Mr. Mike Quinn:

We have to achieve the €24.2 million. I will explain why it is necessary that we achieve those savings. The price of energy is linked to gas, the price of which has dropped significantly over the past three or four years. Other fuel types include coal, which has decreased from $130 in 2011 to $60 a tonne now, and oil. We are all aware what has happened to oil. At the end of this year the Edenderry facility will have to be able to compete with those commodity fuel stocks on the open market. If we do not get the peat price down to compete with those, we do not get access to the grid, which means we do not generate power.

That same scenario happens with the two ESB stations at the end of 2019. While there has been all this movement in the commodity fuel-feedstocks, peat has been guaranteed at a fixed price for the past 15 years under these fuel purchase agreements supported by the PSO but that will end and, therefore, we have to transform our business to drive our feedstock business to compete against these other fuel commodities.

Will we achieve the savings? We have to. The three stations will become what is called co-fired stations. Each of the three stations will operate between 37% and 40% biomass and, therefore, the need for peat will drop by 40% across the stations. We need to a drop of 200 people in employment across the business to do that. We are in a fortunate position in that we will have 216 natural retirees over the period to 2020 and, therefore, if there are redundances, it will be a handful. However, we also see an opportunity on the biomass side to grow employment in the sector. We spent €19 million on biomass last year. That will grow to more than €100 million by 2020 and we believe that will increase to between €175 million and €200 million by 2025. That will generate a significant opportunity for the workforce if we can get the willow crops, for example, off the ground. We are also exploring another scenario. Our peat harvesting business is seasonal, running from May to September, but we are talking to a company at the moment which would take the workforce and deploy it in the private forestry sector during the six months of the winter timeframe. While we might not secure increased head count, we might secure longer term employment all year round by moving to a biomass-peat mix in the power stations.