Farmers outside the catchment areas for the two biomass burning power plants at Ely, Cambridgeshire and Drax, Yorkshire, could soon have the opportunity to grow miscanthus on five- to nine-year index-linked contracts.
Miscanthus specialist International Energy Crops is offering to pay an average of £64/t ex-farm for baled miscanthus to growers within a 25-mile radius of its planned £100,000 biomass pelleting plants at Market Drayton, Shropshire and Swaffham, Norfolk – the first of which is expected to come on stream in spring 2012.
Speaking at last week’s Masstock Energy Smart Farm demonstration unit open evening at Old Springs Farm, Market Drayton, IEC’s Keith Wilson told delegates the company could offer a better deal than power plant operators as it would be providing biomass in a form the generator actually wanted – pellets.
“If you are within the two power plant catchments they will pay £55/t ex-farm for baled miscanthus, but that drops to £45/t outside the area. By investing in our own pelleting plants we can offer growers within a 25-mile radius £64/t ex-farm based on material being 15% dry matter,” explained Mr Wilson.
“We’re in it for the long haul. We will have another pelleting plant at Swaffham and are already looking at the possibility of a third in Somerset; another marginal area for cereals but suited to growing miscanthus,” he added.
The contracts would be for five to nine years and Retail Prices Index-linked, ensuring farmers’ returns kept up with inflation, delegates were told. IEC will seek growers outside a 25-mile catchment, but at a lower price per tonne to cover increased haulage costs.
Likewise, the price growers will be paid depends on storage of baled cane, explained Mr Wilson. After cutting in March/ April, growers wanting to move bales off farm straightaway before July would incur a £8/t price drop. A price of £64/t would be paid for bales removed off farm from July to October and £72/t paid to growers willing to store bales for collection from November through to March, explained Mr Wilson.
The proposed contracts are aimed at developing a wider supply base of biomass material for power generation, opening up opportunities for more growers, said Mr Wilson. IEC also offers a broad spectrum of contracting services from planting rhizomes – it is the single largest root-stock supplier in the UK – through to harvesting operations.
Masstock’s David Neale told delegates the contracts offered much-needed security to growers of miscanthus as it was a long-term crop. After planting, harvesting useful cane began in year two with a stated lifespan of around 15 years, he said.
In comparative terms, at IEC’s contract price of £64/t a 10t/ha miscanthus crop on light blow-away sandy soil supporting a wheat yield of 5.5t/ha would achieve a net margin of £465/ha. That rose to £735/ha for 15t/ha crops on land achieving wheat yields of 7.5t/ha and £1000/ha for the best 20t crops off good, heavy clay soils supporting good wheat yields, delegates were told.