Renewable Heat Incentive must open up opportunities for Irish agriculture

    Ireland’s much-awaited Renewable Heat Incentive (RHI) is an opportunity to encourage the nation to start to take full advantage of green technologies.

    Renewable energy expert VG Energy says the scheme that is being created by the Irish government needs to offer real incentives for businesses looking to future proof energy costs and embrace renewable technologies including biomass and bioenergy projects.

    Commercial sectors including agriculture, waste and aquaculture amongst others are looking toward the government to support their investment and drive a sustainable solution across the nation.

    VG Energy, which provides its energy expertise to help UK organisations, landowners and farmers address energy supply and demand to deliver sustainability and new revenue, believes there is an exciting opportunity to kick-start Ireland’s renewable industry, if the government gets the package right.

    The final consultation on the incentive closed in March and it is hoped that the scheme will be available at the end of the year, subject to government and state aid clearance. An announcement on a Renewable Heat Incentive (RHI) in Ireland is now widely expected next month (September).

    VG Energy Managing Director Steven Rawding said: “It is vital that the RHI scheme gives real incentives to businesses, including the farming community, to take the plunge and commission the projects which will generate additional income, reduce their energy consumption and boost sustainability.

    “Launching the consultation process earlier this year, Minister Denis Naughten TD, highlighted his awareness that farmers, in particular, have ‘explored the potential market opportunities’ but many had decided not to pursue them until the market was more mature.

    “The aim has to be to create the market conditions in renewable heat production needed to encourage farmers to now take that step.

    “For that to happen they must see the clear benefit that such investment will bring them. That is the way that projects will move from the drawing board and become reality.

    “It means ensuring that RHI tariffs are set at a rate that offers that incentive, whilst also delivering value for money for the Irish taxpayer.

    “The support has to be available for the right length of time and it is important that this is not a ‘one size fits all’ approach but a scheme that offers incentives to a range of renewable technologies and projects.

    “We eagerly await the announcement of the final scheme, which hopefully will happen soon.

    “The prize for getting this right is a large one, not just for rural industries, but for the renewable energy sector, rural communities in Ireland in terms of jobs and investment and enterprise opportunities.”

    He added: “All the indications are that the support mechanism for heat looks set to be a 15-year term aimed at farmers, agricultural businesses and the end user, rather than being investor led. It is also believed there will be no ‘tiering’ for appliance size, which is a refreshing approach.”

    VG Energy, headquartered in Scotland, believes with its 650-plus commercial biomass boiler projects across Scotland and the wider UK its experts can provide professional, experience-led information sessions to farmers, ministers and interested parties before the expected roll out in 2018.

    The Renewable Heat Incentive being considered is designed to accelerate the Irish government’s efforts to meet its 12% target of heat derived from renewable energy sources by 2020. In 2015, 6.5% of heat was derived from renewable sources in Ireland.

    It is aimed at incentivising a switch from fossil fuel based heating systems to less polluting fuels – helping participants in the scheme to bridge the financial gap to investing in the new renewable heating system.

    The government has also pledged to ensure that the overall scheme delivers “value for money” for Irish taxpayers.

    It is proposed that there will be a budget cap as well as a further mechanism to reduce the amount applicants get paid over time which will be built in from the beginning. The inclusion of a payment digression is widely expected.

    The government has also said that if the scheme is to be successful it is critical that supply-side policies are aligned to demand-side measures it is also developing.

    The proposals for the scheme include payment being tiered based on the annual heat output – on a per kWh basis.

    The government has said that since the cost of generating renewable heat typically falls with increasing installation size, the tariff would fall from one tier to the next.

    It is not yet known which technologies will be supported by the RHI, but a range are under consideration, including biomass boilers, biomass combined heat and power, biomass direct air heating, ground-source heat pumps, air-sourced and water-sourced heat pumps and anaerobic digestion, as well as solar thermal.

    VG Energy will be sharing its industry-leading expertise at The Energy Now Expo Ireland at The Hub in Kilkenny in October.

    Starting on Wednesday October 25, this is a two day renewable energy event for the farmers and landowners of Ireland featuring an exhibition and conference. For more details visit www.energynowexpo-ireland.com