the economics of bioenergy production at farm level an irish case study
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The economics of bioenergy production at farm level: An Irish Case Study. D. Clancy 1, 2 , J. Breen 1 , A. M. Butler 2 , F. Thorne 1 , M. Wallace 2 1 Rural Economy Research Centre, Teagasc

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the economics of bioenergy production at farm level an irish case study

The economics of bioenergy production at farm level: An Irish Case Study

D. Clancy1, 2, J. Breen1, A. M. Butler2, F. Thorne1, M. Wallace2

1 Rural Economy Research Centre, Teagasc

2 Department of Agribusiness, University College Dublin

overview
Overview
  • Biomass Crops
  • Rationale
  • Irish Policy
  • Objectives
  • Results
  • Conclusions
willow
Willow
  • Willow production often referred to as Short Rotation Coppice
  • Production lifespan of 15 - 22 years
  • First harvest in year 4, every 2/3 years after this
  • Can be grown on a wide variety of soils
  • Suitable for wet conditions – however there is a limit to this
miscanthus
Miscanthus
  • Miscanthus is a perennial tall woody grass
  • Production lifespan of 15 – 20 years
  • First harvest in year 2, every year thereafter
  • Slightly better soil quality than willow required, but can be grown on wide range
rationale
Rationale
  • Kyoto Protocol
  • Security of Supply
  • CAP Reform
  • Deurwaarder (2005): identified profitability at farm level as one of the main barriers to bioenergy production
irish policy
Irish Policy
  • National co-firing targets: replace 30% of peat burned in three state owned power stations with biomass by 2015
  • Approx 80,000 ha of willow or 41,000 ha of miscanthus would be required to meet the targets - currently > 3,000 ha
  • REFIT scheme is mechanism to achieve this target – offers power station price per GJ supplied by alternative energy
irish policy1
Irish Policy
  • Maximum allowable area for farmers in REPS or receiving disadvantaged area payments
  • Therefore biomass will need to be grown outside the region of power stations in order to meet target
  • Biomass is a bulky product – high cost of transportation will reduce area in which it would be viable to produce
  • Supply chain issues need to be resolved to further develop market
bioenergy scheme
Bioenergy Scheme
  • Offers a grant for 50% of establishment costs (major barrier to entry)
  • Scheme only available for approx 700 ha in 2009 – far lower than required area
  • Scheme to end next year – no indication over whether it will be renewed, increases uncertainty in market
research objectives
Research Objectives
  • Investigate the financial feasibility of willow & miscanthus
  • Address the uncertainty regarding the suitability of these crops to Irish growing conditions
  • Examine the competitiveness of biomass with traditional agricultural enterprises
conclusions
Conclusions
  • At current prices, willow & miscanthus generate positive returns and are potentially worthwhile investments
  • Approx 80,000 ha of willow or 41,000 ha of miscanthus would be required to meet the co-firing targets
  • Biomass will need to be produced outside region of power stations – large transportation costs
conclusions1
Conclusions
  • Analysis of the net effect on GHG emissions required
  • Greater incentives need to be offered in order to attract sufficient investment
  • Longer term support mechanisms required to reduce uncertainty
slide15
Thank you for your attention!

Questions, comments and suggestions welcome

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