Annual Report 2016

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Business Reviews

Peat

The Peat business supplies milled peat to Bord na Móna’s Edenderry power plant and the two ESB power plants, Lough Ree Power and West Offaly Power. The business also supplies peat to the Horticulture and Fuels businesses for the manufacture of growing media products for the professional and retail markets and peat briquettes.

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€85.8m Turnover
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3.45m tonnes harvested
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FY16 at a glance

The Public Service Obligation (“PSO”) support mechanism in respect of peat supply to the Edenderry power plant expired in December 2015;


Secured agreement with employees on achieving the cost reductions and changes in work practices required to ensure a viable peat business following expiry in 2019 of the remaining PSO support mechanisms in respect of the ESB plants;


Significant restructuring of the business with a view to achieving increased efficiency and reduced operating costs;


The business continued to fully meet customer needs despite record rainfall and flooding over the winter months, which resulted in losses of peat stocks.

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Outlook

In 2015 Bord na Móna published our sustainability report “Sustainability 2030”, which sets out the Group’s intent to exit the harvesting of peat for energy generation by 2030. Following the expiry of the PSO for the ESB plants in 2019, it is intended that they will be co-fired with biomass on a similar basis to the Edenderry power plant. This will significantly reduce the required volume of milled peat and will require lower production costs in order to ensure that the peat business remains economically viable until 2030. The transition to this new operating model is progressing according to plan. Emerging peat extraction regulations will add further challenges to the business. We remain confident that the required changes will be fully implemented by 2019.

Paul Riordan, Head of Peat