How will 2022 be remembered in the renewables sector? Well, it depends on which angle you’re looking at it from. From a renewable electricity point of view, it’s been a year to remember.

We had the first large-scale solar farm come online, another chance to secure Government funding for wind and solar farms, the removal of the need for planning permission for rooftop solar PV, the ability to sell electricity to the grid and a ramping up of all renewable targets to name a few.

The same can’t be said for the renewable gas (anaerobic digestion) sector. It’s safe to say that many were disappointed more wasn’t done to kickstart the development of an anaerobic digestion (AD) industry to the same extent as solar and wind.

That said, there were some positive steps taken this year which should set 2023 up to be an interesting year for the sector.

Emissions ceilings

After months of speculation, the Government reached agreement on sectoral emissions ceilings in July.

The ceilings set maximum limits on greenhouse gas emissions for each sector of the Irish economy to the end of the decade.

The ceiling for agriculture was set at a level requiring a 25% reduction by 2030. As part of this target, the Government announced a new target of 5.7TWh of biomethane to be produced from AD plants by 2030.

For context, this is 10% of Ireland’s current natural gas demand.

You may have seen figures in the media suggesting that 130 AD plants will be needed by 2030 to meet that target. These figures are wrong.

The actual figure is between 200 and 250, depending on the size of the plant. For context, to produce that volume of biomethane it would require around 290,000ac worth of grass silage and about 4.2m tonnes of slurry.

Now, in reality there will be a diverse range of feedstocks used, but that simple calculation shows the sheer scale of the Government’s ambition.

This scale of development, with farmers firmly at the heart of a new rural industry, would transform the prospects and economics of many farm families.

RHO

Ireland isn’t special when it comes to AD. If anything, we are highly disadvantaged as we have virtually no AD industry to build on.

As with any other country which has an active AD industry, these plants won’t be developed without policy support. I know it, the industry knows it and the Government knows it.

The first positive step towards developing an actual, workable AD support policy is the renewable heat obligation (RHO).

After years of speculation and one public consultation later, the Government announced it was going to introduce an obligation on the heat sector by 2024.

The obligation will mandate suppliers of all fuels in the heat sector to ensure that a certain proportion of the energy supplied is renewable.

The thinking is that AD plant developers will be able to lock into off-take agreements with those suppliers who need to meet their RHO mandate.

However, no one in the industry, both AD developers and energy suppliers, believe this is enough to stimulate the development of AD plants. The RHO is due a second consultation early next year.

Funding

After much hype and excitement within the industry, Budget 2023 turned out to be a bitter disappointment.

Many believed that details of a capital support scheme for AD plants was set to be announced as we know there is one in development.

What transpired was a commitment from Minister of Agriculture Charlie McConalogue to divert €3m in carbon tax funding towards the development of the sector.

For context, one agricultural-based AD plant will cost €10m to build.

But the frustration wasn’t channelled at Minister McConalogue. Arguably the responsibility to provide funding for the sector lies with the Minister of the Environment, Climate and Communications, Eamon Ryan.

Earlier in the year, the Irish Farmers Journal revealed that the European Commission urged Ireland to make use of EU funds to expand public investment in the green transition and energy security as far back as May.

The Commission’s 300bn RepowerEU initiative provided a significant opportunity for member states to secure additional funding to ramp up renewable energy production and in particular, biomethane production, via the EU’s Recovery and Resilience Facility.

The initiative allowed countries to amend their existing National Recovery and Resilience Plans (NNRP), which were developed to assist in the recovery from the COVID pandemic.

The Department of the Environment, Climate and Communications confirmed to the Irish Farmers Journal that it did not apply to the EU for an increased budget under the NNRP via REPowerEU.

The Department claimed that, as Ireland used very little Russian gas, it did not have to take similar actions to other countries, ie channel new funding towards the development of an AD biomethane sector.

What next?

While there have been some positive soundbites from the Government towards providing real funding for the AD sector, details remain non-existent.

However, with a firm 2030 target in place, an incoming RHO and the eyes of Ireland and Europe on the Government for missing a significant funding opportunity, the industry believes there will be some movement on AD funding in 2023.

While its unlikely to actually land in 2023, at least the sector might have a clearer indication of what is coming and when.

If this doesn’t happen, it’s only a matter of time before developers look to other EU countries to find markets to export biomethane to.