Bioenergy: making a market

bioenergy companies need opportunities to sell products rather than grants, Joe O’Carroll tells agendaNi.

Switching buildings to biomass, not capital grants, is the best way to grow the sector, according to Joe O’Carroll. The Kildare-based businessman runs Imperative Energy, which supplies bioenergy systems to the industrial, commercial and public sectors.

“There’s no lack of interest or no lack of ambition amongst the policy-makers to hit those renewable energy targets. The difficulty is how they will actually do it,” he remarks.

Many contractors could start building a plant in Northern Ireland “in the morning” if they had the market. O’Carroll sees public procurement as the obvious route to provide this. He wants to see public buildings phasing out oil for heating and says this can be achieved in 12 months.

All owners of public buildings could purchase the desired input (i.e. renewable heat) and bioenergy companies could design, build and operate a system to meet that need. The product could be offered on a 10-year basis, using 12-month rolling contracts. Importantly, the company would take on the risks such as maintenance costs and only charge for the energy produced.

The size of this market, he estimates, is £50-60 million across Ireland. In Britain, the Department of Energy and Climate Change is already moving its focus from grants to market access in the renewable heat incentive, to be set up from April 2011.

O’Carroll studied forestry at University College Dublin and started work in the northern Forest Service as a harvesting manager in County Londonderry and North Tyrone. He then moved to a panel board mill, where all the on-site energy was fuelled by wood offcuts and other waste products.

Ireland’s advantage lies in its “superb climate” for growing biomass crops and the absence of oil and gas. “We have actually no strategic benefit to continue our over-reliance on fossil fuels,” he contends.

Continued price volatility for fossil fuels is “absolutely certain” but the real difficulty, according to the civil servants he meets, is security of supply. bioenergy, though, does not present that problem due to its local production.

“The interest [in bioenergy] now is high but the confusion levels are higher unfortunately,” he continues, putting this down to the variety of technologies available and the number of people lobbying government, from pig farmers to power station developers.

“In order to protect tax-payers, it’s incumbent on the Civil Service to ensure that there’s a benefit derived from every penny spent,” he continues. Grants do not guarantee this as equipment can break down after purchase and the tax-payer has to pay for its repair.

Different levels of support are needed for different technologies. Solid biomass just needs market access whereas anaerobic digestion is much less developed. On the supply side, expanding bioenergy can also help meet targets for forest-planting.

Speaking to delegates at agendaNi’s bioenergy seminar, O’Carroll said that bioenergy was firstly driven by the “regulatory imperative” i.e. the need to meet aggressive government targets on renewables and carbon.

However, the “economic imperative” was becoming increasingly important. His company’s clients have a green corporate social responsibility agenda but they also want to do business as cheaply as possible.

The market remains “relatively immature” in Ireland; most of his business is in Britain. The early market focus was on products e.g. boilers or turbines, but people now want full “turnkey” solutions.

He also warned of a pre-occupation with producing electricity when, in his view, biomass was best for producing thermal energy.