The Energy business comprises Feedstock and Powergen. Feedstock produces and sells milled peat for the generation of electricity and provides biomass for burning at Edenderry power station. Additionally peat feedstock is supplied to Fuels for the manufacture of briquettes and to Horticulture for a range of growing media.
Powergen’s priority is to expand the generation portfolio while reducing the carbon intensity of electricity production. Powergen is advancing the co-firing agenda at the Edenderry power station and progressing the wind energy programme including the wind farm at Bellacorick, Co. Mayo.
Despite a challenging year in peat production, the Energy business performed well, particularly in the biomass and power generation sectors.
Results
Peat quality was negatively impacted by a third consecutive wet summer – the last three summers were the three wettest in 25 years. Widespread flooding in November 2009 also affected supply to the West Offaly Power and Lough Ree Power stations. However, despite these difficulties, increased volumes were supplied to the power plants and to the briquette factories in response to increased demand which resulted in an overall increase in Feedstock sales.
Powergen had a very successful year. Its existing portfolio outperformed last year and significant progress was made on the biomass co-firing agenda. Construction commenced on the new 112MW peaking plants at Edenderry and commercial operations are due to commence later in 2010. Key project milestones were also achieved in the development project pipeline for two wind farms and the gas-fired plant planned for construction at Derrygreenagh.
Competition
Priority access is currently afforded to all of the generating assets in the portfolio on the basis of long-term power purchase agreements secured for the operations at Edenderry and Bellacorick. The regulated reduction in capacity payments and the overhang of excess generation capacity in the market will make the current environment very challenging and will drive the need for continued efficiency.
Sustainability
The procurement and supply of biomass fuels for co-fuelling forms a significant part of Bord na Móna’s renewable strategy to dilute energy peat usage. In the past year, just over 80,000 tonnes of peat was displaced with carbon-neutral biomass, which was a significant increase on the previous year’s displacement of 25,000 tonnes. The business intends to achieve a minimum target of 30% dilution on the fuel supplied to the Edenderry power station by the end of 2016.
With the confirmation that grid connection offers for wind farms at Oweninny (372MW), Mount Lucas (80MW) and Bruckana (40MW) will be received during 2010/2011, planning applications were lodged for both the Mount Lucas and Bruckana projects. The Oweninny project had already secured planning permission and all three projects will have sufficient firm grid capacity available in the medium-term. The target of achieving 500MW of installed wind capacity by 2015 remains on track. Most significantly, planning permission was obtained for a gas-fired power station at Derrygreenagh.
Innovation
Reducing the cost of peat harvesting and reducing environmental impacts through technological advances is of paramount importance. New production management and operation systems were introduced on a pilot basis in 2009 to reduce production costs. New online moisture measurement and quality forecast systems were also developed and successfully introduced to the power stations.
Modelling of the Single Electricity Market (SEM) has been developed in-house and will facilitate the investment appraisal of future development projects. Bord na Móna is also an active industrial member of the Electricity Research Centre at University College Dublin and continued its development of a Strategic Research Cluster (SRC) working in the fields of electricity transmission systems, market operations and the integration of renewable forms of generation on to the electricity system.