Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I am glad Deputy Moynihan has raised this matter because it is an issue about which I am concerned and have a little knowledge. Moreover, I met the company directly to try to tease out the issue. The background is that to meet Ireland's 2020 binding targets to increase renewable energy to 40% in the electricity sector, 10% in the transport sector and 12% in the heating sector, the Government is committed to so doing under the 2009 renewable energy directive. At present, to meet its current energy demands, Ireland is importing approximately 90% of its fuel requirements at a cost of approximately €6 billion per annum. Developing robust indigenous renewable sources of energy will help Ireland to meet its 2020 targets and to reduce its dependence on such fossil fuel imports.

In February 2012, I opened a REFIT scheme for biomass technologies to promote the use of renewable energy from biomass. REFIT 3, which is the scheme to which Deputy Moynihan is referring, was designed to incentivise the addition of 310 MW of renewable electricity capacity to the Irish electricity grid. The technologies being supported include anaerobic digestion and combined heat and power, which also will contribute to Ireland's renewable heat targets. It also contains incentives for co-firing of biomass, including energy crops such as miscanthus and willow in existing peat-powered generation plants and the use of biomass for generation of electricity only. The scheme operates by guaranteeing a minimum price for renewable electricity generated and sent to the grid over a 15-year period and the cost of REFIT is borne by electricity consumers through the public service obligation, PSO, levy. REFIT payments are made only to electricity suppliers for the renewable electricity exported to the grid. It was never intended to set out a tariff price for biomass itself and prices paid to suppliers of biomass are a private contractual matter between the supplier and the electricity generator. The REFIT schemes are funded, which is paid for by all electricity consumers.

REFIT 3 was designed, in part, to build on the bioenergy scheme operated by the Department of Agriculture, Food and the Marine, which provides establishment grants to farmers to grow energy crops such as miscanthus and willow for use in renewable energy production. It is, however, important to note that the bioenergy scheme was opened in 2007, long before a REFIT scheme for biomass was mooted. Equally, REFIT 3 does not preclude the use of miscanthus by electricity generators other than those co-firing with peat. Miscanthus and other energy crops can be used as a fuel in both the heating and electricity sectors. While miscanthus has certain advantages over other energy crops in respect of returns, I understand it is not suitable for all applications and its high chlorine content can cause corrosion in some boilers. It also is bulky and expensive to transport and therefore, the economics work better when the plantations are close to where it is required. As a result, the markets for miscanthus is limited at present. I understand that most of the miscanthus is used for co-firing with peat at one of the power plants in the midlands. I also understand that a small proportion is processed into heat logs and used in the heat sector. However, I believe that as new biomass plants supported by REFIT 3 come online, this will create further demand for energy from biomass and miscanthus may have a role to play in contributing to meeting Ireland's renewable energy targets.

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