It has been predicted that Ireland will face fines of €150m to €600m because it will not meet the EU renewable energy target of 16% of total final consumption by 2020.

For every 1% we miss the target we have to pay €150m in carbon taxes. We are currently at just 8% of energy generated by renewables. It is predicted that in the best case scenario we will miss the target by 1% to 2%. However, if we do not make a big push now, we could miss it by 3% to 4%.

Click here for more details on the EU's 20-20-20 targets

New levels of support for renewable electricity and the long-awaited renewable heat incentive (RHI) will be two key drivers for the renewable energy industry from 2016. Two important public consultations were launched by Minister for Energy Alex White recently to this end.

The consultation on renewable electricity supports is inviting submissions for bioenergy, solar, offshore wind, wave and tidal technologies to help determine what supports are necessary. These are seen to be complementary to wind energy, but must be both technically feasible and cost-effective. This consultation will also explore the potential and value of providing supports to micro-generation and smaller community-based projects.

Setting the right price

The Renewable Energy Feed-in Tariff scheme (REFIT 3) is the main way the Government currently supports renewable electricity generation. REFITs range from 10.5c/kWh for larger (>500kW) anerobic digesters (AD) without combined heat and power (CHP) to 15.7c/kWh for a CHP AD plant generating less than 500kW. Even the highest figure compares poorly with the rest of Europe (see graph).

Payment types vary from country to country. Some offer fixed tariffs as the total price paid, some provide a top-up premium to the wholesale electricity price, others issue green certificates.

Many countries made the decision to set REFITs high initially to give the sector a boost. The aim was to reduce tariffs as the industry became established and the price of installing plants reduced. This is happening in Germany, where over 9,000 plants have been installed, many of which are on farm. Higher payments were given for on-farm units where slurry was used.

The UK offers a higher tariff to support the development of farm-based AD plants with access to slurry and manure.

In the UK, improvements in tariffs have seen nearly 200 plants established in the last five years. Just as many are in development, but talks of a reduced tariff from next April will slow this down. The recent budget exemption for renewable energy from the carbon levy is being described as a way to reduce development, but is more to do with raising more taxes. Looking at other countries, a tariff of 20c/kWh would be seen as a balance here to make projects attractive. We will look at this in more detail in the weeks ahead.

EU 20-20-20 Targets

  • The European Union has been trying to implement policy around climate change for over 20 years now. Back in March 2007, the 20-20-20 targets set three key objectives for 2020:
  • A 20% reduction in EU greenhouse gas emissions from 1990 levels.
  • Raising the share of EU energy consumption produced from renewable resources to 20%.
  • A 20% improvement in the EU’s energy efficiency.
  • The adaptation of these targets resulted in a major drive and investment in renewable technologies across Europe, but Ireland has lagged behind.
  • Irish targets

  • For Ireland, the overall renewables target was 16% of total final consumption to come from renewable energy in 2020.
  • There were individual targets:

  • RES-E – Renewables contribution to gross electricity consumption of 15% by 2010 and 40% by 2020.
  • RES-T – Renewables (biofuels and the renewable portion of electricity) contribution to transport energy 3% by 2010 and 10% by 2020.
  • RES-H – Renewable contribution to heat (thermal requirement – heating and cooling) 5% by 2010 and 12% by 2020.
  • Bioenergy – the sleeping giant

    “Biomass and bioenergy is the sleeping giant in terms of reducing greenhouse gas emissions, and reducing the potential exposure Irish industry has to volatile energy prices and to help develop economic activity in domestic supply chains,” said Teagasc’s Barry Caslin.

    Up to half of Ireland’s 2020 renewable energy target could be met by bioenergy, wood and other forms of biomass such as wastes from agriculture, according to the a national bioenergy plan, published in draft form in October 2014.

    According to Caslin, the purpose of the Bioenergy Plan is to provide a framework for the sustainable development of bioenergy in Ireland in the period to 2020 and lay the foundations for its longer-term growth.

    The plan will provide a structure for the optimal coordination of the wide range of Government departments, agencies and State bodies that are critical to the development of the sector.

    Turning up the heat

    Renewable heat is the one area where Ireland has performed poorest. The Department of Communication, Energy and Natural Resources (DCENR) has committed to introduce a Renewable Heat Incentive (RHI) in 2016. The consultation launching the new renewable heat incentive (RHI) appears to be targeted to encourage larger industrial and commercial heat users to switch to systems that produce heat from renewable sources, including biomass.

    The focus on larger-scale operations would come as a blow to smaller scale operations such as poultry and pig units that could benefit from generating their own heat. Many have to compete with operations in Northern Ireland that have used their RHIs to effectively eliminate large heating bills. Smaller operations must use the consultation to make the case for a significant incentive for smaller units similar to what is enjoyed in Northern Ireland.

    The schemes will be available from 2016 onwards (subject to EU state aid approval). The planned introduction of a RHI should stimulate increased demand for biomass in all its forms, resulting in increased mobilisation of the private sector timber resource.

    Comment

    Doubling our renewable energy in just five years might seem an impossible task. We are paying for years of inaction. Government policies are needed to accelerate renewable energy provision. Looking back, we put all bets on wind energy. Yes, there were schemes and incentives for other technologies such as anaerobic digestion, solar and combined heat and power (CHP). However, each launch, after long delays, disappointed. It always felt like the bare minimum rather than a real development, while the tariff from consumers’ electricity bills was going to support the old fuel-guzzling power plants.

    There is no magic bullet. There are large projects such as the proposal to convert Moneypoint or even the recently launched Mayo Renewable Power (MRP). This is a plan to build a 42.5 MW biomass high efficiency CHP plant on the former Asahi site in Killala.

    These will create jobs, but we need to produce the biomass domestically for real long-term benefit. We currently import 85% of our total energy requirements. As 2020 approaches, every EU country will have similar targets to implement and the price of biomass will rise. It’s vital that supports feed our need to produce as much of our energy as possible indigenously.

    It’s also of concern that Europe is already moving ahead of the 2020 targets. EU leaders reached agreement on a new climate and energy policy framework for 2030 in October 2014.

    It commits the EU to:

  • Reducing 1990 greenhouse gas emissions by 40% by 2030.
  • A target of at least 27% for renewable energy and energy savings by 2030.
  • If we do not implement policy mechanisms to develop renewable energy for 2020, we will struggle with our 2030 targets.

    Read more on the implications of incentives for renewables in Northern Ireland in the 22 August issue of the Irish Farmers Journal and online from next Thursday.