I thank members for the invitation to address the sub-committee. Teagasc has an active programme in this area and last year launched its 2020 vision, of which the development of the bio-economy in energy is a central part. There is, however, much to be done if there is to be activity in the area and the sub-committee is very important in that regard. We need a change in mind set and policies to make a difference at rural level.
The Chairman outlined his experiences in Güssing, Austria, in a recent letter to me and remarked on what could be achieved in small communities, particularly if there are efforts locally to make regions more sustainable. For this to happen, however, public and private bodies must come together in pursuit of a common objective. As we saw in Güssing, there have been spin-offs for tourism and other things. Teagasc believes that similar projects in Ireland can play a role in sustaining rural employment and providing secure and sustainable energy. It is important to remember, though, that the initiative in Austria has been under way for more than 20 years. Accordingly, we must look back at their earlier projects, especially in heat production, as well as what they are doing now to increase renewable energy production.
The Chairman will have seen the wood gasification CHP plant in Güssing, which could probably be replicated in some locations in Ireland. However, we would need a substantial on-site heat demand and that has proved difficult. We would also need a ready supply of wood, which we do not see as a major problem, but grid connection at a reasonable cost and within a reasonable timescale is a limiting factor and something policy makers will have to revisit.
A more widely applicable approach for most regions of Ireland would be to begin where they began in Güssing 20 years ago, by using well-proven biomass boilers to provide heat for local authority buildings, hospitals and hotels, and this is already beginning to happen. More than 100 boilers have been installed throughout the country using 20,000 tonnes of locally produced wood chip, which is a small amount but represents a start.
The new headquarters of Teagasc at Oak Park House is being heated by a boiler suitable for wood chip, wood and miscanthus use. Almost all of the campus is being heated by non-fossil fuel means. We must give a lead. We, therefore, think all public buildings should look at this opportunity which is exactly what happened in Austria all those years ago.
Biogas attracts great interest, not only in Ireland but also throughout the world. It produces electricity and heat from grass, silage and foraged maize. It is our view that this would be easier to replicate in Ireland than a large-scale CHP plant, although we see some potential in that area for the future. The smaller scale of the biogas 1 megawatt project plant would present fewer grid connection and heat utilisation problems. The technology is mature and well established. In Ireland grass is by far the most widely grown crop and the silage production costs are no higher than in Güssing. Biogas is a flexible fuel. It can be used in boilers or CHP plants or can be upgraded and used as vehicle fuel. It is an innovative fuel with wide application. It also gives a very high energy yield per hectare. The problem is that the prices available are lower in Ireland. That is an issue the sub-committee can help to overcome. If we do not overcome these issues, we will not see such developments in this country. We must find a way to circumvent the problem. The big difference between Ireland and Germany, the United Kingdom and other countries in Europe is that the price they receive in terms of the outputs from these renewal energy sources is much more favourable. We must redress the balance. We intend to install a smaller version of what members saw in Güssing at the Beef Research Centre in Grange, using grass, animal slurries and so on, and it should be up and running by next year.
It is our view that such projects are needed urgently if we are to come near to achieving the renewable energy targets set in the 2007 White Paper on Sustainable Energy and in the Commission's 2009 renewable energy directive. This has implications for Ireland and we must take the matter seriously. The targets set for 2020 are 12% of heat from renewable sources and 800 megawatts of electricity from CHP plants, mainly biomass, as well as 30% co-firing at peat burning stations by 2015. The renewable energy directive requires this country to produce 16% of its total energy and meet 10% of its transport energy needs by 2020. That is quite a challenge but that is why these targets were set and it is up to member states to deliver on them. The first test of the reaction of member states to the directive will be met in the submission of national action plans in pursuit of the directive targets. These must be drawn up by June and the plan submitted by June 2010. We have a relatively short timeframe and it is very important that the sub-committee makes a substantial input into that thought process.
The national action plan which we deem to be very important will have to address the reality that the achievement of the White Paper and the EU directive targets will require the energetic use of biomass on a much increased scale than anything we have seen before. As a rough estimate, we will require 4 million tonnes of this material by 2020. As members know, the figure stands at 1 million tonnes at present; therefore, a substantial increase is required. We see the best prospects of achieving this increase in four areas. The commercial heat market should account for the equivalent of 1 million tonnes of oil equivalent, that is, 2.5 million tonnes of dry biomass. The most likely biomass substitute is wood chip as a boiler fuel. This market is beginning to develop and should grow steadily in the next ten years. However, the greatest long-term source is first thinnings in farm forests. The initial target market should be buildings outside urban areas, for example, those with major and continuous heat demands such as hotels or hospitals. This development would create employment in felling and extracting thinnings as well as chipping and delivery and promote a better forest management strategy by encouraging forest owners to thin.
Similarly, in the residential heat market, the total Irish demand for oil, gas and coal is 2 million tonnes of oil equivalent, or about 5 million tonnes of biomass pellets. The most likely bio-energy alternative in our view would be biomass pellets used in stoves and small boilers.
We have done a great deal of work with local industry and small and medium enterprises at our pilot scale facility at Oak Park and we are delighted to be able to assist the sector to come up with novel and innovative solutions. Sawdust had been used as the first choice material for some time because it was free but it is limited in supply and is already mostly used up. Forest thinnings are now being used and wood residue, cereal, rape straw and energy crops such as willow or miscanthus will be the next possible feedstocks that will have to be considered. We have done much work in those areas.
The committee is aware that a 30% peat substitution target was set out in the White Paper for the three power stations, replacing about 0.9 million tonnes of peat. If we assume a net calorific value of 8 and 12 megajoules per kilogramme for peat and biomass respectively, about 600,000 tonnes of biomass would be required. This will present opportunities in the areas around Edenderry, Shannonbridge and Lanesborough and we should look closely at the opportunities that will be created by this demand.
We then have combined heat and power. Small grid connections like the plant we saw in Güssing, based on either combustion or digestion of biomass, have developed in other countries where higher prices are available for renewable electricity. If we are to apply this concept in Ireland, we must look at this closely. While other countries might have a lower energy efficiency and a higher capital cost per kilowatt hour, the small dispersed units have lower transport costs and much better prospects for heat utilisation.
In Ireland we consider wood, perennial energy crops and grass to be the best prospects for bio-energy feedstocks. The production, processing and energetic use of enough biomass to meet our targets is technically feasible without a significant reduction of our food production capacity but would have a major effect on rural employment. This can only happen if farmers and processors are convinced of the profitability and long-term security of the investment required, which is not to be under estimated. Unfortunately, that is not the case. The prices available for renewables for heat and electricity here are among the lowest in Europe and processors here find themselves unable to offer the sort of long-term supply contracts that would attract farmers. That is crucial. We must resolve these problems. If we do not, much of the biomass needed to meet our targets will be imported, which would mean the loss of a significant opportunity for rural Ireland.
Biomass can provide rural jobs and secure fuel supplies in this country while making significant reductions in our greenhouse gas emissions. To achieve our targets, however, much more cellulosic biomass will be needed and the agricultural sector can and should supply most of this material. For this to become a reality, the national action plan I mentioned earlier is critical, including the introduction of the measures required to promote the industry.
