural Generation.

(iv) Specialised contract planting is available from Rural Generation

(v) Contract harvesting of willow plantations is available from Northern Bio Energy and Rural Generation.

(vi) Willow chip can be dried at a small number of commercial driers in conjunction with Countryside Services Ltd.

(vii) Contract chipping services for willow are available on a wide scale throughout the country.

(viii) Bulk transport of willow chip in a variety of ways is also available from a number of firms country wide.

6.b The important next step is to have a strategic campaign designed to encourage farmers to plant willow.

6.c It is necessary for DARD to encourage farmers to plant willow, as previously they had grown food crops which were harvested annually and not bi-annually.

6.d There is also the issue of the crop being in the ground for 30 years. Most farmers (wrongly) think that willow plantations are as hard to eradicate as native trees. In fact willows do not have a tap root and are easily removed from the soil.

7. Our Aims

7.a As a company comprised of farmers, Northern Bio Energy will do all in it’s power to assist DARD and other Government agencies in the growth of the Renewable Energy Industry in Northern Ireland.

7.b We aim in the coming year to have our own data verifying the cost effective nature of the whole stem harvesting system as we deliver our first fuel to Cookstown’s Leisure Centre.

7.c Members of our company are also willing to give oral evidence to the Committee for Agriculture and Rural Development if invited.

8. Suggested aims for DARD

8.a Harvest the willow plantations established at Loughry in 2005 with the Whole Stem Harvester and conduct a variety of trials to verify natural air drying in Northern Ireland. These trials MUST be initiated during the incoming spring to enable the dissemination of results by September 2008.

8.b Monitor the haulage and chipping operations which will be done on the dry willow rods in September, and view the fuel as it is burned, preferably in Loughry’s own burner.

8.c Inform the farming and general public about these programmes.

8.d Encourage debate on the viability of energy crop production and exhibit the “Stemster” in the DARD Stand of the Royal Ulster Agricultural Show.

8.e DARD must stress to its officers the importance of this whole programme so that momentum is continued and no more time lost than the 3 years gap between mass planting (March 2009) until the first burning of the fuel (September 2012).

8.f With these programmes running, DARD will be leading this form of renewable technology, and playing a pivotal role in meeting the governments new energy target of 20% production from renewable sources.

9. Conclusion

9.a. Each Hectare of willow ,over it’s productive life of 30 years, will produce the equivalent of 4,500 litres of Heating Oil - EVERY YEAR !! - that’s a lot of Carbon Neutral and NON- IMPORTED FUEL !!

Our collective aim must be to –

PRODUCE WILLOW CHIP ENERGY AT 1/2 THE COST OF HEATING OIL !!

LETS DO IT.

10. Appendixes

Northern Ireland Energy Agency

For Further Information please contact

Nigel Brady
Director
Northern Ireland Energy Agency
1-11 May Street
Belfast
BT1 4NA

Direct Line – 02890 265999
Fax – 02890 246133
E-Mail – nbrady@nienergyagency.org

Summary

This paper:

(a) provides evidence that there is significant market potential for biomass heating in N. Ireland with an estimated 133,950 existing and 12,500 new build homes suitable for installing wood heating technology over the next 5 years

(b) provides evidence that Northern Ireland has the capacity to meet a significantly larger proportion of domestic heating requirement from indigenous resources; and

It will be argued that a ten year development strategy is required bringing together Government, the farming and forestry communities, installers and suppliers and NI Housing Executive in its HECA role to provide the private sector with the confidence to invest in this industry and to ensure that the industry develops the critical mass to justify the private sector’s investment decisions...

Introduction
General comments
Evidence
Recommendations
Bibliography

Introduction

From 2nd April 2007, the Northern Ireland Energy Agency, Northern Ireland’s Regional European Energy, part of a network of 380 Energy Agency’s across Europe, replaced the three previous Local Energy Agencies which had operated across Northern Ireland since 1995.

Its aim is:

“To secure the support and active engagement of Northern Ireland’s energy users, particularly households, in implementing strategies, programmes and measures to combat climate change.”

Our work will assist with the Government targets as laid out in the Energy Strategy for Northern Ireland published in June 2004, namely:

1% electricity saving per annum over 5 years 2007-2012
A target for renewable energy generation of 12% of electricity consumed by 2012
Develop support mechanisms to encourage enhanced programmes of Renewable Energy, CHP and Energy Efficiency

With 38 staff operating across Northern Ireland from offices in Belfast, Enniskillen and Londonderry, the Agency carries out a wide range of energy programmes and has a turnover in excess of £2.5 million.

This paper comprises evidence from the Northern Ireland Energy Agency in relation to the Northern Ireland Assembly’s Committee for Agriculture and Rural Development’s Inquiry into Renewable Energy and Alternative Land Uses.

General comments

The Northern Ireland Energy Agency (NIEA) welcomes the Inquiry into Renewable Energy and Alternative Land Uses. Renewable energy provides an excellent opportunity to address climate change and also to enhance social and economic development in rural Northern Ireland.

Given NIEA’s general focus on households, and the significant carbon savings offered by biomass, the main thrust of this paper will be the potential for biomass heating in Northern Ireland’s residential sector plus the opportunities it provides for the agricultural sector.

Evidence

Aim

Terms of Reference

(a) The recent and current policy framework for the development of renewable energy in Northern Ireland, focussing on but not limited to those policies developed and implemented by DARD.

NI Targets.

DETI obligation of 6.3% electricity from renewables by 2012 (250MW).

DETI aspirational target of 12% electricity from renewables by 2012 (480MW).

Wind farms in planning (965.15MW). Source Royal Town Planning Institute, 2007.

Sustainable Development Strategy, May 2006, 25% reduction in GHG emissions against 1990 levels by 2025. Beyond 2025, 40% electricity from renewables with at least 25% of this generated by non-wind technologies.

NI Planning Policy.

Permitted development for renewables. Potential to accelerate deployment of renewables.

PPS 18 will supersede PSU 12 Renewable Energy and aims to encourage and facilitate renewable energy generating facilities. Potential to accelerate deployment of renewables, especially large scale. Note that large scale wind will be necessary to meet renewable electricity targets.

DARD.

Strategic Plan, 2006-2011.

Renewable Energy Action Plan, 2007.

UK Targets.

Domestic target of 20% reduction in CO2 emissions against 1990 levels by 2010.

Draft Climate Change Bill, March 2007, to reduce carbon emissions by 26% to 32% by 2020, and 60% by 2050, from 1990 levels.

10% electricity from renewables by 2010. 20% electricity from renewables by 2020.

Bioenergy Capital Grants Scheme.

UK Renewable Transport Fuel Obligation, April 2008, 5% transport fuel to come from biofuel.

UK Biomass Strategy 2007.

EU Targets & Policy Context.

EU Renewables Directive. To generate 12% gross energy (22% electricity) from renewables by 2010.

EU Commission. To generate 20% of all primary energy from renewables by 2020.

Biofuels to account for a minimum of 10% of all transport fuel by 2020.

Binding target to reduce EU GHG emissions by 20% from 1990 levels by 2020, to increase to 30% should other industrialised nations agree a post Kyoto agreement.

Biomass Action Plan.

EU Emissions trading Scheme.

EU Biofuels Directive 2% by 2005 and 5.75% by 2010 of transport fuel to be biofuel.

Common Agricultural Policy.

Integrated Pollution Prevention and Control Directive.

Water Framework Directive.

Nitrates Directive.

(b) The range of renewable technologies currently in operation or planned in rural communities, taking into account, as appropriate, similar projects elsewhere.

Table 1. Domestic renewables installations in N. Ireland, 2003 - 2007.

Fund	Dates	Technologies	No. of Installations
Clear Skies	03-06	Various	402
PV Programme	03-06	PV	123
NIE/NIHE	06-07	dCHP	50
EREF (NIHE)	06-07	SWH	1500
EREF (Reconnect)	06-07	Various	1502 (to Nov 2007)
EREF (EAGA)	06-07	SWH	600
LCBP	06-07	Various	33
			4,210 Total to Nov. 2007
Extra allocation
EREF (NIHE)	07-08	SWH	500
EREF (EAGA)	07-08	SWH	160
			4,870 + any further Reconnect installations Total expected by March 2008

Source: Compiled by NIEA, 2007.

Table 1 shows that during the 3 year period between 2003 and 2006 only 525 domestic renewables installations took place in Northern Ireland, supported by the UK-wide Clear Skies and Major PV Demonstration Programmes.

Since 2006, a further 3,685 systems have been installed across N. Ireland giving a total of 4,210 to November 2007. This dramatic increase is due to the local Environment and Renewable Energy Fund (EREF) support for both the Northern Ireland Housing Executive’s solar water heating (SWH) programme, and the Reconnect programme’s domestic grants of up to 50%.

Biomass heating is the second most popular technology grant aided under the Reconnect programme, and most installations are in rural detached homes. Source: Action Renewables, 2007.

Reconnect ends on 31st March 2008 leaving the UK-wide Low Carbon Buildings Programme (LCBP) as the only source of domestic grants for N. Ireland residents. LCBP offers significantly less financial assistance, typically up to 30% capped at £2,500 per household; hence it is likely that the rate of domestic retrofit installations in N. Ireland will decrease sharply after March 2008.

The above data demonstrate the importance of providing coherent and effective market support mechanisms, including at least in the immediate future, capital grants to stimulate and sustain the uptake of renewables in N. Ireland.

Table 2. Non-domestic renewables installations in N. Ireland, 2003 - 2007.

Fund	Dates	Technologies	No. of Installations
Clear Skies	03-06	Various	86 (within 32 projects)
PV Programme	03-06	PV	5 (>5kW)
DARD/WERB	06-07	Wind	26 (businesses)
NIE	06-07	Wood boilers	15 (businesses)
			132 Known total to 2007
LCBP Phase 1	06-07	Various	17 projects awaiting installation St1 = 9, St2A = 7, St2B = 1
LCBP Phase 2	07-09	Various	1 PV installed. 5 other grants committed.

Source: Compiled by NIEA, 2007.

Table 2 shows that while Northern Ireland made very good progress under Clear Skies, the PV Programme, DARD’s Wind Energy for Rural Businesses and NIE’s Non-domestic biomass scheme, the number of non-domestic installations has decreased since their closure.

The EREF did not provide grant assistance to the non-domestic sector and, given the competitive nature of the UK-wide Low Carbon Buildings Programme, the number of community installations in N. Ireland has declined.

This evidence supports a case for providing local grant funding to the non-domestic sector including rural businesses.

The Northern Ireland Energy Agency will address only the potential for biomass heating within the domestic sector.

At present, Northern Ireland does not have a target for renewable heat; however, policy drivers are in place in other UK regions and the EU to increase the use of renewable heat e.g. the UK Biomass Strategy, 2007 and the EU’s Biomass Action Plan.

Northern Ireland will need to play its part in forthcoming UK initiatives to increase the use of renewable heat in order to contribute to the overall EU target of supplying 20% of all primary energy from renewables by 2020.

The Biomass Task Force Report (April 2006) states that heat accounts for over one third of the UK’s primary energy consumption, however, at present only 1% of the heat market comes from renewables.

Table 3 shows that in the UK, residential biomass has the greatest market and technical potential for renewable heat delivery (in 2020).

Table 3. Summary of market and technical potential for renewable heat by technology.

Table 1.eps

In Northern Ireland, MOSAIC segmentation research undertaken by Experian (2005) on behalf of the Energy Saving Trust indicates that there are 25% of households (Environmentally Mature and Comfortable Conservatives) that are most likely to take up renewable energy technologies.

Using this segmentation data, the Northern Ireland Energy Agency estimates that there is potential for 133,9501 biomass retrofit installations in N. Ireland over the next 5 years, plus 12,5002 new build opportunities over the same period. See Table 4.

Table 4. Potential for domestic renewables in N. Ireland over 5 years.

Table 2.eps

Assumptions – number of houses achievable over a five year period taking a total of 705,000 houses in NI (NIHE, 2007)
Carbon based on EST figures for UK, supplied 2007-08.
1 Biomass Retrofit - Based on 25% of oil and solid fuel properties (76% of total) who are Environmentally Mature and Comfortable Conservatives = 25% of 535,800 = 133,950
2 Biomass Newbuild - Based on 10,000 new builds pa over 5 years = 50,000 * 25% (EM + CC) = 12,500
GSH Newbuild - Based on 5% taking action @ 10,000 newbuilds pa over 5 years = 50,000 * 5% = 2,500
Solar Thermal Retrofit - Assumed 20% of existing houses with suitable south facing roof who are EM + CC i.e. 705,000 * 0.2 = 141,000 * 25% = 35,250
PV Retrofit - Based on same as solar retrofit - 141,000 * 25% - reduced by 10% because of larger roof area required = 31,725
Solar Thermal New build - Assume 30% of new properties have correct roof aspect and heating system i.e. 10,000 * 5 * 30% = 15,000

Source: Northern Ireland Energy Agency, January 2008.

However, the capital cost of biomass boilers is a known barrier to uptake (Action Renewables, 2005) and given the imminent closure of the Reconnect grant programme which provides £3,250 towards the cost, this potential is unlikely to be fulfilled without new government support mechanisms.

Further evidence is provided in the Renewable Heat Initial Business Case report for DEFRA/BERR, 2007, which concludes that (i) a number of renewable heat technologies do require financial support to make them cost competitive and (ii) a number of such technologies do present relatively affordable carbon savings. [Also see Table 7.]

The range of support available to renewable initiatives at local, national and European levels.

To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it.

Other EU markets have made good progress and their experiences show that renewable heat can be driven by policy support, with particular focus on the residential district heating sector. See Table 5.

Table 5. Renewable Heat Markets.

Table 3.eps

Since district heating may not be feasible on a large scale in N. Ireland given its rural nature, and negative public perceptions surrounding community heating (DARD 2004), the initial focus is likely to be on individual residential technologies.

Table 6 shows that the combined use of capital grants and the Carbon Emissions Reduction Target (CERT) represents the most effective form of support for residential technologies. CERT is similar to N. Ireland’s Energy Efficiency Levy. See Table 6.

Table 6. Residential Sector – individual property based heat solutions.

Table 4.eps

Existing and upcoming policy measures such as the stricter requirements in the 2006 Building Regulations, Part F; the Code for Sustainable Homes and PPS 18 should help to increase the use of low carbon technologies in new build homes in N. Ireland.

However, given that there are only 10,000 new builds per year compared to the existing 705,000 dwellings, of which 133,950 would be suitable for switching to biomass over the next 5 years, biomass retrofit holds significant carbon saving potential in N. Ireland.

Table 7. Carbon Savings.

Table 5.eps

Table 7 shows that residential biomass heating systems offer the opportunity for significant carbon savings at a cost comparable to onshore wind of around £215/tC. (Source: BERR/DEFRA, cited in Renewable Heat Support Mechanisms, 2007.)

Therefore, supporting domestic sector end use of biomass fuels provides a cost effective method of reducing N. Ireland’s carbon emissions.

(f) The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community.

The potential for producing and using biomass fuel offers an opportunity for diversification of farm and rural businesses3; however, in order to support such future expansion, and to benefit from the associated carbon savings, the N. Ireland biomass supply chain must be robust.

Summary of the current status of the biomass supply chain.

Fuel suppliers:

There are 10 biomass fuel suppliers in NI, and 17 in RoI.
Balcas produces 50,000 tpa of pellets and has 8 purpose built pellet delivery lorries with a spare lorry as backup.
Pellet quality is well above the min European standards. Brites conform to wood pellet standard CEN / TS 14961.
Costs: Domestic bulk order 3 tonnes £118/tonne + VAT @5%. Bags £2/10kg bag. Commercial 16 tonnes £100/tonne + VAT @ 17.5%.

Installers:

The Renewable Energy Installer Academy has 559 installers, of which 169 are biomass installers.
LCBP has 253 NI installers, of which 54 are biomass installers.
LCBP Phase 2 has 7 Framework Suppliers, of which 3 are biomass suppliers.

Estimated SRC potential.

By 2002, DARD estimated that there were 447 ha of SRC planted in Northern Ireland. In 2004, the Challenge Fund for SRC supported further planting and by early 2007 another 400 ha had been planted or approved, with a further 410 ha approved for the 2007 planting year (DARD, 2007).

However, given DARD’s estimated potential for 5,000 ha of Northern Ireland’s grassland to switch to willow, there is much scope for further SRC development across Northern Ireland. Hence, the Northern Ireland Rural Development Programme 2007-2013 should continue to support SRC.

Rural business opportunities.

The establishment of SRC plantations.
The establishment of Energy Services Companies (ESCos) by farmers, using locally grown willow or locally manufactured pellets.
Note that Balcas exports a significant percentage of its 50,000 tonnes of wood pellets to power stations in GB due to the limited local demand at present. This is both economically and environmentally sub optimal and demonstrates the risks to the potential biomass industry of leaving all the risk of unplanned development with the private sector.
The establishment of district heating networks supplied by locally grown willow plantations. Capital grants would assist the installation of centralised community wood chip boilers. E.g. Camphill in Clanabogan, Co. Tyrone.
The establishment of district heating supplied by wood pellets. Capital grants would assist the installation of centralised community wood pellet boilers. E.g. The Share Centre in Lisnaskea, Co. Fermanagh.

Environmental impacts of SRC.

In Northern Ireland, SRC will typically replace grassland therefore there are no issues regarding deforestation. Indeed, SRC is likely to provide positive benefits to wildlife, diversity of plant species, insects and birds; furthermore, it offers opportunities for bioremediation. (DARD, 2004)

(g) The ways by which the Department for Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to the sustainability of the agricultural/rural sector and contributes to Northern Ireland’s renewable energy targets.

To provide continued support for SRC plantations.

To support the establishment of Energy Services Companies (ESCos) by farmers, using locally grown willow.
To support the establishment of Energy Services Companies (ESCos) by farmers, using locally manufactured wood pellets.
To support the establishment of district heating supplied by locally grown willow plantations and to provide capital grants for the installation of centralised community wood chip boilers.
To support the establishment of district heating supplied by wood pellets and to provide capital grants for the installation of centralised community wood pellet boilers.
To provide capital grants for the installation of domestic and non-domestic wood fuelled boilers.

Recommendations

1. To call for the development of a ten year strategy bringing together the Government, the farming and private sector to create a framework for the orderly role out a biomass heating industry;

2. To provide continued support for SRC plantations.

3. To support the establishment of Energy Services Companies (ESCos) by farmers.

4. To support the establishment of district heating networks where appropriate.

5. To provide capital grants for the installation of domestic and non-domestic wood fuelled boilers.

Conclusion.

Northern Ireland has a large rural population who cannot be economically connected to the natural gas network and who are at present and who will otherwise remain dependent on more polluting fuels such as oil and coal for space and water heating. Northern Ireland is fortunate in having the possibility of remedying this situation from the development of indigenous resources. This potentially represents a five fold gain. It reduces CO2 emissions, it provides space and water heating costs for rural households on terms which would be immune from the international upward pressure on fossil fuel prices, it provides a revenue stream for the farming community, it creates a rural supply and installation industry with the potential of local manufacturing, and finally it would reduce Northern Ireland’s exposure to fuel imports.

However this opportunity will be lost if all that Government is prepared to do is offer verbal support and a few short term demonstration schemes or a grant regime of short or unpredictable duration.

New energy industries require a framework. The fact that biomass unlike gas or electricity does not have wires or pipes does not mean that there is not a need to provide connectedness and confidence between all those who are potential actors in this industry – the farmers who are the suppliers of the fuel, the installers of the appliances, the manufacturers of the appliances, the financial institutions who are required to finance the transactions and the end customers who put their confidence in this industry. If a new biomass industry is to develop and realise its potential a longer term view is needed.

The responsibility for ensuring that this happen lies with Government.

Bibliography

Action Renewables, 2005, Potential Market in Northern Ireland for Small Scale Renewable Energy Technologies, Market Research Report.

Action Renewables, 2007, presentation at the Renewable/Sustainable Development Conference, Royal Town Planning Institute, 2007.

DARD, 2004, Study on the Potential Market for, and Economic and Environmental Sustainability of, Heat and Power and Heat-Only Systems in the Rural Economy.

DARD, 2007, Renewable Energy Action Plan.

DEFRA/BERR, 2007, Renewable Heat Business Case.

DEFRA/BERR, 2007, Renewable Heat Support Mechanisms.

Energy Saving Trust, 2005, MOSAIC Segmentation Research, Experian.

Northern Ireland Environment Link

Northern Ireland Environment Link is the networking and forum body for non-statutory organisations concerned with the environment of Northern Ireland. Its 49 Full Members represent over 90,000 individuals, 255 subsidiary groups, have an annual turnover of £44 million and manage over 230,000 acres of land. Members are involved in environmental issues of all types and at all levels from the local community to the global environment.

These comments are agreed by Members, but some members may be providing independent comments as well. If you would like to discuss these comments we would be delighted to do so.

Prof Sue Christie, Director
Northern Ireland Environment Link
89 Loopland Drive
Belfast, BT6 9DW
P: 028 9045 5770
E: Sue@nienvironmentlink.org
W: www.nienvironmentlink.org

Northern Ireland Environment Link is a Company limited by guarantee No NI034988 and a Charity registered with Inland Revenue No XR19598

Introduction

Northern Ireland Environment Link (NIEL) welcomes the Agriculture and Rural Development Committee’s decision to hold an inquiry into the development of renewable energy within the rural community and alternative land uses. NIEL would encourage the Committee to see this ‘invitation to submit written evidence’ as the start of the evidence gathering and stakeholder involvement process. We would encourage further opportunities for engagement to include inviting presentations to the committee, external consultation events, site visits to examples of best practice (local and international) and submissions from local and international experts.

Terms of Reference

The terms of reference provide a useful steer for those wishing to provide comment. However, NIEL believes that greater emphasis should be placed on trying to ascertain the relative benefits of each energy source/renewable technology and in investigating the potential impacts of any support mechanisms on the wider integrity and sustainability of Northern Ireland’s countryside and rural communities.

The Terms of Reference seem to avoid mentioning the issue that is driving much of the moves towards renewable energy. Although climate change is not the only reason for encouraging renewable energy development and alternative land uses, it seems perverse that the inquiry does not use the opportunity to contextualise the problem and put forward their proposed report as a contribution to efforts to mitigate and adapt to climate change. Linking the enquiry to the climate change challenge would also draw more attention to the importance of land use policies, which has slightly been lost in the Terms of Reference.

Northern Ireland Environment Link, Scottish Environment Link, Wales Environment Link and Wildlife and Countryside Link prepared a policy paper, Bioenergy in the UK: Turning Green Promises into Environmental Reality, which sets out measures that the Links believe need to be taken by national and devolved governments to ensure that UK bioenergy production and use develop in a sustainable way. NIEL would like this document to be given due consideration in the Committee’s inquiry (copies will be forwarded to Committee members but also see Bioenergy in the UK).

Context

The science of climate change is now well established and the evidence to suggest that urgent action is needed is overwhelming. For example:

The Intergovernmental Panel on Climate Change (IPCC), a group containing over 2500 scientists, reported (AR4) that ‘warming of the climate is unequivocal’ and that ‘most of the observed increase in temperature is very likely (90%) due to human activity’. The findings of the IPCC are also supported by the Academies of Science of the 11 largest countries in the world, including the Royal Society of London.
The Stern Review calculated that the dangers of unabated climate change would be equivalent to at least 5% of GDP each year. However, when more recent scientific evidence is included in the models, the Review estimates that the dangers could be equivalent to 20% of GDP or more. In contrast, the costs of action to reduce greenhouse gas emissions to avoid the worst impacts of climate change can be limited to around 1% of global GDP each year. The central message is that reducing emissions today will make us better off in the future: one model predicts benefits of up to $2.5 trillion each year if the world shifts to a low carbon path.
The recent SNIFFER report on the impacts of climate change on Northern Ireland identified a number of direct effects, mostly negative, on human health, the economy, natural habitats and water resources.
John Sweeney’s research and modelling in Maynooth identifies the significant changes in agriculture that will particularly affect the eastern side of Northern Ireland. Climate Change will affect the agricultural practices and the crops that are grown through differing climatic conditions both in summer and winter. Many of these impacts are inevitable given the temperature rises that are already assured for the future, but it is clearly in Northern Ireland’s self interest to do its utmost, along with others, to minimise temperature rise. JS Climate Change and Agriculture

Northern Ireland should contribute its fair share of emissions reduction to stabilise the world’s climate at not more than 2oC above pre-industrial levels. Our scientific understanding of climate change is evolving but it is UK and EU policy that in order to prevent the most dangerous effects of climate change global temperatures should be stabilised at no more 2oC above pre-industrial levels. This is the imperative that informs all target setting and is determined by the concentration of carbon dioxide in the atmosphere.

Renewable Energy is under-utilised in Northern Ireland despite the existence of an impressive range and quantity of resources: only 4% of Northern Ireland’s electricity is generated from renewables, compared to 12% in Germany. NIEL believes that small renewable energy generators have an important role to play in providing a significant proportion of Northern Ireland’s energy needs with the added benefits of reducing the release of greenhouse gases and increasing the security of electricity supply by diversifying the numbers and types of sources.

Responding to the Terms of Reference

The UK Climate Change Bill will place legally binding emission targets on the UK Government. NIEL supports the UK Climate Change Bill and the NI Assembly’s desire to be included within the scope of the Bill. In addition, NIEL will continue to call on the Assembly to introduce legislation which will specifically require emissions reductions targets in Northern Ireland. We believe this is necessary to ensure the region contributes its fair share to international efforts to limit global warming. An annual Northern Ireland Carbon Budget, which includes legally binding regional targets, should be set to enable an immediate and sustained decline in Northern Ireland’s greenhouse gas emissions by an average of at least 3% per annum. The Northern Ireland Assembly should introduce cross-departmental policies and measures which will reduce carbon emissions and allow people, infrastructure, biodiversity and natural systems to adapt to changing climatic conditions.

Legally binding carbon reduction strategies and targets at the devolved level should include the specification of emissions reductions sector by sector, and the instruments by which government will ensure that each sector will stay within its carbon budget. This would:

Translate the commitment to make a fair share reduction into policy.
Curtail debates as to whether to cut emissions and enable the focus to be on how they should be cut, thus making the task more politically straightforward.
Ensure that Northern Ireland benefits from the social, economic and environmental gains to be derived from cutting carbon emissions.

Adaptation is about developing resilience in natural systems that allow them to respond to change. The Bill should make provision for a programme for action on adaptation every three years, not just a report. This would help to deliver on the conclusion of the Stern Report that: ‘Government has a role in providing a clear policy framework to guide effective adaptation by individuals and firms in the medium and long term’.

It is vital that Northern Ireland should take advantage of the economic opportunities that will arise from the transition to a low carbon economy, and the targets will act as a potent driver for this. Long term targets should also provide the stable policy framework necessary for investor confidence and thereby aid the economy, not disadvantage it. The Carbon Trust study of 2005 provides information on how a reduction of 60% can be achieved while providing benefits in terms of job creation and economic growth and this information can provide a strong base to plan our emissions reduction programme. A recent report by WWF and others provides information on how an 80% reduction can be achieved at the UK level 80% Report.

According to the terms of the EU Energy package announced on 23rd January 2008, one of the UK’s legally binding targets is to achieve a 15% share of renewables in the final energy demand by 2020. A series of interim targets were also agreed by the EU on the following basis: member states must achieve a 25% of their 2005-2020 renewables increase by 2012, 35% by 2014, 45% by 2016, and 65% by 2018. Together these targets would make up an “indicative trajectory” that each member state would be expected to follow.

The EU energy package will also formalise transport fuel targets which the UK are introducing through the Renewable Transport Fuel Obligation (RTFO). The proposals set a minimum target of 10% for use of renewable transport fuels (this includes hydrogen fuels, etc as well as biofuels) in transport in the EU to be reached by 2020. This element remains controversial as serious questions have been asked of the policy’s sustainability. The RTFO includes sustainability criteria but at the moment the criteria are not mandatory. The DARD Renewable Energy Action Plan deals mainly with bioenergy development. Again, we refer you to the Links’ Bioenergy in the UK report.

The Sustainable Development Strategy First Steps to Sustainability introduced a target, “to ensure that 40% of electricity consumed in Northern Ireland is obtained from indigenous renewable energy sources beyond 2025.” The Programme for Government restated the SD Strategy target to ‘reduce Northern Ireland’s carbon footprint by 25% (on 1990 levels) by 2025’.

A number of policies recently announced by Assembly Ministers will impact on Northern Ireland’s ability to reduce emissions. There were a number of positive elements including the release of the draft Planning Policy Statement 18: Renewable Energy and the Minister for Finance and Personnel’s announcements on the rating system. If implemented the ratings measures would replicate similar schemes already operated by some local authorities in England. Building Regulations have also been updated for the better in recent years but NIEL was disappointed that mandatory microgeneration in new buildings will not now be required.

In January 2008, commenting on a North - South study on renewable energy and the electricity grid (‘The Grid Study’), the Minister for Enterprise Trade and Investment, Nigel Dodds, said that Northern Ireland “can make a significant contribution to the UK’s climate change goals by enhancing the amount of electricity generated from local renewable sources” and that “it is clear that we must be more ambitious in setting future renewable energy targets.”

(b) The range of renewable technologies currently in operation or planned in rural communities, taking into account, as appropriate, similar projects elsewhere.

(c) The relative importance in terms of contributing to Government’s renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable sources, and how relevant each could be to the NI economy.

There is huge potential for renewable energy generation in Northern Ireland. An upcoming NIEL publication, Climate Change: the Energy Issue, will provide information on many of these technologies. Macro-wind (Airtricity currently has plans to build a 10GW wind-farm, which could supply enough power for eight million homes) and tidal current (it is estimated that the UK has a 70 TWh/year marine energy resource) energy offer the most potential for renewable energy generation, with solar, geothermal, anaerobic digestion (the RICS has suggested that 30% of Northern Ireland’s vehicle fuel demand or 16% of its heat and power demand could be supplied by anaerobic digestion of biodegradable waste), small-scale hydro and wind, biofuels and CHP from biomass all likely to contribute to the energy mix.

The Grid Study discusses how renewable energy can be integrated with the grid. In addition, decentralised electricity production can be much more efficient, especially for rural communities and/or where the demand for energy is dispersed, and should be a very attractive option for many farmers, especially those who could produce and consume their own energy from local sources.

The table below examines the potential installation of renewable energy technologies in new homes, required to meet a 2016 target of zero carbon homes (adapted from Renewables Advisory Board, 2007).

Technology	Minimum capacity installed to meet building regulations for new Zero Carbon homes (kW) for 300,000 new homes per year in UK	Northern Ireland capacity potential based on 12,000 new homes per year (kW)	Northern Ireland generation potential (GWh)
Electricity
PV	237350	9494	74.90
Micro Wind	24222	968.88	2.55
Small Wind	116253	4650.12	12.23
Large Wind	20479	819.16	2.15
Medium / Large Biomass CHP	215903	8636.12	22.71
Total Electricity		24,568.28	114.54

Heat		Based on current levels of uptake(1)
Medium / Large Biomass Heat	339	1500	10.52
Community Biomass Boiler	330	1000	7.01
Solar Water Heating	25357	2360	2.60(2)
Heat Pumps	2451	4965	3.64(3)
Domestic Biomass Boiler	1550	33,913.5	10.81(3)
Total Heat		43,738.5	34.58

1. Heat potential from micro and embedded renewable generation in Northern Ireland’s new build housing in 2016 is estimated using current levels of installation in 2007.

2. Based on an average annual generation of 2207kWh per panel

3. Based on an average space heating demand of 11,000kWh per annum per dwelling

Biofuels – While we believe that biofuels have the potential to play a role in replacing a proportion of the fossil fuels used in transport, they are not a panacea and without ensuring strong sustainability criteria within any policies for their production and use, increasing the demand for and use of biofuels could be more damaging than beneficial. It is unacceptable to promote biofuels which cannot be reasonably shown to offer genuine carbon savings (based on complete life cycle costings) and which do not meet sustainability criteria.

Broadly speaking, we feel that second generation biofuels are the most likely to satisfy sustainability criteria. If possible, biofuels should be produced from the ‘waste’ of food crops or food; thus causing less disruption to existing land use, food supply, natural habitats and water availability. However, there must also be a commitment, from the outset, to introduce policies which will reduce the demand for energy within the transport sector and the UK energy market as a whole. We recommend:

Ensuring that biofuels meet strict, externally audited, widely accepted and mandatory sustainability and greenhouse gas balance standards, including at least a 50 per cent saving on greenhouse gases compared to fossil fuels, taking a whole life-cycle approach (including fertilizers, pesticides and effluent treatment).
Taking account of the greenhouse gases caused by land-use change and forest clearance to grow biofuels so that, where high carbon land-uses are lost, no saving is claimed.

We would also direct policy makers to the recently released UN report, Sustainable Bioenergy: A Framework for Decision Makers, which concluded that, “Only through a convergence of biodiversity, greenhouse gas emissions and water-use policies can bioenergy find its proper environmental context and agricultural scale.”

The growth of short-rotation-coppice could also be aligned with wastewater treatment, however, it is important to ensure that discharge conditions are applied. Willow has been used as a biofilter of wastewater with some success, however, long monitoring must be maintained. Biofuels from managed and coppiced woodlands can also supply a valuable energy source on a smaller, but also significant, scale. Small native woodland areas could be associated with rural dwellings and be used as an energy source and also contribute to biodiversity, water management and landscape enhancement.

(d) The range of support available to renewable initiatives at local, national and European levels.

(e) To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it.

We believe that the microgeneration market should be encouraged by offering enhanced rates, banded by technology (primarily through unit price but if necessary through ROC trading) for the electricity traded by microgenerators and by making it administratively simple for them to access these payments.

We would promote initiatives which replicate schemes being run in Germany whereby microgenerators are guaranteed a favourable price (banded by technology) for their electricity for a fixed (medium-to-long term) period of time. This system is acknowledged, by the Renewable Energy Foundation (REF) amongst others, to have resulted in a greater mix of technologies and has given German policy makers the flexibility to adapt their policies as technologies emerge and develop.

The ROC system, as it currently operates, results in a predominant technology (onshore wind), which is often economically viable without the ROC, being pursued rather than encouraging innovation in emerging technologies.

On January 28 2008, the Irish Energy Minister, Eamon Ryan, unveiled a new renewable energy grant scheme which will offer funds to businesses, schools and hospitals that want to install biomass-fuelled and anaerobic digestion combined heat and power units (CHPs).

The Renewable Energy Installer Academy (REIA), a pilot project funded under the INTERREG programme as a joint initiative of Action Renewables in Northern Ireland and Sustainable Energy Ireland in Republic of Ireland, was developed in response to the recognition that the lack of trained installers and specifiers is one of the critical barriers to the development of a sustainable renewable energy market. It is now planned to build upon the success of the pilot project and to develop REIA into a sustainable association for renewable energy installers to promote and ensure quality renewable energy installations. A key function of REIA will be the accreditation of training facilities to deliver the required competence in renewable energy installers and the registration of installers. The establishment of sufficient capacity in training institutes to deliver training will be essential to meeting the training needs and ensuring the competence of renewable installers.

Case Studies from the Concordia Study Trip to Freiburg, Germany

Concordia (Northern Ireland’s social partnership group) visited Germany in November 2006 to study the application of sustainable development in the city of Freiburg. The tour covered a wide range of topic including how renewable energy has been used on farms and in a rural setting. Notes from the trips to a number of farms and settings, which detail a range of inivative schemes and incentives, can be found below. Complete Freiburg Report

A Solar Roof

The main change to this farm enterprise was the addition of solar panels installed on the roof of the barn. These give a total output of 29.4 KW and are controlled by four transformers. The control centre links via the phone lines to a control centre in Freiburg which manages the input of the generated electricity into the grid. The project cost 135,000 euros and was financed by both private funding from the farmer and bank loans. The price received for the electricity is 54.5c per KW which is guaranteed for 20 years under contract. Future contracts will not be as attractive for newcomers to the business but this farmer gained best price because he was one of the first to take up the initiative. There is no direct state funding and a monthly management fee is paid to the power company for managing the system remotely. There is still a wooded area maintained and wood is cut and chipped for heating the house on the property.

Farm Biogas

The farm takes delivery of liquid slurry from other farms as fuel for a biodigester. This is delivered at no cost by local farmers and they exchange raw slurry for the digested slurry which is the end product of the process and acts as a better soil improver. Between 15 and 20 cubic metres of slurry is used per day. The slurry is mixed and bulked up with corn, grass and wheat in 1 tonne batches. Approximately 6 tonnes are used of these per day.

The cost of the plant was 700,000 euros. This was financed mainly by bank loan: the lower interest rate through a state bank is a considerable incentive (2% against the standard banking rate). Income is derived by selling the electricity into the grid. (main income element) and supplying a district heating system which includes neighbouring houses and the local sports ground. The rate achieved for the generated electricity is 10.1c per KWh with an additional top-up of 6c as an organic allowance for a guaranteed 20 year contract. His maximum output is 260KWh x 67000 hours per year.

Heat Exchange

This dairy farm produces milk that is sold to a local dairy. A heat exchanger is installed to use the heat from the fresh milk to raise the temperature of the water for heating the house to a temperature of 35 degrees centigrade. The exchanger produces 1 litre of water at 35 degrees for every litre of milk going through the system. The farm also has a wood chip burner linked to the system which is used in winter to boost the temperature. The farm also rented land for a wind turbine and invested in the generation of electricity. The tubine is a 1.2 megawatt machine and has been financed through a mixture of private investment (140 investors covered one third of the total cost) and a major bank providing two thirds the cost. The total cost of the turbine was roughly 4 million euros. The electricity generated gets a value of 10c per KWh. This is equivalent to the price achieved within Northern Ireland, but Northern Ireland has a much better wind resources that would allow more electricity generation per turbine.

Sewage Plant

The sewage plant takes all of the waste water from a local highly residential area of roughly 40,000 inhabitants. All of the standard wastewater treatment processes are employed on site but the plant also allowed for the treatment of nitrogen and phosphorous. The main difference on site compared with plants in Northern Ireland was the use of a biodigester producing biogas to fuel a generator. This plant took all of the solid material from the waste water, treated it to reduce the pathogens and producing compost which is taken by local farmers. The farmers are paid 40 euros per tonne for the removal of the material and it is used as a soil improver. Most of the energy produced is used on site with any additional power sold into the grid.

(f) The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community.

The renewable sector in Germany supports 170,000 people and existing German government support measures promoting renewable energy could create 130,000 new jobs by 2020, according to the German Environment Ministry. The figure for the UK is only 25,000 with a small percentage of these jobs in Northern Ireland. Northern Ireland has huge potential for developing and exploiting renewable resources, a manufacturing tradition, a skilled workforce and a need and Government commitment to develop new infrastructure. The scale of the opportunities offered by a low carbon economy were illustrated, for example, by the 1999 analysis by Greenpeace which showed how over 30,000 new jobs could be created in the UK if the Government committed to a target of 10% of electricity from offshore wind in the next 10 years. In a recent speech, the Prime Minister stated that the overall added value of the low carbon energy sector by 2050 could be as high as $3 trillion per year worldwide and that it could employ more than 25 million people.

The CAP remains a key driver of Northern Ireland’s agricultural policy. As mentioned in the introduction, agriculture can play a significant role in mitigating and adapting to climate change beyond simply contributing to renewable energy targets. Permanent grassland is one of the most important farmed habitats in the EU (and particularly so in Northern Ireland) for biodiversity, and it is also a significant carbon sink. NIEL believes that cross-compliance should be strengthened to ensure permanent grassland is protected. NIEL considers it essential that measures to address climate change are introduced into both pillars of the CAP. However, it is important to recognise that there may be additional costs for implementing measures needed to adapt farmed land to address the effects of climate change on biodiversity and it is appropriate that adequate funding is provided to deliver these measures.

In the longer term we believe the CAP must evolve to support sustainable land management and to address the environmental challenges we are facing. We seek a radical re-orientation of land management policies to:

protect and restore our wildlife and habitats;
protect and enhance our historic environment, landscapes and woodlands;
ensure the sustainable use of our limited water and soil resources;
help mitigate and adapt to the challenges arising from climate change;
promote sustainable local food production; and
ensure the secure and sustainable production of animal welfare friendly food and other commodities.

Additionally, adapting farming practices to make them more sustainable will also be important so that agriculture can reduce its emissions of greenhouse gases and protect soil and water resources.

Much political, legislative and media attention has focused on mitigation issues, while adaptation has been given much less thought. This is especially true here in Northern Ireland and perhaps the UK in general, as there has been a perception that climate change will not have a significant impact on the region’s natural systems and societal infrastructure in the short to medium term. It is worth noting that, while more attention has been directed at adaptation recently, considerable further effort is required.

The Woodland Trust report, Adapt or Die? Climate Change and Woodland, introduces a number of policy priorities for inclusion in an adaptation strategy. In this report the Trust argues for the importance of landscape scale action. Any attempt to help biodiversity adapt to climate change should place a particular emphasis on the urgent need to conserve and create landscapes welcoming to wildlife because of the scale of the action required and the timescale needed for habitats to develop to maturity. By making natural systems more resilient, not only will biodiversity benefit but human society will also benefit from the ‘services’ which natural ecosystems provide such as flood relief, healthy soils, carbon sinks and future sequestration, water quality and renewable natural resources. Woodland, as the most widespread semi-natural habitat, is uniquely placed to act as a key component of a more sympathetic and receptive landscape for wildlife in the face of climate change. Woodland Trust - Adapt or Die

NIEL has identified the urgent need for climate change adaptation measures to be made a priority. We believe that climate change impact assessments should be incorporated within all government policies and strategies. The assessments should detail the impacts of programmes and projects on mitigation targets and ensure that all policies take into account the ability of human and natural systems to adapt to climate change. In particular, planning can be used as a key driver of a low carbon economy and can help deliver ‘future proofed’ infrastructure and natural systems. Planning policy should ensure that the impacts of any proposed development on carbon emissions and the potential impact of climate change consequences on the development are considered. It is particularly important that climate change impacts are a strong consideration in all decisions relating to nature conservation as new ways of looking at designated sites (e.g. buffer zones, corridors, low intensity networks and landscape scale actions) will be required for wildlife to be able to adapt to changing climatic conditions. Planning and nature conservation policies, and action plans, should facilitate the implementation of landscape scale action to help habitats and species adapt to climate change. The traditional practice of designating nature reserves as the primary means of protecting either species or habitats will need to be reviewed.

Powertech Ltd

40 Devesky Rd, Carrickmore,
Co. Tyrone
BT79 9BU
Email: info@powertechireland.com

Powertech Ltd

Powertech Ltd is a renewable energy company in Co. Tyrone, formed in 2003, with thirty employees. The business is centered around solar, geothermal and biomass heating systems. To date the total biomass heating capacity installed in Ireland by Powertech is 20MW. These installations vary from domestic building to hotels, schools and other industrial buildings.

Summary of Response

In Northern Ireland, as elsewhere, there will continue to be a need for sources of electricity and heat. At present, 90% of this need is met by using fossil fuels.

The supply of such sources is limited, dependent on extraneous factors and causing irreparable damage to the environment. European Directives require member states, under penalty of severe fines, to reduce dependency on fossil fuels and to reduce carbon emissions.

Existing sources must therefore be replaced by renewable sources.

A key source of renewable energy can be obtained by growing wood.

With the adoption of a new approach, wood for energy could be produced in large quantities at a cost comparable to existing fossil fuels, such as coal, oil and gas, which would also give a good return on investment to the producer. This could rejuvenate the agricultural sector, create employment and revenue for the rural community, while reducing dependence on the dwindling supply of imported fuels.

This would involve a new approach both to the power-generating infrastructure and to the method of production of wood (biomass).

Existing power generation facilities need to be adapted to burn biomass.

New power generation facilities, strategically located, need to be constructed so that the heat generated in the production of the electricity can be utilised.

The technology involved in producing electricity and heat from biomass is clean, simple, and tried and tested throughout the world, including Northern Ireland (as exemplified by Balcas in Enniskillen).

There needs to be a radically different approach, as has happened elsewhere, to the growing of wood, which can achieve high output at low cost. This will involve short rotation forestry (6-8 years) instead of existing 25-30 years, the selection of different species of trees,(e.g. eucalyptus, poplar), the adoption of different methods of silviculture, and the use of land no longer used or required for traditional farming crops.

Large quantities of land in Northern Ireland, with good accessibility and easy harvesting potential, are now unused or are under-used for agricultural purposes, and are readily available for the growing of trees.

Many of the traditional sources of income on family farms are no longer available and need to be replaced by new revenue-generating sources. Short Rotation Forestry (SRC) could play a major role in achieving this.

To be successful and to gain the support of the farming community, this strategy will require the support of government, both for the power-generating infrastructure and for the growing of wood to supply the infrastructure. This could largely be met by the restructuring of current financial incentives and/or tax remissions for capital investment in renewable energy, extended to include crop production.

Savings made by government in meeting the requirements of European Directives and thereby avoiding the payment of fines which would result from non-compliance could be used to help finance these incentives.

Submission to Inquiry

1. Our purpose in making this submission is to encourage the Committee to examine the potential to use a much greater proportion of the land to help meet the demand for renewable energy and thereby to contribute to a key element of the Programme for Government – to reduce greenhouse gas emissions by 25% below 1990 levels by 2025, while providing significant economic benefits to the farming community. In this submission, we wish to focus in particular on the contribution that a fresh approach to the growth of wood, and in particular eucalyptus, specifically for energy purposes, can make to the government’s targets for renewable energy and for the development of the rural economy.

2. In this submission, we will first refer briefly to the general background and then deal in turn with each of the terms of reference of the Inquiry.

Background

3. In recent years, there has been a sharp decline in the use of the land for traditional agricultural purposes. Income from traditional farming activities has also declined sharply for the vast majority of landowners. There is now a significant proportion of land, which in the past was required for the growth of agricultural produce, now available for other uses. This is likely to be the situation for the foreseeable future, particularly in light of EU set-aside and other policies.

4. In parallel with this, there is an urgent need in the island of Ireland to develop alternative sources of energy. The island of Ireland has the most energy import-dependent economy in the industrialised world – importing almost 90% of all its fuels. Climate change due to greenhouse gas emissions is now recognised as a key international policy issue. The government is committed to meet its obligations arising from the Kyoto Protocol and European Union directives. All these factors make it imperative that every viable option to secure a reliable and safe energy supply is explored. This submission will focus on one specific means – the development of Short Rotation Forestry (SRF) – to achieve that objective, while making an important contribution to the economic wellbeing of the rural community.

Comments on terms of reference

Term of reference a)

5. The Department of Agriculture and Rural Development (DARD) has already begun, in a number of key documents in recent years, to chart a policy direction which, if implemented and developed, would begin to address some of the issues which face rural communities. These documents include:

6. The Northern Ireland Rural Strategy 2007-2013;

Northern Ireland Forest Service – A Strategy for Sustainability and Growth;

The Northern Ireland Forest Service Business Plan for 2007-2008.

7. Key elements of the policy framework include:

Promoting alternative land use options through increased conversion of farmland to woodland and increased exploitation of non-food crop opportunities;
Focusing on the central role of agriculture and forestry in the development of renewable energy;
Expanding forest cover to contribute to renewable energy policies, while providing an alternative and viable land use for farmers and landowners, and making an important contribution to the balanced development of rural areas;
Encouraging the development of new afforestation, largely led by the private sector, with the aim of doubling over the next 50 years the area of forest;
Strengthening the social and economic infrastructure of rural areas by promoting and expanding entrepreneurship and employment, community capacity, skills acquisition and organisation for local strategy development.

8. In the wider policy context, the government has introduced Renewables Obligations for electricity production and road transport fuel, which involve obtaining an increasing proportion of electricity from renewable sources.

Comments in this submission on subsequent terms of reference will suggest a strategy to achieve the above objectives.

Term of reference b)

9. Good work has been done in recent years in Ireland, north and south, with regard to renewable technologies, but this still remains at a low level in comparison with other European countries and it has had only a limited impact on rural communities. This impact is likely to remain minimal, because in general they do not involve the production of goods or services by a significant proportion of the farming community, they do not involve the use of land for productive purposes, and therefore they do not lead to the generation of economic benefits for the rural population. The vast majority of existing woodland in Northern Ireland is coniferous. In general, it is planted in upland mountainous areas with poor accessibility; it takes about 30 years to mature, and harvesting costs are high. As a result, the return on investment to the rural community is extremely limited, and it is unlikely to be an attractive option in the long term.

10. In this general context, and in the particular context of land use for the production of wood and for renewable energy purposes, a few comparative statistics may be helpful.

In Northern Ireland, forest and woodland cover 6% of the land area (approximately 86,000 hectares).
Forest cover in Great Britain is 12%, in the Republic of Ireland 10%, and in Europe 33%.
EU policy targets an increase in the contribution of renewables to 12% of Europe’s total energy by 2010.
96% of all Europe’s renewable heat comes from wood.
Austria produces 70% of its electricity from renewable sources, with biomass yielding 11.2% of total energy supply and 21% of heat production.
24% of Sweden’s energy and 22% of Finland’s energy come from biomass.
Sweden plans to be the first country worldwide to eliminate oil from its energy mix by 2020.

11. In its key policy document - A Strategy for Sustainability and Growth - the Northern Ireland Forest Service points out that at current rates it would take well over 100 years to attain even the current Great Britain forestry intensity.. The present targets set for Northern Ireland envisage an annual increase of only 550 hectares per annum in combined public and private forest areas, including 100 hectares of Short Rotation Coppice willow.

Term of reference c)

12. This submission addresses the broad issue of the importance of renewable energy sources for heat and electricity, the contribution which a new approach to the increased production of wood can make to these areas and the economic benefits which this can have for rural dwellers. See sections f) and g) below for details.

Terms of reference d) and e)

13. At present, grants and incentives are available to landowners in Northern Ireland for woodland development. Suggestions in relation to these are included under f) and g) below.

Terms of reference f) and g)

14. The remainder of this submission examines the potential role of one major farm and rural business – Short Rotation Forestry (SRF). It is intended to outline the case for a new approach to afforestation which can provide a realistic, viable and economically sound alternative to existing land use and which can complement other strategies being developed for the provision of alternative sources of renewable energy, involving a new approach both to the power-generating infrastructure and to the method of production of wood (biomass). It argues that Northern Ireland can, and indeed must, produce greatly increased quantities of wood at commercially competitive rates for existing and new power stations, and that this can be done in a way that represents good value for the Northern Ireland economy and a guaranteed local market for producers of wood.

Power-generating Infrastructure

15. One of the key elements will be the adaptation of existing power generation facilities in Northern Ireland in order to burn biomass on a large scale. In addition, new power generation facilities, strategically located, need to be constructed so that the heat generated in the production of the electricity can be utilised. At present, electricity is generally produced independently of heat, and maximum efficiency is not achieved. This is not sustainable in the long or even the medium term. When other sources of fuel are being developed, such as biomass, it makes good economic sense to maximise their potential by the combined production of localised heat and power stations.

16. The technology involved in producing electricity and heat from biomass is clean, simple, and tried and tested throughout the world. An excellent example of this already exists in Northern Ireland where Balcas in Enniskillen has a modern plant in operation which produces combined heat and power.

17. The modification of the existing infrastructure and the development of new infrastructure, as outlined above, will be the engine which will drive the demand for biomass. A guaranteed outlet for biomass in power stations, underpinned by strong support from government, would generate confidence within the farming community to produce wood on the scale which will be required.

Short Rotation Forestry (SRF)

18. A major source of supply for the power stations, whether serving Northern Ireland as whole or smaller sub-regions, would be the large quantities of wood to be produced specifically for this purpose by the farming community. There are large areas of Northern Ireland which are currently not being used for any economic purpose. It is well established that the climate in Ireland is among the best in the world for the growing of trees. Unlike many areas of England, these lands are in the ownership of the farmers who can made decisions, without reference to lessors, about the utilisation of their land for this purpose

19. In order to meet government energy and environmental targets and to help develop the rural economy, there is a need to produce wood primarily for the purpose of meeting our energy needs. This needs to be done in a way that will be economically attractive to those who own land which is now available for alternative use, while meeting energy needs in a reliable manner and at an economic price. This new primary purpose will radically transform the perspective from which certain species of trees are viewed. It will involve a paradigm shift in relation to the development of forestry, resulting in wood being produced predominantly for energy rather than for lumber, and grown largely on arable land rather than in mountainous as heretofore. Because such land was used previously for agricultural crops and already has a good infrastructure, harvesting costs are reduced substantially.

20. Short Rotation Forestry (SRF) is a subtle variation on traditional forestry practice, but the potential improvement in terms of yield is substantial. With careful and measured choice of species and suitable horticultural techniques, it has been shown that very high yields are possible over significantly reduced rotations in a sustainable manner. The practice of thinning crops will produce usable fuel, and can take place as early as four years after planting, with a final harvest after six to eight years.

21. The benefits of single stem hardwood are manifold, both in costs and value. Wood grown as single trees is preferable to coppice material, from both harvesting and fuel quality perspectives. Burning clean, white wood causes none of the problems such as high moisture content, high proportions of bark to wood and unsuitable chemical concentrations, low density/high handling costs usually associated with Short Rotation Coppice (SRC).

22. To date, there has been little development of Short Rotation Forestry in the UK and none in Northern Ireland. However, in recent years, there have been small pockets of development in England which have clearly demonstrated the potential of SRF to deliver clean green energy from wood in a relatively short time span, at economic rates, and which can be replicated in Northern Ireland.

Eucalyptus

23. Among the range of crops examined for their suitability as biomass crops were SRC willow and poplar, miscanthus, many annual crops and eucalyptus grown on short rotations. Eucalyptus has been shown to be the clear leader, with an annual yield of 45-50 tonnes per hectare. By comparison, the yield for sitka spruce, which is the predominant species grown in Ireland and is the most common source of biomass in Ireland, is 15-20 tonnes per hectare. Indicative costs and returns show that eucalyptus can be produced at a cost which offers a good return on investment to the producer and good value for money to the purchaser.

24. Eucalyptus can help to meet energy needs by taking the maximum amount of energy from the minimum area of land at the lowest possible cost in the shortest possible time, while at the same time respecting the environment, and reducing carbon emissions. It will produce a renewable energy crop that is clean, high quality, low cost, fast growing (short rotation). It can be grown locally, thus minimising transport costs. It can be used for heating all types of buildings and for providing heating and electricity (CHP).

Conclusion

27. In this submission, a case has been made for a new approach to the development of wood growing in Northern Ireland. This would involve a way forward that would be economically attractive to those who own land which is now available for alternative use, while meeting energy needs in a reliable manner and at an economic price. We are confident that, if adopted, this strategy could go a long way to transform the rural economy of Northern Ireland and to put it in the forefront of renewable energy developments. We would welcome the opportunity to make an oral submission, if invited to do so by the Committee.

Rural Development Council

RDC Logo.psd

Mr Paul Carlisle
Committee Clerk
Committee for Agriculture and Rural Development
Room 284
Parliament Buildings
BELFAST
BT4 3XX

30th January 2008

Dear Sirs,

Re: Inquiry into Renewable Energy and Alternative Land Uses

RDC welcomes the Agriculture and Rural Development Committee decision to hold an inquiry into the development of renewable energy within the rural community and, where appropriate, alternative land uses.

The role of the Northern Ireland Rural Development Council

The Northern Ireland Rural Development Council (RDC) is an independent organisation operating at a regional level across rural Northern Ireland.

Established in 1991 its main objective is to advance rural development.

RDC is presently managed by a 13-member Council comprised of representatives drawn from a wide range of rural interests. This independent Council of rural stakeholders is working to bring about positive change for those who live, work and enjoy the countryside.

In practical terms this means:-

1. RDC provides objective analysis so decisions can be based on clear evidence

2. RDC delivers practical actions and solutions

3. RDC identifies, promotes and shares best practice

RDC is involved in the delivery of European grant programmes and acts as a key agent for the International Fund for Ireland (the Fund). This has included, among other activities, support to help people in rural areas to develop community halls, create workspace, gain employment, sustain transport networks, build play parks, deliver training, protect their environment, access essential services and maintain their local shop. RDC is currently working with 441 projects with a combined EU and Fund investment of £23.167 million.

It is this experience that informs the RDC response to this inquiry with a focus on:-

The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community

We hope you find our comments useful. Should you require any further information please do not hesitate to get in contact.

Yours sincerely,

Teresa Canavan
Deputy Chief Executive

Farmers and Farming

1. Rural represents a significant economic resource in the region. Rural areas in a changing marketplace offer considerable scope for economic innovation drawing on natural, environmental and cultural resources.

2. A concerted and positive signal from government for a creative re-take on rural enterprise is particularly important given the vulnerability of the agri-food industry in Northern Ireland. Whilst there is a body of farmers that can face up to the challenges of competing in global markets, coupled with an innovative food processing sector, at least 60% of farms are too small to support a full-time farmer, and although working as efficiently as possible, many farms (particularly in the beef suckler sector) make no money or effectively ‘pay’ to be farmers.

3. Whilst farmers are only part of the rural population with a stake in rural economic development, they are a significant focus for appropriate structural change, particularly in more marginal areas (a sizable portion of the overall land area of Northern Ireland). The map below shows levels of dependency on farming for employment and household livelihoods. It includes full and part-time farming, spouses and family members employed on farms, and full, part-time and casual labour. Green areas are those where there is a higher level of dependency on farming and typically, a lower productivity from farming also.

NI Map.eps

4. The pattern shows different levels of dependency on agriculture from West to East, with particular dependency in the rural west, the south, and the north east. Areas where dependency on agriculture is high and productivity limited require a significant re-deployment of farm resources. This would suggest a potential opportunity to diversify into renewables and the opportunity to explore the potential for and feasibility of clustering renewable energy developments in appropriate locations.

5. Farmers often however lack confidence in the applicability of their farming skills outside of farming, or indeed lack qualifications and additional skills required for re-directing farm resources into other enterprises. Key to this re-deployment must be an appropriate and integrated programme of support, in other words, there may be a need to support skills development and training of the local workforce to help retain more economic benefits from renewable energy technologies – both in developing crops and in the specialist manufacture of plant and service provision.

Rural Communities

6. Rural communities offer great potential to be early adopters of renewable energy however the use of and development of renewable energy sources are still in many ways new and whilst some are much more tried and tested than others there remains a level of uncertainty or fear in use. Only a small number of RDC funded projects have embraced new technologies (see annex 1 for information on the groups, technologies and feedback). One of the main messages from groups engaging in renewable energy technologies is that it is a long term process and to measure the economic benefits needs a long term view.

7. Community driven schemes can act to stimulate the market and offer opportunities for private sector developments to emerge.

8. To increase usage, awareness and promotion there needs to be adequate investment in organisations that can help with information and advice. This needs to be tailored for specific sectors, organisations and businesses to help them respond. People and communities need information and knowledge to help to motivate them. Working demonstrations of energy efficiency measures and alternative energy installations at small and larger scales to show what is achievable is recommended.

9. Embedding renewable energy developments in a local area through community ownership can have wider social and economic benefits and helps to promote public awareness of sustainable development. Opportunities to work in partnership should be explored between communities, the private and public sectors. Government should also help the public sector to lead by example and should market this message to the public.

Funding

10. The new Rural Development Programme 2007-2013 offers potential opportunities to fund renewable energy projects both within communities and more specifically the farming sector. Although this will not offer a full solution to funding requirements it should offer opportunities to test out and pilot new approaches in helping to raise awareness in the benefits of renewables. The proposed National Rural Network to be established as part of the new programme also offers opportunities to share best practice and to disseminate lessons from other EU regions to the Northern Ireland community and farm sector.

Rural Generation Limited

RGL Logo.psd

Brook Hall Estate
65-67 Culmore Road
Londonderry
BT48 8JE

Tel: +44(0) 28 7135 8215
Fax: +44(0) 28 7135 0970
Email: info@ruralgeneration.com

Committee for Agriculture and Rural Development
Room 284
Parliament Buildings
Belfast
BT4 3XX

1st February 2008

Dear Paul,

Re: Inquiry into renewable energy and alternative land uses.

Further to your letter 13th December 2007, we wish to submit evidence to the Committee.

Rural Generation Ltd is a biomass company based in Londonderry. We are involved in the promotion and use of Short Rotation Willow Coppice both as an energy crop and as a biofiliter. We also sell biomass boilers. Our main area of interest is biomass to heat.

We welcome the opportunity to feed into the process. We welcome the Committees focus on a renewable energy and on alternative land uses, as we believe that Northern Ireland has a capacity to develop a sustainable biomass to energy industry.

I shall try to be as brief as possible:

1. In PPS 18, section 2.12, Sustainable development strategy there is a reference to “Building on the existing success.” I hope that this is recognised, as a recent development in using forestry in Northern Ireland, as a route for the disposal of sewage sludge, has mitigated against the development of Short Rotation Coppice. This is evident in the reduced level of applications for the planting of willows in 2008.

2. In PPS 18, section 3.1, policy objectives, there are targets of 12% renewable electricity by 2012 and 40% by 2025. There is no reference to heat targets. It is important that when considering the contribution that agriculture can make towards renewable energy, that conversion efficiencies are considered i.e. biomass converted to heat is normally at about 90% efficient. Biomass to electricity is normally about 30%. Essentially you get three times as much energy by converting biomass to heat than by converting biomass to electricity.

3. Peter Robinson’s recent decision not to implement new building regulations that require developers to incorporate renewable energy technologies in the building process is, in our opinion a mistake. This was a good opportunity to move the situation forwards. I’m sure that you are aware of the Stern report which was published in 2007. It not only highlights the consequences of not taking action now, to address climate change, but it also quantifies the cost of delaying action. It is important to recognise that any delay in taking action will incur higher costs in the long run. We therefore believe that there has to be recognition that reducing our carbon footprint will have a cost.

4. Within the Draft Programme for Government 2008-2011, one of the key goals for the environment is to ensure that 12% of our electricity is generated from indigenous renewable sources by 2012. Electricity only accounts for approximately 34% of our energy consumption. Why is there no target for heat?

5. Also within the Draft Programme is a target for increasing the area of forest and woodland by 1,650 hectares by 2011. This equates to approximately 0.2% of the land under agriculture in Northern Ireland. The target is pitifully low and will not make any significant contribution to our biomass resource. Northern Ireland has one of the lowest levels of afforestation in the European Union and we would suggest that considerable effort should be put into increasing the area.

6. We understand that the current grant scheme supporting the installation of biomass boilers into domestic houses will cease in March 2008. In our opinion this will cause a downturn in boiler installation as most house owners will not proceed with boiler installations without grant assistance. This also sends out confusing messages to the public as there is a perception that government is not committed to heat from biomass.

7. There is an unfortunate situation at present where agricultural businesses cannot benefit from Invest Northern Ireland’s expertise and schemes. While DARD have considerable expertise in supporting the agronomic aspects of farm businesses I think that it is generally accepted that they have been unsuccessful in fulfilling their remit in terms of Rural Development. They are essentially an agricultural organisation, not a business support agency.

8 We are aware of an initiative within sustainable energy branch of DETI (seminar 19th Feb 08). This is a very welcome development as interdepartmental cooperation is required.

9. It is imperative that DARD develop short term medium and long term strategies for the development of renewable energy. These strategies should be delivered by way of specific plans, with identifiable and measurable targets, e.g. it was unclear what would follow on from the short rotation challenge fund which ran from 2004-2007. As far as we were aware the new scheme was only launched in November 2007 so there was a period of approximately 12 months when farmers and land owners were uncertain about whether the scheme would continue, or what would replace it. Why can a programme not run for 5-8 years with clear milestones and deliverables? Investment in agricultural land is generally long term and it is difficult to cope with short fix changes in policy which are not anticipated.

We wish you every success with this initiative which we consider is critical both for farmers in Northern Ireland and for the long term issues associated with security of energy supplies. We are willing to give oral evidence to the Committee if you think that this would be helpful.

Yours sincerely

For Rural Generation Limited

Michael Doran
Business Development Director

Ulster Farmers’ Union

UFU Logo.psd

Renewable Energy and Alternative Land Use Opportunities for Northern Ireland Society & Agriculture.

World focus is currently on renewable energy and its potential to mitigate excessive climate change. The disastrous implications of this climate change has galvanized world governments and climate change forced them to recognize the deleterious consequences of relying too heavily on the highly profitable petrochemical economy. Historically cheap and widely available fossil fuel did not engender efficient energy system design while the ignorance of wider environmental implications led to a failure to significantly improve efficiencies. The European Commission now recognizes that there is a major world problem to face and that one important aspect of this is to reduce the emissions of noxious gases into our atmosphere especially those derived from fossil carbon fuel.

This new direction indicated by Europe creates many opportunities for those who are able to produce raw materials and or energy from non fossil sources. Northern Ireland has more potential to benefit from the opportunities created by these necessary fundamental changes than any other country in the European Union. The Province imports the highest proportion of fuels within the entire European Community; it pays some of the highest prices for energy and then promptly wastes through inefficient design a greater proportion than almost any other country. There is real potential to improve on all these figures and if the Northern Ireland Government was to target any or all of these factors then the result would be more money kept within the local economy, which would significantly improve the province’s balance of payments, as well as providing substantial benefits for the environment and the development of ‘rural’ Northern Ireland.

The short term policy decisions must be focused on energy but as the renewable market matures it is essential that an eye is kept on the development of renewable raw materials. In five to ten years it is these renewable raw materials and their potential to produce sustainable products that will give the greatest opportunity for economic growth and employment for all sectors within Northern Ireland. It is essential that sufficient land resources will be available for these future markets and that they are not all committed long-term to comparatively low value energy production – the government in the Republic of Ireland has already taken cognizance of this and planned accordingly. To put this into perspective, one acre of land currently produces enough vegetable oil to directly replace one ton of diesel fuel oil and the by-products of the oil seed crop would replace a second ton of fuel. The same vegetable oil could however directly produce enough insulation foam to insulate fifteen houses to modern standards, hence replacing many thousands of pounds worth of imports; and then at end of life the insulation would be burned safely to replace the second ton of fossil fuel. Furthermore products that have been derived from vegetable matter without the polluting influence of mineral oils can usually be recycled by bio-remediation on land that is being used for non-food products which in turn further reduces fertilizer input.

96% is the figure commonly reported to be the percentage of fuel imported into Northern Ireland. This figure alone stands in stark contrast to the fact that Ireland as a whole is best positioned within the entire northern hemisphere to benefit from biomass production. The North Atlantic Drift with its associated mild winters and wet summers coupled to Ireland’s northern latitude, which gives rise to long daylight hours, means that it is able to produce 15% more biomass than the UK mainland and up to three times more biomass than Eastern Europe. The island also benefits from some of Europe’s best wind resource and highest tides. These important competitive advantages must not be allowed to be disregarded or avoided any longer.

The potential for biomass as a source of energy must not be underestimated. The planet as a whole is radiated with energy from the sun (the ultimate source of all renewables) that is in excess of 26,000 times that that is released by man by burning fossil fuel. Most of this energy is reflected back out to space but a very large quantity is absorbed by plant growth and stored in biomass. The normal planet cycles and atmospheric cleansing safely stores this excess energy in what we now call fossil fuel. It is interesting to note that all of man’s present energy requirements and future energy requirements could easily be accommodated by redirecting some of these natural energy systems without recall to fossil fuels. It is highly unlikely that society as it is currently constituted would have the desire to make such radical changes but that on its own is not good enough reason to ignore the benefits that are currently available. For example the most efficient and cost effective method of capturing this free sunlight energy is photosynthesis or simply growing biomass. To put this into a financial perspective, the most efficient practical photoelectric cells available on a commercial scale are theoretically about 11% efficient at energy conversion; in Northern Ireland this figure is practically found to be about 8%; when this is stored the efficiency falls to about 4% -- the same as photosynthesis. To cover a hectare of land with photocells would cost in excess of £20,000,000 while the same area of grass or crops would store the same energy for about £200. The first scenario is heavily endorsed and supported by powerful industrial lobby interests with huge financial resources, the second is supported by concern for the environment and a stressed agricultural sector who are currently in a position to supply biomass but have no viable route to the energy market.

It is essential that the policies that the Northern Ireland Government decides upon encourage the integration of this renewable energy into an existing energy network. This will require difficult but minor changes to the current supply chain structure to allow free competition for local markets that are currently exclusively supplied by external investors. Similarly new short supply chains will have to be created on a local basis to save wasteful network overheads. If the electricity supply network is taken for an example there are very significant benefits to be made. Fossil fuels are imported and burned in power stations that waste at source between 50 and 70% as heat and noxious gases. The remaining energy is then distributed at high voltages at further losses in the region of 10%. In winter the peak requirement for Northern Ireland electricity is about 1800 megawatts for only about three hours in the day and this figure falls to a base load of about 300 megawatts – this huge variation in load often means that generators must be left running doing nothing because they cannot be restarted in time for the next peak. This all leads to an ‘availability charge’ that dwarfs by comparison the supply electrical unit charge. It is this availability charge that needs to be opened up to the local market which in turn would reduce payback times for any renewable electrical installation to those that would be of interest to financial institutions for investment. To further progress this example if electricity and heat were generated in a distributed network using local combined heat and power plants, then energy savings in excess of 75% would be achieved –this alone would surpass Europe’s 2050 target. The easiest way to visualize this scenario would be to look at the influence the Internet had on computer processing power; there was a rapid movement away from central powerful computers to local small personal computers networked to produce a much more powerful computing entity. There is considerable support and research within mainland Europe and the timing is now ripe for the Assembly to endorse and promote this network energy technology to the benefit of the local economy.

It is important that the Northern Ireland Government opens strenuously protected markets such as electricity and fuel to local producers at financially viable prices. The previous NI Electricity Regulator reported that the producer of electricity should receive 80% of the retail value, this aspiration has not even come close for the average local renewable electricity supplier. If this figure could be achieved then direct financial support, required to install technologies, such as anaerobic digestion or small scale combined heat and power or even larger projects such as tidal power, would be supplied by commercial financial institutions without further ongoing government financial support. In Germany, the government guaranteed the electricity supplied price from anaerobic digesters at approximately 20¢ per kilowatt hour. This promoted a very large number of installations because they became financially worthwhile – in Northern Ireland anaerobic digesters are currently just not financially viable with the low electricity price offered resulting in gases from waste that should be fuelling our local economy currently adding to our greenhouse gas emissions.

The food versus fuel debate has the potential to stifle the renewable market and it is essential that the Northern Ireland Government is in a position to judge the relative merits from an unbiased local point of view. There is plenty of potential for the industry to supply both energy and food but there is a requirement for a holistic viewpoint to be taken. Currently the food industry dispatches approximately 50% of the harvested food to landfill very often for aesthetic reasons. Energy could and should be recovered from this source and used to generate local heat and power as required. Land use should be considered carefully and more use made of all parts of the crops that are grown. A very large proportion of the agricultural production in Northern Ireland is sold as raw material without the benefit of added value which benefits the local economy. To achieve this it is essential to create local and often shorter supply chains directly from the farm to the end user. The National Non-Food Crop Centre was set up several years ago in the UK by the DTI and DEFRA to address these supply chain problems; this organization has achieved significant success in promoting the local economies and the Assembly should consider establishing this or a similar body within Northern Ireland to promote, guide and implement this agenda.

Both Central and Local Government in Northern Ireland are themselves very large energy consumers which, despite commitments by the former NI Secretary of State, still fails to properly endorse and nurture the renewable market. Current technology which is well proven throughout Europe could be employed to introduce renewable energy sources directly to the Government Estate without further research and development. Assistance however is needed at the start to encourage, train, guide and support some of the approximately 40,000 individual Single Farm Payment registered landowners (biomass producers) into developing energy supply companies. If this was to occur, then confidence and financial support shown by the Government would be multiplied several fold as any money spent would be kept within the Province and help the local economy and directly promote both a secondary service support industry and development of rural areas throughout Northern Ireland.

The Northern Ireland Government should consider how best to implement a renewable policy throughout all aspects of its structure, not only to give coordination and consistency but also to promote a holistic approach. The structure of Government within the province tends to specialize in numerous independent Government Departments that take responsibility for their specific domains. This has worked well historically in promoting and giving accountability to each of those specific domains individually but has not been so successful in introducing policies that cover and interact between all Departments. One model that should be considered and possibly replicated is that currently used to introduce Biodiversity regulation throughout NI Government.

The local agricultural industry has once again much to offer society as a whole. While in recent years agriculture has become synonymous with the agri-food industry it still has the original and most cost effective source of renewable energy and sustainable raw materials available to mankind. Over the past 50 years the financial value of farming relative to the energy market driven world has fallen dramatically. Any future that has sustainability or renewables incorporated in its ethos has no alternative but to use land area as an integral part of its strategy. It is imperative that farmers –the current landowners in Northern Ireland –are instrumental in forging a brave new world.

Northern Ireland’s farmers are ready and willing to deliver but are enormously frustrated at the present inertia. A political impetus and coordinated approach from Northern Ireland’s Government is a pre-requisite to ensuring that this can be realized.

Appendix to UFU Submission for NI Assembly Renewables Inquiry

1. ‘Renewables’ Legislation

International

Kyoto Protocol (Dec ’97) – UK to reduce greenhouse gas emissions by 12.5% on 1990 levels by 2008-12

EU

20% average share of renewables in overall energy consumption by 2010 (15% for UK)
10% binding target for biofuels in transport by 2020
Report by end of 2011 on a similar sustainability scheme for biomass

UK

Energy White Paper
10% electricity from renewable sources by 2020
Publication of ‘Biomass Strategy’ for heat
Possibility of increasing proportion of transport fuel from renewables through
Renewable Transport Fuel Obligation (RTFO) – currently 5% content by 2010

ROI

Renewables Energy Feed In Tariff (REFIT) (May 2006)
€80/ha national top-up to €45/ha EU Energy Crop Premium (Dec 2006)
Energy White Paper (March 2007)
€11 million Renewable Energy Grant Scheme for CHP systems (Jan 2008)
REFIT Tariff increased to 12 eurocents/kWh (Jan 2008)

NI

NI Renewables Obligation Order – 6% electricity by 2012/13
£59 million NI Environment and Renewable Energy Fund (Feb 2006)
DARD Renewable Energy Action Plan (Jan 2007)

2. UFU ACTION

Established UFU Rural Enterprise Committee
Established firm links with National Non-Food Crops Centre (NNFCC)
Engaging with Government: (DARD, DETI, Invest NI); NI Assembly; and Local Councils
Responded to DARD Consultation: Recommendations to ‘DARD for a Renewable Energy Policy’
Speaking with NI industry: Energy & Environment Show (2006); UFU ‘Renewable Energy’ Conference (Jan 2007); and participation in DARD/industry ‘Renewables Open Day’ (Aug 07)
Inclusion of ‘public procurement’ of renewable energy in UFU NI Programme for Government Document
Meeting with NI Electricity Regulator
Meetings with Irish Farmers’ Association

Woodland Trust

Woodlands Logo.psd

Response to the Committee for Agriculture and Rural Development inquiry into renewable energy and alternative land uses

1. The Woodland Trust welcomes the opportunity to respond to this consultation. The Trust is the UK’s leading woodland conservation charity. We have four main aims: no further loss of ancient woodland, restoring and improving woodland biodiversity, increasing new native woodland and increasing people’s understanding and enjoyment of woodland. We own over 1,000 sites across the UK, covering around 20,000 hectares (50,000 acres) and we have 300,000 members and supporters.

Summary

The Woodland Trust supports the use of renewable energy sources as an important part of mitigating climate change, where such energy generation is environmentally sustainable. While the inquiry refers to renewable energy generally, our evidence relates mainly to bioenergy – the production of heat, power and liquid fuels from biomass. This fast-developing sector has potential to make a huge impact on forestry, conservation and land-use issues in Northern Ireland in the near future.

Bioenergy could reduce net production of greenhouse gas emissions, and mitigate against climate change, and could therefore play a significant part in the Department for Agriculture and Rural Affairs approach to reinvigorating agriculture. However, it should be environmentally sustainable; offering real carbon savings, avoiding negative impacts on the natural environment and wherever possible delivering positive environmental benefits.

The use of biomass for production of heat and power, and in the longer term, for second-generation biofuels, will achieve the greatest greenhouse gas savings. Use of low-grade timber and forestry residues, and planting of new woodland and short-rotation coppice, also have the potential, if targeted, to provide other positive environmental benefits, such as restoration and buffering of semi-natural habitats. We would therefore prefer policy and incentives to favour these developments, rather than production of transport fuels from agricultural crops, which potentially provides less greenhouse gas savings, and carries more risk of negative environmental impacts.

The Department for Agriculture and Rural Affairs must ensure there are necessary checks and balances to prevent unsustainable practice. In particular, it is essential that some form of certification, linked to both financial incentives and regulation, is put in place as soon as possible to ensure bioenergy production is environmentally sustainable.

The recent and current policy framework for the development of renewable energy in Northern Ireland, focussing on but not limited to those policies developed and implemented by the Department of Agriculture and Rural Development

2. Bioenergy could form part of a wider suite of polices to help Northern Ireland diversify its energy mix and make greater use of renewables. Indeed, we argue that sustainable bioenergy could be used in the effort to mitigate against climate change, and subsequently ensure that the UK meets its emission reduction targets.

3. If managed correctly there might be a number of opportunities for the Department of Agriculture and Rural Affairs to use an expanded bioenergy industry to deliver environmental benefits that not only mitigate climate change, but ensure that the natural environment is capable of adapting to new pressures. Most of these benefits relate to production of heat or combined heat and power from biomass, or, in the longer term, the production of second-generation biofuels from woody crops and could include the following:

Restoration of Plantations on Ancient Woodland Sites (PAWS): Many of Northern Ireland’s ancient and long established woods have been planted with non-native conifers. This has taken its toll on the unique woodland wildlife that ancient woods support. In many PAWS sites, ancient woodland communities cling on in isolated pockets, along rides or in glades, but a further round of felling and replanting could lead to their being lost altogether. The Woodland Trust is calling for restoration of all non-native conifer PAWS to mainly broadleaved woodland. While some of this work has begun on the Forest Service and other estates, a more buoyant market for low-grade timber could stimulate further restoration work.
Buffering semi-natural habitats. Ancient woods and other semi-natural habitats often exist as isolated islands within an intensively managed landscape. As such they are vulnerable to negative edge-effects from surrounding land, such as nitrate run-off. New planting, including new native woodland, short rotation forestry and short rotation coppice, which require less intensive management than conventional arable crops, could act as buffers.
Bringing semi-natural woodland into sensitive and appropriate management, where it can be demonstrated that this will have biodiversity and/or social benefits.
Economic benefits: an expansion of the domestic timber market could benefit both individual woodland owners and the wider rural economy, through creation of employment in timber harvesting and transport.
Improved soil and water quality: Certain crops, especially multi-annual crops that require less intensive management, including fewer fertilisers and pesticides – miscanthus and short-rotation coppice – could lead to improved soil and water quality, if they were to replace conventional arable crops.

4. Nevertheless bioenergy poses threats to the environment if it is not sourced sustainably, and the Department for Agriculture and Rural Development should be cautious in how it utilises the policy mechanisms available to increase production. Some of these threats include:

Loss of valuable wildlife habitats to biofuel crops, or to the land-uses they displace, such as food crops. Valuable wildlife habitats include both semi-natural habitats and others, such as improved wet grassland. They could also include set-aside land that has been left fallow and has developed biodiversity interest.
Increased use of fertilisers or pesticides, affecting water quality, where crops requiring this kind of management displace a less intensive land use.
Increased use of deep ploughing and heavy harvesting techniques that create a risk of soil erosion, for example, in management of short rotation coppice.
Over-exploitation and insensitive management of woods, and replanting with inappropriate species.
Use of monocultures, which has both landscape and biodiversity implications, and would make crops more prone to disease
Unknown biodiversity effects of planting large areas of new crops, such as Miscanthus.
Continued and further intensification of land use between and around semi-natural habitats, just at a time when we are recognising the need for ecologically functional landscapes for the conservation of biodiversity. This is critical to survival and adaptation of wildlife in the face of climate change.

The relative importance in terms of contributing to Governments renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable sources, and how relevant each could be to the Northern Ireland economy

5. Current evidence is that the greatest potential greenhouse gas savings can be achieved through burning of woodchip to generate heat, gasification of biomass to produce electricity, and the use of “second-generation” biofuels produced from biomass. The use of low-grade timber and forestry residues, short rotation coppice and forestry for these purposes also offers more opportunities for “win-win” developments, where greenhouse gas savings from using bioenergy are supplemented by other environmental gains such as restoration and buffering of semi-natural habitats, reduced intensity of land-use, improved soil and water quality, as outlined in point 3 above.

6. The Woodland Trust would therefore like to see bioenergy policies place greater emphasis on the use of woody biomass crops for these purposes, rather than on agricultural crops such as sugar beet, oilseed rape and wheat for the production of biofuels. We particularly support small-scale, local, use of woodfuel for heat, since this offers an opportunity to develop local timber markets, benefiting rural economies, and to minimise emissions from transport of feedstocks.

7. Projections by the NFU for meeting the 5 per cent target by 2010 from production of wheat and oilseed rape indicate that this would require at least 1.2m ha of land, which is equivalent to 20 per cent of the UK’s arable land[1]. The NFU believes this target could be met through current surplus production of wheat, and use of set-aside land. However, in order to meet the 10 per cent target by 2020 through domestic production, biofuel crops would have to compete with the many other pressures on land in the UK, particularly use of land for food production and areas of biodiversity and recreational value. It is likely therefore that targets will only be met by importing biofuels, or by importing the raw materials such as palm oil, and rightly this is creating a great deal of concern about the potential effects of a burgeoning global market, which is seeing biofuel crops displacing both valuable natural habitats and the poorest people in developing countries. Concerns about the sustainability of biofuels have recently been expressed by both the Royal Society[2] and the Environmental Audit Committee[3], and the European Commission will also be reviewing biofuels policy in the forthcoming Renewable Energy Directive.

The range of support available to renewable initiatives at local, national and European levels

8. We believe that arable biofuels should not receive additional funding as there is sufficient market demand for their production. The Department for Agriculture and Rural Affairs could channel this funding into developing the woodfuel sector as this offers the most environmentally sustainable form of bioenergy.

The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those businesses and wider community

9. Farm and rural businesses and rural communities could potentially contribute a great deal to developing a sustainable bioenergy sector for Northern Ireland. There are already examples in Northern Ireland of small-scale, local use of woodfuel for heating, and a number of farmers have taken up the option of growing short-rotation coppice. We believe that woodland owners, both on large estates (including Forest Service) and small farms could benefit from a re-invigorated timber market, providing woodfuel for heat and power. Farmers could contribute through further diversification to produce short-rotation coppice and other biomass crops.

10. However, it is essential that the policy and support framework is in place, so that there are appropriate checks and balances, and sufficient practical guidance, to ensure that the developments that take place create a bioenergy sector that offers genuine greenhouse gas savings without other adverse environmental impacts.

11. Northern Ireland is already struggling to meet the commitments held with the relevant sections of the Biodiversity Action Plan (BAP) and the sustainable development framework. Any new policies on bioenergy must pay heed to the likely effect on biodiversity and the requirement that Northern Ireland create ecological functional landscapes capable of meeting the various biodiversity commitments.

The ways by which the Department of Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to Northern Ireland’s renewable targets

12. The Department of Agriculture and Rural Affairs will have a crucial role to play in ensuring that policies to encourage renewables do not damage Northern Ireland’s environmentally sensitive areas. In particular, the department can ensure that bioenergy is sourced sustainably, without damaging biodiversity, and the ecosystems upon which society is dependent for water, air and soil quality.

13. We would stress that any development in renewable energy must take place within an overarching framework that has at its centre reductions in energy use, through behavioural change, rather than focusing narrowly on substituting one energy source for another.

14. The Department of Agriculture and Rural Affairs should primarily deliver policies that cultivate landscape scale action. This would seek to develop an ecologically functional landscape rather than small isolated sanctuaries of biodiversity, and it is critical that producing bioenergy contributes to landscape scale principles rather than detracting from them. Importantly land-use policy should deliver an integrated response that will mitigate climate change, and allow species to adapt across ecologically robust habitats. Bioenergy can contribute to this, but only if there is a rigorous and transparent sustainability assessment.

The Woodland Trust, 1 Dufferin Court, Dufferin Avenue, Bangor, County Down, BT20 3BX

www.woodland-trust.org.uk/campaigns

For more information please contact:

PatrickCregg@woodland-trust.org.uk 02891 275 789 or

LeeBruce@woodalnd-trust.org.uk 01476 581 111

[1] NFU (2006), UK Biofuels – land required to meet the RTFO 2010. www.nfuonline.com/x9763.xml

[2] Royal Soceity (2008),Sustainable biofuels: prospects and challenges. http://royalsociety.org/document.asp?id=7366

[3] Environmental Audit Committee (2008), Are biofuels sustainable? http://www.parliament.uk/parliamentary_committees/environmental_audit_committee/eac_210108.cfm

WWF Northern Ireland

wwf Logo.psd

13 West Street, Carrickfergus
Co Antrim, Northern Ireland
BT38 7AR
t: 028 9335 5166
f: 028 9336 4448
www.wwf.org.uk/northernireland

Mr Paul Carlisle,
Committee Clerk,
Room 284,
Parliament Buildings,
Belfast
BT4 3XX.

Reference: ARD Committee inquiry into renewable energy and alternative land uses

01 February 2008

Dear Mr Carlisle,

WWF Northern Ireland welcomes this inquiry and the opportunity to comment on it.

WWF Northern Ireland is part of the world’s largest independent conservation organisation in the world which operates in over 90 countries. WWF is a challenging, constructive, science-based organisation that addresses issues from the survival of species and habitats to climate change, sustainable business and environmental education. WWF has some five million supporters worldwide and approximately 90% of our income derives from voluntary sources such as people and the business community.

WWF works to

conserve endangered species - such as tigers, great apes and whales;
protect endangered spaces - such as forests, savannahs, wetlands and seas;
address global threats to the planet - such as climate change and toxic chemicals

for the benefit of people and nature.

If you have a further queries on this submission please do not hesitate to contact me.

Yours sincerely

Malachy Campbell
Policy Officer WWF Northern Ireland

WWF NI Submission to Ard Committee Inquiry Into Renewable Energy and Alternative Land Uses

(a) The recent and current policy framework for the development of renewable energy in Northern Ireland, focussing on but not limited to those policies developed and implemented by the Department of Agriculture and Rural Development.

In addition there are also UK targets most notable the targets within the draft UK Climate change bill namely to reduce Carbon Dioxide (CO2) emissions by 60% by 2050 with an interim target to reduce CO2 emissions by 26-32% by 2020 against a 1990 baseline. However, WWF is pressing for these targets to be revised upwards to ensure a reduction in CO2 levels of 40% by 2020 and 80% by 2050.

In order to facilitate the achievement of the national and international targets and also to guide the development of energy policy in Northern Ireland, WWF Northern Ireland believes that there is a real need for a long term NI energy strategy which sets more ambitious targets for the generation of renewable energy in NI than currently exists.

In January 2008, commenting on a North South study on renewable energy and the grid, the Minister for Enterprise Trade and Investment, Nigel Dodds said that Northern Ireland “can make a significant contribution to the UK’s climate change goals by enhancing the amount of electricity generated from local renewable sources” and that “it is clear that we must be more ambitious in setting future renewable energy targets.”

WWF Northern Ireland fully supports this. Unfortunately though, the recent Programme for Government (PfG) was not more ambitious than any of the existing strategies as it only restated existing targets. For example, the target in the PfG to reduce NI’s carbon footprint by 25% by 2025 though welcome was a pre-existing target from the NI Sustainable Development Strategy (NI SDS) and WWF Northern Ireland is disappointed at the lack of ambition in demonstrated by the fact the 2007 PfG did not raise existing targets in the NI SDS.

The passing of the legislative consent motion in relation to Northern Ireland’s participation in the UK Climate Change Bill on Monday 10th December 2007, means that Northern Ireland agreed to be part of the UK Climate Change Bill. In introducing the legislative consent motion the Environment Minister Arlene Foster said

“it is now accepted that climate change is the greatest environmental challenge faced by the world today.”

and

“The UK Government, and each of the devolved administrations, are committed to tackling the issue, because we in Northern Ireland must play our part.”

Given that the interim target in the current draft of the Climate Change bill is to reduce CO2 emissions by 26-32% by 2020 against a 1990 baseline, a target to reduce Northern Ireland’s carbon footprint by 25% by 2025 is again actually below the comparable UK target, in terms of both the level of reduction and the time by which this has to be achieved, again reflective of a lack of ambition in Northern Ireland. WWF Northern Ireland recommends that in line with the emerging science, Northern Ireland aims to reduce its carbon emissions by 40% by 2020 and 80% by 2050.

While Scotland has a target to produce 40% of its electricity from renewable resources by 2020, Northern Ireland’s target is to have 12 % of electricity generated from renewable resources by 2012. According to a 2003 report by WWF Scotland nearly 50,000 new jobs could be created in Scotland in sectors such as wave and wind energy, recycling, public transport and organic farming. Though the potential for renewable energy sources such as wind and wave power are undoubtedly larger in Scotland than Northern Ireland, it is anticipated the potential in Northern Ireland would be significant and the potential for job creation should be explored.

Enormous potential exists for renewable energy, and yet only 4% of Northern Ireland’s electricity is generated from renewables. This compares to 12% in Germany which has embraced green technology and has around 170,000 people employed in green industries and that is projected to rise to 300,000 by 2020. The German government already has a target to cut CO2 emissions by 40% against 1990 levels by 2020, which it estimates will generate savings of €5bn in private households and industry by 2020, and that on average, every tonne of CO2 saved has a saving effect of €26.

In light of the range of potential benefits of greater development of renewable energy sources in Northern Ireland, Northern Ireland needs a long term energy strategy to reduce our dependence on imported fossil fuels, develop the potential for renewables and create jobs.

(b) The range of renewable technologies currently in operation or planned in rural communities, taking into account, as appropriate, similar projects elsewhere.

There is a broad range of renewable technologies available including, but not limited to, wind power (onshore and offshore), hydro, wave power and marine current power, biomass and biodiesel, solar power both in terms of solar water heating and photovoltaic, as well as passive solar heating. Given the recent advancements in bioenergy which mean that fuels can now be generated from rapeseed, cereals, and even grass, as well as the potential energy resource provided by (what are currently viewed) as organic agricultural and forestry wastes and by-products, it seems clear that a number of opportunities exist for Northern Ireland to reduce its dependence of fossil fuels and increase energy production from a range of renewable sources.

The nature of energy supply, in terms of the centralised grid is a very important factor, as it is a hugely inefficient system. Decentralised electricity can be much more efficient especially for rural communities and/or where the demand for energy is dispersed and should be a very attractive option for many farmers, especially those who could produce and consume their own energy source and WWF Northern Ireland supports the principle of decentralised energy.

The recent proposal by Rose Energy also shows the potential for what are currently viewed as waste products to be turned into energy sources, while tackling a waste and potential pollution problem.

(c) The relative importance in terms of contributing to Governments renewable energy targets, of heat from renewable sources, electricity from renewable sources and fuel from renewable sources, and how relevant each could be to the NI economy.

While the increasing utilisation of more efficient Combined Cycle Gas Turbines (CCGTs) has benefits, Combined Heat and Power (CHP) plants, which also use the heat generated in the course of the electricity production process, have an even greater efficiency level (of approximately 80%). For example, the Blackwater biomass CHP plant at Benburb (run by B9) operates at approximately 75% efficiency. Significant steps could be made in reducing the amount of energy consumed by greater use of CHP stations and should be facilitated as part of an integrated energy policy. It is however important to say that WWF’s support for CHP also depends on the fuel source used. For example WWF does not support the production of energy from domestic waste as a renewable resource, as this requires and often encourages the production of large quantities of waste. Similarly, while biomass is carbon neutral, WWF would not support the use of genetically modified plants for biomass projects and would recommend the use of native species like willow which support a greater level of (native) biodiversity in biomass projects.

While WWF recognises the potential for renewable bioenergy sources to be grown in Northern Ireland it believes the broader impact of their production must be considered and acceptable levels of social and environmental performance in the production of bioenergy among supply chain actors, from growers to end users should all be factored in. For example, there is a risk, especially on a small island, that a biofuel processing plant would create a market demand that cannot be met locally. This would put pressure for biofuel to be imported. This risks creating a demand for importing biofuels that may not have been produced sustainably and this could have significant, long term detrimental consequences for people and nature, as exemplified by the biofuels produced from the palm oil plantations that have been planted on former rainforest in Indonesia. The changes in land use for biofuel production in the US and subsequent changes in wheat prices demonstrates how global changes in policy and demand can affect commodity prices.

In WWF’s view, the following environmental principles need to be addressed by any standard as a minimum both for crops produced in Northern Ireland and as a requirement for imported fuel sources

not damage high conservation value habitats and biodiversity
not degrade soil quality
not adversely impact the quantity and quality of freshwater resources
not lead to damaging release of toxic compounds into the environment
lead to substantially positive lifecycle GHG balances compared to fossil fuel equivalents

WWF will only support bioenergy that is environmentally, socially and economically sustainable and considers that effective measures are needed to address the following issues:

(1) Bioenergy must deliver large positive energy and Greenhouse Gas (GHG) balances over fossil fuels

(2) Bioenergy feedstock must be selected on the basis of the most efficient GHG balance, from production through to processing and use

(3) Bioenergy policies and programmes must address displacement effects (where a certain crop displaces an existing crop which in turn may then expand onto High Conservation Value Areas) that influence GHG balance poverty and the environment

(4) Permanent grasslands, natural and semi natural forests, natural floodplains, wetlands and peatlands important for threatened species and other High Conservation Value Areas (HCVAs) must not be turned into intensive bioenergy production

(5) Bioenergy feedstocks must be produced using better management practices

(6) Implementation of bioenergy policies must take into account food security and must not threaten the realisation of the right to food

(7) Governments must take measures to ensure an equitable playing fireld for small producers

(d) The range of support available to renewable initiatives at local, national and European levels.

The development of renewable energy in Germany has already been referred to and a major factor in the success of the renewable energy industry in Germany has been the policy of the German government in offering what are described as ‘feed in tariffs’ whereby energy (electricity) usually above and beyond what the producers consumes themselves, is purchased from the producer at a set rate, normally above the normal rate, on the basis of a long term contract. This approach has helped to make Germany a leader in renewable energy in Europe and globally and significantly, this option of feed in tariffs has also been adopted by the Republic of Ireland (RoI).

In January 2008, the Republic of Ireland’s Energy Minister, Eamon Ryan announced a new renewable energy grant scheme totalling €11 million channelled through Sustainable Energy Ireland (SEI) for the installation of biomass-fuelled and anaerobic digestion Combined Heat and Power Units (CHP), which included feed-in-tarrif or guaranteed price of €120 per MegaWatt Hour (MWh), for the production of electricity from biomass CHP and anaerobic digestion under the REFIT scheme. The Minister has also introduced a new feed-in-tariff under the REFIT scheme for wave energy of €220 per MWh. WWF Northern Ireland believes if such a system of feed-in tariffs were to be instigated in NI it would greatly assist the development of renewable energy sources.

Smart metering, whereby electricity demand is metered every half hour, is another option which has been shown to reduce demand.

WWF Northern Ireland understands that the Environment and Renewable Energy Fund (EREF) which offers grants for the installation of small scale renewable energy technologies in households will not be extended beyond the original deadline of March 2008. WWF views this as regrettable and would like to see this scheme continued. Similarly WWF Northern Ireland was disappointed at the decision by Minister for Finance and Personnel Peter Robinson to reverse the decision made by previous Secretary of State Peter Hain to require fitting of micro renewable technologies to all new build in Northern Ireland. However WWF Northern Ireland is delighted at and supports Minister Robinson’s decision to take forward a proposal to provide a rate rebate to existing homes that make energy efficiency improvements such as cavity wall and loft insulation and the proposal to give an initial rate exemption for the first purchase of new homes which are zero carbon rated.

(e) To compare the range of fiscal and other incentives offered elsewhere to support the development of a renewable energy industry and the infrastructure to support it.

Please see above.

(f) The potential role of farm and rural businesses and rural communities in the delivery of a renewables programme which contributes to the sustainability of those business and the wider community.

The 2007-2013 Rural Development Programme offers a great opportunity for farms, rural businesses and communities to contribute to the delivery of a renewables programme. However for this to happen in practice, the renewables programme needs to be better incorporated into all axes of the the NIRDP. For example, there is a measure in the NIRDP under Axis 1 is to modernise agricultural buildings. The current DARD guidance on this measure focuses on animal and handler welfare only even though the Commission guidelines included the possibility of this measure encompassing renewable technologies on farm. Similarly, several measures under Axis 3 offer the potential for communities to look at renewable technologies but again DARD’s focus would appear to be channelled along the more traditional lines for developing rural communities such as crèches, amenity spaces development and car parks.

WWF believes that notwithstanding the importance of the existing range of measures in the NIRDP proposals, there is clearly a much greater opportunity for the programme to enable farms, rural businesses and rural communities to contribute to a renewables programme and this potential should not be lost.

(g) The ways by which the Department of Agriculture and Rural Development could implement and resource a renewable energy programme in a manner which contributes to the sustainability of the agricultural/rural sector and contributes to Northern Ireland’s renewable energy targets

WWF Northern Ireland notes that a key underpinning rationale for the 2007-2013 Rural Development Programme is addressing climate change and is pleased that the Commission has guided Member States to include measures that will contribute to this objective under all axes of their programmes and not simply be considered as an Axis II priority. In the Community Strategic Guidelines for Rural Development for the 2007-2013 Programming Period, Member States are encouraged to focus support on ‘development of new outlets for agricultural and forestry products, which includes “support for investment and training in the field of non-food production …by …helping the development of renewable energy materials, biofuels and processing capacity”, under Axis I, ‘Improving the competitiveness of the agricultural and forestry sectors’. Also, by “developing the provision and innovative use of renewable energy sources”, under Axis III, ‘Improving the quality of life in rural areas and encouraging diversification’. In addition to the more obvious ‘combating climate change’ element of Axis II these offer the potential for the NIRDP to make a significant contribution to Climate Change objectives. There is a need now that the programme is in place, for DARD to ensure that these measures are readily available to farmers, rural businesses and communities and positively incentivised with clear monitoring target associated to their delivery.

WWF Northern Ireland also welcomes the broader approach that appears is being taken by DARD, that would support the development of a range of renewable technologies, rather than an over emphasis on the development of wind power.

Session 2007/2008

First Report

The Committee for Agriculture and Rural Development

Report into Renewable Energy and Alternative Land Use

Ordered by the Committee for Agriculture and Rural Development to be printed 24 June 2008 Report: 39/07/08R (Committee for Agriculture and Rural Development)

Membership and Powers

Powers

Membership

Table of Contents

Report

Appendix 1:

Appendix 2:

Appendix 3: Written Submissions

Inquiry Aim and Terms of Reference

Aim

Terms of Reference

Approach

Summary of Recommendations

Findings and Recommendations

Statutory Progress

Recommendation

On publication of the Department for Enterprise, Trade and Investment Bio-energy report, both DETI and DARD should examine it along with this report for areas of complementarity.

Government needs to seriously address the actions needed in order to achieve the PSA target of 12%. This should be addressed urgently.

DARD Renewables Action Plan

Recommendation

The Department of Agriculture and Rural Development should devise realistic timelines for the implementation of the Renewables Action Plan. This timeline should include key challenging and measurable targets for the achievement of outputs.

The Department should address, as a matter of urgency, the legal status of the Agri-Food Waste Challenge Fund and the match funding element of the £10 million renewables programme. The Department should also exploit potential funding available through the European Union.

Opportunities for Farm and Rural Businesses

Recommendation

Market Certainty

Recommendation

Public sector procurement should favour biomass heating solutions, helping to create the market demand to stimulate the industry. Such a commitment would be aligned with the Government’s climate change and sustainable development objectives.[5]

Business Planning Focus

Recommendation

Non-Wind Renewable Energy

Recommendation

Anaerobic Digestion

Recommendation

Strategic Support

Recommendation

Cross-departmental Monitoring

Recommendation

Additional Recommendations

Recommendations

A key objective for DARD should be to increase the exploitation of RE opportunities.[13]

Northern Ireland has enormous potential to participate in the RE sector, especially by the agricultural industry. This potential should be exploited.[14]

Northern Ireland building regulations should be revised to promote the use of renewable energy technologies in all buildings.[17]

Planning Service needs to be more facilitative of small-scale planning renewable energy technologies.[18]

Energy is a legitimate concern of many Assembly Committees and should not be reserved by the ETI Committee.[19]

Renewable Energy schemes must be based on sound science, sustainable and carbon-justified, as well as economically viable.[20]

Appendix 1

Minutes of Proceedings of the Committee Relating to the Report

Thursday 29 November 2007 Conference Room, Cafre, Enniskillen

1. Apologies

2. Committee Inquiry

Dr William McCrea

Tuesday 26 February 2008 Room 152, Parliament Buildings

1. Apologies

2. Committee Inquiry

Dr William McCrea

Tuesday 8 April 2008 Room 152, Parliament Buildings

1. Apologies

2. Committee Inquiry

Dr William McCrea

Thursday, 24 April 2008 Senate Chamber, Parliament Buildings

1. Evidence Session with Ulster Farmers’ Union.

2. Evidence Session with the Department of Agriculture and Rural Development

3. Evidence Session with Northern Ireland Authority for Utility Regulator

4. Evidence Session with Mr Ian Duff.

5. Date, time and place of next meeting.

Dr William McCrea

Thursday, 1 May 2008 Room 144, Parliament Buildings

1. Evidence Session with Action Renewables.

2. Evidence Session with the Northern Ireland Environment Link

3. Evidence Session with World Wildlife Fund for Northern Ireland.

4. Evidence Session with Mr Ian Duff.

5. Date, time and place of next meeting.

Dr William McCrea

Thursday, 22 May 2008 Agri-Food And Biosciences Institute, Large Park, Hillsborough, Co Down

1. Correspondence Issued

Ordered by the Committee for Agriculture and Rural Development to be printed 24 June 2008
Report: 39/07/08R (Committee for Agriculture and Rural Development)

Minutes of Proceedings
of the Committee Relating
to the Report

Thursday 29 November 2007
Conference Room, Cafre, Enniskillen

Tuesday 26 February 2008
Room 152, Parliament Buildings

Tuesday 8 April 2008
Room 152, Parliament Buildings

Thursday, 24 April 2008
Senate Chamber, Parliament Buildings

Thursday, 1 May 2008
Room 144, Parliament Buildings

Thursday, 22 May 2008
Agri-Food And Biosciences Institute, Large Park, Hillsborough, Co Down

3. Committee Business – SR The Financial Assistance for Young Farmers Scheme
(Amendment) Order (NI) 2008

Tuesday 24 June 2008
Room 152, Parliament Builidings.