Oireachtas Joint and Select Committees
Wednesday, 4 December 2019
Joint Oireachtas Committee on Climate Action
Renewable Energy - Wind, Solar and Biogas: Discussion
We are now in public session. I welcome members and those who may be watching our proceedings on Oireachtas TV. At the request of the broadcasting and recording services, I ask that members and visitors in the Public Gallery ensure that, for the duration of the meeting, their mobile phones are turned off completely or switched to flight mode, as they interfere with the broadcasting system.
I welcome representatives from the Irish Solar Energy Association, ISEA, Mr. David Maguire and Mr. Michael McCarthy, from Renewable Gas Forum Ireland, RGFI, Mr. P.J. McCarthy and Mr. Donal Dennehy, and from SuperNode, Mr. John Fitzgerald and Mr. Robert O’Connor.
I advise our guests that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of that evidence. They are directed that only evidence connected to the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside of these Houses, or an official either by name or in such a way as to make him or her identifiable.
We will start with opening statements. I would be most grateful if our guests could limit their statements to five minutes, if possible. I invite Mr. Dennehy to make his opening statement.
Mr. Donal Dennehy:
I am the industrial director for Danone Ireland. Danone is the largest dairy group in the world, with more than 100,000 employees, 1,000 of whom are located in Ireland. We have two large manufacturing plants in Ireland at which we produce infant formula. Danone has a stated goal of "One planet. One health", and it drives all of its employees towards that goal, which means decarbonising our plants. We cannot do that without using biomethane and that is why I am here. On behalf of RGFI, we thank the Chairman and the members for inviting us to address the committee.
RGFI is a not-for-profit forum representing those with an interest in an indigenous Irish biomethane industry, including farm organisations, community groups, Gas Networks Ireland, GNI, and end users for renewable gas. We are asking the committee to consider renewable gas as part of the renewable energy mix. RGFI fully supports the Government's long-term climate ambitions. We believe that with smart, evidence-based policies, the transition can be positive for Ireland. This requires significant private and public investment, however, and the deployment of appropriate new and innovative renewable technologies.
We acknowledge the commitment to reviewing the potential of anaerobic digestion to supply biomethane in the draft national climate action plan, NCAP. We are concerned, however, at the figures used in the marginal abatement cost curve, MACC, analysis in the plan. We believe those figures are wrong and that is key to our presentation. The MACC estimates biomethane at a cost of €377 per tonne of CO2 abatement, whereas we estimate it, with proof, at some €78 to €150 per tonne of CO2 abatement and this is in line with other jurisdictions.
In October, RGFI submitted a business case for biomethane in Ireland to the Department of Communications, Climate Action and Environment. This KPMG report shows an overall positive 1.26 cost-benefit ratio through to 2050 for producing biomethane from agricultural organic matter. Specifically, by replacing 12% of current natural gas consumption with biomethane, Ireland can save 2.6 million tonnes of CO2 per year, supporting our decarbonisation targets and creating more than 3,000 jobs for rural Ireland by 2030.
In the replacement of gas, biomethane is the lowest cost solution. In order to realise this vision, we will need: Government policy and legislative support for biomethane, agricommunity-led anaerobic digester, AD, plants; a number of large food and commercial waste plants; and a capital investment of €1.5 billion, supported by industry. The proposed deployment and ramp up is in line with Northern Ireland, where 60 AD plants were built in the first five years of the industry being developed.
RGFI represents some of Ireland's largest energy users, including my company, Danone, Dairygold, Diageo, Pernod Rickard, Johnson & Johnson and Wyeth Nutritionals. Biomethane is the only viable and available alternative solution for many of our businesses to decarbonise our processes without impacting on overall operations. As users of natural gas, we can make an immediate switch to biomethane, which would deliver our environmental and climate benefit targets at lowest cost and with least disruption. We are willing to play our part in this transition. However, having the right policy conditions to support a scalable, renewable biomethane gas industry is essential if we are to remain competitive and in order to sustain economic growth.
Ireland has sufficient capacity to produce the required agricultural feedstocks without impacting on the livestock industry. Scaleable AD will provide certainty of demand for many farmers, with capacity to produce more grass for both animal feed and the new AD market. That will increase farm incomes significantly, bring about improvements in farm practices and further support the global reputation of Irish food exports.
As the Government finalises the national climate energy plan, we ask the committee to support a target of 12% for the replacement of current natural gas consumption with renewable biomethane; that biomethane would be included in the plan and in the Government's submission to the EU Commission, and funding support for the sector. Failure to support an indigenous biomethane industry, at the appropriate scale, will lead to a missed opportunity for the decarbonisation of agriculture, as well as higher energy costs for industry, a weakening of national energy security, and reduced competitiveness for the processing and manufacturing sectors. I thank members for their attention.
Mr. David Maguire:
We are grateful to the Chairman and members for affording us the privilege to present today. For those who are not aware, the ISEA has been lobbying for support for solar energy since May 2013. We are an all-island trade representative body with approximately 17 members in the solar space. It has been a very exciting month. We have seen a real sense of urgency that I have not seen in some time. The publication of the climate action plan is to be very much welcomed. The phasing out of peat stations is also to be welcomed. The approval by the Government of the renewal energy support scheme, RESS, with a revised goal to deliver up to 70% renewables in our electricity mix by 2030 is really ambitious and extraordinarily challenging. It will require a step change from both the public and private sectors in terms of how we approach renewables.
In terms of the quantum, we are proposing to deploy more than 12 GW of capacity between now and 2030. The background is that we have only managed to deploy 3.8 GW in almost two decades, which indicates the extent of the challenge that we face in the renewables sector. It is a matter of regret that we have not achieved our 2020 climate change targets. That is very disappointing, particularly as the solar industry has had more than 0.5 GW of available fully-permitted projects ready to come online before 2020. Moving forward, we have seen financing costs at a record low in terms of infrastructure, whether that is for wind, solar, biomass or others. We are also seeing a massive cost reduction in those technologies, which are also historically low. Despite our heretofore limited deployment of these technologies, our late mover advantage is that we have never been able to bring them online at a lower price than is the case today.
We have 1.3 GW of solar capacity fully permitted, with grid connections available, land and permits secured, with a further 1 GW due to receive offers for grid connection coming out of enduring connection policy, ECP-1. The industry has been investing since 2016 to be ready for the RESS auctions. While I very much welcome the Minister's announcement and the carving out of solar, it is only 10%, which represents a maximum of 300 MW in the first auction. That is a little disappointing. As an industry, we also welcome the community element. It was originally proposed in the high-level design of RESS that community schemes would not come online until the second auction but the Department has stepped forward and brought that into the first auction. We think that is a great thing to do, although it will be very challenging to get community schemes correct. We have experience of that in other jurisdictions. We also very much the proposal for a €2 community contribution for every megawatt hour of generation. In terms of community funding, we have seen challenges in other jurisdictions but there are now methodologies and technologies that can make this more efficient such as crowd-funding, where a €10 investment has the same transaction cost as €100,000. The challenge is not slowing up the deployment of the renewables while the communities raise capital. We ask the committee and the Government to consider whether the Ireland Strategic Investment Fund, ISIF, or another organ of the State could perhaps provide bridging finance to allow community finance to come on board.
Switching back to solar, the KPMG report specifically shows that we are an industry which could quite easily deploy 4 GW by 2030. We believe we can do a great deal more than that, and in the process create 7,300 jobs, and a significant value in terms of gross value added to the economy in tax take in the order of about €3 billion in that timeframe between now and 2030.
Despite the positive news we have had in the past month, some serious barriers remain in the context of the deployment of renewables and solar in Ireland. What we would like to see is more frequent auctions rather than four auctions between now and 2027. As well as being more frequent the auctions should also dovetail with when the grid is available to take those assets online. We would also like to see some consideration being given to reduce the cost and the time to connect and operate on the Irish grid system. I very much welcome the moves that ESB Networks has taken in terms of engaging with industry to look at those costs but, frankly, this is something we have been talking about for four years. We have the highest grid connection costs in Europe. That means it is a higher levelised cost of energy, LCOE, because at the end of the day it is the consumer that pays.
We would also like to see legislative change to allow private wire in Ireland, whereby a generator can connect directly to the consumer. This is quite a frustration for us coming from other jurisdictions in Europe where we are able to supply real power behind the meter and to have private wire across third party lands.
In the lead-up to the auctions, we would like to see a standardisation of rates and development contribution, which are leading to massive uncertainties in the auction process. We need a standardised local authority rate and a standardised development contribution. We would also like to see a fair price in terms of feed-in tariff for rooftop solar. Under our obligations in the renewable energy directive, I believe we are obliged to provide a fair price for the wholesale price of power for any power that a consumer does not use themselves. That is really important because it will change the behaviour of the public in terms of the way people consume and sell electricity themselves. What may help to start the rooftop deployment of solar in Ireland is this feed-in tariff along with, potentially, a reduced VAT rate for renewable energy assets on houses such as, for example, solar photovoltaic, PV.
There also needs to be legislative changes to limit the qualification for planning appeals. The wind industry has suffered greatly in the context of extended appeals and the solar industry is suffering also. It is very easy to make an appeal in Ireland, which drags out the deployment of renewables by more than a year. The climate action plan suggests that we need to deploy 8.5 GW of wind between now and 2030. This will be extremely challenging. It will never happen and we will have no chance of achieving it if we do not reform the process of planning appeals. The UK, our nearest neighbour, effectively has a planning exemption in respect of solar for rooftops of up to 2 MW. We ask for planning exemption for 0.5 MW. This would remove the barrier for those who want to install solar on business premises.
We have come along way in the past few months, but we need to overcome some real hurdles. It will require a co-ordinated effort from the public sector and the private sector. The private sector has been waiting for some time. We are ready. We now ask that the organs of the State to step up also. We are beginning to see that.
Mr. John Fitzgerald:
I thank the committee for the opportunity to present. Addressing climate change is the challenge of our time. It is an existential challenge that will determine our way of life, our well-being and the future of the habitat we enjoy today. Those who follow will judge us on how we act upon this, and rightly so.
I will focus on the transformational opportunity that offshore renewables, and particularly wind, present to us. Ireland has a comparative advantage with some of the best wind regimes in the world. With advances in technology in the past ten years, including floating offshore wind, Ireland is well placed for the production of renewable electricity at scale.
Our land to sea ratio is 10:1 so we have long been in marine renewable resources unlike some of our European partners who have no marine resources whatsoever. The resource we have on our doorstep is inexhaustible. The question is, how will we exploit this gift we have been endowed with. The answer is that with vision and strategic intent Ireland can turn this comparative advantage into a competitive advantage and become a leader in addressing climate change. Renewable technology advances have seen wind and solar generation becoming more competitive than nuclear and fossil fuel-based generation.
The new EU Commission has set an objective of Europe becoming the first carbon-neutral continent by 2050. Much policy and support in that regard is expected in the proposed new green deal. Electrification of heat and transport and the production of hydrogen and other gasses are set to see European demand for electricity production increase by more than double to 7,800 TWh by 2050. Without fossil fuels, this would necessitate a massive ramping up of renewable generation and deployment.
Offshore wind is forecast to become the biggest source of generation in Europe by 2050, overtaking onshore wind and solar. The reasoning behind the enhanced offshore wind drive includes higher wind speeds and load factors. One can generate twice as much energy from a wind turbine in a marine environment than onshore. There is community resistance to onshore, notwithstanding all of the efforts and endeavours that have been made for onshore wind. Scale effects that can be achieved offshore is staggering. There is also the possibility of deploying large offshore turbines leading directly to falling prices.
WindEurope undertook an indicative exercise, a report on which it published last week, that allocated the EU Commission’s offshore target of 450 GW across those countries with offshore wind resources. In this notional allocation, this country was given 22 GW with the following observations: Ireland needs to increase its leasing and consenting rate; it needs to work on its connectivity and supply chain; and it needs to start mobilising the technology by 2025. It is useful to contextualise this 22 GW in two ways. First, Ireland's current peak demand is 6 GW and the proposed Celtic interconnector is 0.7 GW. When one considers the scale it is clear that this would entail exporting resources to continental Europe. Second, the resource available within our waters can be measured in the thousands of gigawatts. In other words, Ireland could aspire to do as much as it wishes in the future. It is clear, however, that, notwithstanding its peripheral location, Ireland is, given its superior resources, viewed as a potential significant exporter of renewable wind energy. I recommend WindEurope's Our Energy, Our Future report to members. It makes for quite interesting reading.
Once one develops a material amount of energy in the European context, connectivity to European demand centres is required. Irish consumers could not be expected to underwrite such an investment in generation and transmission. Agreements with importer nations and entities would need to be struck. Offshore wind is less variable than onshore but there are major benefits to not having too high a concentration of offshore wind in any single region, such as the North Sea, so that we may keep the lights on 24-7. While Ireland could have the lowest cost of production, considerations around the cost of connecting and continuity of supply will inform the optimum spread of offshore wind around Europe. The takeaway in this regard is that it is a European problem, not a national one, and we should think of it in that context. A more integrated European regulatory approach than currently exists is required, as is a more interconnected pan-European grid. We also need a master plan to try to get a good outcome for Europe, as a continent, by 2050. Each country may make a case for how much it wishes to contribute in generation. WindEurope’s report states, "Countries with offshore wind resources have a geographical responsibility to lead Europe in this ... enabling higher levels of offshore deployment".
We are of the view that offshore wind will be called upon to increase its share of renewables in the future as other sectors struggle. Many European countries are constrained due to designations, lack of marine resources and so on. Ireland's 22 GW reflects an excess potential, but what is the right amount? We could transmit as much as can to Europe. Serving 5% of European energy demand by 2050 is not an unreasonable aspiration and would result in circa 70 GW of offshore wind. This scale of development would result in new indigenous industries to diversify job creation and the tax base, especially in regional areas, and it would regenerate our coastal communities. The scale of the development would also result in energy security with an avoided annual fuel bill of €5 billion to €6 billion and there would also be export revenue for the State's coffers. Ireland would be offering leadership in responding to climate change. Ireland would also exceed its targets and avoid penalties associated with not meeting those targets.
The exact quantum of 22 GW or 70 GW is less important than the concept and the vision of Ireland as a major exporter of renewables. In this context, indigenous supply chain industries and jobs may be created in a way that they would not be created for a domestic play. Beyond the vision, the next step is a roadmap to achieve and realise our potential. Ireland needs to commit to the development of our renewable assets in the context of the long-term vision. We need to give investors and developers a strong signal - as other countries have - that we are serious about developing our offshore resources. In the past, Ireland has sparked industries that we had less right to develop than offshore wind. By setting favourable terms and by supporting the inception of special development zones, such as the Shannon free zone and the International Financial Services Centre, Ireland has brought in foreign direct investment and supported local development. We can do the same with offshore wind development. The benefits of sharing the development of our offshore resource with those companies already involved in offshore generation in the North Sea are clear: more decarbonisation and more jobs in Ireland. All we need to do is provide certainty to the market. A special development zone is one option in this regard. Supporting indigenous innovation in order to encourage the development of industries that are sustainable is vital. We currently have a dormant offshore industry which sends its best people to work in the UK offshore wind industry. This can be developed and grown to provide local jobs at a number of ports in Ireland, supporting not just the Irish development but also the European supply chain.
Follow through is necessary for the structures and frameworks in order to support a growing and developing industry. A renewables centre of excellence should be set up with participation from industry and Government. It is important that there is joint involvement. It has worked very well in the UK. Innovation support for new technologies – again with industry and Government participation - would also be required.
I would mention test and deployment centres, of which we have some, for offshore renewable energy technologies that deliver innovative projects, not only following technology but developing it. It would be important for such a project to be pre-consented to the extent that it can be to accelerate that take-up of technology, to have a connection regime and to have a tariff regime for limited energy.
Furthermore, spatial planning for the optimal use of the marine environment is something to which we aspire. I commend the Government on its efforts in that respect and it needs to be finished out by 2021. It is important to have an engineering feasibility study for various levels of offshore renewable development. I would point to a specifically dedicated zone-cluster for marine renewable technology to encourage companies to start up in Ireland. Such an approach can give Ireland the chance to realise its potential, help Europe to become carbon neutral and Ireland to become a leader in addressing climate change.
I thank the members for their time and if there are any questions my colleague, Mr. Robert O'Connor and I will be happy to endeavour to answer them.
I would like to share my time with Senator Paul Daly. I thank all the contributors for their submissions and presentations. I will direct my questions first to the representatives of SuperNode and I thank Mr. Fitzgerald for his comments. What did SuperNode's assessment take into account with respect to how offshore wind has been developed in the UK and Denmark? Were the representatives disappointed the Government, when it undertook a review of energy security, only included the context of fossil fuels? Will SuperNode make a submission in the upcoming review of energy security? Have the representatives any comment to make about fossil fuel lock-in and concerns about how the Government's strategy is potentially facilitating that? Will they comment on the new marine planning Bill in the context of offshore wind development? When one of the representatives has responded to those questions, I will address questions to some of the other witnesses.
Mr. John Fitzgerald:
I will try to answer those questions. I will start with Deputy's question on carbon lock-in. It is incredibly difficult to do deep decarbonisation. Ireland is probably the leading country in decarbonising our electricity system as an island system. It is very difficult to decarbonise. Carbon lock-in will have to be actively tackled in our economy to try to escape from the clutches of carbon That is an ongoing process that will continue through the coming decades. We built our economy, in terms of our power, transport and agricultural systems, over 100 years based on carbon. Therefore, it will be devilishly difficult to extract ourselves from carbon.
It is welcome we will have a new marine planning Bill. It needed a push and it certainly got that. I understand by 2021 we will have a marine spatial planning strategy. It is important that system is streamlined so that people can develop projects in a way that is environmentally and socially responsible. The marine spatial planning and development Bill is important and it should be expedited as a priority and continue to be a priority.
In terms of our ambitions for energy security and the use of offshore wind or other energies, what I have outlined is a European context. It is not arguing that offshore wind should be counted towards X% of our energy security system. There is no doubt it should be but what I am espousing is a vision and a view that we would say we have this incredible resource. However, it will not get developed. Nobody will ask us to develop it. We need to be on the front foot and develop it ourselves. The primary market for a scale of 20 GW or whatever is the European market and Ireland will be a secondary market. By virtue of having all that energy on our doorstep, we will enhance our own security of supply. We need a better network and better connectivity. I applaud the Celtic interconnector and other forms of connectivity with Europe. That is the way we will develop the future. We will not do it as an island power system. We will have to do it as part of an integrated pan-European system.
I thank Mr. Fitzgerald for his response. I will move on to the Irish Solar Energy Association. Mr. Maguire mentioned some legislative impediments. Will he outline what specific changes are needed in planning law to minimise the ongoing delays in the process? Will he give a trajectory of what he believes solar energy can contribute to reducing emissions by 2030 and by 2050 in a context of the overall picture? Does he consider solar energy representing 10% of the overall auction is sufficient? Will this specific category remove obstacles to solar development?
Mr. David Maguire:
As we have seen not only in the renewable sector but with data centres and elsewhere publicly, to a certain degree much of our planning law is based on UK planning law. It is quite similar. One of the businesses in which I am involved, BNRG Renewables, has deployed many solar systems in the UK as have many members of our association. We have been engaged with the planning authority for the development of a 10 MW site in eight weeks. There is a statutory obligation on that planning authority to turn around the determination for that development in that time, or in 13 weeks if it is put to a vote in the local authority. The appeals process is limited to a procedure. One can only submit an appeal if there is a breach of procedure or if the procedure has not been followed. That appeals window is open for six weeks and then it closes. What I find very frustrating in Ireland is that it is very easy to take an appeal. The appeals process must be robust but there is a great deal of uncertainty about planning. We have been constructing solar systems globally in different jurisdictions for more than 12.5 years and Ireland is one of the most challenging development jurisdictions in which I have ever deployed this technology. That is due to the uncertainty surrounding planning. We do not have planning guidance on this but the planning system is robust enough to assess projects on their individual merits. The challenge is the risk of the appeals process. That needs to be reviewed with a view to reforming it. Specifically, planning in respect of rooftop projects should also be considered. Deploying solar systems on rooftops is exempt from the formal planning process in many European jurisdictions, whether it be a MW system on a factory of a solar system for a domestic home. We have had discussions on this issue with An Taisce and other conservation bodies, including the National Trust in the UK which openly welcomes solar systems on listed buildings provided by such systems are installed sensibly. Currently, that is a barrier to people putting solar systems on the roofs on their houses. Those are the two areas that should be considered in planning law.
The third area that needs to be considered is the private wire issue, but that is probably a matter for the regulator, the Commission for Regulation of Utilities. As a generator, I cannot connect my generating asset to supply electrons to a factory located in a field away from my business but one can do that in many European jurisdictions. I have to connect to the grid with all the costs that entails. Addressing that issue would unlock great potential in terms of corporate power purchase agreements, PPAs, in Ireland. Ultimately, as an industry, we are seeking best value for money for the consumer. If renewals are oversubsidised in this country, they will just become unacceptable politically and they will not work.
Mr. David Maguire:
My final point is that solar representing 10% of the auction-based scheme is quite disappointing. Ultimately, it is widely agreed within Europe from various independent assessments that solar energy is likely to deliver 20% of the entire electricity demand in the European mix by 2030. In terms of the trajectory we are on in Ireland, being pessimistic, I think we could probably deploy between 3.5 GW to 4 GW by 2030. Being optimistic, it could be 8 GW. We are somewhere around 5 GW or thereabouts in terms of capacity.
The groups before us are all up and running. In an ideal world, how do they think we are fixed as a country with regard to skilled personnel and technological know-how in our workforce? If the groups get over their planning hurdles and are up and running, do they have the workforce required for each of the three projects? How can that problem be overcome, if it is a problem?
Mr. Donal Dennehy:
With regard to biomethane, we have the advantage of being late to the table. In Europe there are 17,000 biomethane plants, with two being built in France every week. When we started, the technology had biomethane generating electricity to feed into the grid. That is no longer the process and the technology has matured and is very efficient. This will be led, owned and run by farming communities. Biomethane will be produced and injected into the grid. We in the industry extract it on the far side of the grid like we extract green electricity. It is simple and a well-known technology tried and trusted across Europe. The fact that we are late to the table is better for us as there have been lessons from all the mistakes.
Mr. John Fitzgerald:
It is an excellent question. We have had perhaps 15 years of experience of onshore wind and there is a supply of 3 GW or 4 GW in the country. We build and service this but there are no export jobs or there is not a significant amount of materials made in this country for export. I have outlined an export proposal but we do not have the required personnel today. We would need to plan today to start this and it is not around the corner. I am not talking about the auction next year or the year afterwards. I am talking about ten years down the line and developing an approach to set people up and then encourage and foster them. We can then talk about tens of thousands of jobs to develop industries and to become a leader in an element of the supply chain. We will not become leaders across the supply chain but there are elements of the supply chain where we could become leaders and grow indigenous jobs that are sustainable and could be a source of wealth and income for the country, even if a turbine is built in another country rather than in our own waters.
Mr. Michael McCarthy:
It is a very good question and the short answer is "Yes". I have no fear that we are insufficiently skilled in terms of the workforce required to build out solar here. We have many people involved in the sector with rooftop solar but with regard to meeting the aspirations of the action plan and the very serious demands that decarbonisation places upon us, it is important to begin at the macro level and remove the barriers that the Chairman has highlighted. Rooftop solar will create the "energy citizen" and democratise our energy sector.
We need to look at lifting the planning restrictions. My association met the Minister with responsibility for planning during the summer and outlined our position. The official line was that wind energy guidelines would dominate the thinking in the Department. The Minister made an announcement at the start of the week and we expect, perhaps this side of Christmas, that the Minister for Housing, Planning and Local Government will make an announcement and take on board the different considerations we have. The planning system is fairly robust but we want a policy in place that is transparent and operative for consumers who want to enter into the space. It should also serve a responsible trade association that wants to ensure the highest standards in industry.
KPMG produced an independent report a number of years ago titled, A Brighter Future: Solar PV in Ireland. It considered all the scenarios for deploying solar power in Ireland and predicted we could create 7,300 jobs by deploying approximately 3 GW of solar power in the system. As the chairman has said, there is approximately 1.7 GW ready to go and we are awaiting the announcement from the Minister flagged on Monday. There is a solar pot but 10% of availability in the first auction, which we expect to run in June next year, is under-ambitious. We will intensively try to persuade the Minister of the merits of increasing that allowance. There are more than sufficient skilled personnel there. As a country we regrouped after the recession in the 1980s and the most recent recession to upskill and learn new trades and qualifications. I have no doubt we can do this again in the renewable sector, particularly on the solar side. We are ready to do this but we need the barriers removed in order to achieve that outcome.
Mr. P.J. McCarthy:
We are engaging with the industry. Mr. Dennehy is here representing the industry. In our engagement with other large energy consumers, they recognise that the Exchequer cannot carry the burden of the cost of this. We recently submitted to the Department, and we are mandated to put together, an integrated business case that seeks to map where funding is required on a phased basis. It is what is required between now and 2030, and there are multiple options for funding. One is the carbon tax. For example, approximately €60 million in carbon tax is being collected from the gas consumer and the most recent budget provided for an increase of €6 per tonne in carbon tax. With large energy consumers we are looking at potentially socialising the cost through a gas public service obligation. It is another option where the industry is willing to participate. We are working through a number of different feasibility studies with KPMG around the business case for biomethane, looking at commercial structures and propositions in order to stimulate and enable the industry. There is some work in progress but on the question of funding, the biomethane industry will play its role. We need very clear policy from the Government to support it.
I am sharing time with Senator Michelle Mulherin. My first questions are for the Renewable Gas Forum. Will the witnesses outline the benefits and potential risks, if any, with respect to the production of biomethane? There are probably no such risks but I must ask the question. Would a specific kilowatt tariff be required to get a biogas operation running on a farm versus what would be got back? Would a certain subsidy be proposed? The witnesses spoke about slurry storage versus silage. Have case studies been done on how many cows would generate a certain amount of gas on a certain number of acres? That is the way farmers would be thinking on the basics.
Some of the questions on wind energy have been answered. There was mention of 32 GW of wind energy potential but how many windmills would that require with current technology? What kind of studies have been done on costs in getting this moving and allowing us become a wind energy exporter?
Planning on the solar side was mentioned. Other than that, are there blockages in the system to people putting a different heating system in a domestic house? Legislative changes were changed but is there something we can do in marketing industry to attract domestic users to change their technology or go with solar in new houses? Have the witnesses interacted with any farming organisations? There are many rooftops over cubicles and slatted units that could be used.
Mr. Donal Dennehy:
The sole reason I am engaged in this today is that we need biomethane to replace natural gas. We have no choice. We buy green electricity already and we have done that for many years. It is impossible to buy green gas and it will not be available unless we support and build industry.
If we really want to support decarbonisation, both as a company and nationally, we need the alternative to be located here. We have spoken about a figure of 12%. Danone is committed to taking 100%, which is a huge amount, in one company. Dairygold will take another large proportion. Dairygold will supply us. Members can see how the chain will start to come together. Farmers will also be producing it. That is the model we are considering. I will refer to my colleague on how it is done.
Mr. P.J. McCarthy:
I wish to respond to Deputy Neville's question about risks. For pillar industries such as the agrifood, beverages, biopharma and biomedical sectors, the biggest risk is not supporting biomethane. The difficult sectors to decarbonise are agriculture and heat production. We are very confident that with support from the Government and the right policy and legislation, we can assist in substantially decarbonising both of those difficult sectors by supporting biomethane.
One positive aspect is that we can do this in a comprehensive manner. We certainly look to Europe for the best practices and technology. We have aligned with the revised renewable energy directive. The slurry to silage ratio has been specifically and purposefully designed in line with the sustainability criteria pertaining to the production of renewable biomethane gas. We are very much referring to the best available practices and technology and aligning with our European colleagues, who are assisting us with that expertise and those competencies. As was mentioned earlier, being late to the table is to our advantage for the simple reason that we can draw on those resources and the expertise and competencies which we as a nation do not currently have. We are collaborating on a consultative basis with key stakeholders, including Teagasc, industry and consumers, who are very important to our economic activity in rural Ireland. We are looking at safeguarding current and future investment. Many of the market drivers affecting biomethane and decarbonising heat are driven by the trade sector and global consumers. We do not need to explain how valuable that export market is to the agrifood, beverage and biopharma sectors. Along with creating an additional 3,000 jobs directly in the production of biomethane through anaerobic digestion, we are also looking to safeguard the competitiveness and sustainability of our manufacturing and processing sectors. Those sectors include Danone, which is represented here today, and others.
Mr. Robert O'Connor:
I thank the members for their questions. I will try to respond as quickly as I can to the two-part question about the number of turbines needed to generate 22 GW of electricity. We are not a developer and that is not our number. Given the scale of turbines, we benefit in some ways from not having deployed them over the past five, ten, 15 or 20 years. At an output of 20 MW per turbine, it would take around 1,100 turbines to provide that very large output. That would be part of a European network. There have not been any significant studies of the cost, but I would look at our near neighbour, the UK. The strike price for offshore wind energy in the most recent auctions was £39 and €44 per MW hour. If we can get our act together at scale, we have the opportunity to plan development zones producing 3 GW, 10 GW or 22 GW. As part of a network, these would allow us to achieve prices like that for the consumer.
Mr. David Maguire:
We did engage with the Irish Farmers Association and we have been working with farming organisations. In response to the question on barriers to domestic generation other than planning, I note that there is no feed-in tariff. Consumers do not get a fair price for the power they do not use. It is simply injected into the grid and no price is paid. We would like to see a fair price for that. Setting that at the right level will be much more efficient than grant aid, which can come and go at the whim of the next Minister. Moreover, that could also alleviate fuel poverty. It would not just be wealthy houses who could afford to install solar panels. Those that are in jeopardy of fuel poverty would also be able to do so. Private sector banks will step up in the knowledge that if the power is not consumed, it will come back to households in the feed-in tariff.
The other challenge we face is the difficulty of connecting to the grid. The time it takes to get ESB Networks to respond and approve a connection for commercial projects, such as on the rooftop of a factory or a milking parlour, is incredibly long. They are the two core barriers as I see them.
I have some questions. A common theme in the presentation was the jobs that could be created by this. The witnesses from Supernode mentioned it. There was talk about jobs in onshore wind generation for years and they did not materialise, so people are a bit cynical about that. I would like to know what type of jobs the witnesses are talking about. Are they manufacturing jobs?
Where do the majority of solar panels come from? Would they come from China or do the witnesses propose that we might manufacture them here? Where is the optimal place to get solar panels?
I welcome the developments around biomethane which the witnesses are involved in. At what point would what the witnesses are suggesting be a commercially viable endeavour for a farm to engage in? What herd size or acreage would be needed? What is the necessary combination of silage and waste material? What are the logistical challenges for the necessary infrastructure, including pipelines, planning, community acceptance, odours, etc? Mr. Maguire has been quite exasperated by planning processes in general, whether in connection with the ESB or the planning system. I have to say I agree with him. Could the witnesses comment on the difference between offshore wind generation in the Atlantic and in the Irish Sea where commercial viability and price are concerned? How does that compare with onshore wind in terms of cost?
It seems pretty obvious to me that we should be putting solar panels on every roof. Was there ever an audit of how much roof space is available? Clearly there are lots of challenges involved in building solar farms on greenfield sites. This mainly concerns microgeneration. Do the witnesses have any idea of the capacity of rooftop space?
Mr. John Fitzgerald:
Onshore jobs have not materialised with onshore wind. That is because we took an incremental approach. There was a scheme, a refit, then another scheme and another refit. We did not have the scale to get the industry jobs. We missed a trick there. The point I am making is that offshore wind generation will not emerge in the next year or two. It is five years away. Generation on the west coast is certainly a long way away. We need to plan to have those jobs to-----
Mr. John Fitzgerald:
Potentially. That is what we want. The scale that exists in the UK, generating 5 GW, 10 GW or 15 GW, opens possibilities around new systems, innovation and doing things differently. If we wait for the technology and generate 3 GW or 4 GW using technology we import from the UK, we will not get any jobs out of it.
Mr. John Fitzgerald:
We have been talking to them. I know the committee is under time pressure. The Senator asked about generation on the west coast versus the east coast. Load factors are so much better on the west coast but connectivity is a greater challenge, as it always has been.
There is a trade-off between the two. The same is true all over Europe. Europe has to rewire itself anyway, no more so than along the Atlantic.
Mr. John Fitzgerald:
No. Floating offshore is coming. The point of production costs on the west coast will be the lowest in the world. The east coast will not be as good because the wind regime is not as strong, but it will be closer to demand centres. Onshore has lower costs again. I will provide a number for the committee to take away. In France, there was an auction for offshore wind where €44 per MWh was the strike price. In Germany, €60 per MWh is the strike price for onshore wind. Offshore has proven cheaper because of scale, in that one can go big and get economies of scale that cannot be got in an onshore environment. The largest offshore wind farm in Ireland is 150 MW, but the typical offshore wind farm is 1 GW.
Mr. Donal Dennehy:
The Senator asked about the model of anaerobic digestion, AD. It would be rural, with the digesters owned, run and led by the farming community. We envisage its fuel being 50% slurry and 50% crop or grass. It is a simple model. The most efficient set-up is a 20 MW unit. Biomethane is generated and taken away in a tanker. Gas Networks Ireland is constructing injection points, including in Mitchelstown, and these will be distributed around the country for the biomethane to be injected straight into the line.
Mr. P.J. McCarthy:
There is something in this for all of the farming sector from tillage to beef, suckler and dairy herds. The dairy sector can assist in slurry management and offsetting a number of challenges. There will also be an opportunity. According to Teagasc's national figures, one third of farmers are losing money, one third are breaking even and one third are making money. To safeguard the future of agricultural industries, including dairy, beef, piggery and poultry, those farmers who are losing money or breaking even have an opportunity to consider this technology as being complementary to what they are already doing. For example, half of a farmer's land could go towards supplying feedstock to the AD plant. Our vision is for this to be agri led and community led, whereby ownership would remain with the community and farmer groups. The industry is available to provide support, including financial, for construction and whatever else is required. There is an opportunity to decarbonise agriculture and, in turn, assist the process manufacturing industry to decarbonise as well. It is a win-win.
Mr. David Maguire:
Approximately 85% of the entire global manufacture of solar panels is in south-east Asia, with most of that in China. Manufacturing only accounts for approximately 30% of the system cost, though, making it the lower added value part of the system cost. A third of roofs in Ireland would be suitable for solar energy. Since it satisfies 60% of the typical demand in a family home, it would certainly meet more than 10% of the country's entire domestic demand, if not 30%.
I welcome the panel, in particular Mr. Michael McCarthy, who is returning to this room. He was the Chairman of the Thirty-first Dáil's environment committee, of which I was a member.
Mr. Dennehy mentioned the agriculture sector in terms of biogas. Is there a role for the semi-State sector? Bord na Móna has tentatively started to move into biogas and has submitted a planning request for one biogas plant. What role could the semi-States play, particularly given their landmass and sites?
The KPMG report was mentioned, but the European Commission also examined this matter and stated that we were ideally suited, given that we have a large agriculture sector relative to the country's size. The Commission came down on the same side in that there is a great deal of agricultural waste that could be used. In terms of fuel, slurry and silage were referenced. A plant that is operating in Nurney uses food waste and waste from meat factories. Could that have further potential? Unfortunately, there is a great deal of food waste. Some of that cannot be avoided. For example, it is accepted that the waste from meat processing factories forms a part of it, but the Nurney plant also takes food waste from hotels.
Mr. P.J. McCarthy:
It was a valid observation. We are being guided by best practice and a European policy perspective. When the European Commission undertook a comprehensive study in 2016 and 2017, it identified Ireland as having the greatest potential of all other member states to produce biogas. That is a fact. We have the resources and ability to deliver. Interestingly, 95% of that will come from agricultural sources. We are a population of approximately 4.5 million people and are not the same as, for example, the UK. The opportunity presented by food waste is being taken up even as we speak. There is an opportunity, given that there are two separate entities developing or producing biomethane - the waste industry and the agri-led industry. Bord na Móna is a member of the Renewable Gas Forum Ireland, RGFI, and we are working closely with it to develop that in the waste sector. There are opportunities for all parties. In decarbonising agriculture, for example, there is an opportunity to help decarbonise heat. No one sector will deliver enough, though. We need a clear policy that supports biomethane from wherever it comes.
Do the witnesses envisage a network of small plants or a small network of large plants? I believe Germany has 6,000 plants. What steps can be taken to reduce opposition to plants' siting? There is already opposition. Some of it will not be justifiable, but some will be. People have concerns, so we must ensure that this does not go the same way as onshore wind in the midlands where we saw significant opposition.
Mr. P.J. McCarthy:
That is a valid observation. We need to position ourselves and be strategic about this. The RGFI is an industry forum that represents the full supply chain. We are engaged strategically with the potential AD operators on where they are looking to locate their infrastructure. Through Gas Networks Ireland, we have tested direct grid injection for up to 15 km. We have favourable positions on policy, with connection and business arrangements from the Commission for Regulation of Utilities, CRU. There is a positive disposition towards biomethane being transported in the grid. As such, the fundamentals are in place.
We have the green gas certification scheme, which verifies and validates the sustainability of the production of renewable gas. It is aligned with European policy, best practice and best technology, and we are fully auditable. Where biomethane is concerned, it uses the accreditation bodies approved by Brussels. The end consumer can have confidence.
I see this as resolving the problem. Mr. Michael McCarthy has heard me say at a previous meeting of the committee in this room that we can use it to solve a problem, to create jobs and to generate power. That is the good news.
On solar, I have introduced a Bill that deals with planning permission for rooftop solar. The current planning permission at 12 sq. m is very restrictive in that it does not allow for installation of a standard panel. The following question is to Mr. Michael McCarthy and Mr. David Maguire. Should planning permission in respect of domestic dwellings be abolished or should the 12 sq. m be increased to 35 sq. m per domestic dwelling?
On connectivity, should we forget about trying to connect to the grid and focus on the use of the solar energy for self-consumption, such as charging an electric vehicle and so on? If the preferred option is to try to connect to the grid, what and where are the blockages in that regard? The many very large agricultural sheds that have been erected all across the countryside present us with a huge opportunity for energy generation via solar panels, particularly those that are west facing. Where are the blockages to doing this? For the owner of a shed, a house or GAA clubhouse who wants to install solar panels, what does the Government need to do right now to enable them to do it?
Mr. Michael McCarthy:
The current restriction is 0.5 MW. The association has asked for a 2 MW exemption. The principle is important in the sense that the planning permission is a necessary part of a robust planning system. The ask from the industry in terms of a request to increase the exemption to 2 MW is reasonable. The exemption was brought in at a time when we were dealing with solar thermal, which is a much heavier panel. We met the Minister, Deputy Eoghan Murphy, during the summer. The focus of the Department at that time was on the wind energy guidelines, in respect of which the Minister made an announcement at the beginning of this week. The Department has since committed to examining the proposed ISEA planning permission and we expect some movement on that this side of Christmas.
The point in terms of rooftop space is important. We can lead the way in Ireland in terms of decarbonisation. The State can do that by way of the Department of Education and Skills in terms of school rooftops and the Department of Agriculture, Food and Marine in terms of the roof space on farms. The blockage to this is the lack of an export tariff. Nobody is going to introduce a system if what is unused must go back into it. There is a particular issue around ESB Networks and the export tariff. This industry deals with a number of organs of the State, including the Department of Communications, Climate Action and Environment, the CRU, ESB Networks, EirGrid and 31 local authorities, which is quite difficult at a bureaucratic level. For most other industries there is probably only a regulator and one point of contact. This area is populated by many organs of State, all of which are important and necessary. To meet the aspirations of the climate action plan, the chief civil servant of the State, Mr. Fraser, has oversight of all of the actions. This industry needs one individual to go to in terms of the various barriers that exist in the deployment of solar.
In regard to self-consumption or export to the grid, we are speaking of small-scale generation. I live in a semi-detached house. If I install solar panels on my house, should I forget about trying to export to the grid?
Mr. Michael McCarthy:
It is inevitable. We need a change of heart and a clear statement from ESB Networks in terms of an export tariff. We are not here today to complain. Rather, we are here to discuss the benefits of solar. The Chairman touched on the improvements and developments that have taken place over the past year or two. There has been more action over the past year or two than in the previous three or four years. If we are to meet the aspirations of the climate action plan, we need the organs of State to follow through. What Deputy Stanley mentioned is inevitable, but we want it to happen sooner rather than later.
In regard to the renewable electricity support scheme auctions, which will commence in June, we welcome that there is provision for a solar pot, but 10% of our overall capacity is only 300 MW. There is 1.7 GW of solar ready to deploy now.
On wind energy, in terms of potential, Mr. Michael McCarthy mentioned the east coast. The first wind farm in Ireland is the one in Arklow, which is on the east coast. My understanding is that that site was picked on the basis of it having a ridge. Is sea depth on the western sea board a massive problem? Obviously, the west also has potential because, as referenced in the Wild Atlantic Way, it is wild. Is it proposed to use floating turbines?
Mr. John Fitzgerald:
The Deputy is correct. Traditionally, the North Sea is a very shallow sea and so it has been very easy to develop a good deal of it using fixed bottom turbines. In regard to the west coast, where the depth is greater than 30 m to 50 m, this becomes too expensive. Floating offshore is a technology that is in trial in Portugal, France and Scotland. Scotland is a great example of a country that has embraced new technologies without necessarily putting its hand in its pocket to pay for them. It has invited industry in to do its demonstration projects in Scottish waters. I would recommend the high wind project, which is a novel technology floating offshore wind funded by, primarily, Equinor, which has achieved astounding load factors with floating offshore winds. This technology is not available here to date. It will be commercial in the next three to five years.
Mr. John Fitzgerald:
It depends on the wind regime. In the case of onshore wind, if one can do it at scale it is hard to beat in terms of pricing for wind. The big issue is that it is not possible to scale onshore and there is no space in Europe to do it. Even if it could work for Ireland, Europe is power hungry and it has a shortage of land space. It needs marine-based renewable resources so floating offshore is a game changer, which will come on stream in the coming years. It has been proven technology-wise and it will be commercialised in the first instance in the North Sea by 2025. It could come here in the late 2020s or the early 2030s. We need to prepare for it and work out what we want to do with this opportunity.
My final question is on the renewable energy sector and may be answered by any of the witnesses. Renewable energy generation is new to us and so we do not have the necessary skill sets or apprenticeships to deal with it. Is the industry prepared to run apprenticeship schemes, as was done in the past by the sugar companies and Bord na Móna?
Mr. David Maguire:
Industry is very much engaged with academia and the colleges to train up electrical engineers for our sector. We are seeing more Irish civil engineers returning from overseas to work in the sector. We may lack some of the labour to build out the plants but we have the skill sets. People are coming here from overseas to support the technologies in terms of wind and solar.
Mr. P.J. McCarthy:
We are very aware of the opportunities. We see this as a growth area. The target we are setting is only touching the tip of the iceberg from our perspective. From a rural economy perspective, this is a key opportunity for sustainable jobs. In our view, in the growth phase, 3,000 real, sustainable, direct jobs will be created. These jobs will assist in the creation of other sustainable jobs with industry in the manufacturing and processing sectors.
I am afraid I must tell Mr. Dennehy and Mr. P.J. McCarthy that in my reading of it the best scientific advice runs counter to everything they have said today. I refer them to the three reports published recently for the Sustainable Energy Authority of Ireland, SEAI, on the bioenergy supply curve for Ireland for 2015 to 2030 published in 2016; the costs and benefits of biogas and biomethane in Ireland published in 2017; and the sustainability criteria options and impacts of Irish bioenergy resources published this year. The best independent scientific advice makes it clear that the costs of using agricultural feedstock is, at best, marginal. Perhaps we should look at and refer to the German example. Germany has been way ahead of us on this with massive investment. It has stopped that process. Due to the environmental problems associated with growing maize for biomethane instead of for feedstock Germany stopped doing it. I believe the same thing would happen here. The reports also state that if we are going to use the gas, it only makes economic sense to do so if it is used on the farm on site rather than in industrial food production facilities. That is when it starts to make economic sense.
The reports also state that if we are going to do it then grass silage amounts should be no more than approximately 20% or 25%. Waste materials are what works. If we used a higher proportion than 20% to 25% of grass silage there would be net negative climate emissions because we would be engaged in a gas production system. It would be a continuation of what we are using with high levels of artificial fertiliser and the effects of ammonia and nitrous oxide as well as other environmental effects. We have destroyed our land with this industrial farming system and we do not need to make the process worse.
The reports also state that slurry is not available. They completely differ from what the witnesses have just said. The Northern Ireland route is the subject of utter scandal and corruption with regard to the renewable heat incentive scheme. Anaerobic digesters are similar to the renewable heat incentive scheme in the way it has led to a massive increase in industrial agricultural production systems where animals are kept indoors and there is a huge expansion in slurry with huge consequences and environmental consequences. If we want to go down that route for Irish agriculture we might just about have enough slurry but that is not the way we want to go. We want to keep our animals out.
We do not want to go to intensive industrial agriculture. We want to be origin brand green and not have an industrial agriculture model. To do all of this to create an artificial baby milk powder that we ship halfway around the world to replace breastmilk, which is the more natural healthy and genuinely low-carbon and sustainable product, just leads to the entire system from tail to end probably being one of the least sustainable things we do. We need to be honest and clear with Irish farmers and not send them down the garden path towards a system that will be pulled back because it is not sustainable. How do the witnesses answer these accusations? They are based on my reading of the best scientific research.
Mr. P.J. McCarthy:
I will go through some fundamentals on best scientific advice. At the time those studies were carried out they applied and were worked to the first renewable energy directive. We moved on from that and the second renewable energy directive clearly sets out the best scientific advice and best technology available. We have moved on from a lot of that data and information. With regard to the availability of slurry, the competent body to advise farmers is Teagasc and it clearly states the availability of slurry is there. We have spent the significant sum of €1.54 billion over the past ten years on slurry storage. This is to cater for the environmental requirements of slurry storage. Slurry is available. The figures are there and Teagasc has them. I would not expect the SEAI to have those figures specifically.
With regard to ammonia and fertilisers, one of the fundamental issues and concerns we had about the assumptions made by SEAI in its study is that while we engaged with the SEAI comprehensively on that particular piece of work, and there were some decent inputs into it from industry and the producers, from a cost perspective the feedstock is there and is available and we are not interfering with any other feedstocks.
Those three studies were carried out by the best leading international experts. The SEAI has a hugely positive reputation for the independent scientific advice it applies on renewable energy. I must say I know Teagasc is obsessed with industrial grass production as being the only thing we need to do in this country. I have a fundamental problem with Teagasc in this regard. I will come back to the fundamental issue that the reports were done by the best international experts and include their assessment that to make the economics work we would have to have a grass price below the current grass silage price for the animal system. I go back to what I have said about Northern Ireland. My understanding is that the massive environmentally reckless expansion of anaerobic digestion in Northern Ireland is leading to the generation of new pig slurry quantities equivalent to Northern Ireland having a population of 12 million people creating the same levels of slurry. We have a question to answer as to whether we want to turn this country into a slurry pit or do we want to go the green organic high value-added agricultural system.
Mr. P.J. McCarthy:
With respect, they should be updated because they are already outdated. The figures we have from the Department of Agriculture, Food and the Marine and from Teagasc are reliable. The slurry is there and it is available. We are looking at dealing with current challenges. With those current challenges are opportunities and the potential to decarbonise. We did observe, and it is on the public record, that we went back to the SEAI with our concerns as an industry on some of its assumptions. With the best will in the world, it used artificial fertiliser as part of the costs of production. From this there was no reference to the better fertiliser value of digestate biofertiliser that goes back in. That was completely missed. What we are saying here as an industry is that biofertiliser is of better value. It is a biofertiliser that goes back in and replaces artificial fertiliser. With respect, there are some fundamentals in that assumption and those reports are incorrect and inaccurate.
Mr. McCarthy might write back to me regarding the three reports I have cited, listing the instances where he believes they are inaccurate or scientifically incorrect and give references for his opinion in this regard. I would very much appreciate it.
My next question is for Mr. Fitzgerald. We have a huge comparative cost advantage in offshore wind and we should be thinking ambitiously. It is part of a European project. I was just looking through the European report that Mr. Fitzgerald referred to. Ireland is looking at 22 GW and we have 425,000 km² of probably the windiest sea area in the world and Poland, with only 30,000 km² in the relatively becalmed Baltic generates 28 GW, which is 6 GW more than us. This leads me to think we are not being ambitious enough with 22 GW. I note the European report divides it between 6 GW in the Irish Sea and 16 GW in the west and with regard to cost very much focuses on the north west rather than the south west, which surprised me. Perhaps the north west is windier and that is why it is a lower cost. Let us assume we follow the report's advice and put 20 GW in the north west. Does Mr. Fitzgerald believe shipping it to the rest of Europe will involve the onshore Irish transmission system? Are we best landing it ashore in Ireland and using existing and new interconnectors to transfer it? Has Mr. Fitzgerald thought yet about how that 20 GW of power would be shipped?
Mr. John Fitzgerald:
The 22 GW was an exercise carried out by WindEurope. It is not our figure, it is a figure it gave us based on a European objective scenario for 2050. We could do more or less as we so decide. We have an abundant resource. The questions are how much we want to do, how we would do it at scale on the west coast and what methods we would use. We have a transmission system built for 4.5 million people. It is probably creaking at the seams with the amount of land-based renewables we are trying to put onto it. It does not have the capacity to accommodate 5 GW or 10 GW of energy in the European context. It just cannot do it even with the planned Celtic interconnector, which is a necessary piece of infrastructure.
Domestically it makes sense. It is not sized for Europe but sized for Ireland. It is 0.7 GW and we have talked about 20 GW so this will not work and, therefore, one needs dedicated networks. The good news is Europe needs dedicated networks because very quickly when one gets beyond 40 GW or 50 GW in the North Sea there is a dearth of capacity around the North Sea so Europe has a problem. We are an extreme of having an excess of renewables and a lack of connectivity. The problem is around Europe in its entirety so we need to develop better technology, to move that power, and dedicated networks.
At a separate committee hearing we interviewed the chair designate, now chair, of EirGrid, Mr. Brendan Tuohy. On that occasion I made the point that we must start in the Irish Sea but also start now on our west coast. I say that because, as we know from experience, it takes between ten and 15 years at least to develop big scale infrastructure projects.
I assume that the ENTSO-E ten-year plan is the place to put those sorts of projects, to get European funding or for it to be co-ordinated between the north-west European electricity market system. Is that a fair assumption? Is anyone working with SuperNode at the moment on the technology that it has?
Mr. John Fitzgerald:
There are no transmission system operators, TSOs, for the seas so there is no responsibility for an overarching European network or framework. What one has is a collection of national TSOs that put together a plan. Last week, at the WindEurope conference an MEP basically said that ENTSO-E is not working to accommodate 450 GW and its plan does not incorporate that.
I did some work on this area, in a former life, and I agree with Mr. Fitzgerald. It seems to me that we reached the conclusion that an independent system operator would be the best way to manage the overall process. How would Mr. Fitzgerald rate the political chance of that happening any time soon?
Mr. John Fitzgerald:
It did not happen for competition reasons when we tried to break up the utilities and have TSOs, and allow people around this table, on the private sector side, to participate in energy. That did not happen then because of local national prerogatives but for climate change it has to happen. Many countries will be unable to decarbonise economically by themselves because they are trying to put in technologies where they do not have a comparative advantage so the cost will go up. There are a lot of landlocked countries in Europe that do not have a marine resource. If they are going to truly decarbonise then they will need to co-operate and there will need to be a common European plan. I hope that the new Commission will recognise that in due course in their climate law and implement it but without that we are doomed.
I have read all of the presentations with interest and apologise for not being here to hear them.
Some of my points may have been discussed already. I will begin by discussing the renewable gas forum. I wish to make the general point that when we declared a climate emergency we also declared a biodiversity emergency and there is an intersection around our climate and ecological targets. I share some of the concerns expressed by Deputy Ryan given that Ireland sponsored the report to the UN on land use, the issue of the transfer of land, for example, to grow fuels versus other things. Ideally, we must consider biofuels as a by-product of ethical farming practices and that is where we want to move to, and remember that Ireland has a lot of waste products and high levels of food waste.
I will focus on ammonia pollution. Ireland was found to be in breach of ammonia emission levels in 2016 and 2017, and there are forecasts that we are in danger of continuing to breach the level. In Ireland, the Nitrates Action Plan has been hugely criticised by the Environmental Protection Agency, EPA, plus Ireland's rivers have breached the acceptable levels of ammonia and we know that we are in breach. The witnesses will have heard of some of the other concerns about the North but one of the concerns about the North concerns ammonia as well. The witnesses have talked about the model moving on, moving towards Red II, and considering artificial fertilisers. What is happening, what should happen and what can happen in terms of the ammonia levels? What I say relates to the planning issue, which we have also heard about, in terms of locations. We do not want a situation whereby having an anaerobic digester located in one's area means damaging the ecology, biodiversity and water supply.
The advice seems to suggest that the best use of this form of energy is local use on farms or in factories. Is there a role for dedicated local networks? I mean that rather than feed the energy into the grid we could have local networks that feed into specific industries with which there is a relationship. If data centres were located in Ireland they are estimated to lead to a 34% increase in energy demand. My query concerns dedicated networks for particular clients.
Mr. P.J. McCarthy:
I hope that I remember all of the questions. If I miss one, please let me know.
An important aspect, in terms of addressing a number of those issues, is that we need to ensure that biomethane is supported in the National Energy and Climate Plan, NECP, that will go to Brussels in December of this year.
Specifically on ammonia, ammonia is released when raw slurry is spread. Ammonia is, typically as we experience it, gaseous. Significantly, with anaerobic digestion technology and the process of having this on-farm, the process converts the ammonia to ammonium. The process crystalises it and transforms it into molecules so it comes out in the digestate, which is biofertiliser. That capturing prevents ammonia from being emitted into the atmosphere and one converts it, as part of the biofertiliser, through application to pasture land. In line with the Red II, those opportunities are clearly outlined, which is where we see significant opportunities and benefits around environmental and biodiversity issues. It assists certainly with the displacement of artificial fertilisers which, fundamentally, in their manufacture use a lot of fossil fuels. We could build an indigenous biofertiliser industry. We know what the ingredients are and we are dealing with the ammonia issue. One would apply to land a more homogenous material that is absorbed by the soil and readily taken up by plants thus displacing artificial fertiliser and dealing with the ammonia issue. Also, one avoids the run-off generated by raw slurry spreading and artificial fertiliser thus improving water quality. We are working with many local authorities and local community groups such as LEADER groups in Ballyhoura, Kilkenny and other regional jurisdictions to solve the problems and improve water quality, air quality and biodiversity. There are fundamental environmental and ecology reasons to support this.
On specific networks, as mentioned earlier we do not need a dedicated network because we already have gas networks. The biomethane reaches and meets the same technical standards as natural gas so we do not need any specific dedicated networks. We are working with some regions where they are considering developing local networks such as Sligo; localised use is fundamental to our strategic approach that anaerobic digesters are located close to networks, or have access to networks, where one has end-use. In cases where there are gas users who are off-grid, we can certainly consider solving that by way of a virtual pipeline.
On SuperNode, one of the concerns is the effect of just transition on employment. The management of just transition in Scotland has led to great disappointment. People have lost their jobs in more carbon intensive industries and they hoped that transition would be an area of retraining and the creation of a different model. In Ireland the process of onshore may have been done slowly. In Scotland, we are looking quite similarly at the same model but it has greatly disappointed people and there is a real concern that just transition has not been built in. We also know that the principles of the Just Transition Silesia Declaration require we ensure there is just transition wherever possible and it is a key component of the business. I ask the witnesses to outline a few key points on the matter.
We have heard consideration being given to the issue of the potential use of composites. We know that composites that have been partly funded by the State have been unable to get co-operation from business. The use of composites is an issue. Working with apprentices is another issue. Working with institutes of technology to train people up for the future is a specific question.
I would like to ask about planning. It has been mentioned that we are moving towards offshore floating. We know that wind speeds are increasing globally. That is the news we are hearing now. It is appropriate that the planning processes which are starting are long because they need to be long. We have been told that planning for a model with regard to offshore floating is slightly down the line. How do we plan for a five-year roll-out that involves offshore floating, addresses the environmental changes that will affect things like wind speeds, builds up local capacity and invests in materials and in the workforce?
Mr. John Fitzgerald:
When I referred to dedicated networks, I was saying that we need extra specific networks. A common network will be available to all. We do not have enough network for the offshore play or the export play. That is really what I was saying. I have visited the village of Wick, which used to be one of the busiest fishing ports in the north east of Scotland but was decimated when the herring stock depleted. This coastal community has been rejuvenated by the offshore wind experience. It is unlikely that offshore will do much for a coal miner who is 50 miles from the coast. It is difficult. I would say that if there are jobs-----
Mr. John Fitzgerald:
These yards are used by the offshore industry in Scotland. A number of jobs have been created there. In Ireland, we need to focus on coastal ports when we are establishing clusters of excellence in the renewable energy sector. The Government must decide what it wants to do. Along with the institutions and organs of the State, the Government must plan to drive the private sector and the policy in a way that develops jobs for electricians and fitters, etc. Such jobs are needed for the development of this sector. The potential exists for the development of innovative technologies in which we can become exporters of products. Just as we are world leaders in areas like biopharmaceuticals, we can become world leaders in elements of the offshore wind industry, which is still being developed. It is five years away, but we need to plan if we are going to make it. If we say five years from now that we want ten turbines, the turbines will be built but we will not get any sustainable employment from them beyond the employment involved in their construction. We are planning for something that is five or ten years away.
According to Mr. Fitzgerald, the Government is responsible for guiding and pressing for standards. Is it expected that there will be guidance in areas like procurement, life cycle costing, integrated quality criteria, social benefit and social considerations? That comes into these issues.
Mr. John Fitzgerald:
We can send a strong signal that we want to develop an offshore industry. We have done this before, for example in respect of strategic development zones and the pharmaceutical sector. In this country, we have focused on areas in which we did not have a comparative advantage. We decided we were gong to do something and we did it really well. It is a matter of strategic intent and vision. It is question of whether we want to do this, and whether we want to get jobs out of doing it.
We have spoken about the tariff. I think we are a little bit away. We need to reconcile many issues relating to the tariffs and the feed-in. To what extent should we be intensifying our efforts to ensure public buildings are feeding into the grid, even if there is no financial benefit, while increasing the supply within the grid in terms of renewable energy?
When I read the initial presentation, I was a little concerned that there was some negativity about planning. Therefore, I was glad to hear an acknowledgement that a robust planning framework is important. I would like all the members of the panel to give a short reply to this question. To what extent would they recognise things like environment and social impact assessments as part of a robust planning network that allows us to avoid mistakes and ensure best practice is developing? I ask the witnesses to comment on that.
A lot of solid points have been made about improved planning and moving to 2 MW. As I understand it, PPA contracts are private. We are looking to bypass the planning process to facilitate something that is not necessarily of public benefit.
Mr. David Maguire:
I think there should be a feed-in tariff, but it is up to each individual Government body. The Senator also asked about planning and best practice. As an industry, we looked at best practice in planning guidance across various EU member states. We produced our own document, which we submitted to the Department. We asked all of our members to adhere to that. The bar is significantly higher than the statutory planning requirement with regard to public engagement and guidance. We can make that document available to the committee.
Mr. David Maguire:
It is quite comprehensive. The question of the public benefit has arisen in the context of the private wire issue. Ultimately, what we are seeking here is not a subsidy for that in any shape, manner or form. We are seeking to ensure that consumers and producers can work business to business. Does that answer the Senator's question?
Mr. David Maguire:
Under Irish legislation, an application to ESB Networks or EirGrid must be made by anyone who is seeking to transmit power through the network system. We cannot cable directly. From a planning perspective, there is no problem in terms of pure permitting legislation. The regulation of the wire is the problem.
Mr. P.J. McCarthy:
I will be brief. We can make a separate submission to the committee. We are looking at applying best practice and best technology. We have already experienced a number of AD plants going through the planning process. Our vision involves applying best practice. We are willing to forward details of that to the committee in order that they can be shared separately.
I think all of the Senator's questions have been answered. The overarching message for SuperNode is that the potential of offshore wind energy is absolutely massive. Ireland has a lot to contribute. We need to plan for this now. If we were to look for the best example of a floating wind turbine as part of our efforts to secure best practice for Ireland, would Mr. Fitzgerald recommend the High Wind project?
Mr. Fitzgerald has spoken about doing this at a European level. Are we looking at a supergrid? If the wind is not blowing here, it is blowing somewhere else. The same thing applies in the case of solar.
Mr. John Fitzgerald:
We need to look at whether we want to have the lowest cost. There has not been a significant focus on how much it will cost. If I wanted to develop renewable energy, I would go to where the renewable resource is at its best. If it was too difficult to transport it, I would change my approach. I think Europe needs to take a joined-up approach. Electricity is the vector to decarbonise transport and industry. That means we will have much more production of renewable energy in Europe. We need to think about how we can do that in a sustainable and secure manner. More grids are needed. A supergrid will probably be needed beyond 2040.
We need to start thinking about what we want to do and what role we want to play. Europe has said that it is feasible to deploy up to 450 GW of offshore wind power. We have a massive resource. We could do 5 GW or 100 GW. We have to think about what we want to do and what needs to happen. I recommend that we look at some kind of feasibility report that would objectively advise this committee on what the options are. We can take it on from there. There is time. It is all about preparing and planning. If we wait, we will become a technology taker and we will get precious little out of this opportunity.
Mr. John Fitzgerald:
It would not qualify as a project of common interest under the regulations as they exist today. I hope that in the future, it will be appreciated that nothing is more of a project of common interest than a co-operative effort to save our continent and our world. It feels like it should be a project of common interest, but technically it would not qualify as such a project today, which is an issue.
The issue of anaerobic digestion came up with us in our cross-party report. It is in the all-of-Government action plan. We are hearing about the crisis in farming at present. We are looking at alternative income sources for farmers, to be purely economical about it. This is in addition to the search for better and more environmentally friendly farming practices. I take the point that has been made about the anaerobic digestate. Essentially, a more environmentally friendly fertiliser is being produced. In turn, that fertiliser will be used on our farms.
I would like to ask about the environmental issues that arose in Northern Ireland. I appreciate that this is not Mr. McCarthy's particular area. He spoke about best practice. Is he confident that we have the oversights here? I refer, for example, to the EPA. Are we in a position to ensure environmental breaches do not happen here? What is the best practice, to return to the phrase that was used earlier? I represent a constituency that has urban and rural districts. When I speak to people from the farming community, it strikes me that there is great buy-in from farmers. They are coming together. We need to ensure we are rolling this out in a strategic way across the country so that farmers can benefit from it. All of us need to be able to see the environmental benefits. Farmers can earn an income from forestry, anaerobic digestion and slurry management, etc.
Mr. P.J. McCarthy:
I would like to address a couple of points. First, we have set out some fundamentals for the industry to give confidence to producers and end consumers of renewable gas. Approximately three years ago, we set out a European call on the design process for the green gas certification scheme, which involves a guarantee of origin. This is not available in the North. The sustainability of the production of biomethane has not been monitored in the North. The producers and the members of the farming community need to have certainty that there are clear guidelines. The certification scheme, which is designed around the RED II, is the first of its kind in Europe. We have gone for best practice. After we went to tender on foot of a European call, the contract was awarded to Dena and DBFZ, which are experts in this area of sustainability. They advise the European Commission. They are co-authors of some advisory and policy documents at European level.
From an Irish perspective, we have referred to best practices, best competencies and best expertise. Despite what we might think, we do not have that expertise in Ireland. We need to draw on the resources, expertise and competencies at European level. That is the only way we can get confidence. We are interested in building a robust and sustainable industry. All sectors can embrace the benefits and opportunities here. I refer specifically to the need to know what we are doing, and to know it is based on the best available technologies. We need to draw on the expertise of other member states across Europe, such as France, which have set out some key strategic enablers. Fundamentally, the establishment of a national co-ordination body is being promoted by the RGFI at present. This was highlighted in a recent KPMG report. We are engaging with Teagasc in a collaborative and consultative manner to look at assisting in the development of expertise and competencies. We are setting up the Teagasc range as a centre of excellence for the development of the best technology and the best advice. We are looking at facilitating that through the planning process. We are looking at the best routes for developing biomethane. The best pathway for those who are interested in developing the industry involves looking at the national strategic advisory body. The RGFI, along with Teagasc and GNI, is looking to step up to that.
I assume the ISEA is feeding into the relevant Department. Its representatives have highlighted planning issues in the solar sector. Briefly, do they have any key messages for the Government as it seeks to implement the all-of-Government action plan? The witnesses were very positive about the plan. What would be the key points from our committee? Over the next few weeks and months, we will bring in Ministers and officials to discuss how to meet the targets.
Mr. Michael McCarthy:
I will be brief. There is a significant issue here. As a trade association, we have had a very strong engagement with various organs of the State. We are grateful for that. At an overarching level, we recognise that the renewable electricity support scheme includes a solar pot of 10%. I ask the committee to send a statement to the Minister, Deputy Bruton, and his officials about the need for this to be increased. That means 300 MW of solar, but 1.7 GW is ready to deploy right now.
A number of other issues, including the issue of barriers, have been raised. The export tariff for rooftop solar is a critical issue for creating the energy citizen. This is a significant issue for the CRU and for ESB Networks.
We expect to have some engagement with the Minister of State, Deputy English, and the Department on the planning submission this side of Christmas. We expect that because we have had a very productive engagement to date. The urgency is now more relevant than it was some time back.
We are thankful for this committee, which was born out of the Citizens' Assembly. It is very important for us that a multiplicity of stakeholders have bought into an all-of-Government action plan on climate. The infrastructure of the State must be improved to accommodate the deployment of solar energy.
Mr. David Maguire:
I would like to make a specific point about planning. I think I speak for everyone involved in renewables and all other infrastructure investments in the State when I say that the planning system is very inefficient in terms of its timing and its certainty. In particular, the appeals procedure makes it easy to appeal and hold up developments that are strategically important to the State. I do not think we are just talking about solar here. Serious reform is needed. To be specific, the qualification of appeals being heard needs to be tightened up. In the case of solar, I think there should be an exemption for rooftop developments regardless of whether the building is domestic or commercial.
How do we reach a point at which we are not in breach of our ammonia limits? We are in breach of them at present. Maybe we could get some supplementary information on that in written form. I continue to have some concerns in this regard.
I will be brief. Wednesday is a crazy day here. There was a discussion on price earlier. I will concentrate on the offshore wind and solar sectors because they seem to be the potential leaders at the moment. I apologise to those involved in biomass. What is the cost per unit for solar? What is the cost per unit for offshore wind? These issues are important for the people in the country.
I have one more very simple question. Those involved in solar energy seem to feel that it is the Cinderella of the renewables sector. Not much attention has been given to them, particularly by comparison with offshore wind and biomass. Is it the contention of Mr. Maguire and Mr. McCarthy, as business people who want to make money, that although they are looking after domestic needs, there is an obvious need to expand? How much expansion do we stop at? There are 7,300 jobs in this sector. Expansion will be necessary to keep making a profit and to keep the business going. Maybe the solar energy sector has less potential in this regard than the offshore sector. The oceans are vast.
Our territorial waters are also vast so what are the plans? Is the plan to invade and conquer the whole offshore area around our coast? Would the sustainability of jobs be dependent on that? When do we say that enough is enough?
Mr. David Maguire:
On the cost specifically, it is difficult for me to give the Senator a figure but as an industry we are not seeking a generous feed-in tariff. Those days are gone. We are seeking a stable support mechanism that is an auction for the electorate so industry will drive down the prices. Everybody in the renewable energy sector will agree the feed stock is free. Once one is up and running, that cost will decrease. For solar energy, it could be anything on the range from 6 cents to 9 cents for a kW hour. Ireland is paying a higher LCOE for wind and solar energy and other technologies than the consumer needs to. We are higher than the rest of our fellow EU member states because of our connection costs and our planning costs. That cost is passed on.
On expansion, this is a global business. We are active building projects in multiple jurisdictions across the globe. We have projects under construction in the US, Australia and Europe. Many of the industries one sees in Ireland that are talking about offshore wind energy, onshore wind energy and solar energy are global businesses. Some of them are Irish. Ours is an Irish-owned business and it is operated and headquartered here but we have operations globally. This is not about Ireland and if it was, we would be out of business because we started developing here at the start of 2016 at the same time we entered the US market. We have since got about 130 MW of projects under construction in the US with lots more to come. Those skill sets go overseas all the time.
Mr. John Fitzgerald:
The Senator asked about cost. We have a comparative advantage with wind so we can make it. It has been made in the UK and France for a wholesale price of 4p per kW hour. That is really competitive. It does not need a subsidy and we are not asking for one. We are asking for a framework to work out how much we want to do and to set out a road map to have as much offshore wind energy as possible because as was said, our resource is huge. The question is how much we want to contribute to decarbonising Europe through our offshore wind resource because that is our strength. Offshore wind energy and wind energy are what we have. We are at 55° degrees latitude in the north west. If we want to do other things we can do them as well but wind is what we have a comparative advantage with. We want to export and earn revenue from doing that. It is not about subsidising our industry. It is about our industry creating wealth for our economy, generating jobs, helping us meet our climate commitments and helping others to meet their climate commitments. It is about leadership.
Mr. Donal Dennehy:
On biomethane, KPMG has done a detailed costing. It is in the document and as an industrial user I kill myself over this because I know I will pay more for the gas. I have to accept that. I also accept that if the industry is properly led with good direction and good policies, it will come to a sustainable level and the gap will close rapidly if the industry is properly directed and supported. For that we need proper policies.