Farm Energy Challenge (part 1): client promotion
Energy is an integral part of farming, but as fossil fuel reserves deplete and prices rise, energy use will change. We find out what farming’s future might look like.
All industries are under pressure to become more energy efficient. According to a recent E.ON/Farmers Weekly survey, farmers use about 46,000kWh of electricity on average every year, costing almost £5,500 and producing around 20t of carbon dioxide emissions.*
The food supply chain is becoming more aware of its carbon footprint, and retailers are increasingly demanding energy audits and reductions in carbon emissions from their suppliers. That’s why Farmers Weekly and E.ON have launched the Farm Energy Challenge, to see how real farmers can take practical steps to reduce their energy use.
“As energy costs rise there will be an even greater need to waste less, use less and ultimately to generate energy yourself,” says Iain Walker, head of small and medium enterprises at E.ON. “Monitoring energy is the first step to a sustainable future; it’s only when we can see what we are using that we can take steps to reduce waste and use less.
“In the future, we are undoubtedly moving away from the days of large, distant power stations, to a world where a greater percentage of energy is generated and consumed on site,” he adds. “So there will be a need for individuals and businesses to look to micro-generation; and agriculture and horticulture business are in a great position to do that. For some, that future might be right now but for others the biggest wins are available without that need for upfront investment; by being smarter about processes or by updating or upgrading current equipment.”
Energy policy
But before that vision becomes a reality, there are still a few obstacles to surmount. Not least the government’s energy policy, which is causing great concern among farmers. “Farmers are tied to energy policy in so many ways,” says Andrew Kneeshaw, managing director of E.ON’s third-party adviser, Gateway. “If you took government support away from renewable energy projects, most of them wouldn’t stack up financially. Global policies are changing and there’s a lot of uncertainty out there.”
Another concern is that renewables support measures have to be paid for – and are generated from a levy on household and business energy bills, which has sparked controversy as wholesale prices continue to rise. Roughly half of consumers’ energy bills are made up of wholesale prices – the rest is in the form of levies, tax, grid maintenance and suppliers’ margins.
With fossil fuels in decline and energy prices on an ever-upward trend, what can farmers do to cut their bills? Before spending £10,000s on renewable energy projects, the first step is to ensure the farm is operating at optimum efficiency, says Jonathan Scurlock, chief renewable energy and climate change adviser at the NFU. “Simple measures like cleaning fans and installing variable speed motor drives can pay back in less than a year.”
Farmers should carry out an energy audit to identify waste, and ensure they are on the best value tariff to keep costs to a minimum, he adds. Only then should they look into whether renewable energy generation stacks up on their farm.
“In the future, renewables will become more commonplace as we move from the early adopters to mainstream practice,” says Dr Scurlock. “If the middle group of farmers move to where the top 25% are now, agriculture will be more in control of its costs and more able to manage its environmental footprint, with associated opportunities to add value.”
Although carbon-friendly farming is not yet a mass market, demand from consumers and retailers is only likely to grow, he adds. “By taking a two-pronged approach – improving energy efficiencies and generating renewable energy – farming really can be sustainable. As the government and consumers recognise that, we will really start to see a transformational change, putting farmers in the lead role for sustainable food and energy production.”
*Findings based on a survey of 496 respondents in October 2013
What can be done?
Farmers have already made great strides in reducing energy use. Horticultural, pig and poultry producers have cut energy use per unit of production by between 20% and 30% over the past 10 years. By doing so they have benefited from a discount on Climate Change Levy of up to 90% – and farmers could see more of these initiatives in the future, says Mr Kneeshaw.
“These sectors have achieved a pretty dramatic improvement, which most people would not have anticipated,” he says. “Of course, some of that has come from better production efficiencies, but the lion’s share is from updating equipment and improving energy management control; all of which other farmers can replicate, whichever sector they are in.”
Big wins
Although most consumers initially consider changing tariffs or suppliers to reduce their bills, changing energy management has a far greater and longer-lasting effect, he adds. “There is a law of diminishing returns when shopping around for better deals and, in a way, energy efficiency is the same. There are some big wins initially, and then the gains become smaller and smaller. You could make 20-50% savings through better energy management, compared with perhaps a 5% saving by changing tariffs.”
So while large savings can be made in the short-term, the biggest challenge in the longer run is probably financial, with many farmers not able to justify larger expenditure to make greater savings. “Replacing an old, inefficient grain dryer, for example, can rarely be done on the grounds of energy cost,” says Mr Kneeshaw. “In most cases, that kind of investment will have to wait until a bigger business case can be made. But when you do have to act, make sure you weigh up the long-term cost of the item, not just the initial capital outlay.”
Ultimately, switching from manual energy controls to automatic variable ones will save farmers energy, both in the immediate and the longer term. “Going forward, we are likely to see better informed decisions on energy efficiency, with more information being available on performance, and more monitored consumption coming from smart meters and control systems that record performance and give good feedback,” says Mr Kneeshaw.
Energy toolkit
One example of this is E.ON’s new Energy Toolkit – a package of help and advice to help farming customers waste less energy. Designed to help businesses see more clearly where and when energy is used, it includes online advice tailored to agriculture.
Customers can also request a free wireless electricity monitor, which provides a real-time display of energy usage, updated every 10 seconds so farmers can see the impact of turning appliances on or off almost instantly. The monitor also has a memory function that compares energy use by day, week or month, plus daily averages to show when consumption is higher.
There is also a free helpline through Gateway to offer farm-specific advice, identifying which hot-spot areas to tackle first. For more information visit E.ON’s Energy Toolkit
Read the other Farm Energy Challenge articles:
If you would like an Eon expert to give you advice on how to save energy, please contact Eon at www.eonenergy.com or call 0800 655 788