Building a renewable future

Bord na Móna’s new CEO, Mike Quinn discusses the company’s new strategy with Owen McQuade and where he would like to see the company in 2030 and beyond.

Mike Quinn took up his role as CEO of Bord na Móna at the start of the year. When asked what his first impressions were, he replies: “The scale of the company. We have 80,000 hectares across the Midlands as far south as Tipperary. It is a fairly diverse range of businesses including power generation, waste and feedstock which is now split into two businesses – biomass and peat.”

Quinn has joined the company in a period of transition. He sees “significant opportunities” for the company, “but we are now at a crossroads where we need to define where we are going.”

“Because of the nature of the industries we are in, five years is not a long time. One of the first changes I made was changing the existing strategy which was focused on 2020 to a new strategy with a 2030 time horizon,” explains Quinn.

2030 strategy
Looking at the issues facing the company into the future, Quinn says there are regulatory challenges across all the company’s businesses not just in the power generation sector but also in the fuels and waste businesses. These issues have shaped the future strategy.

“We are in a unique position with our land bank. In February this year we set out where we want to be in terms of a strategic direction for the company. In power generation we want to be the number one renewable energy supplier on the island of Ireland by 2030, and not just in wind. We see significant opportunities in biomass, solar, landfill gas and waste to energy. We want to become a portfolio player in energy,” reflects Quinn.

Bord na Móna is already the largest user of biomass in Ireland, consuming 320,000 tonnes last year. The company is working with ESB to turn its two peat-fired stations over to co-firing that will give a demand source for two million tonnes of biomass each year. In addition to the power generation co-firing, the company is developing a biomass briquette for the fuels side of the business.

It also recently applied for planning permission for an Ovoid smokeless fuel plant in Foynes, Limerick which will manufacture lower carbon fuels. “Biomass touches every division of the company and is key to our future going forward. We have now created a new division to focus solely on biomass and the manager of that will report directly to myself.”

Although much of the company’s focus is on biomass, wind energy will remain “front and centre” as part of the portfolio strategy. “We have a land bank that is flat and devoid of any vegetation, with a strong wind profile. It is ideal for wind farm development.”

Implementation
Having overseen the development of the new strategy, Quinn now sees the focus shifting to implementation: “My experience, particularly in my last job, is that if we can’t be number one or number two in a sector we should take a serious look at whether we should be in that sector or not,” he comments.

An example he gives is solar energy. Bord na Móna has a land bank with large tracts of flat land that do not need clearing and are ideally suited to ground-mounted solar. “We see the opportunity to become the number one utility-scale solar company in Ireland,” says Quinn.

“Biomass will have a significant role in Ireland’s energy mix going forward to 2030 and we have an opportunity to be the number one biomass supplier on the island. All our business units are working towards a strategy whereby they have to be number one or number two in their markets.”

Quinn has found energy “a very interesting sector, with the fundamental shift from fossil fuels to renewable energy.”

“Bord na Móna is in a great position to benefit from that shift, particularly on the biomass side of the business. We are in at the ground floor of a new business and we want to be the market leader in biomass in Ireland,” he continues.

Biomass is a “huge opportunity”, says Quinn. The company uses two million tonnes internally for power generation. By 2020 the demand will be for 3.3 million tonnes and with the RHI and other drivers that will grow to five million tonnes by the middle of the next decade. “We want to be the major feedstock supplier to that industry,” says Quinn.

Sustainability is already central to Bord na Móna’s business and the company is widely recognised as a leader in the area. “Sustainability will remain central. We will continue to import biomass from sources that are sustainable economically, environmentally and socially.”

Energy will be a “portfolio play, with wind, solar, biomass including anaerobic digestion and new technologies such as gasification.” The goal is to have five different revenue streams by 2030. Traditionally the company has focused solely on the 26 counties and what it can do with its own land. It has now been decided at board level to extend that to the 32 counties and the company will look at acquisitions on an all-Ireland basis.

“With solar, we are not interested in small scale i.e. less than 5MW which are driven by grid connection. We are talking about utility-scale solar farms in tens of MW.

“Earlier this year Mount Lucas wind farm was opened and is performing beyond expectations and we have decided on the location for our next wind farm. We have said we will do a wind farm a year for the next seven years. That doesn’t mean they will necessarily be owned 100 per cent by Bord na Móna. We are working with Coillte on a number of joint opportunities and we will also look at development opportunities not on our own land.”

The company has looked at other renewable energy technologies in continental Europe and there is the opportunity to co-locate solar farms with wind farms: “Grid is a scarce commodity and these technologies are to some extent counter cyclical. Wind is strong during the short winter days and solar prevails on longer summer days. We are developing a 5MW pilot plant on Mount Lucas to explore the co-location option,” explains Quinn.

Biomass
Bord na Móna biomass revenue for last year was €19 million and the company sees that growing significantly to 2020. “Edenderry Power co-firing has been successful. We are also establishing a domestic biomass supply which will be a combination of forestry products and willow. The company has undertaken a lot of development work on willow and plans to have 15,000 hectares of willow that will generate 300,000 tonnes of biomass which is enough to supply the Edenderry power plant.

Harvesting willow will use the same skill set that exists for harvesting peat.” Willow harvesting is tractor-based using trailers and Bord na Móna has the largest tractor fleet in Europe with 665 tractors. The harvesting of willow will complement peat production which takes place from May to September and willow is harvested during the winter months. Quinn says this will further boost the local economy in the Midlands where “there is not a lot of alternative employment”. At the peak of the summer season the company employs 2,500 people. “We have a duty of care to keep the business going and grow alternative revenue streams. Peat is not going to last forever and renewable energy is an important part of our future. In the longer run willow could replace peat.
Quinn believes that it is “a tremendous time to get into biomass.”

“We have the credibility to establish both international and domestic supply chains. Where Irish bioenergy sector companies struggle on the financial close for CHP and biomass stations is with the fuel supply chain. We see Bord na Móna as providing a developed scale biomass supply chain. The company will offer 15 year supply chain agreements to bioenergy companies. We will be cost competitive because of the scale. We see ourselves as an enabler for the biomass sector.”

Economic benefits
There are knock on effects for the economy in developing a large scale biomass supply chain, such as the potential impact on Irish Rail. Bord na Móna has 720km of narrow gauge rail track. It is conducting a feasibility study with Irish Rail to take biomass into Dublin Port and transfer on a spur to the company’s narrow gauge rail and onto the power station. “Two million tonnes has the potential to provide a significant boost to Irish Rail’s freight business.”

In finishing, Quinn emphasises the importance of the biomass opportunity for the company’s future: “We are going back up the biomass supply chain and looking to secure long term, 20 years plus, sources of wood and other biomass. We are in it for the long haul.”

Mike Quinn’s management style
“I’m very driven by numbers and very hands on. I like consistency and drum beat”, a word Quinn uses a lot. Quinn has introduced monthly and quarterly reviews that look at every element of the company’s profit and loss account (P&L). Each business unit general manager has a monthly three hour session with Quinn “to go through the numbers”, which is something relatively new for the business. The focus of the monthly reviews is on the market, market share, innovation and new products and any regulatory developments.

Quinn also reviews the business unit five year plans, “with a heavy emphasis on succession planning”. Looking at key strategic positions within each of the business units. “We have to have people that are able to step up a level within 12 months. That will also help us with any acquisitions,” says Quinn.

The geographical spread of Bord na Móna’s business is not such a challenge for Quinn as in his previous role he managed nine factories for a US multi-national across the globe and travelled every week for five years.

He is always keen to get out of head office and the monthly reviews are held at the various sites away from Newbridge. Indeed he only spends two days a week at Newbridge with the rest on site or looking at new opportunities.

Quinn describes his key philosophy as: “I have to understand the business. I have to know the people. I have to see, touch and feel it, so that I can have knowledgeable conversations with the people who run these businesses.”

Profile: Mike Quinn
A native of Castletroy in Limerick, Mike Quinn graduated from DCU in engineering. He says that he is “an engineer who has learned how to be a finance guy.” His first job was for Apple writing software and he also worked in R&D in California for Apple. He “fell into management” taking a six month assignment when he was 27 and never left.

After Apple he worked in medical devices and for the last 13 years in the aerospace sector, “where the supply chain is everything and like energy it is heavily regulated.”

His interests outside work focus on sport and is “heavily into rugby and still plays soccer.” He lives in Limerick with his family.