Ireland’s Energy Minister Pat Rabitte gave his consent for the partial merger between the two state supported companies, Coillte and Bord na Móna, to work in the areas of wind, biomass, shared services and green tourism. Bord na Móna is an integrated utility service provider encompassing electricity, heating solutions, resource recovery, water, horticulture and related services; and Coillte operates in forestry, land based businesses, renewable energy and panel products. The joint venture claims to capture future opportunities for growth and optimise performance in the sectors.
Minister for Agriculture, Mr Coveney said that he had considered the issue with Mr Howlin (Public Expenditure and Reform Minsiter) and Mr Rabitte, and had come to the agreement that the joint venture would be beneficial to all. The merger allows both companies to continue with their core businesses but to join up on overlapping operations.
The most significant areas of synergy were listed in a press release, by the Department of Communications, Energy and Natural Resources:
- A Biomass business, to be called BioEnergy Ireland, which would procure biomass at market rates from both Coillte and private sources and use this to supply the entire market (including Coillte’s board companies and Bord na Móna’s power station) on a competitive, commercial basis.
- A wind business comprising initially of two Coillte windfarms, with further integration of the wind business over time.
- Shared Services to consolidate central support services and drive cost efficiencies,
- Recreation and Tourism to realise the green/agri-tourism potential inherent in the combined land banks of the two companies.
Mr Coveney stated that “the decision allows Coillte to focus on its core activities in forestry and operating its board mills while allowing the company to harness those areas of synergy it has with Bord na Móna. Ultimately this decision will allow the State to derive as much value as possible from both companies.”
There is considerable concern, in the Bioenergy industry in Ireland about the venture and about the lack of consultation. The initiative, could lead to excessive market dominance in the biomass supply chain by a super-state entity, with loss of jobs and income in local economies. The biomass sector has many new SMEs who have invested heavily supplying wood, willow and other biomass to heat and power units, in a range of small to large-scale businesses. They are important players in helping Ireland achieve its 2020 renewable energy and greenhouse gas reduction targets. They contribute significantly to local jobs and economies, and it is unclear how they will be affected, by a company which may have an unfair competitive advantage.