I would like to thank the Irish Bioenergy Association for the opportunity to speak again at their 13th conference today. Days like today represent important opportunities for the exchange of views and to learn from the experiences within the bioenergy sector here and abroad.
As I have said before, we are still too reliant on fossil fuels for our energy needs. Though we are making progress in reducing the amount we import, we are paying more for what we do import. The Sustainable Energy Authority recently reported that in 2012, despite Ireland’s dependency on fuel imports being at its lowest level since 2000, the cost of all energy imports to Ireland rose to approximately €6.5 billion.
This statistic demonstrates how vulnerable Ireland is, in terms of ability to afford energy at the domestic level to the competitiveness of our business, to price shocks associated with such reliance on imported energy and how we can’t be complacent in this regard.
That is why we must continue with our goals of enhancing energy security, reducing price volatility and ensuring energy sustainability at competitive prices for both individuals and businesses. One way in which we can do this is through diversifying the fuel mix upon which we depend.
Renewable energy is playing a key role in shaping Ireland’s long term energy future and is critical to delivering the policy goals of secure, environmentally clean and affordable energy supplies sourced indigenously. Allied to delivering improvements in national energy efficiency it will help wean us off our dependency on expensive, imported and carbon intensive fossil fuels while maintaining and supporting competitiveness and enterprise development opportunities.
As you are aware, the 2009 Renewable Energy Directive has set very ambitious and challenging renewable energy targets with the objective of achieving 20% of all energy in the EU to be from renewable sources by 2020. The target addressed to Ireland that 16% of all energy consumption to be from renewable sources by 2020 is one the most challenging in the EU.
Ireland’s National Renewable Energy Action Plan, published in 2010, sets out the suite of measures on how we intend to achieve this target. The target will be achieved through 10% of energy consumption in transport, 12% of energy consumption in the heat sector and around 40% of energy consumption in the electricity sector coming from renewable sources.
We remain fully committed to achieving these targets and we are making good progress towards achieving these targets and at the end of 2012, 7.1% of Ireland’s overall energy demand was met by renewables. Of this, renewable electricity accounted for 19.6% of our electricity generation, with 5.2% of the energy in the heat sector and 2.4% of the energy in the transport sector from renewable sources.
Though wind has to date been by far the most significant source of renewable electricity and, indeed, is expected to continue in that regard, the Government recognises it must be complemented by other policies to meet our renewables target.
In this regard bioenergy has a critical role to play and it is expected that it will account for approximately half of the EU’s (and Ireland’s) renewable energy by 2020.
Bioenergy is highly versatile and can address energy needs across the electricity, heat and transport sectors, and can help position us to meet the challenges in the longer term to 2030 and to 2050. Indeed it is already making an important contribution across all three energy sectors and accounted for three percentage points of the 7.1% from renewable sources in 2012.
Its benefits are manifold. It can contribute to the three pillars of energy policy: security of supply, competitiveness and sustainability. A successful sector will also present enterprise development opportunities, support jobs, contribute to rural development and will have positive environmental impacts through lower greenhouse gas emissions and how it can assist with waste management.
Critically, though, it is an energy source that we have the capacity to develop here and Ireland has exceptional natural advantages with regard to bioenergy. We have a suitable climate for forestry and for growing energy crops meaning we can be entirely cost competitive with other markets. There is also a large amount of agricultural land available for new forests or conversion to energy crops.
Bioenergy also offers great opportunity to the agricultural sector. Technologies such as anaerobic digestion can help us manage wastes, including problematic farm waste, and provide energy at the same time. These technologies can help existing agricultural businesses to remain competitive and improve productivity while also helping to meet our renewable energy targets and help deliver on various water quality and environment-related targets.
Bringing about the development of an environmentally and economically sustainable, viable bioenergy sector in Ireland will not be an easy task and many challenges must be overcome. For, instance, land that is suitable for growing purpose grown energy crops will be frequently suitable for high-value agriculture production. It is also a sector with a bit of chicken and egg to it. Farmers, quite rightly and rationally, will not dedicate valuable land to the development of biomass in the absence of an end-use for the biomass. Similarly, energy users will be reluctant to invest in bioenergy technologies unless they can be assured of the availability and secure supply of the biomass feedstock.
We therefore have to work out how to stimulate both demand and supply and to get them working in tandem.
In order to address all these issues, my Department is currently in the process of finalising a national bioenergy strategy.
The strategy will lead with demand and set out in detail the actions required to optimise the bioenergy sector’s contribution to the 2020 renewable energy targets. Central to the strategy is the continued support for the significant policies already in place. The Biofuel Obligation Scheme will continue to be the means through which we will meet our 10% target and it has the potential to incentivise production of indigenous biofuels and REFIT3 will continue to support the generation of electricity and CHP from biomass.
The analysis underpinning the strategy is that an additional bioenergy-focussed measure in the heat sector represents the most cost effective means of meeting a number of different policy goals. The strategy will therefore incorporate targeted and cost effective measures to stimulate demand for biomass-fuelled heat demand.
The sector has many complex supply chains and interdependencies depending on the source of the biomass and the nature of the end-use to which it is put. No one Government Department, Agency or industry stakeholder has sole responsibility for the sector.
It is important, therefore, that proper governance of the strategy is put in place. It is intended to shortly establish a committee, representing the diverse nature of the sector in place, to oversee developments in the bioenergy area and the actions arising from the bioenergy strategy. Having such a committee in place would also serve a dual purpose of maintaining a high visibility and profile for the sector as well as a vehicle to facilitate constructive engagement between all the relevant actors.
As you are aware, biogas is currently supported under REFIT for electricity generation and Combined Heat and Power (CHP). Research conducted to date both here and abroad suggests that biogas has real potential to make a meaningful contribution to decarbonising our economy particularly in the heat sector and the transport sector. When the gas is produced from waste it can help avoid the reliance on biofuels that compete with food for land-use.
I have already met with a number of stakeholders regarding their views on bioenergy and what we should be doing and one message I’ve repeatedly heard relates to the potential of biogas and biomethane. In this regard, I intend to have the committee look at this potential in detail, supported by robust economic analysis. I expect that the process will include stakeholder engagement and I would welcome the industry’s input in this regard.
The Strategy will lead to new market outlets being created. The strategy will therefore contain a complementary set of “supply side” policies that will facilitate Irish biomass producers to meet that demand.
2020 targets and ambitions are firmly in the short-to-medium term category and Europe and Ireland’s focus will now be on what can be achieved in terms of 2030 and 2050. You will be aware that the EU Commission recently set out its ambition for a 2030 Energy and Climate Framework. The proposals include a reduction in greenhouse gas emissions by 40% below the 1990 level, an EU-wide binding target for renewable energy of at least 27% and renewed ambitions for energy efficiency policies.
The Government will be working closely with European partners to establish the scale of the contribution Ireland should make to the achievement of the proposed EU target. However, analysis of the Commission’s proposals will be required to ensure that the framework allows for action that is cost effective and does not place a disproportionate burden on energy consumers.
However, we can welcome the inclusion of a target for renewables in addition to a greenhouse gas target. Minister Rabbitte, along with Ministers from seven other Member States had specifically called for this. Given the long lead in and asset life for energy developments, clear investment signals are critical for the renewable energy sector, and the bioenergy sector in particular, if it is to be in a position to make a contribution to 2030 goals.
Not only is the renewable energy sector, and especially the bioenergy sector, of key importance in the context of 2030, it also provides a real, and sustainable, economic opportunity for Ireland.
The breadth and complexities of issues of importance to the evolving nature of the bioenergy sector is reflected in today’s programme and I hope it leads to constructive discussion on the issues.