Mr. Mark Foley:

I am responsible for the division of Coillte which seeks to create additional value in terms of the land under our management where forestry is not the primary use. This is primarily in areas such as wind energy, biomass, providing land for infrastructure projects and other land uses as well as telecommunications mast sites. Slide 10 shows a map of Ireland and members will note that Coillte's 6,000 plus discrete properties reach far and wide into the heart of rural Ireland. Attributes such as location, local geography, topography and elevation combine to make Coillte's land assets highly desirable for a wide range of end applications.

Turning to renewable energy, particularly wind energy, it is not widely known that Coillte has been a key player in the development of Ireland's renewable ambition since the pioneers of this vibrant sector unfolded a new vision for sustainable green energy in Ireland as far back as 20 years ago. Before I talk about Coillte's portfolio and our five-year strategy, I will remind members why renewables are so important to Ireland, a peripheral country on the western tip of Europe with very limited natural resources. There are four reasons renewables are important. First, the 2009 renewables directive from the EU sets out a very clear and unambiguous ambition for Europe to achieve legally binding targets for 2020 and that European ambition cascades into very specific targets for individual countries including Ireland. We have three targets. Our targets for electricity from renewable sources is 40%, the target for heat is 12% and the target for transport is 10%. I will deal with the first two in my presentation, which are relevant to Coillte.

The second reason renewables are important is our excessive dependence on imported fossil fuels which today still exceeds 90% of all energy needs. I do not need to spell out to the committee what this means in terms of the risk to Ireland from both the perspective of security of supply and that of the cost of energy. The third reason is climate change. The members no doubt will have read that the International Panel on Climate Change reported again this week with a very clear statement that "It is extremely likely that human influence has been the dominant cause of the observed warming of the planet since the mid-20th century". Therefore, arguably, the preservation of our planet and the stewardship of our natural resources may very well be the greatest issue facing mankind in the 21st century. The final reason renewable energy is important is economics. The Redpoint study for IWEA and, more recently, the Poyry study, The Value of Wind Energy to Ireland, which was produced within the last two weeks, confirms that the increased deployment of wind energy does two things - it reduces the wholesale cost of electricity and, crucially, it stimulates employment.

I will move on to slide 12. I have included on this slide a screen shot from EirGrid's website at 5 p.m. on Wednesday, 26 March. Members will see that renewables accounted for 20.6% of all energy generated in the preceding 24 hours. That is a very good story for Ireland. Coillte has enabled 40% of current installed generation capacity, 2,000 MW of renewables, which blows on the grid today. The way we have done that is by selling upland sites to wind farm developers to facilitate the construction of new generating plant. We facilitated access to sites for construction and maintenance through the provision of rights of way across our lands. We have provided way-leaves for developers and we have supported the ESB, as the distribution system operator, and EirGrid to connect wind farms and build grid capacity. We have completed in excess of 80 transactions in this sector in the past 15 years and the revenue from this activity has enabled Coillte to fund the development phase of our own portfolio of projects.

One could ask what is Coillte’s role as we look to Ireland’s ambition to 2020 and beyond. First, we intend to capture more of the value in this particular sector for our shareholder by developing and operating some of our own projects, including partnerships with strong companies such as the ESB and SSE plc, formerly Scottish and Southern Energy plc. Coillte’s development portfolio comprises nine projects across seven counties in Ireland with the potential to generate more than 500 MW of operating capacity. Developing the projects will provide Coillte with secure REFIT-backed income streams for the next 15 years, helping to balance our income profile which is currently over-dependent on the construction sector.

The second point in terms of Coillte’s role is that we will continue to be one of the largest suppliers of land to the sector in the form of high-quality sites, rights of way and way-leaves enabling the industry to deliver the necessary electricity generation and grid capacity to allow Ireland to reach its 2020 targets. In that regard the next four years are absolutely vital as the REFIT incentive ceases at the end of 2017.

The third role for Coillte is that it is committed to open and transparent presentation of all facts and the best scientific data relating to its wind farm developments. We believe that early engagement with communities is absolutely essential. We believe that communities have a right to be heard and that an appropriate form of community benefit provision should be an integral part of all development projects.

Fourth, much has been spoken about the potential for a major export project whereby renewable energy from land-based wind farms in Ireland – the midlands in particular – would be deployed to provide green energy to the UK. We believe such a project merits deep consideration as it offers the potential for very significant investment in the indigenous economy with the attendant benefits in terms of job creation, economic activity and returns to the Exchequer. We are mindful of Government policy in respect of this particular area.

We believe that Ireland has a unique and exceptional opportunity to drive the renewables ambition to best-in-class levels giving real leadership in this space in Europe, maximising our potential for what is a free, natural resource and helping to mitigate CO2 emissions in other sectors of the economy. Today, we are talking about the potential benefits we could achieve in mitigating the effects of agriculture. Our provisional estimate suggests that 1,300 MW of newly installed wind generation capacity has the potential to mitigate a substantial proportion of the incremental emissions arising from the projected increase in the national herd between now and 2020 as part of the Food Harvest 2020 strategy. In that regard, we would welcome a new gate process which prioritises projects of scale and with low planning risk which are capable of being delivered in the medium term for the benefits of Ireland Inc.

I will move on to slide 14 and talk about biomass, in particular small diameter round wood which originates from Ireland’s forests and how it can contribute to the development of a vibrant and competitive manufacturing sector which generates its process heat requirements from a renewable feedstock rather than fossil fuels. In that regard, I will turn to the Government White Paper on energy policy which sets a target of 12% of thermal energy to come from renewable energy sources by 2020. The renewable heat sector, however, remains largely underdeveloped having grown very slowly to 5.2% in 2012, mainly as a result of wood waste utilised in the timber processing sector. Based on our current renewable electricity standard – heating, RES-H, trajectory, Ireland’s 2020 target will prove very difficult to achieve.

We believe that the introduction of a renewable heat incentive, RHI, is now essential. An RHI is a payment system for the generation of heat from renewable energy sources similar to the REFIT scheme for electricity. Generators of renewable heat are paid an agreed rate per kilowatt hour for hot water or steam which they generate and use themselves. The payment is for an agreed period and index linked. We believe such a scheme would be self-funding from an Exchequer perspective. The scheme was introduced in the UK in 2011 and has resulted in more than 611 MW of installed thermal capacity spread over nearly 3,000 accredited biomass installations. The source of the data is the Department of Energy & Climate Change, DECC, in the UK. The resulting benefits have been recycled through the UK national economy, stimulating economic activity, creating new jobs in engineering, design, installation and maintenance of biomass boilers themselves and through the associated operations such as logistics required to process and supply the local biomass.

There is now an imperative for Irish industry to adopt green energy solutions. However, project economics for large-scale renewable heat investments are proving very challenging. The relatively high costs of biomass boiler technology present a significant barrier. An RHI would offset the higher capital investment required, thereby improving project economics and encouraging the wider deployment of biomass renewable energy technologies. The benefits are very clear. First, a reduction in Ireland’s reliance on fossil fuels, a reduction in our greenhouse gas emissions and improving domestic fuel security. Second, improving and strengthening the competitiveness of Irish industry by minimising carbon taxes, replacing fuel costs and protecting against fossil fuel price volatility. Third, stimulating rural development and local job creation because it is a labour-intensive business and is very much rooted in the local community; providing a vital outlet for our growing private timber resource which will come to market in the next decade, giving it a market and a channel for growers of short-rotation energy crops; and reducing the future level of EU fines which may manifest in a situation where 2020 targets are not met. The final point relates to helping offset emissions in other sectors such as agriculture.

Coillte is underpinning the future energy supply of one of Ireland’s leading pharmaceutical plants. It is biomass in action in the real world. This is our flagship case study. Having secured a five-year biomass fuel supply agreement with Astellis Ireland Limited in Killorglin, County Kerry, we now supply the plant with all of its biomass renewable energy requirements and have done so for the past 28 months. We are successfully delivering both security of supply and lower energy costs to a world-class company. Astellis is one of the top 20 pharmaceutical companies in the world and employs 1,600 people globally. It operates a modern finishing facility in Kerry where it manufactures organ rejection drugs.

I will now turn to land generally and how Coillte has responded to the needs of customers and stakeholders alike through the deployment of our land asset for a wide range of end uses. Coillte has a long and proud tradition of adding value to our land asset, thus ensuring that additional value is captured for the shareholder over and above that which our forestry activities generate. Members will see from slide 19 that value creation is not just restricted to a Coillte context but of equal importance is the value we have brought to a range of sectors, customers and communities in the past decade. I will refer to some of those sectors. In terms of infrastructure, where our primary customer base has been State-owned local authorities, Coillte’s land asset has helped unlock solutions to key infrastructure provision including water schemes, the construction of new roads and motorways, county road upgrades and various utility schemes. Activity in this sector has been low since 2008 due to the recession. However, we are very pleased to see activity recommencing in both County Donegal and County Galway as key county roads are being prioritised for improvement in 2014.

In terms of development, our activities have extended across many aspects of the sector.

Irish Distillers' soon-to-be-commissioned state-of-the-art facility for the maturing of its branded Irish whiskey products near Midleton, County Cork, is a prime example. These lands for this signature development were sold by Coillte to Irish Distillers Limited in 2012 and we are proud to be associated with such a successful export brand for Ireland. Clearly, this market sector was buoyant pre-2009 but there are still occasional once-off transactions in this sector of which Irish Distillers Limited is a case in point. Since the onset of the recession, activity in aggregate in residential property has been limited. However, Coillte continues to support local communities in the form of land for sports and community facilities, such as the example illustrated in the slide on display, where Coillte provided allowance for Emo GAA club in County Laois.

Turning to agriculture, Coillte is mindful of Ireland's ambition, as articulated in the Food Harvest 2020 strategy, and we have seen significant activity and strong pricing in this sector in recent years. Our activities, in the main, relate to small to medium-scale transactions with farmers who seek to increase their holdings and thus increase their own output, typically by acquiring adjoining lands from Coillte. Last year, approximately 85% of all land transactions were in the agricultural sector. Coillte also plays an important role in connecting communities through the deployment of its land asset in support of telecommunications infrastructure across the length and breadth of Ireland. Coillte has a portfolio of 429 telecommunications towers on its lands, of which 116 are owned directly by the company. These new structures were built by Coillte to support 3 Ireland's requirements to deliver the national broadband scheme between 2009 and 2012. The remaining sites are leased in the main to the major telecommunications operators. I have no doubt but that Coillte's land assets have and will play a key role in realising Ireland's ambition to ensure that rural Ireland is not disadvantaged in securing high-performance broadband connectivity into the future. I will conclude by drawing members' attention to a recent innovation whereby Coillte joined forces with a company called OCMS Ireland to market Coillte's estate as a prime location for film and television ventures, both home-based and, in particular, the big budget US productions. This initiative was welcomed warmly by the Irish Film Board and the Department of Arts, Heritage and the Gaeltacht.