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Sunday 4 December 2016

Battle on to get farmers to sign up for biomass

Renewable energy companies launch contracts for growers

Published 21/09/2010 | 05:00

Farmers are being offered biomass contracts for thousands of acres of land, as demand for renewable crops soars.

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Three renewable energy companies are competing to sign up farmers at the Ploughing Championships this week, with contracts covering several thousand acres available.

Renewable energy group Biotricity is launching its first tranche of grower contracts, worth €1m, to supply feedstock for its biomass plant at Rhode, Co Offaly.

The plant, which has just been approved for planning permission and is due to open in 2012, will produce 15MW of renewable power and further process 120,000t of biomass for use in heat and power plants.

This first tranche of contracts will be for 3,000ac, with additional tranches expected every year.

The company is offering a guaranteed price of €36/t for short-rotation coppiced willow at 50pc moisture on either seven or 15-year contracts.

Support

With a minimum contract size of 10 acres, the company is offering financial support to meet the establishment costs of the crop, with repayment spread over the duration of the contract.

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Biotricity says the contracts are estimated to deliver a gross margin, net of repayment of establishment costs, of €205 to €230/ac.

Although willow is only harvested every two years, farmers will receive an annual payment, calculated on the bi-annual harvest.

Meanwhile, well-known bioenergy guru and farmer John Gilliland is also offering willow contracts to farmers to supply a plant in Castlebellingham, Co Louth.

The former president of the Ulster Farmers' Union has secured a partnership with Standard Brand, producers of the Zip brand of firelighters and firelogs, to produce firelogs from willow chip.

"The plant is up and running already and has a guaranteed market," he says.

Mr Gilliland is offering farmers a 10-year contract.

Based on planting in 2011, the company will pay for crops harvested in 2014 and every two years after that.

For farmers who want the company to harvest the crop, the price being offered for the first harvest crop is €20/t, the second harvest is €25/t and €30/t for the third crop, all at 55pc moisture.

"In return for a 10-year commitment, we will also offer a €300/ha subsidy towards establishment costs post-grant," says Mr Gilliland.

Establishment costs for willow are estimated at €2,400/ ha, with a government bioenergy grant worth €1,200/ha available.

Tailor-made packages will be negotiated with farmers who would prefer to harvest, dry or transport their own crop.

Mr Gilliland's aim is to secure 200ha (500ac) of land for planting in 2011 and a further 200ha signed up each year for the following five years.

Welcomed

"Ideally, we are looking for land within a 100-mile radius of Castlebellingham, but where there are groups of farmers in other areas, we can arrange for drying and transport," he said.

Bord na Mona has also confirmed that it will be talking to farmers at the Ploughing about supplying willow to its plant in Edenderry.

The company is offering index-linked payments of €39-44/t, delivered at 55pc moisture. Contracts for 15-20years are available to individual farmers, groups of farmers and co-ops.

Teagasc bioenergy export Barry Caslin has welcomed the increased demand for renewable crops, and added that farmers would have to assess each contract on offer carefully.

"They need to look at who absorbs the costs of transport and drying, whether there is adequate harvesting machinery in the area, whether the payment is index-linked to inflation and whether the crop suits their farm," he said.

IFA bioenergy chairman JJ Kavanagh also welcomed the increased demand.

"If there is a margin in it for farmers, it has to be welcomed," he said.

"The Government's 45,000ac target for renewable crops looks achievable if farmers can generate a sustainable income," he added.

Irish Independent