Farmers see expansion of their herds as a risk, which means many will be looking at renewable energy as a steadier revenue stream for the future.
A challenging environment for the farming community, with many looking to diversify revenue streams
September’s RABDF survey of dairy farmers suggested that 49% are planning to leave the sector, whilst the lion’s share of the remaining half have put their expansion plans on hold. There were a number of reasons for this negative outlook:
The base price of milk has fallen well below cost of production
Working long hours for very little financial return
No help from the banks
No successor in place to take things on
It’s no secret that margins have been squeezed in the past year, but many forward-thinking businesses are taking a long, hard look at their farms to see how they can make it work in 2016 – and well beyond that.
For years farmers have been diversifying to buffer themselves from increasingly volatile markets. But the type of project has changed. Rural tourism remains a favourite but renewable energy is promising to overtake it.
By 2013, more than one in three farmers had invested in one form of renewable or another. Indeed, there are now a handful of well-understood and commercially viable technologies to choose from: solar, wind, biomass and energy from waste.
Interest in the latter, specifically anaerobic digestion, in which farm and/or waste can be turned into biogas to produce electricity and heat, has increased. Energy security, as well as significant long-term reductions in energy costs, plus double-subsidies have made it an attractive proposition. Some of the power can also be sold to the grid.
Take a look
There are quite a few success stories out there, showing how farms have installed biogas plants. In fact, Government figures show capacity increased by 32% from 164MW in 2013 to 216MW in 2014.
Farm-fed systems doubled and there are now 147 AD plants on UK farms – which means it’s relatively easy to go and see one in action, the space required and how it affects the day-to-day running of the farm.
“Spend a good amount of time looking at as many different systems as possible to see which will benefit you the most. Try and use a technology provider with plenty of experience in British conditions,” says Stephen Temple, Farmers Weekly Green Energy Farmer of the Year (2010).
But Stephen still remains in the minority – whilst a majority of farmers have considered renewable energy, it remains an idea rather than a firm investment priority. Nevertheless, the NFU would like to see 1,000 AD plants on UK farms by 2020. To get there, more farmers will need to sort the myths from the facts.
Banks will listen
AD requires significant capital investment, but the banks are more responsive than you might think. What’s more there is funding available to assess whether your farm is suitable for AD. As with any project like this, you need to consider the options available as well as the environmental, financial and social implications.
It’s true to say that the government’s attack on renewable energy subsidies has created some debate and it’s unclear how this will play out until the proposals are turned into policy. That said, the consensus is that solar and wind are likely to be hit hardest, with the impact on AD less clear cut.
Come January we’ll know more. Before that The Farmer’s Guide to Renewable Energy can provide you with the background information you need.
The fall in milk prices have cast a shadow over the farming sector
Few farmers want to expand their production to help balance the books, so diversification is another option
Investing in renewables can provide secure, cost-effective energy supplies for the farm and for export to the grid
Choosing the right technology isn’t easy, especially with the government’s review of green subsidies
By January there will be a clearer picture of the schemes available
Learn how your farm could significantly reduce energy costs by taking advantage of AD.