Taking what Mr. Lindgren has discussed, many boxes were ticked in terms of the places we had travelled to. That led to us entering into arrangements to design and build our own efficient facility for Ireland. The picture shows the design of our facility. We will do some refining based on the visit this week and some other work we are doing but generally in terms of what members can see, in the background, the taller building with the pipes is our CHP plant including the boiler, the larger building, the turbines and the building with the pipes above it. Connected into that at the front would be our materials handling section. We had to do a good deal of feasibility work on that, and an issue we will discuss later is the availability of raw materials supply but also the most efficient use of that in job creation. To the right is the pellet production area. That includes a standard pellet production line for our use of residues and pulp wood and also a research and development line for other materials. The larger building at the front is a storage area.
This facility that we designed and for which we will seek planning permission is a 50 megawatt CHP pellet combine. It will produce 17 MW of electricity per hour, 33 MW of heat hot water and 16 tonnes of pellets. Producing per annum it has a combined total of 833 GW of green energy, which is substantial and will go a long way towards Ireland's requirements in growing renewable energy sources.
In terms of the job creation we have detailed, approximately 50 people will be directly employed within the facility across operations, administration, marketing and sales. In the construction phase, which will take two years, we have come up with a turn key solution. While we are building the civil engineering works here, the critical components, including the turbines and so on, will be built elsewhere. Between 75 and 100 people will be employed in the construction end of the project. On the supply of materials, in terms of supply chain management, in excess of 100 people will be employed. Haulage will be a large part of that, taking whatever viable resource is available within a 120 kilometre area.
The position of our plant on the western corridor area is appropriate with respect to the amount of forestry from Donegal down to Clare, Mayo, Galway and Roscommon. In terms of services and support industries, in our area we will look at supplying heat directly to industry and hopefully provide a green business park with manufacturing energy. In more remote areas in smaller towns and villages, we hope to supply district heating based on providing pellets through boilers. We will utilise local people and resources, including many from the construction area who are now unemployed such as plumbers, electricians and so on.
Our biomass requirement is a critical aspect of this project. We have met the relevant people, private and public, and generally what we are looking at in our pellet manufacturing is a requirement of approximately 210,000 tonnes, which is approximately 190,000 cubic metres of pulp wood. That pulp wood is required to have the high standard of pellet where we are looking at 4.8 MW per tonne minimum.
Our requirement in respect of CHP fuel is about 170,000 tonnes or about 155,000 cubic metres. The fuel used would generally be wood left on the forest floor ranging from branches to tree tops and any other type of waste material in the region. We have designed our CHP to be capable of taking a number of different types of fuel.
We have had meetings with different regional producer groups. We will examine different types of fuel which are more suitable for CHP and which can then be — to use research and development language — pelletised. Rotational crops will take considerable pressure off the lack of availability of biomass in this market.
We ask the committee to take on board a number of considerations. We are aware that the feed-in tariffs are €120 MWh. That is set for ten years but it needs to be set for a minimum of 15 years because of the capital investment in this project. When our investors examine the structure of this project, the critical components are, first, do we have a supply of raw materials and can we get a contract to meet at least a percentage of that supply. The second component is what is known as the spread risk. When one considers the supply of materials, the cost of them versus the cost in terms of the electricity produced, that will impact on our revenue streams. The costs involved in biomass supply in Ireland are quite high compared to the costs in Sweden. Our haulage costs are higher. Our CPH fuel cost can range from being between 15% to 50% higher here and our pulpwood cost can be 50% higher.
The revenue streams we get from the feed in tariffs will be utilised to develop a pellet market. The reheat schemes and green home schemes have been effective but they will be in place only until 2010. Mr. Michael Murphy has been out targeting and researching specific markets. In terms of spending money on capital equipment, while it is good one has the funds to do so, many people have not invested in such equipment because they are not sure of the continuity of supply. No one wants to spend money on converting to a biomass-based fuel system, a pellet boiler for instance, if one has to reply on imports and there is not a large supply of the equipment in the marketplace. Therefore, I would ask the committee to consider extending the grants beyond 2010 because our plans are to have this facility operational by 2012 at the latest.
With respect to the various incentives that exist, we have looked at how ROCs are used in the UK. By using heat in our facility to dry materials to produce pellets, what we are doing is storing our heat to be used at a later date. By doing something similar in the UK, one would get ROCs. By producing hot water and using it for district heating schemes, one would get double ROCs, as it were. The way that this is calculated and maintained can create difficulties but the main revenue stream that would be viable for this would be the feed in tariffs.
With respect to the end users, the grant funding is important. With respect to district heating, there is a potential to develop such schemes in many small towns in various counties. A small circuit or network of pipes could be laid which would be fed off a centralised boiler and pellets and that supply to the houses would be metered and charged. That would need some incentivisation for the first few years to build up the market.
Any industry to which we supply heat and electricity should be given levy exemption certificates, which, effectively, are carbon credits. That is a synopsis of our operation. I apologise for rushing through it but I am aware of the time element. I will take any questions members may have.
