Renewable energy: short-term fad or long-term future?

Planning issues are still one of the biggest obstacles to investment in renewable energy in the UK. Engagement with local communities is advocated at all stages throughout the planning process.

Confidence in the government’s support for such green energy is dwindling, influenced by factors such as the reduction in FiTs levels and retrospective policy decisions moving the goal-posts. Income returns within the sector are dependent on policy changes as much as the numbers involved.

Supply chain marketability can be improved through the use of ‘greener’ produce, and certain forms of renewable such as AD are now being seen as waste management tool as well as for energy production.

A review of energy usage on farm is recommended in the first instance, and if then investing, the terms and conditions of any contract should be checked by an independent consultant and unexpected add-ons should not be underestimated.

The technology risk is huge, but the sector is still in its infancy and with this comes the doubters and the trade-off is that the longer before investment, the lower the return will be.

The renewable energy discussion held on Thursday 11th October 2012 generated a total of 420 tweets on the topic from its participants. By adding together the number of followers of each person who took part, and bearing in mind that if you follow someone you can then see everything that they tweet or retweet, then this discussion reached 44,000 followers in total.

In addition, bearing in mind that these followers could be following a number of those who took part, these tweets generated 409,000 impressions.

The title of this discussion was “renewable energy: short-term fad or long-term future?” The aims were to establish from stakeholders and others the views of the current state of renewable energy in the UK. A full summary of the discussion can be found here: http://tiny.cc/y5j5lw .

An example of the participation in AgriChatUK from its community is that advance notice of this particular discussion led to a chartered surveyor preparing the following briefing, which served as ideal pre-topic reading: “Renewables basics: the facts” http://blondeagadvisor.wordpress.com/2012/10/09/renewables-basics-the-facts/

Q1a what are the main pros and/or cons to agriculture/farms/rural businesses of using renewable energy compared to fossil fuels?

Pros

  • UK plc needs diverse energy supply
  • A diversified cost controlled energy source tailored to the site and demand
  • Supply chain now looking for “greener” produce so involvement with renewables can improve marketability. e.g. M&S Plan A
  • Return on capital, funding, cheaper tech – esp PV & wind.
  • Provision of electricity at known cost as a risk management tool, particularly dairy or vegetable growing
  • Small scale AD is now being seen as waste management tool as well as energy producer

Cons

  • Nimby’s need nice views
  • Cost and planning.
  • Income reliant on government, sensitive neighbours

Q1b have you thought about installing renewable energy to power your farm-what stopped you/were you successful?

  • Capital cost + bureacracy. Hydro preferred. Wind too much impact on environs and inefficient.
  • In Scotland the EnergySavingTrust did the farm audit for free. Windfarm cost a lot, mid 5 figures
  • Need to review own energy usage first as savings could be significant before expenditure on renewables. Looked at geothermal, solar, hydro and wind. Wind won big.
  • Its not quite as easy as you are led to believe. Seek sound advice. FITs industry infested with double glazing type sales pitch.
  • We have 450kw of hydro on farm at home. I’m in London now, but will go back to farm because renewables has given it a long term future
  • Woodfuel boiler here was £23000 for farmhouse.(3 quotes)  A nonsense even with our own woodland for fuel.

Q2a are planning rules still getting in the way of on farm renewables development?

  • Planning is biggest issue in the Lea Valley. With gas costs at £30k per acre per month renewables are the only viable future. Lea Valley has 100 Glasshouse Growers, 4 CHP, 2 Turbines, 1 AD plant & 1 AD plant under appeal.
  • The SAC told me it’s getting harder to get planning permission for wind turbines in Scotland
  • The key message coming across from consultants is to ensure you engage with the local community throughout the planning process.  In Cornwall where 1 community group had some funding & pushed on without consensus there is now a divided town.  But it’s not possible to keep everyone happy – some are extreme and threateningly anti change. Also engagement with community can get hijacked by noisy nimby minority
  • Design your scheme well up front. Much better than reacting during planning process.
  • UK gvt U-turned on plans to exclude smallscale renewables from support under Renewables Obligation scheme  http://www.fwi.co.uk/Articles/08/10/2012/135623/Government-u-turn-on-renewables-support.htm
  • It has significantly damaged confidence for all EU biofuels & bioenergy. The question is can EU now meet C & RE targets at all?

Q2b what makes renewable energy a viable option for farm diversification alongside other options?

  • Best are those projects that require high power that can be produced by renewables eg-ice cream parlour
  • Good opportunity for add on business if you have own woods. BUT, capital costs prohibitive.
  • Often better to use electricity rather than export – bigger return!

Q3a are people still interested in self investment projects given reduction in government incentives? (FiTs/ROCs)

  • What would happen if the price of oil dropped 30% would people still be investing in renewables?
  • One investor said they’d given up on Europe now, until development of 2nd generation.
  • Return is good from good wind sites but all solar can be only 6-7% when write off equipment over life. Our site average for wind, small scale 6 kw, payback in 8 years (nearly there) then free power + Great return!
  • Is the speed of change damaging confidence more than numbers? Do farmers have confidence that project maths will be same by completion?
  • Lea Valley considering AD/CHP with or without FiTs, no longer seen as a revenue stream for protected horticulture
  • If it dropped 50% it would still be higher than when I started in 2001
  • Surely the FiTs still make wind/solar a good investment over a signifcant long term period?
  • It’s getting harder to make the numbers stack and confidence in FiTs is dwindling
  • Problem is 2nd generation will be impacted as badly as 1st. And investment/development comes from proven technology.

Q3b what more does the government need to do to support, encourage & facilitate farmers moving into renewables? 

Q4a when renting or buying a rural property would u pay more if it had a form of renewable energy installed?

  • I would pay more-ish if it had undeveloped potential.
  • Renting, probably not, buying a big maybe.
  • RICS draft information paper – Valuation of renewable energy installations https://consultations.rics.org/consult.ti/renewable_energy_installations/viewCompoundDoc?docid=1220468
  • Put off according to local estate agents – particularly lifestyle buyers. Frightened of it and looks.
  • Never underestimate impact of feel good factor. If renewables are good investment, it’s a no brainer?
  • Buying yes, almost always mentioned in particulars now. But whether it commands premium dependent on scale etc

Q4b what are attitudes to self-investment in small wasting assets rather than long-term investment (land)?

  • Grants/cheap loans needed for pre-planning. I think you can have both if total funding not more than£200k in 1st 3yrs.
  • Depends what the ROC is on the ‘small wasting asset’ doesn’t it?
  • Leasing solar/wind installations simply allows someone else to cream off the return. Avoid if at all possible!
  • From my research rental is the best option as it removes the huge risk/cost of planning
  • Read the terms and conditions and get an independent consultant to check the plans if unsure
  • But leasing or renting could take away the hassle and no need to commit investment
  • Planning cost itself is manageable. It is the unexpected add-ons that risk breaking the bank. Don’t underestimate

Q5a as renewables are relatively new, what improvements in technology are needed before investing? 

  • The trade-off is that the longer you leave investing, the lower the return will be
  • Let’s not forget agri-waste e.g. fruit+veg not at supermarket spec
  • Translucent solar glass technology is now at 30%. With 1% loss of light = 1% loss of yield, glasshouses need 80% before viable!
  • Technology risk huge, particularly small scale wind. If you  are investing look for UK track record & UK based servicing/Guarantee.
  • Energy Storage – solve that & we’ve cracked it (for everyone, everywhere!).
  • Grid connection can be where you tear your hair out – costs are ridiculous and getting quotes for 2017
  • Is anyone out there using or looking at micro-hydro or DIY stuff? I have heard French farmers with DIY Archimedes style turbines.

Q5b has performance of technology ie turbines matched predictions or has downtime impact higher than expected? 

  • Hydro scheme today operating at 50% of what it should, endless examples of similar issues, mainly wind
  • In 6 years of wind power generation our repair/servicing down time days can be counted on fingers of one hand

Q6a with diff companies out there offering forms of renewables what are top 3 things when choosing a provider? 

  • Track record is the main thing, but as usual if it seems to good to be true, it often is!
  • Reliable, trustworthy and able to show that they will be there in the future when things go wrong
  • If you want advice on deal terms, value etc an agent is needed but for turbine type, location, etc you need tech input. Most now have in house tech teams or work with others with the specialisms.

Q7a do you think AD plants are a feasible way to produce energy with current food shortages? 

  • Systems which can take multiple feedstock sources the way to go. Ethical rather than feasibility issue on energy crops.

Q8a is the UK being left behind due to policy uncertainty & changes meaning we’re not fulfilling our potential?

  • Until these constant policy changes and U-turns are resolved many won’t commit.
  • The UK will fall behind – we always do. Providers are still not clear on home solar/wind, so much potential to tap into
  • Scandinavia etc have been geared up for renewables for years, UK just playing catch up. Economic environment doesn’t help

Q8b what do you see as future of renewables? Will attraction subside in short-term or more people invest in long-term? 

  • There are whole swathes of the country who are not sure when to enter the market
  • If a business case can be made with or without tariffs the agricultural. community will be there in the take up
  • The future has to be renewables. So much is still in its infancy and with this comes the doubters. We must move forward
  • Long-term we’ll become energy self-sufficient. Price of bought-in energy will be driver, early RE adopters are winners
  • AD now also being pushed as small scale units as waste management provision so acreage not so much an issue
  • Renewables are here to stay there is now a foothold to work from, no time like the present

 

Links to more information

Great link for everything that’s happening in the news regarding renewables:

http://www.fwi.co.uk/landing-page/farmenergy/

2012 Farmers Weekly Green Energy Farmer of Year: Steve Edmunds, 90kW of solar PV & 50kW of biomass heat, Renewables demonstration farm

http://www.fwi.co.uk/Articles/04/10/2012/135557/2012-Green-Energy-Farmer-of-the-Year-Steve-Edmunds.htm

Advice through NFU Farm Energy Service: http://www.nfufarmenergyservice.com/

Energy Saving Trust – how can renewable energy work for you?

http://www.energysavingtrust.org.uk/Generating-energy

DECC: Digest of UK Energy Stats: energy production & use over last 5 yrs, key series back to 1970 http://www.decc.gov.uk/en/content/cms/statistics/publications/dukes/dukes.aspx

DEFRA farming statistics – diversification and renewable energy production on farms in England 2010

http://www.defra.gov.uk/statistics/files/defra-stats-foodfarm-landuselivestock-farmstats-diversification-release2010-201201261.pdf

Morrisons Energy in Farming Report 2012: http://www.morrisons.co.uk/Global/0_FarmingPage/Morrisons_Renewables_Lo_Res.pdf

2 types of FiTs: generation & export tariff:

http://www.decc.gov.uk/en/content/cms/meeting_energy/Renewable_ener/feedin_tariff/feedin_tariff.aspx

Further information about ROCs can be found on the Ofgem & DECC website:  http://www.ofgem.gov.uk/Sustainability/Environment/RenewablObl/Pages/RenewablObl.aspx

http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/renew_obs/renew_obs.aspx

Relu – social, environment & economic impacts of increasing rural land use under energy crops

http://www.relu.ac.uk/news/policy%20and%20practice%20notes/Karp/Karp.pdf

Relu – Farm diversification into energy production by anaerobic digestion

http://www.relu.ac.uk/news/policy%20and%20practice%20notes/26%20Banks/PPN26.pdf

Wind speed map here: http://www.bwea.com/noabl/

Is anyone plugged into the Farmers Power Station? http://blog.molevalleyfarmers.com/2012/01/best-energy-generation-prices/

‘The Energy Problem’: http://www.withouthotair.com/

The liquid air battery: http://www.bbc.co.uk/news/science-environment-19785689

The carbon neutral farm? http://www.farmingfutures.org.uk/resources/case-studies/paul-sousek-carbon-neutral-farm

Rural Focus R4F Technical Advice Days: http://www.businessanswers.info/Rural/R4F-Technical-Advice-Days

Woodfuel grant funding available in east of England: http://www.fwi.co.uk/blogs/agribusiness/2012/10/woodfuel-grant-funding-available-in-east-of-england.html

Why is bioenergy from waste an important avenue for renewable energy  http://bioenergy-midlands.posterous.com/why-bioenergy-from-waste-is-the-way-forward

“Increasing amount of poultry farms installing boilers & realising benefits”

http://www.frogmarygreenfarm.co.uk/environment/#boiler

UK government commitment to EU to generate 32% of electricity from renewables by 2020 target

http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/renewable_ener.aspx

http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/re_roadmap/re_roadmap.aspx

On Sept 14, Britain’s 3500 wind turbines broke records by supplying >4 GW of electricity to national grid

http://www.telegraph.co.uk/comment/9559656/Germanys-wind-power-chaos-should-be-a-warning-to-the-UK.html

Alan Spedding, 14 October 2012

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