Teagasc's Barry Caslin discusses bioenergy's role in Ireland's plan to meet its binding renewable targets in 2020

Author: Barry Caslin, Teagasc

Approximately half of the energy required to meet our binding renewable targets in 2020 is anticipated to come from bioenergy. Up to now most of the emphasis has been on renewable electricity, particularly wind. The deployment of bioenergy technologies must also increase in the three key sectors of heat, transport and electricity. Crucially the deployment of bioenergy technologies will displace greenhouse gas (GHG) emissions that will count towards Irelands GHG targets.

EU 2020 climate and energy package

The 2020 package is a set of binding legislation to ensure the EU meets its climate and energy targets for the year 2020. The package sets three key targets:

  • 20 per cent cut in greenhouse gas emissions (from 1990 levels);
  • 20 per cent of EU energy from renewables;
  • 20 per cent improvement in energy efficiency.

The targets were set by EU leaders in 2007 and enacted in legislation in 2009. Every EU member state was given an individual target which would deliver the overall 20:20:20 Targets across Europe.

Ireland’s targets

EU member countries have also taken on binding national targets for raising the share of renewables in their energy consumption by 2020, under the Renewable Energy Directive (RED).

These targets also vary, to reflect countries’ different starting points for renewables production and ability to further increase it – from 10 per cent in Malta to 49 per cent in Sweden. Ireland’s target is 16 per cent of its Total Final Consumption (TFC) of energy has to come from renewables by 2020.

The overarching target of 16  per cent TFC by 2020 is broken down into three individual targets of 40 per cent renewable electricity (RES-E), 10 per cent transport fuels (RES-T) and 12 per cent renewable heat (RES-H).

Many people get confused between the individual targets for heat transport and electricity and the RED target of 16 per cent. In Table 1 you will see that the 40 per cent renewable electricity target is anticipated to deliver 9 per cent of the 16 per cent target. 12 per cent renewable heat contributes 4 per cent of the 16 per cent and the remainder is from renewable transport.

Table 1: Ireland’s Renewable Targets (RED 2009/28/EC)

2020 Target NREAP1 Target Ktoe2 2020 Ktoe expected

from bioenergy

% of the 16% TFC in 2020
RES-E (Electricity) 40% 1045 52 (2%) 9%
RES-T (Transport) 10% 426 128 (3%) 3%
RES-H (Heat) 12% 527 421 (9.6%) 4%

1National Renewable Energy Action Plan

2 ktoe Thousand tonne of oil equivalent

Table 2: Where are we in relation to targets – 2014 figures

2020 2014
Overarching 16% TFC 8.6%
RES-E 40% 22.6%
RES-T 10% 5.2%
RES-H 12% 6.7%

Source – Dept. of Communications Energy & Natural Resources (DCENR)

Ireland is about half way there in terms of time and half way there in terms of achieving the targets. The greatest difficult will be in meeting the second half of the targets particularly when it comes to the Renewable Heat (RES-H) and Renewable Transport (RES-T) targets.

SEAI analysis

The Sustainable Energy Authority of Ireland (SEAI) did an analysis of Ireland’s trajectory in meeting our 2020 targets in full. SEAI concluded that in the absence of any further support measures Ireland would fail to meet its 2020 target. The modelling estimates that the renewable heat target of 12 per cent would possibly only achieve the 8 per cent mark and the key overall target of 16 per cent TFC which straddles all three sectors of heat, transport and electricity would be missed by possibly 2 per cent. Labour Senator John Whelan confirmed that for each per cent we miss out target it will cost Ireland €150m in carbon credits per year. This is certainly enough to focus the mind.

Framework 2030

EU leaders have already reached agreement on a new Climate Change and Energy Policy Framework for 2030 at the October 2014 European Council.

The agreement commits the EU to:

  • Reducing greenhouse gas emissions by 40 per cent overall in the EU by the year 2030, compared with 1990 levels;
  • A target of at least 27 per cent for renewable energy and energy savings by 2030.

DCENR are now negotiating with the EU and establishing through a lot of analysis what targets should be applied to Ireland for 2030 and what is a realistic contribution from Ireland in reaching those overall EU targets.

Renewable electricity support scheme

Renewable electricity is a regulated sector. You have to be licenced as a generator by the Commission for Energy Regulation (CER), you have to be licenced to supply electricity we also have utility metering. Up until now renewable electricity was supported through the AER and REFIT schemes. The REFIT 2 and REFIT 3 schemes closed to new applicants at the end of 2015. The REFIT 3 scheme is of particular interest to the Anaerobic Digestion (AD) biogas sector. There are a series of things which need to be in place such as planning permission and a grid connection agreement with those applications.

There are also milestone requirements in those schemes of REFIT 2 and 3 that should be achieved by given deadlines. In REFIT 2 which is more for wind and hydro you have to be connected to the grid by the end of 2017. By September 30, 2018 that plant must be fully operational. DCENR have recently consulted on the REFIT 3 are considering putting in similar milestones and objectives there also.

The Single Electricity Market (SEM) between Ireland and Northern Ireland will be further transitioned into a new arrangement called ISEM looking at how markets can be better integrated across Europe in terms of electricity. Any future support scheme will have to fall in line with ISEM. This will all lead to a new support scheme for renewable electricity in 2016.

DCENR are currently doing a consultation on the type of technologies, range of sizes and level of supports needed for renewable electricity and they plan to submit a state aid submission to Brussels in Q1 or Q2 of 2016. They appear to be engaging quite early in the process which should mean a short approval process.

Draft bioenergy plan

The DCENR published a Draft Bioenergy Plan in October 2014. The reason it’s a Draft Bioenergy Plan is that there is an SEA Strategic Environmental Assessment and AA Appropriate Assessment need to be completed before it can be adopted. This work is already underway and is expected to conclude in early 2016.

The draft bioenergy plan currently has four working groups. They are divided into: demand, supply chain, research and transport working groups. The RHI comes under the remit of work group 1 demand which is chaired by Errol Close of DCENR.

The RHI is the favoured policy mechanism by DCENR as it pays based on metered output. It links the incentive payment to the actual output of renewable heat or it pays for performance.

Renewable Heat Incentive (RHI)

Renewable Heat is an unregulated sector with no utility metering or licencing currently in place. This will make eligibility criteria for a RHI more complicated. The type of supports to date for renewable heat included Accelerated Capital Allowances (ACA) for taxation, Employee Investment Incentive (EII), carbon tax, Reheat and Greener Homes which in the past provide grant aid towards buying a biomass boiler. The Building Regulations Part L together with support for Combined Heat and Power (CHP) also helped support renewable heat.

Why an RHI is being considered

SEAI analysis found that the option with the least modelled cost to the exchequer is an appropriately focused Renewable Heat Incentive (RHI). Providing:

  • Stability and long term security for investors;
  • Value for money for consumers;
  • Significant positive impact on non-ETS (Emission Trading Scheme) sector emissions.

DCENR are proposing to introduce a RHI for larger non-ETS industrial and commercial renewable heating installations. The process of developing the RHI is very similar to that of supports for renewable electricity. The state aid application is expected to be submitted to Brussels in Quarter 1 or Q2 of 2016 and with much of the necessary negotiation with EU officials already in train – it is expected to launch a RHI in 2016. Areas currently being considered are the types of technologies which should be supported e.g. biomass boilers, heat pumps, the heat component of anaerobic digesters etc., use of the heat, alternative comparisons, support mechanisms, monitoring and verification procedures and budgeting. DCENR in their state aid submission will have to prove that in the absence of a support mechanism an investment would not take place. The RHI is expected to be exchequer funded.

RHI and grandfathering

The Department are very conscious that similar to the development of a RHI in the UK where the development of biomass boilers stagnated up until an official announcement of an RHI, that we need people to make progress now with projects in order to help reach our 2020 targets and DCENR have confirmed that any investment commissioned after July 8, 2014 is the cut-off date for grandfathering projects.

Rather than waiting for EU submission and state aid approval, any project which is installed after July 8, 2014 will be eligible to an RHI. You will be eligible to apply when the RHI is approved. The only question mark is what range of boilers will be supported. As I mentioned above DCENR intend to support the larger boilers which will most likely be 500kW+ boilers.

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Author: Barry Caslin, Teagasc Approximately half of the energy required to meet our binding renewable targets in 2020 is anticipated to come from bioenergy. Up to now most of the emphasis has been on renewable electricity, particularly wind. The deployment of bioenergy technologies must also increase in the three key...