Interview with Des O’Toole (Coillte) on the state of play of bioenergy in Ireland

Last month AEBIOM reached the symbolic threshold of a thousand supporters on its Linkedin Page. In order to thank its most active followers, we decided in return to give to one of them the opportunity to speak about their activities within the bioenergy field. Des O’Toole, Business Development Manager for Coillte, has always been among the most active contributors on social media platforms regarding bionergy topics, and among the first to follow AEBIOM. This is why we wanted to know more about his vision on bioenergy development in his country:

 

Des O'toole

Des O’Toole – Ireland’s forestry and forest products sector has developed significantly in recent years. The forestry sector now contributes €2.3 billion to Ireland gross domestic product (GDP) annually and supports approximately 12,000 jobs mainly in rural locations. Annual production of wood from Irish forests is now estimated at 2.95 million m3. Coillte, the semi-state forestry organization, produces 2.43 million m3 of this with the balance coming from an emerging private sector forestry resource and a small amount of imports. This annual production volume can be categorized into large saw log (1.81 million m3), fencing (0.15 million m3) and small diameter pulpwood (0.99 million m3). The markets for these forest products are construction, packaging, fencing, wood based panel board production and most recently the emerging biomass for energy market.

Unlike many of our European counterparts, Ireland does not have a long tradition of biomass for energy and natural gas is the dominant heating fuel in industry (44%) and commercial sector buildings (54%). In 2007, funding of €26M was made available by our Government in an attempt to stimulate the bioenergy sector and capital grants of up to 30% of eligible costs were made available. The support scheme closed in 2011 and supported the installation of 204 biomass units (78MW), 85 heat pumps (5.1MW) and 242 small scale solar installations. Most of the biomass units installed during this period were small (< 200kW) with little or no uptake at the larger industrial scale. The bioenergy sector has significant potential in Ireland but has seen limited growth in the last five years. The industry now needs a stimulus to encourage new investment in the sector.

  • Why did Coillte decide to engage in the development of bioenergy projects? How do you foresee the development of this branch within Coillte?

Coillte identified a number of supply chain inhibiters and re-engineered its role within the supply chain in an attempt to unlock new commercial supply opportunities. Security of supply was seen as a barrier for clients planning larger scale capital investments and a pre-requisite to secure bank financing.

By moving up the value chain to supply biomass on long term contract though our newly established regional supply hubs; this creates a new sustainable revenue model and contributes to overall supply chain development and market growth. Each regional supply hub now stimulates local economic activity and supports local employment through the entire supply chain while contributing to Irelands national renewable energy targets. It can be expected that the growth of a renewable heat sector would help the biomass energy supply chain to mature and stimulate regional demand for forest thinning’s, energy crops and other biomass.

In terms of the future, there is great potential to provide energy savings and carbon emissions reductions directly to our clients. By lowering energy costs for Irish industry, it ensures these businesses remain competitive in a global environment thereby contributing to the long term sustainability of these industries. However, there are significant challenges to overcome before the sector will reach its full potential.

  • What are the main barriers, in your opinion, regarding the current development of bioenergy projects in Ireland ?

Investor confidence is critical to shift investments towards renewable technologies and any renewable heat policy should aim to accelerate market growth by removing the economic barriers currently preventing major capital projects from proceeding. The key factors impeding market growth are current low fossil fuel prices, poor project investment economics and the lack of an appropriate subsidy to offset the initial higher capital investment and differential fuel cost. As a result, new biomass supply opportunities are extremely limited.
The Irish Government White Paper on Energy Policy set a target of 12% of thermal energy (RES-H) to come from renewable energy sources by 2020 but progress has been slow (6.5% to 2014). Based on our current trajectory, Ireland’s 2020 RES-H target will not be achieved and Ireland now faces potential EU fines for each percentage point Ireland falls short of its overall combined RES target of 16%. The Department of Communications, Energy and Natural Resources (DCENR) published a draft Bioenergy Plan in October 2014 whereby they acknowledged a gap in meeting our RES-H target of up to 200ktoe and announced the intention to introduce a support mechanism in the form of a renewable heat incentive (RHI) in 2016. Details of the scheme are still unavailable at this time and once introduced, uptake is still expected to be slow as project lead times for larger scale heat projects can take up to 20 months to allow for feasibility, capital approval, planning and environmental permits, project design, boiler lead time and the construction and commissioning phases. The introduction of a targeted focussed RHI should stimulate increased demand for wood fibre, but may not be enough to avoid future EU fines for missing our 2020 targets.

  • As a semi-state forestry organisation, how does Coillte consider the impact of bioenergy on forests ?

It is widely recognised that our State and the emerging private forestry resource will play a key role in the future development of the bioenergy and forest products sector here in Ireland. We see forest certification and eco-labelling such as the wood fuel quality assurance scheme (www.wfqa.org) as an important means of giving independent assurance to consumers that the biomass that they purchase meets minimum quality standards and comes from sustainably managed forests. Coillte currently hold certificates for both the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification Schemes (PEFC) and as private forestry is mobilised, private sector forest certification will become much more important going forward.
Irelands biomass is a valuable indigenous resource and my key guiding principle is that it should be utilised in a way that maximises value throughout the supply chain. Balancing regional demand for biomass all uses requires a strategic focus on planning and mobilising to ensure all demand can be met.

  • Based on Coillte’s experience, does bioenergy improve the competitiveness of Irish industry?

Without a renewable heat incentive and against current fossil fuel prices, biomass is currently not competitive in Ireland, however this cannot be looked at in isolation. Many of our clients have a global ambition to become carbon neutral across the entire value chain from sourcing raw materials to manufacturing, product use and eventual product disposal. Some are now actively working with their suppliers to reduce emissions and use resources more efficiently. Carbon neutrality can be achieved, in broad terms, through first reducing the value chain carbon footprint followed by pursuing carbon-offsetting strategies to reduce the net emissions to zero. Reducing Ireland’s reliance on fossil fuel imports, reducing national greenhouse gas emissions and improving domestic fuel security are key pillars for developing a green economy.
Our client Astellas Ireland Ltd operate a modern pharmaceutical finishing facility in Kerry which serves the world-wide market as the production base for the formulation of organ rejection drugs used in transplant surgery. They place a high value on sustainability and corporate social responsibility and as a result in 2010, the company began to examine alternatives to fuel oil as the main source of energy for the plant. Management prioritised their commitment to good environmental practice and installed a new utilities building comprising a 1.6MW boiler and ancillary fuel store with below ground delivery pit. The wood chip boiler was designed to supply the base steam demand for the facility with the existing oil boiler acting in standby/assist mode. Another client Glaxosmithkline who manufacture products in the oral care and over the counter medicine sectors are currently installing a 4MW biomass plant at its facility in Waterford to produce steam to serve the production facilities. These large scale thermal heat clients allow the expansion of our regional biomass supply hubs and underpin the development of the local supply chain.

  • You are personally active on social media, how important is it for you to communicate on Bioenergy? 

There is a much lower public awareness of the bioenergy sector here in Ireland and we recognised the need to raise awareness and to educate our stakeholders if we are to grow the sector and stimulate interest and demand for our products. To do this we embraced the concept of social media and adopted a proactive approach utilising the various platforms such as Twitter and Linkedin.

Using social media, our team started to raise the profile of the sector through various thought leadership articles and case studies promoting our new supply chain model and successful client installations. This activity combined with our involvement in the Irish Bioenergy Association (www.irbea.org) and our ongoing advocacy work has influenced key stakeholders and Government policy resulting in the expectation of a new government support subsidy to be launched soon. Public perception surrounding bioenergy has been largely positive as it is seen as a significant rural employer.

Des O’Toole, Commercial Business Development Manager – Biomass | Coillte

 

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Interview conducted by Jean-baptiste Boucher

 

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