15-year contracts available for biomass
Bord na Mona (BNM) will offer 15-year contracts for project developers supplying biomass, Mike Quinn, the company’s CEO, has announced.
Speaking at Tuesday’s Energy in Agriculture event, Quinn said this move comes as the semi-state company aims to phase out of the generation of power from peat by 2030 – a decision that was first announced in 2015.
“So we need to transform and at speed. A key step in this transformation is the formation of BNM BioEnergy, a new division of BNM.
“BNM BioEnergy is developing a secure, robust and competitive supply of biomass from both indigenous and international sources.”
In the past, he said, a major obstacle for developers has been their ability to source sustainable biomass at a scale and price point to make projects viable. This has also lead to difficulties in financing projects.
Quinn added: “Bord na Mona BioEnergy aims to be the largest supplier of sustainable biomass in Ireland and a significant business that will replace peat as the predominant source of revenue and employment in Bord na Mona over the next 10 years.
Last year alone, we sourced over 400,000t of biomass for our Edenderry power station, which allowed us to co-fire at 42% of the total fuel required and we expect this to increase to 50% by 2020.
“We are currently working with the ESB on a project to convert their two stations to co-fire with biomass.
“In 2020, the three power stations will have an annual requirement of over 1.2 million tonnes. This increased usage of biomass will contribute to a significant reduction in the state’s energy-related carbon emissions going forward,” he said.
Quinn continued to say that the supply chain associated with the three power stations will allow Bord na Mona BioEnergy to leverage the significant volume required to produce sustainable biomass at a very competitive price in the global supply market.
Details of the contracts
Bord na Mona BioEnergy, he said, will enter into long-term, 15-year contracts with project developers. The company will also handle all of the sourcing and logistics arrangements for delivery of the biomass to the project site.
“Most importantly, these supply contracts will be backed by BNM’s balance sheet as a commercial semi-state.
“We believe this will be very attractive to funding sources and should act as a key enabler when raising finance on biomass projects.
There will be no floor or ceiling on the size of these contracts in terms of annual tonnage demand or duration as we believe our supply chain can cater for the volumes required by the smallest to the largest of projects.
“It is our intent to provide a platform to source indigenous biomass firstly before importing biomass.
“For every tonne we are able to source in Ireland, we are committed to importing one less tonne. Our ultimate goal is to have all our demand supplied from 100% indigenous sources,” he said.
He added: “We’ll be importing wood pellets and wood chip from the US and other countries until our own self-sufficient sources – like the willow plantations and fast-growing eucalyptus we’re planting on farms and on BNM land, plus the private forestry sector – come on stream over the next 10-15 years.”
He also said that the company will only be sourcing biomass from sustainable sources.