Poplar plantations qualify for strong supports

Minister Bruton & DCCAE announce launch of SSRH

June 4, 2019

In very welcome news this morning, Minister Bruton has announced that the SSRH scheme has officially been opened to accept applications as of today. This is particularly good for those looking to set up facilities of up to 2 MB as the supports are best suited to those facilities. The positive news for forest owners and those interested in timber supply, is that there is now the potential for better returns on the lower margin elements of your forest products. If your forest is in an area restricted to market access by distance, it is possible you may have a biomass facility establish close to you and thus improve the revenue from thinning operations in particular (where the main volume extracted is pulp). Thius might also facilitate earlier thinning and thus improve the returns due to a shorter rotation.

Alternatively, it is very much worth considering establishing Poplar plantations under the wood for fibre scheme. The grant will cover the establishment of the crop and the annual premium is €520 per hectare for 15 years (over 10 hectares planted).

Green Belt is the country's leading grower of poplar and is developing markets beyond simply biomass for the products generated from the growth of this timber. An expected IRR from a poplar plantation, over a 15 year cycle is a conservative 5% per annum, compounded. Green Belt can source and acquire land and licences on your behalf for this and any other forestry application you might have. We are also in a position to secure supply contracts for biomass plants under the SSRH scheme - Energy supply contracts, Energy delivery contracts, Supply of biomass only - and welcome an opportunity to discuss these options with you.

The full press release from the DCCAE is below in text or follow the link.

Minister Bruton Announces Support for Renewable Heat Applications open today Support Scheme for Renewable Heat

The Minister for Communications, Climate Action and Environment, Richard Bruton T.D., today (4th of May) opened the second phase of the Support Scheme for Renewable Heat (SSRH), which will provide operational support for biomass boilers and anaerobic digestion heating systems.

Making the announcement Minister Bruton said: "If we are to cut greenhouse gases, we must replace fossil fuels by renewable sources. This scheme is designed to replace fossil fuel heating systems by heat pumps and by heat from biomass or anaerobic digestion. These are sustainable and renewable sources."

"The scheme will include important protections to ensure that the heat supported is sustainable, used for useful purposes and represents value for money for the taxpayer. Over the lifetime of the scheme, the successful delivery of this programme can reduce carbon emissions by 11Mt – a significant contribution to meeting our emissions reduction targets."

Applications are open today. This round of the Scheme will support businesses and farms for up to 15 years for the installation and on-going use of biomass and anaerobic digestion heating systems. The Scheme is designed to support up to 1,300 GWh of renewable heat per year (equivalent to the heating needs of circa 120,000 homes).

Overall, the projects supported will increase the renewable heat use in Ireland by three percentage points and decrease emissions in the non-ETS sector by approximately 300,000 tonnes of CO2 per year.

The scheme has integrated lessons learned from other similar schemes in other jurisdictions and, as a result, includes detailed eligibility and budgetary controls.

The Sustainable Energy Authority of Ireland (SEAI) will administer the scheme. Jim Gannon, CEO of SEAI, commenting on the launch said: "Across Europe, heating remains one of the most challenging areas in which to achieve carbon emission reductions. This scheme is a vital component part of the Government's overall policy framework to decarbonise heat. SEAI is looking forward to delivering the scheme efficiently and effectively, mobilising the marketplace while maintaining a keen focus on value for public moneys."

The first phase of the SSRH, an installation grant for heat pumps, opened in September 2018 and supports ground, air and water source electric heat pump installations with grant-aid up to 30% of the capital outlay. Under Project Ireland 2040, the National Development Plan sets out an allocation of €300 million for the rollout of the scheme for the period up to 2027.

Full details of the Support Scheme for Renewable Heat including the tariff levels, terms and conditions and how to apply are available on SEAI's website.

ENDS Note to Editors:

Biomass is the biodegradable fraction of products, waste and residues of biological origin from agriculture, forestry and related industries including fisheries and aquaculture.

Biomass boilers work by burning biological matter and outputting the resulting heat for use in heating systems. Wood pellets, chips, logs or other biological materials are fed - automatically, semi-automatically, or by hand - into a combustion chamber where they are ignited. The hot gas and air produced by this process travel through a flue, and are then passed through a heat exchanger, which transfers the heat to the water used in the property's central heating system. The excess heat is also stored in a thermal tank.

Anaerobic digestion is a process in which organic material (e.g. food waste, agricultural waste, silage, energy crops etc.) breaks down, in the absence of oxygen, to produce biogas. This can be combusted to generate heat and/or electricity.

A heat pump system harnesses energy from renewable sources (such as the air, water or ground) outside the building. This heat can then be used for heating buildings, hot water, and for use in manufacturing processes.

Electrical heat pumps use a compressor to draw heat from a low temperature source, such as external air or ground to heat the building interior. While conventional heating systems such as storage heaters and boilers cannot produce more heat than that contained in their fuel source, a heat pump typically will produce three to four units of heat for every unit of electricity consumed.

The Support Scheme for Renewable Heat (SSRH) will support commercial, industrial, agricultural and other non-domestic heat users to adopt renewable heating systems.

The SSRH has been developed to increase the use of renewable energy in the heat sector by circa three percentage points.

The tariffs have been calculated to compensate the difference between renewable technologies and the fossil fuel counterfactual, i.e. natural gas.

Existing biomass or biogas installations will not be eligible for support under the SSRH. This is in line with State aid rules which provide that projects will only be eligible for support if they apply for aid before work on the project starts.

The lessons learned from similar schemes in other jurisdictions have been integrated into the design of the SSRH. In particular, there are eligibility criteria that projects must continue to conform to over the period of support (up to 15 years). These criteria will ensure that heat generated is applied to useful, economically justified purposes only. In addition, there are a number of budget management mechanisms to ensure value for money for the exchequer. These include project budget caps, an annual budget cap for the scheme, annual reviews of the tariffs offered to new applicants and periodic tariff reviews to prevent windfall gains.