Image: Ben Whittle, Sussed Images
Much has been said about the renewable energy opportunities available for farmers. But how can they get involved, make money from it and control their ever-increasing energy costs? James Miles-Hobbs of Rural Development Associates weighs up the options
Poultry farms are well-suited to take advantage of renewable energy.
For a start, their electricity consumption is usually high and there is often a need for heat, which is likely to be supplied by an off-mains gas source. Poultry shed roofs are also ideal for the installation of photovoltaic panels.
But how should they go about getting involved?
The first step is clearly to assess the farm’s current energy efficiency and ascertain if some simple improvements be made. Producers should have an energy audit done to assess how the farm is performing at the present time.
Next, they need to assess the feedstock potentials, including waste materials available, and consider what type of energy is most suited to their particular operation. (See Table 1 ‘Pros and cons of different technologies)
The next step is to investigate their local electrical grid connection, review whether planning permission will be required and, if so, what are the obstacles.
On the subject of planning, there is an overall pre-emption in favour of renewable energy applications and the local planning department will need a good reason not to grant planning permission.
But significant restrictions may well apply, particularly around environmentally sensitive issues such as the impact on the landscape.
Additionally, with the drive to localism, planners will want to see increased local consultations prior to and during the application process.
Funding and FiTs
Finance is another key area and producers need to put together a timeline for the project, produce a capital investment budget and work out what the payback will be.
Government help is also available, through Feed-in Tariffs (FITs) and the Renewable Heat Incentive (RHI), though potential investors need to be aware that the goalposts are constantly shifting.
FITs are government guaranteed payments for the production of electricity and are paid firstly, for the electricity producers generate and secondly, for the electricity they export off the farm. (Table 2 sets out the different rates.)
From the date the installation goes in, the FIT will increase by the RPI annually. For example, the Department of Energy and Climate Change announced an increase in tariffs of 4.8% to come in from 1 April 2011. The inflation rate around February 2012 will set the rate for 2012-13.
But there are clouds on the horizon. There are two reviews of the FIT regime, one already started and one waiting in the wings.
The so-called Fast Track Review has already been published and is intended to be implemented from 1 August 2011. This has concentrated on scaling back the FIT’s on large scale photovoltaic installations, and increasing the FIT’s on anaerobic digestion (see Table 2).
No sooner does this come about, than a further review of the FIT regime will be under way in the summer of 2011, due for implementation from April 2012.
There is a growing recognition in the renewable energy industry that the government has got its sums wrong, particularly in terms of photovoltaics, and even the 10-50kW band could be substantially reduced due to budgetary pressures from April 2012.
The message loud and clear, therefore, is “start installing PV on your shed roofs now, while the incentives are there”.
Renewable Heat Iincentive
The second offering from the DECC is the RHI, to come in this month (15 July), which gives a return for every kilowatt of heat produced, fixed for 20 years (see Table 3).
The scheme covers such technologies as biomass burners, ground source heat pumps and solar thermal.
On larger installations, heat will be metered to determine the level of payment. Although the apparatus is fairly standard, producers will need to get one that is registered with OFGEM, (the Office for Gas and Electricity Markets), for these purposes.
The RHI is likely to be of particular interest to businesses without mains gas, which includes most farms, as the current cost of heating using oil or LPG can be almost double that of gas.
Small electric and heat schemes (under 50kW and 45kW, respectively) need to be MCS (Microgeneration Certification Scheme) assured to qualify for FIT and RHI payments.
Best of all worlds
Biomass CHP (Combined Heat and Power) is potentially the Holy Grail for poultry farmers – burning poultry waste on a regular basis to produce electricity, with heat as a by-product.
The electricity would attract Renewable Obligation Certificates (see Glossary) worth roughly 9p-11p/kW, while the heat would attract payments under the RHI.
Poultry waste would be reduced to less than 5% of its original weight and the ash could be spread on the land as fertiliser, while the disease cycle would be broken.
Unfortunately, a commercially viable system has yet to be developed, but a number of companies are working hard on this.
There is also a need for government to reclassify poultry litter as a by-product rather than waste, otherwise it comes under a different set of regulations which considerably increases the costs of the whole project.
Need more help
There are a number of organisations that can provide free assistance to farmers thinking of venturing into renewable energy, from trade associations such as the NFU and the CLA, to government agencies such as the Regional Development Agencies and Business Link. They all produce free or inexpensive guidance notes or handbooks written from an impartial perspective. In addition, there are commercial consultancies.
• James Miles-Hobbs is a director of Rural Development Associates Limited, a farm business consultancy which provides specialist advice on renewable energy. This includes energy audits, feasibility studies, installation of all renewable energy technologies and assistance with finance, planning and taxation advice. Tel: 01380 730 044 or email email@example.com