NEWS RENEWABLES INSIGHT10 | FRIDAY JUNE 19 2015

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Renewable energy still offering goodreturn for farmers despite subsidy cuts

The new Conservative Government will undoubtedly enforce a raft of changes on the renewable energy sector. Olivia Midgleyassesses the impact on farm-based renewables and gets some advice on how to get the best out of on-farm renewable energy.

FARMERScan apply for grants of up to £10,000 to undertake afeasibility study and businessplan to investigate the potentialof AD on their farm.Waste and Resources Action

Programme, the companybehind the on-farm anaerobicdigestion grant scheme, is alsooffering capital loans of up to£400,000 (or a maximum of 50per cent of the capital cost).

To be eligible for the fund,the AD plant must be fedpredominantly on farm wastessuch as manures and slurries and have an output of less than250kW. The fund is open untilMarch 31, 2016.

GRANT CHECKERFind out more about the grantsavailable at www.fginsight.com/aboutgrantchecker

£10,000 AD grants available

� Farmers need to ensureinstallers are MicrogenerationCertification Scheme (MCS)registered to ensure thesystems are installed correctlyand will be eligible for the RHI� The MCS certificationprovides assurance the installerwill not ‘disappear overnight’�Ensure the scheme is thecorrect size to meet the demand

you need. Installing somethingwhich produces more energythan is required will impact onyour potential fuel savings� Ensure your equipment, suchas a biomass boiler, AD plant, orwind turbine, is regularly serviced�Shop around and do yourhomework on contractors andsuppliers. It can save you moneyin the long run

Get the best from renewable energy

THERE may be a wave of subsidycuts set to unravel across the industry, but experts believe thefuture is bright for the farm basedrenewable sector.Despite the Queen’s Speech in-

dicating diminishing subsidies including the Feed-in Tariff (FiT)and the Renewable Heat Incentive(RHI), the right technology in the right spot could be, and in thefuture may have to be, viable on its own.The latest Defra figures show

more farmers than ever are diver-sifying to boost their income.In 2012/13, 58 per cent of busi-

nesses in England had some formof diversified activity and renew-ables formed a percentage of that.

rMore farmers arediversifying income

Merlin Hyman, chief executiveof Regen SW, said: “In the lastquarter of a century, the extraor-dinary growth of renewable ener-gy has been a ray of hope and 2013was a ‘crossover year’ when morerenewable energy capacity was installed across the globe than fossil fuel capacity.

Costs“The UK has reached 20 per cent of its electricity from renew-ables. Remarkably, costs have fallen rapidly to the point we can seriously discuss the end of subsi-dies for some technologies.”It is a sentiment echoed by

experts across the industry.Diana Popa, head of sales in Eu-

rope and North America for windspecialist Vergnet, said: “Despitethe reductions in the FiT, we donot think this will deter continued

investment in medium wind. Thescheme still provides a very stronginternal rate of return as well as support for major energy con-sumers in the context of increas-ing energy prices and reducing reliance on fossil fuels.”Solar and wind have seen the

biggest uptake on farms across thecountry, but biomass boilers andanaerobic digestion (AD) are becoming increasingly popular.Dr David Tompkins, organics

technical manager at Aqua Envi-ro, said the last year had seen arecord number of AD plants builtin the UK, with numbers domi-nated by on-farm systems. He added: “Anaerobic digestion

is being integrated into UK farm-ing systems in ever more creativeand climate-smart ways: ammo-nia-stripping from high-nitrogenfeedstocks such as poultry manure means agronomicallyvaluable nitrogen is retained forfertiliser use, while clean-up of ex-haust gases allows CO2 from gasengines to be used in glasshousecrop production.

Guaranteed revenue“In good harvest years where cropprices are depressed, the guaran-teed energy revenue from AD canbe particularly attractive andgrowers are increasingly recognis-ing the benefits of keeping that val-ue within their own businesses.”Victoria Lancaster, head of

renewables for H and H Land andProperty, added: “It is becomingapparent certain forms of renew-able energy are ‘safer’ investmentsthan others.“Anaerobic digestion and heat-

producing technologies tend to bemore acceptable to planning au-thorities and local communities.”But for those looking to invest

in large scale wind and solar farms,Ms Lancaster advised farmers toobtain planning permission assoon as possible so their projectcan fall within the current tariffsrather than endure the uncertain-

ty of cuts, which are still unclear. “In terms of immediate future

changes it is likely only farm scalerenewables will be directly affect-ed, with smaller scale forms of re-newable energy such as roofmounted solar panels, domesticbiomass boilers and heat pumpsbeing regarded as relatively ‘safebets’ by the industry,” she said.“In particular, installing forms

of green energy which do not re-quire planning permission arelikely to be less affected by cuts totariffs. However, farmers shouldact to install any small scale tech-nologies as soon as possible toavoid any nasty surprises in the fu-ture,” Ms Lancaster added.Richard Michie, digital market-

ing director at Euro Energy Serv-ices, agreed farmers should movequickly.He said: “Oil prices are on the

rise again and the RHI is reviewedeach quarter. So the sooner farm-ers install, the better returns theywill receive. They will also startprotecting themselves against ris-ing energy costs and be able to usetheir savings and earnings toplough back into their farms.“Despite the fact the RHI is due

to reduce again on July 1, returnson biomass boilers, solar thermaland air source heat pumps forfarmers are still very good.”The domestic RHI on biomass

is currently 8.93p per kWh and isbased on the heat the property requires.The payment is index linked,

tax free and paid by the Govern-ment every quarter. For a typicalfarmhouse needing 32,850kWh,this will equal a payment of at least£2,933 each year for seven years.Mr Michie added: “Commercial

biomass RHI is paid at the lower

rate of 5.87p per kWh but the payments are over a 20 year peri-od. We are currently working witha farmer who for an initial outlayof around £25,000 will earn anRHI payment of £95,000 plus es-timated fuel savings of £35,000over the next 20 years.

Fuel savings“Even without the RHI, the fuelsavings alone will pay for the boiler plus a profit.”Energy analyst at Strutt and

Parker Andrew Crowther urgedfarmers to be aware of hiddencosts when it came to installingnew projects. He added: “Thereare a few things to be aware of andwe would advise people to get in-

dependent advice to make surethat, for example, the solar PV isthe correct size for the buildingand the farmer has been given the correct rate of return.“Quite often a contractor will

factor in electricity generated tobe used on site and we find this canbe overestimated which ups therate of return so be aware of that.”Mr Crowther added farmers

should also ask whether metering,grid connection and structuralsurveys are included in the workas they are all costs which must befactored in.“We would always advise farm-

ers to do their homework and go with the contractor with thebest reputation.”

In good harvestyears wherecrop prices aredepressed, theguaranteedenergy revenuefrom AD can beparticularlyattractive DR DAVID TOMPKINS

Obtain planning permission as soon as possible so energy projects fall within the current tariffs.