Ms Aoife MacEvilly:

There is no issue with the fact that it is auto-consumption of its own fuel. It just presents a different business case for us to assess. The Senator is inquiring as to why, if the developer believes it has a justifiable business case, the commission is probing beyond that. That is the nature of the assessment that is set out in law for us to conduct. Given the scale of the support that is given to biomass HE CHP, it is not enough for the developer to state it can take that large amount of money and come up with a business case and that is sufficient justification. We are asked, under the law, to consider is this a heat use that would be economically justifiable under market conditions if the CHP plant did not exist. That is why we are looking at it from a different perspective than, say, the developer. That is why we ask for an example of how this would be produced in the market in an efficient way.

The simple example we come across when we are looking at a HE CHP plant is where there is an existing heat load. For example, in the presentation, there was a milk drying unit which perhaps had been using an oil-fired generator to produce the heat. A HE CHP unit comes along to replace that. Obviously, there was a business case for drying the milk with the oil-fired unit so we know there is a commercial case for that use and then the HE CHP plant is introduced to replace those oil boilers. One then has better use of the heat and has created primary energy saving. That is the simple case.

When it comes to a planned plant such as that in Mayo, it is more difficult to assess and we have to use this alternative case, as we call it, which is almost like a hypothetical judgment around whether, under market conditions, somebody would dry this biomass as a business in the absence of the CHP plant. That is how the economic case is justified.

A more expensive input means expensive heat to produce so there must be an efficient unit to do it and sell it under market conditions. What has happened in this case is that we have looked at the 2018 application versus the 2012 one. There is more expensive fuel, more expensive heat, and a less efficient process. That is why they are falling below the levels which give the full certification.