I welcome Ms Ann Kehoe and Mr. Robert Ronan from the Green Energy Growers Association, GEGA, who are here to make a presentation on the potential production of renewable energy from agriculture, and I thank them for attending. Before we commence, I draw their attention to the fact that members of this committee have absolute privilege but the same privilege does not apply to witnesses appearing before it. Members are also reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House, or an official, by name or in such a way as to make him or her identifiable. I call on Ms Kehoe to make her presentation.
Renewable Energy: Discussion with Green Energy Growers Association.
Ms Ann Kehoe
I thank the Chairman for the opportunity to make a presentation to the committee. We are aware of the time constraints involved and we would like, therefore, to provide a brief background in respect of what we have achieved since our establishment in 2006, outline our targets for the future and indicate a couple of matters regarding which we may seek assistance from members. The documentation with which members were presented may be missing some of the pictures that I intend to show as part of this PowerPoint presentation. This is because it takes some time to e-mail such pictures and also photographs.
The Green Energy Growers Association, GEGA, is a non-profit national organisation which was established by people who own land, namely, farmers. We wanted to focus on the type of renewable energy the land could be used to produce. We examined the marketplace carefully and invested our own money in our activities. We have never asked for or received funding from anyone other than our members. People such as Mr. Ronan and I invested our money at the outset in order to carry out research, ensure that we were moving in the right direction and obtained the knowledge and information required to make what we set out to do happen. The primary drivers behind this marketplace were climate change and energy security. We import billions of euro worth of fossil fuels every year. This is a good market to head into because it will grow and develop.
When we examined the sources of renewable energy, we had to look at what farmers can produce efficiently and effectively to generate a commercial return and income into the future. Bioenergy sources are biomass — farm and forestry — biogas, which is related to using anaerobic digestion as waste, bioliquid, which generally comes from seed crops; and our natural resources, wind and water. We have to focus on one to proceed. Even though all the resources will all be part of the answer to the provision of energy long into the future, we focused on biomass as a crop that could be grown and harvested to generate a return every year. Biomass can be trees, plants, crops, straw and so on. The harvest is converted into solid bioenergy via pellets, woodchip in bale format, briquettes, etc. The crops are grown, harvested, chopped and converted into energy. That was the simple format we wanted to look at.
Forestry is also a good source of biomass but not every farmer will plant trees. We looked at what crops could be used. First, we considered industrial hemp because that is a rotational crop, which can fit into a tillage enterprise. We grew more than 120 hectares in 2008 as a research project. We did everything on a substantial basis in order that we could find out as much as we could in one season. We grew it on a trial basis throughout the country from Wexford to Kerry to Meath. The crop in the slide was grown in County Tipperary. It grows to 12 ft. We very much focused on high yielding crops in order that we would not affect the food-fuel balance. Some people ask what will happen to our food industry because we produce so much energy from the land through biomass. We have examined this extremely carefully and that is why we looked at high yielding crops that can produce between 15 and 20 tonnes of biomass per annum. Industrial hemp can do that but we must conduct more research on it because there are difficulties relating to harvesting it.
We looked at reed canary grass for marginal land. Teagasc has taken up the trials and research on this for us and, hopefully, in a few years, it may be a possibility. We focused on miscanthus, which is growing successfully. The slide has a picture of Mr. John Stafford in Wexford alongside a miscanthus crop. He is 6 ft. tall. Miscanthus is a grass that produces between 15 and 20 tonnes of biomass per annum and takes three years to establish. For example, if it was planted in 2007, it could not be harvested until this year but could be harvested annually after that. It continues to grow and produce a yield every year without replanting for more than 20 years. It is still producing high yields in the UK after 26 years. When it is being established, one must ensure the proper nutrient is in the ground but the same nutrient is used every day to produce grass or corn. Once it is fully established, there are no other inputs. Perhaps after five years, a soil analysis could be conducted to ensure nutrients are still there. It is a woody type straw or cane. In other words, when it is harvested, it is like a bamboo. That can be harvested with existing agricultural machinery.
Ireland has the potential to produce 11 million tonnes of miscanthus biomass every year. Given the abolition of set-aside, the cessation of sugar beet production, nutrient cross compliance, many farmers giving up milk production and various other issues, a lot of land is available. Approximately 700,000 hectares could become efficient at producing biomass without impacting on existing food production. Miscanthus comes from a seed, is planted and grows vigorously but it takes two years to fill out. It grows 12 ft. tall every year and, therefore, can produce significant biomass per annum.
When it comes to harvesting in the spring, the plant dries out, the leaves fall off and when the first cold hits, it becomes like a brown cane. A conditioner mower is used to cut it down and it is left on the ground for between two and six weeks. It can rain or snow or anything else because the crop dries from the inside out. The outside is a glossy material which is not affected by rain. A farmer has three months, January to March, to do this and must ensure the crop is off the ground by April when it starts to grow again. If there are a few nice dry windy days, for example, in January or February, it is moved, left on the ground for a few weeks before there are two or three more nice dry, windy days to bale it. Once it is baled, it is taken in and stored in a shed and this is the raw material ready to be converted into energy.
As an association at this stage, we knew exactly what we wanted to grow, where and how to grow it and convert it into biomass but we had to ask how this could be done in a commercial fashion while ensuring the rural community and farmers were involved. We set up and designed the GEGA national framework within which we helped to develop green energy service companies in seven regions. Each is a private limited company and the first investors were 30 shareholders from the farming community. They invested to bring the company through its first stage of development. In other words, they set up the company, bought the equipment and helped to develop the first crops. The seven companies have more than 1,000 hectares of miscanthus planted. A green energy service company is a rural-based business that grows, stores and processes biomass into bioenergy products such as chip briquette or bale format. The bale format can be fed on automatic systems into large commercial boiler systems to produce heat and electricity.
The group of shareholders elected a board of directors to the seven companies. Each company has six directors and, therefore, there are more than 40 directors across the country. We have more than 200 shareholders from the agri-community. As individuals and groups, we have invested more than €4 million to date in development, equipment, machinery, knowledge research and planting crops. The Department of Agriculture, Fisheries and Food has been good in that it put in place an establishment grant for willow and miscanthus, which played a big part in developing the acreage we have. It was put in place for three years, ending this year, but we were delighted that the Minister has announced a €20 million grant to be put in place for the next three years, 2010-2012. The grant came under attack from other farm interests who query its provision when REPS is more important. It is not like that. The Government is looking far ahead and it is an investment in the future. We hope we have the support of the committee for the grant when people make this argument.
We know what we need to do for the future. The final page lists benefits to the economy of what we have done and of taking it to the next stage, which is straight to the marketplace. There are a few hurdles, the main one being finance. Miscanthus, as a biomass material, is not a tried and tested product in this country and, therefore, when we approach financial institutions to put a commercial system in place or our potential customers do so, they say it is a little risky and they are not prepared to fund it. They will talk about it and bring it to a certain stage, but the money is just not there. We are encouraging the Department of Agriculture, Fisheries and Food to use 20% of the €20 million budget to develop commercial systems in some of its facilities, such as Moorepark, Kildalton College in County Kilkenny or Johnstown Castle in County Wexford. It would help to kick start this industry if we were able to bring bank officials and potential customers to such facilities and practically demonstrate how this high-tech business works. That would create the confidence needed to take the final step.
I emphasise three things. First, we need help to hold on to the establishment grant announced. Second, it would be fantastic if the Department invested in the installation of three systems in its facilities. Less than €1 million is needed to kick start that process. Third, the Department should consider using €3 million or €4 million of the existing €20 million budget that has been put aside for the next three years to install commercial systems elsewhere. That would demonstrate the potential of this industry and help it to grow and develop. I thank the Chairman and the members for their attention.
I thank Ms Kehoe for her presentation. I read with interest the document on willow and miscanthus. Over the years, Professor Hugh Gordon pioneered this approach at Hillsborough.
Ms Ann Kehoe
Yes.
I would like to speak about the economic benefits of the work of these companies.
Ms Ann Kehoe
There are seven companies.
Does the Green Energy Growers Association have plants and processes to produce the final energy product? Is it produced as a bale or as a pellet? Does the association have a network of boilers? Has a critical mass been achieved to ensure an economic return? I am trying to remember where I heard the association's presentation previously. I do not know whether I saw Ms Kehoe on television or met her at some other forum. The challenge has always been to strike a balance between producing enough material and ensuring one does not interfere with the supply to the food chain. We need to use land that was not primarily used for food production in the past. With that in mind, how big does Ms Kehoe envisage that this sector will get? If its growth is somewhat limited, can it reach a consistent critical mass? A few years ago, people were intermittently engaged in the pellet manufacture and pellet boiler businesses. Problems were encountered with reliability of supply and the market. Each one needed the other. It was an example of the "chicken and egg" syndrome. Can Ms Kehoe give an idea of how she thinks this sector will develop?
I welcome Ms Kehoe and Mr. Ronan. I thank them for their pioneering work in this field. Perhaps this committee can take up the three important points they made. What kind of land is suitable for the production of this crop? Does it have to be good land? Can hilly land be used? Can the delegates indicate where the various production companies are located here?
Deputy McGrath asked one of the questions I had intended to ask. Where can we see these companies in operation? Seeing is believing in many cases of this nature. What is the nearest location to west Cork, which is my part of the country? I cannot say I have seen this grass growing in west Cork, although it may be there. Perhaps I am not looking carefully enough. I am interested in this concept. Any potential source of energy must be considered seriously. I am not up to speed on this sector. I ask the delegates to put me in touch with someone who can show me what is happening.
Does Deputy O'Keeffe wish to ask a question? I would like to ask many questions on behalf of growers. Where is the market for miscanthus which achieves a price of between €60 and €65 per tonne? What transport charges are envisaged for hauling miscanthus to processing facilities? What processing charges and costings were carried out before the price promise to farmers was determined? If the market price for a forest residue is approximately €15 or €20 per tonne, can miscanthus compete in the energy market? Is a take-up pay contract in place to guarantee farmers the price that is being quoted, or is the entire price structure aspirational? What investment has been made in developing an end use for miscanthus? Have the growers applied for planning permission for processing plants? What tonnage is expected to be harvested this winter or spring? Can the association explain the failure of approximately 20 crops of miscanthus this year? Reference has been made to a yield of 15 or 20 tonnes per hectare. The UK's leading research organisation in this area has said that the average yield is approximately 10 tonnes per hectare. What is the association's claim in this regard based on?
The Chairman has asked all the questions. He has been very well briefed.
I could ask a couple of more questions, but we have time constraints.
Ms Ann Kehoe
I will try to answer most of the Chairman's questions. He might remind me if I leave any question off the list. I assure Deputy Doyle that we have researched this area carefully. As we are investing our money in it, we have taken a very commercial view of it. The balance between fuel and food is terribly important, as is the balance between supply and demand. We have taken certain actions to kick start this industry. In 2006, which was the first year, we planted a small number of acres in County Wexford. No grant aid was available at that stage. In 2007, we planted 150 hectares across the south east, in counties Kilkenny, Wexford and Tipperary. The first three green energy service companies were set up at that time. The four newer companies were set up at a later stage. We have planted more than 1,000 hectares of miscanthus over the past three years. We were keen to demonstrate practically all the things that can go right or wrong. When we were planting, we imported seed and machinery but it did not work properly. We then made our own manual planters to ensure that this crop was planted extremely well. We have learned realistic lessons from our practical experience. We do not process this plant into pellets. We originally planned to develop a processing facility to produce pellets. When the economy changed dramatically, the price of oil dropped. We decided not to invest millions of euro in a processing plant to turn this material into pellets before selling it, as that would have added costs to the process. We have worked closely with Carlow Institute of Technology, for example. We are beginning another technical research programme with the institute at the end of this month. Technology is very important in this industry. We have signed a contract with a German company to supply guaranteed top-of-the-range miscanthus boilers. When the big bales of miscanthus are fed into the boilers, chips will be produced automatically. Can the members of the committee imagine the cost savings we have achieved from being able to do that? The miscanthus is transported just once, from the farm to the point at which the energy is burnt. One can burn miscanthus in chip or briquette form. A miscanthus briquette processing facility will be developed in County Wexford before Christmas. Anyone who wants to sell miscanthus briquettes will be able to send miscanthus to Wexgen Limited. We do not believe in duplication and we will not reinvest in something that has already been done in a certain area. One makes best use of everything that is available, for example, we make best use of farmer experience.
In what areas are the green energy service companies located?
Ms Ann Kehoe
The companies have similar names. The company in Cork is Leegen Limited. It has an office rather than a processing plant and is located just outside Cork city. I will put Deputies in touch with its board of directors. Members of the association have crops growing all over Cork. The seven companies have not established separate processing facilities but seven businesses as this keeps costs as low as possible. Six directors operate each company. If a grower has a certain number of tonnes of miscanthus in a shed and we install a commercial boiler system in a local swimming pool, hotel or manufacturing facility, the directors of the green energy service company will co-ordinate to ensure that the miscanthus can be delivered straight into the premises provided it is a large bale format facility. If that is not the case, we can rent a chipping machine for one day — we have carried out trials on this — and the grower can have the miscanthus chipped in a shed as close as possible to the end facility. The supply chain has been developed in a manner which keeps costs as low as possible. If we can compete with the current price of oil, the market can develop and provide real returns.
The Chairman asked an important question about damaged crops. About 20 crops were damaged this spring. Teagasc lost one of its crops and all the companies had a damaged crop in 2008. The damage in 2008 was caused by a combination of factors. We had severe weather conditions from the time the crops were planted in 2008 which meant they were exposed to cold, wet conditions and were tightly compacted. When weed control was used in the spring of 2009, the Roundup somehow went into the rhizome and damaged it. We will re-establish the crops in the coming spring. We are learning from what has happened and are working particularly closely with Teagasc. We have also worked closely with other companies, including Quinns of Baltinglass and JHM Crops. We know what happened and what we need to do to avoid similar cases in future.
The price of €65 per tonne is not aspirational but is written into a supply contract. It is the basic price to the grower and probably the lowest rate that will ever be paid to growers. As the price of energy increases, so too does the price paid to the grower. We have the interests of growers at heart because we are all growers. Every shareholder who has invested in these companies is a farmer or grower. Mr. Ronan and I are both growers. The grower is our priority and at the core of everything we do.
Ms Kehoe stated that the seven companies meet on occasion.
Ms Ann Kehoe
They meet every week.
Would it not be preferable to have one national company running the entire operation?
Ms Ann Kehoe
The Green Energy Growers Association, a non-profit organisation, is the national body which helps to co-ordinate the companies. The values of local production, supply, ownership and pride is the reason we have seven individual companies rather than one national company. Renewable energy, particularly biomass, will depend on local production, supply and delivery to be cost effective. As the companies develop, we may form one national company. We have discussed the best way to develop and we have found there is a certain pride in each region to develop their activities at local level. Community and team spirit is driving this process.
Individuals cannot be a member of more than one board.
Ms Ann Kehoe
They can be a member of more than one board, although it is not common. I am the national director of the Green Energy Growers Association, a non-profit organisation. My husband and I are farmers in County Tipperary and shareholders in Tippgen Limited, our local green energy service company. I am also a director of Tippgen because the shareholders of the company elected me to that position. It is important for me to keep abreast of the problems and challenges facing the companies. The other directors are based in the respective regions.
Ms Kehoe is a member of all the boards.
Ms Ann Kehoe
No.
Does Ms Kehoe envisage a role for voluntary and community groups in promoting the sector? Does she expect the sector to provide social capital for communities?
Ms Ann Kehoe
It would be fantastic to provide energy to a school, nursing home or other facility with significant heat demand in every village. However, there is no point providing heat for a school because it will be closed for two or three months of the year. Green energy service companies could provide low cost biomass heat in community facilities. We have been contacted by a Deputy from County Kildare with regard to a community which would like to do something in a community centre, school and crèche in a housing estate. We will meet the Deputy in question and do what any company would do, that is, carry out a study to determine whether there is a business case for becoming involved in the project. This would initially mean bringing in the product from outside. We would then encourage local farmers, located in a cluster around the facility, to become growers and within two years they could be producing the biomass.
I asked about the type of land used for miscanthus production.
Ms Ann Kehoe
In the early days, word went out that miscanthus could be grown in any type of soil. Miscanthus is like any crop. The Chairman asked about tonnage and yield. If one grows miscanthus on poor land, it will, like any crop, produce a poor yield. If one grows it on top class land, one will get a yield of 20 tonnes per hectare. If one grows it on relatively good ground that produces grass, maize or corn, it will produce a good yield. We have learned from experience that one does not grow miscanthus on poor land, although it can be grown on damp, moist or heavy land. However, one must be careful and ensure that it is possible to access and move machinery on the land in March to harvest the crop.
Miscanthus is planted as a rhizum, a type of root, in the first year. This root grows underground to one metre in diameter and creates a table under the soil. While it does not miraculously dry out bogland, it creates a table which makes it much easier to travel on the land. We may not have been fussy enough in the first year about the type of land on which the crop was planted but we have become much more fussy. We will visit the farm and dig holes to determine whether the land is suitable for miscanthus. Those who know land will know immediately whether this is the case.
Where little is known about land in terms of digging or ploughing, we will subsoil them to loosen up the soil and create oxygen in it. It does not pay us to plant miscanthus in land that will not produce a very good crop. The green energy service companies and energy users want a secure, cost-effective supply of biomass provided in a system with effective standards. There is no single solution to renewable energy. It will be a combination of biomass, wind energy and other forms of energy.
Miscanthus is obviously cut by a flail mower. Ms Kehoe stated the root system forms an underground bed or table. I am interested in the root system. Does one have to keep planting every year? Does one have to remove the roots at any stage?
Ms Ann Kehoe
Only if one wishes.
Deputy McGrath has more or less asked my question. I was wondering if the roots caused any difficulty when the land is being reinstated. Are the roots fibrous and do they have to be removed? I saw miscanthus growing near Barryroe in west Cork during the summer. It looked fine. It looked very good when it was harvested. I did not know it was a rhizome.
To return to Deputy McGrath's question about the quality of soil, the land is County Meath is as good as one would get in most parts of the country and some of the crops have not done that well.
I do not agree with that.
Perhaps it is not as good as the Golden Vale.
The Chairman should admit defeat.
Will Ms Kehoe give a reason for that?
Ms Ann Kehoe
I know the crops to which the Chairman refers because we know the growers who are involved extremely well. Some of the crops in County Meath were planted a little later in the year than we would have liked. We think the rhizomes that were planted were a little small. We can add to that the cold, wet soil conditions. In 2008 miscanthus did not grow as well as in 2006 or 2007. Even though it loves damp, it does not like the cold and the continuous rain.
Roundup was used for weed control. Miscanthus crops should be topped before one applies weed control. Weed control is only necessary in the first and second year. When Roundup was applied to the crops that had not been topped, it trickled down into the rhizome and damaged them.
Given that we have invested so much in the development of the crops — it is our own money that we have invested — we have learned the hard way. We did not sit back and wait three or four years for Teagasc or somebody else to do it. Teagasc is doing valuable research and we work closely with it, but we have got stuck in and developed the crop ourselves. It is natural that we made mistakes along the way, but we never made the same mistake a second time.
Does one use special fertiliser or is there a need for any fertiliser?
Ms Ann Kehoe
We are careful about doing a soil analysis if a person wants to grow the crop. If it shows the soil is normal in terms of pH and nutrient value, then there is no need to add any fertiliser. We recommend farmyard manure if it is available because it adds to the organic matter in the soil and oxygenates it, which helps the crop. After the first harvest if pig slurry or farmyard manure is available it adds a bit of life and gives the crop a kick start to develop. We do not recommend a chemical fertiliser unless the soil analysis shows the land is devoid of a particular mineral. If a mineral is lacking we add it before we plant the crop.
Does GEGA, Green Energy Growers Association, see itself expanding beyond miscanthus? Is there any role for second generation crops such as straw?
On Ms Kehoe's point about organic matter and the conflict with food production, what about the Bord na Móna peatland in the midlands? Is it possible to sow miscanthus on that land?
Ms Ann Kehoe
No. We have researched the peatland and, unfortunately, peat seems to be unsuitable for the production of miscanthus. We do not know whether that is due to the acid in the soil. What was the second question?
It was about second generation crops and diversifying beyond miscanthus.
Ms Ann Kehoe
We would like to diversify. Miscanthus can be blended with anything, for example, willow, forestry and straw. The beauty of a miscanthus-guaranteed commercial heating system is that it will take any other product, including wood chip, willow, straw or any biomass. A wood chip boiler will not necessarily take miscanthus. The boiler system must be specifically made for miscanthus.
We would love to develop into other products. The reason we developed miscanthus first is because when it goes into the ground it stays there for 20 years, which means a guaranteed supply. We are considering industrial hemp, which we grew successfully. It was a brilliant crop, but the problem was that we did not get enough tonnage of biomass from it to give a return to the grower. Therefore, unless we can take fibre off it first and then use the raw material for biomass it will not be something that we will do again although it grows very well in this country. If we can find a crop to replace sugar beet in the rotation we will have the problem solved.
The reason we are looking at crops that produce a big tonnage per acre of ground is to ensure that one has efficient energy production. Efficient food production works in tandem with that. We supply the food industry as well. We are huge supporters of the food industry. We want it to not alone remain at its current level but to grow. There is enough good, productive land in this country if we manage it well to produce both energy and food. That is what we aim to do.
On behalf of the committee I thank Ms Kehoe and Mr. Ronan for their presentation and for answering questions.
The joint committee adjourned at 12.45 p.m. until 11 a.m. on Wednesday, 14 October 2009.