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 Irish Case Study

  • Biomass Crops

  • Rationale

  • Irish Policy

  • Objectives

  • Results

  • Conclusions


Willow
Willow Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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 Irish Case Study

  • 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


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

Thank you for your attention! Irish Case Study

Questions, comments and suggestions welcome