Author: Dr John Reilly, Head of PowerGen Development, Bord na Móna
In 2015, Bord na Móna announced a new strategic path for the company that would see it move away from its traditional energy peat business while still remaining a major Irish employer. The announcement meant that for the first time, the company committed itself to ending energy peat production and this will see peat gradually transition out of the national fuel-mix for electricity generation by 2030.
As this transition from energy peat production gathers pace over the coming years, the company will focus on building a new sustainable business model centred principally around its considerable land assets.
The announcement marked the beginning of a new era for the 82-year-old company that has helped maintain Ireland’s security of energy supply by supplying milled peat for electricity generation for much of that period. The other major economic contribution the company has made since the early days of the foundation of the State is the significant employment opportunities that it provided – especially in the midlands region and historically also in the west of Ireland. In fact, Bord na Móna has been central to the development of the midlands’ economy, in particular, over the last 80 years or so. The ultimate cessation of energy peat production will pose significant challenges not just for the company, but also for the economy in its heartland across the midlands.
The company has been planning for a considerable period for when it would be no longer commercially viable to harvest its finite peat resources for energy production. Various estimates regarding the end of commercially viable energy peat predicted it would occur sometime in the first half of the 21st century. This transformational phase has been complicated by the fact that it coincided with the move towards decarbonisation of the world economy, a move that represented an enormous shift in global energy policy.
As a semi-state company, Bord na Móna has been especially conscious of its responsibility to implement Irish, and by extension European, energy policy. Taken together, the dual imperatives to finish energy peat production and contribute to economy-wide decarbonisation have had a major impact on the company’s business model and have become the primary drivers of Bord na Móna’s journey to become a sustainable 21st-century business.
Low-carbon economy
Bord na Móna grasped at an early stage that the need to decarbonise the economy provided not just challenges, but huge opportunities for the company. The challenges are significant, given the company’s historic reliance on the energy peat business. The company identified its land as the key asset in its bid to transform itself. Its land bank of over 80,000 hectares affords it the opportunity to continue to produce energy, not just from milled peat but also to put an ever-increasing focus on the use of renewable sources of energy.
These assets have allowed it to commence its journey as a wider portfolio player in energy generation using wind, biomass, solar, landfill gas and waste-to-energy opportunities to help in the gradual transition away from reliance on energy peat production as the economic power-house in the company, while addressing the significant decarbonisation challenge facing the company as part of the transition to a low-carbon economy.
By 2017, Bord na Móna will have in excess of 200MW of renewable-energy assets connected to the Irish power system. The portfolio includes a significant element of baseload generating capacity, making the company one of the largest generators of renewable electricity in the State. The company developed Ireland’s first commercial wind farm at Bellacorick in Co Mayo, which is over 22 years in operation. This, along with in excess of 40MW of biomass capacity at its Edenderry powerstation, which has been co-firing biomass since 2008, provided the company with a solid platform from which to expand its renewable capacity.
Having last year opened an 84MW Mountlucas wind farm (Offaly), it also owns and operates a 42MW wind farm at Bruckana on the borders of counties Kilkenny, Laois and Tipperary. In addition, it also recently signed a JV agreement with Coillte to jointly deliver the 64 MW Sliabh Bawn windfarm in Co Roscommon that will become operational in 2017.
Apart from its focus on wind and biomass, the company also installed a 5MW landfill gas generator at the Drehid landfill site in Co Kildare. The development pipeline is also extremely strong and the company has 1,000MW of on-shore wind capacity at various stages of development on its cut-away peatlands across the country. The form and nature of Bord na Móna’s landholding is such that the deployment of ground mounted Solar PV at scale is also another possibility that the company is considering should, as is anticipated in many quarters, a vibrant solar sector develop in Ireland as it has in many other EU member states.
The scale of the company’s wind farm sites is such that co-location of solar and wind on sites to optimise the use of existing grid infrastructure is being examined, as this would have the additional advantage of driving further diversity into Bord na Móna’s evolving renewables portfolio.
Biomass
https://youtu.be/Bg9WzcZ9da8
Biomass is central to Bord na Móna’s sustainability agenda. The company is already one of the largest users of biomass in Ireland and is on track to consume up to 400,000 tonnes in 2016. Aside from the potential to co-fire the peat-fired power stations with biomass, Bord na Móna is also developing a range of biomass-based products to add to its range of heating products, which currently sees it as the largest player in the domestic heating market. With an ever-increasing focus on the need to decarbonise the domestic heating sector and the increasing popularity of stoves, the company sees a significant opportunity to deploy a range of biomass heating products led by the biomass briquette, which will look and feel very much like the quality peat briquette which has been a market leader in the sector for many decades.
Biomass will undoubtedly play a significant role in Ireland’s transition to a low-carbon economy and while we have significant indigenous biomass resources and the potential to grow that resource base, imports will likely play a key role in meeting Ireland’s needs.
Bord na Móna has been at the forefront of developing biomass supply chains in recent years and will continue to develop and enhance the logistics of biomass supply in the coming years. We believe that there remains significant potential to further develop indigenous supplies of biomass through mobilisation of the private forestry sector and the development of an energy crop programme focused on willow, which has proven to be an extremely useful addition to the biomass supply mix.
The company believes that it will be possible to develop a viable energy crop sector in the future by providing a guaranteed market place for up to 300,000 tonnes of willow annually, which would require up to 15,000 hectares of land and would thus provide a valuable additional income stream to the agri sector. There is no doubt that the establishment of a profitable and effective biomass supply chain, which would link farmers to end users, has so far proven difficult to establish for a variety of reasons, but Bord na Móna remains of the view that the opportunity will emerge given the right conditions and the company will continue to work with all stake holders to ensure that indigenous biomass enjoys a prominent role in Ireland’s low-carbon future.
Transitional phase
Bord na Móna’s other businesses are also in a significant transformational phase. Horticulture will continue to grow as a supplier of growing media while increasing diluents in much of its product range. Fuels is already transitioning in terms of environmentally friendly renewable fuel sources and renewable home heating supply. The company has recently received planning permission to build an ovoid smokeless fuel plant in Foynes, Co Limerick which is designed to manufacture lower-carbon fuels. The company’s Resource Recovery business is also planned to grow as a key component of its new sustainable business model.
The transformation of Bord na Móna will radically impact its carbon profile, which is already falling dramatically, and will see a very substantial decline in the next decade and a half. It is also ramping up its already significant investment in biodiversity, rehabilitating thousands of hectares of cutaway peatland across Ireland. It is envisaged that these rehabilitated areas will add significantly to national and local biodiversity creating new amenity lands. The programme will also increase Bord na Móna’s potential as a supplier of environmental goods and services building on its existing achievements in places like the Lough Boora Discovery Park.
The challenge of moving to a low-carbon economy is a significant one and particularly for utility companies like Bord na Móna. Our business transformation programme is designed to help us meet the challenges head-on and to contribute to the development of a low carbon economy, while preserving many of the benefits the company has provided over its eighty year history.
Taken collectively, Bord na Móna aims to maintain its substantial employment profile as it transforms into a more sustainable business model. The transition will allow sustainable alternative businesses, substantially based on its bogs and landholding, to be fully established before it ceases supplying energy peat to the power stations in 2030.
Dr John Reilly is a member of Bord na Mona’s senior executive team with specific responsibility for the PowerGen business unit, which has both thermal and renewable generating assets in its portfolio. He is responsible for strategy and the development programme underpinning Bord na Mona’s expansion activities in the electricity market. He has over 15 years’ experience in the energy sector and was previously part of the senior management team at Edenderry Power prior to its acquisition by Bord na Mona Energy from the major German utility player EON. He has also previously worked for Fortum, the Finnish Utility. John is currently a member of Eurelectric’s Environment and Sustainable Development Policy committee and IBEC’s Energy Policy Executive, where he previously chaired the Climate Change Working Group. He is also on the Board of the Electricity Association of Ireland (EAI) and the Electricity Research Centre (UCD).