Mr. Leslie Codd:

Senator Mulherin and Deputy McConalogue asked about the RHI incentive. I can inform the Senator in response to another very good question she asked that Irish mushroom producers have embraced renewable technology in line with the scale of their mushroom production units. The decision each producer makes on whether renewable technology is worthwhile depends on whether the price of oil and the price of wood, which is the used biomass, is high or low in the year in which that decision is made. I changed to renewables on my farm in 2007 because it was beneficial for me at the time. At the moment, it would not be beneficial for me to do it because of the price of oil. It would not really make as much financial sense as it did a number of years ago. The incentive for large-scale farms is reasonably okay. When the gap between oil and wood is large, the smaller farms would really need an incentive before they would consider converting over. The capital cost is quite large.

The Senator asked whether it would be difficult for farms to finance such a conversion. A farm producing €100,000 of product each week could be looking at a capital cost of €200,000. If the RHI scheme was in operation and farms were getting a reasonably fixed amount of aid on their heat for 15 or 20 years, based on the number of kilowatt hours they use, it would be very bankable. I do not think it would be a problem for small and large producers to embrace this. I know that the levels which should be paid in respect of various ages and scales of heating systems are up for discussion. The scheme that was introduced in Northern Ireland was probably a little over-generous. A scheme like the UK scheme would be better. I understand that there is some wastage of heat in the North. Nobody wants to see that. People who are interested in embracing renewables have made submissions on the scale at which that should be done in each industry and the level of grant aid that should be provided for each scale of boiler.