Energy Institute

Why aren’t we using more biomass for district heating and power generation in Ireland?

Biomass, including waste wood and plant material is extensively used for district heating as well as combined heat and power production in Denmark, Austria and Sweden.  It has also found application in co-firing with coal for power generation.

However, the relatively high cost and limited availability of local biomass in Ireland, the availability and lower cost of imports, and the inconvenience of handling biomass compared with competing fuels such as oil and gas go some way to explaining why less biomass is used in Ireland.

Why can’t we use our biomass in district heating?

When used for heat, biomass can be converted to useful energy at up to 90% efficiency; whereas the efficiency can be as low as 35% in electricity generation, with 65% of the energy being lost and in effect wasted when there is an alternative and more efficient use for the available biomass as a source of heat.

Under the National Renewable Energy Action Plan, Ireland has an ambitious 12% renewable heat (RES-H) target to be reached by 2020, up from 6.6% in 2015 (Fig. 1) 1.

Figure 1: Thermal output in Ireland in 2013 and 2020 if we meet the 12% renewable heat target under national forecasts

SEAI (2015) A Macroeconomic Analysis of Bioenergy Use up to 2020. Available Online

  • ASHP
  • GSHP
  • Biomass boiler
  • Solar thermal
  • Biogas
  • Biomass CHP

Many Central and Northern European countries have district-heating systems where the community’s needs for hot water and space heating are met by metered heat piped from a central source such as a boiler or CHP plant. Such systems are highly suitable for a centralised biomass-fired co-generation of electricity and heat.

In comparison, Ireland has few district heating systems and all were established with some form of public support 2. The demand for home heating in Ireland is dispersed due to a pattern of low density housing development with many one-off or standalone houses. This scattered distribution of housing in Ireland greatly enhances the cost of providing district heating. Further barriers include a lack of an existing infrastructural network for district heating and the need for financial investment and support, combined with a lack of indigenous knowledge or planning guidelines specific to district heating, although this may change in coming years 3.

The greatest potential for district heating in Ireland is in large-scale schemes that target apartments and services (in Dublin) as well as small-scale high occupancy buildings in the rest of the country located where more expensive existing heating sources prevail (i.e. that are not connected to the gas network). The Tralee Town Council District Heating scheme is a good example 4.

Recent SEAI analysis 5 indicates that without further policy measures, the RES-H 12% target will not be reached. The estimated shortfall is between 1 and 5 percentage points across a number of scenarios depending on fossil fuel prices and cost competitiveness of renewable heat technologies.

The renewable heat sector is for the most part underdeveloped with less deployment of biogas and solid biomass than needed to meet our targets for renewable energy in heat. Since 2006 there has been a 2% average annual decrease in industrial renewable heat, although biomass energy use in the residential sector has increased by 9.5% between 1990 and 2011.

Current policies such as REFIT supports, energy efficiency goals and, taking into account natural migration to renewable heat technologies, will not deliver the 12% renewable energy target in the heat sector by 2020. Previous support programmes which incentivised the uptake of renewable heat such as the SEAI Greener Homes Scheme and the ReHeat programme 6 have expired and have not yet been replaced. The Government’s Bioenergy Plan has been published, albeit in draft form until a Strategic Environmental Assessment (SEA) is completed, and the Renewable Heat Incentive is awaiting EU approval 7.

The proposed exchequer funded Renewable Heat Incentive (RHI) scheme for larger non-ETS industrial and commercial renewable heating installations is expected to contribute to meeting the 2020 target. According to the SEAI, the most cost-effective option for renewable heat under the incentive is the replacement of oil in large industry and supplying commercial sites with biomass boilers. Additional uptake of heat pumps in the commercial sector would also be needed.

Initiatives and opportunities for the conversion of public sector buildings to convert to bioenergy heat supply contracts were also proposed in the Governments draft National Bioenergy Plan 8. A final version will be finalised by 2017.

Could we make more use of biomass in power generation and CHP?

The biggest user of biomass for energy purposes in Ireland is the Edenderry Power electricity generating station, which co-fires biomass and peat. There is further potential for peat substitution by co-firing biomass at the two remaining peat-fired stations operated by the ESB.

Several large users in the wood processing industry have established combined heat and power plants (CHP) to meet their heat requirements while exporting surplus power at attractive rates 9. There are two such commercial wood-fuelled CHP plants in Ireland, one at Grainger Sawmills and the other at Munster Joinery in Co Cork 10. In County Mayo a developer is building a 42.5MW biomass high efficiency CHP plant 11.

These plants were incentivised as a means to generate renewable electricity through the Renewable Energy Feed in Tariff (REFIT) scheme, the 3rd version of which is currently underway. While previous versions have focused on other renewables such as wind, hydro, and waste, REFIT 3 is designed to incentivise bioenergy. REFIT 3 aims to support the addition of 310MW of electricity capacity by combined heat and power (CHP), biomass combustion and biomass co-firing 12, 44 MW of which were supported in 2015/16 by the Public Service Obligation (PSO) levy, funded by electricity consumers via a surcharge on electricity bills 13. REFIT is designed to provide price certainty to renewable electricity generators, paying the difference between the wholesale price and the guaranteed REFIT price 14,15. The main expenditure in the biomass fired CHP supply chain is fuel supply and dedicated supply chains, whether domestic or international depending on availability or price.

REFIT 3 (€ per MWh)


REFIT 3 (€ per MWh) 2014 2015
Biomass landfill gas (REFIT 2) 85.451 85.622
Biomass combustion 89.136 89.314
Biomass combustion - energy crops 99.623 99.822
Large biomass CHP (above 1500kW) 125.839 126.091
Small biomass CHP (equal to or less than 1500kW) 146.812 147.106
Large AD non CHP (above 500kW) 104.866 105.076
Small AD non CHP (equal to or less than 500kW) 115.353 115.583
Large AD CHP (above 500kW) 136.326 136.598
Small AD CHP (equal to or less than 500kW) 157.299 157.613

While co-firing of biomass and peat is taking place in Edenderry, combined heat and power (CHP) uptake rates remain low. The introduction of a carbon tax in 2010 16 was intended to signal future policy intent and to incentivise a reduction in fossil fuel use. The reduction was envisaged as coming about through increased energy efficiency, a switch to lower carbon fuels and greater recourse to renewable sources.  At present, however, when the international market prices of competing fuels in electricity and heat generation such as gas and oil are low, the price element of this signal is not strong enough to drive a significant switch to renewable sources such as biomass.

Under the right conditions, large-scale biomass for power generation in Ireland is certainly possible but it would require the development of a secure and economically affordable supply chain in Ireland. While international trade in biomass has grown in response to government subsidies, particularly in the Baltic countries, it remains small when compared with fossil fuels 17. There is general recognition that our national bioenergy resources including forestry, energy crops and biofuels need to be developed and supported through a cohesive approach addressing supply side as well as demand side issues.

Biomass Resources:

The development of indigenous biomass resources on a large enough scale for power generation in Ireland would involve building a supply chain from a modest base. Ireland has not realised its potential to produce woody biomass to date due to lack of incentives, the dominant agricultural sector, and reliance on traditional land use and management 18. Ireland’s current forest resource only covers 11% of the land (lowest in the EU alongside the Netherlands and the UK). To meet the stated Government targets for 16% renewable energy by 2020, the gross demand for forest biomass for energy use would increase by 170%, which would require significant investment and grant aid to further afforest the land and develop roads that provide access to forests.

Farmers and landowners have to be convinced that it is a profitable use of their land and would need to be incentivised. A new large scale processing industry would need to be developed and Ireland would have to create an incentive large enough to attract power users to buy the energy. The UK experience indicates that the subsidies involved could be higher than other renewable electricity options like onshore wind, however, biomass is a more economical option for renewable heat.

The limited Irish supply means that wood-fuels are being imported at present to meet the growth in demand driven by the REFIT and the carbon tax 19. A much faster biomass mobilisation than today is needed to avoid supply shortage in the transition phase as we move to greater amounts of biomass being used to generate our heat or electricity.  The potential for negative consequences of land use change on food production also need to be considered 20.

Despite competition with other lower-cost fuels and a lack of industry infrastructure entrepreneurs associated with forestry, the heat supply and combined heat and power industry believe there is potential to develop Ireland’s biomass resource 21. With the right supports in place, such as a renewable heat incentive to producers, users and service providers much more could happen 22.

SEAI commissioned research underway has concluded that the available material from forestry will increase in the period 2020 to 2035 as existing private forestry reaches maturity. The research report will outline the scope for increased woody bio-crop production and list the barriers to realising these resources.

Robust projections of this nature are required to generate the necessary level of confidence among investors and operators alike to create the demand and supply chains for biomass in Ireland. Updated Biomass Supply Curves are expected to be made available as an output from this research in 2016.

Exhibit 2: Current biomass energy growth compared to the growth required to reach the European Commission scenario