Farmers urged to risk assess their energy usage

Farmers and landowners are being urged to develop their own energy strategy to avoid paying increased fuel and fertiliser bills in years to come. Speaking at the On-Farm Energy Generation conference held at Stoneleigh last week, CLA’s chief surveyor Oliver Harwood set out some basic steps to establish what options are available.

Carbon isn’t properly costed, Mr Harwood explained, which is why renewable energy production needs to be incentivised with schemes like Feed-in Tariffs (FITS) and the long-awaited Renewable Heat Tariff, expected next year. “None of these would be necessary if there was a proper price for carbon.

“But, even if we put the carbon agenda aside, if farmers fail to do anything about energy production their businesses will become less sustainable as energy costs continue to rise.”

Added to the decreasing stocks of accessible oil is the fact that most of the UK’s larger power stations are nearing decommissioning and need to be replaced. “Oil and gas prices are set to increase by 60% by 2016 and the price of electricity will also go up,” he added.

Where do you start?

The first thing to do is to look at exactly what you’re paying now for your energy. This includes how much derv, red diesel, electricity, gas and oil you use. Then you have to establish when and where this energy is being used to create a usage profile of all energy usage across the farm.

What will this demand profile be used for?

By establishing the amount and time that most energy is used on the farm, you’re able to work out what technology best suits your situation.

What about energy audits?

Carrying out energy audits should be standard practice on farms, but no-one does them. There’s roughly a 10% saving sitting there waiting for farmers to identify, without any major changes to the system. Energy often isn’t taken as seriously as other costs, and it’s just a case of treating it like inputs or depreciation. No renewable is as profitable as not wasting it in the first place.

Are there ways of getting cheaper energy?

Buying groups are a good way of getting better rates, for example the CLA Energy Club has the buying power of 35,000 farmers to negotiate better deals with energy companies.

What about producing your own energy?

Firstly, you need to establish what resources you have access to on your land, or indeed on your neighbours land should they be willing to co-operate in a joint venture. This could be wind (over 6m/sec), solar (usually more effective south of Nottingham), hydro, biomass or anaerobic digestion.

How do I work out if it’s windy enough to put in a turbine?

There are free, online databases which give a rough indication of what the typical wind speed is in your area. Go to For a more accurate indication the Carbon Trust website ( offers computer modelling, allowing you to enter topographical details on your farm.

Are Anaerobic Digesters only for dairy farms?

No. There are a number of different options for farm AD plants, including waste processing if near a city or food processing plant, or farm waste if you have cattle or sheep. The capital costs are again high but there are benefits like low carbon, high value fertiliser and excess heat.

What do I need to have a biomass boiler?

If you have trees, or you produce straw, then biomass could be an option. Returns are strong where there’s a demand for heat, particularly if you can sell to tenants or use the heat in your business. If and when the Renewable Heat tariff comes into play this could make things more affordable.

What about solar PV power?

If you’ve got a south-facing roof, or a block of unproductive land, solar could be an option. There’s less mechanical risk and the sun’s more reliable than wind. It’s expensive, but costs should fall as more PV units are produced.

What are the other options?

Solar thermal and indirect solar thermal are both options that work well with other systems, like biomass boilers, as in the summer heat would be provided by solar, rather than running the boiler.

Futures markets and commodity risk management online course:

  • Risk management strategies for a more predictable financial performance
  • Educated conversations when collaborating with your advisors
  • Negotiate better prices with your grain merchants

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