Farm Energy research: The power to cut your energy bills
Almost 60% of British farmers plan to tackle rising energy costs in
the coming year – but only 43% are confident in their ability to do so,
according to a new Farmers Weekly survey.
The survey, conducted in association with energy company E.ON,
showed that 67% of respondents planned to make operations more
efficient in the coming 12 months, with 48% saying rising energy
costs were a key priority. Complying with legislation and managing
commodity prices were other important factors.
Energy prices have been very much in the spotlight over recent months,
and more than half of the farmers polled were concerned about the
government’s energy policy. “Farmers need consistency, transparency
and long-term policy signals,” says Jonathan Scurlock, chief renewable
energy and climate change adviser at the NFU. “At the moment we are
seeing too much political point-scoring, particularly when it comes to
consumers’ bills and renewable energy production.”
Some 69% of farmers said they needed to take a longer-term view of
energy use and costs rather than focussing on monthly bills. Almost half
said they wanted a better grasp of energy use on their farm, and 45%
wanted help identifying options for reducing energy use.
“Only 56% know where they are using energy”
Of the main barriers to managing energy use on their farm, 41% cited
complicated tariff structures; 37% said high costs, and 30% reckoned
it was too time consuming. Worryingly, 29% claimed there was a
lack of data and understanding of energy use, with a similar number
complaining about lack of information on how to reduce energy use.
Andrew Kneeshaw, managing director of the Farm Energy Centre,
admits that comparing one tariff with another can be confusing. “But
regulation and better practice is starting to improve things for small
businesses.” Examples include scrapping restrictive notice periods on
contracts, and reducing back-billing from six years to one.
“Information on comparative energy usage of machinery and equipment
is patchy, but it is getting better,” he adds. “And there is plenty of advice
out there, whether through your energy supplier, the Farm Energy
Centre, national farming organisations or levy boards, which offer
sector-specific help.”
Energy bills
On average, farmers reckoned they spent an estimated £5458 a year on
energy, with holdings over 200ha averaging £7500 and those between
20ha and 99ha spending £3500. But only 56% knew exactly where they
were using their energy, with just a quarter using energy-monitoring
tools.
Fertiliser, fuel and feed were farmers’ greatest areas of expenditure, but
almost a fifth said energy was their highest cost. Lighting, heating and
grain drying accounted for the most energy usage, respectively, although
farmers’ perceptions were perhaps different to reality, as previous
surveys show heating to be the greatest drain.
“Very few people are carrying out energy audits or connecting up
monitoring systems so they can see where they should be focusing their
efforts on saving energy,” says Iain Walker, head of SME at E.ON. “By
far the majority of energy used in agriculture is in heating, refrigeration
and ventilation. Improving heating controls or insulation will have a
significant effect on bills, but often comes near the bottom of people’s
‘to do’ lists.”
In a bid to reduce costs, 70% of respondents had changed their light
bulbs to energy-efficient versions, and the same number were taking care
to switch off lights when not in use. Half were turning off machinery,
while 29% had bought more energy efficient equipment.
“It is concerning is that the vast majority of efficiency measures are
focused around ligh ting, which only accounts for 6% of energy use on a
typical farm,” adds Mr Walker. “There seems to be a disconnect between
where energy is actually consumed on a farm and what people are doing
to reduce it. It is only by getting a grip on exactly where you use energy
that you can put a plan in place to start making serious reductions where
it matters most.”
Taking action
Over the past year, two-thirds of farmers said they had acted to reduce
energy costs, with 61% having changed their tariff or supplier. A
surprisingly high number - 38% - had invested in renewable energy, with
30% changing the timing of operations. Almost two-thirds reckoned their
energy management had become more efficient over the past five years,
but 30% said it hadn’t changed and a worrying 9% said they didn’t know.
In the coming year, 94% of farmers hope to reduce their costs of
production, with 55% expecting to do so by adopting new farm
management practices. A similar number plan to monitor and manage
farm energy bills, while almost half anticipate negotiating more
favourable contracts with suppliers. Some 42% want to invest in more
efficient machinery and equipment, and 15% plan to change staff
behaviours in a bid to reduce costs.
“Generating energy is interesting; saving it isn’t”
Over the same period, 59% plan to implement energy specific actions,
with more than a fifth hoping to invest in renewable energy technology.
Another 16% plan to change tariff or supplier, with 14% expecting to
improve the efficiency of electrical, heating and ventilation systems.
However, only a tenth anticipate carrying out an energy audit, 6% will
install smart energy meters, and just 3% expect to invest in automatic
monitoring and targeting systems.
According to Mr Scurlock, carrying out an energy audit and using smart
meters is an important first step in tackling energy bills. “You need to go
through all your areas of energy use, and examine your equipment – in
some cases simply cleaning fans can really help performance,” he says.
“Renewable energy generation may be attractive, but actually it’s the
really dull stuff, like insulation and variable speed motors, that can give
you a much better payback.”
Farmers are quite split in their view of renewable energy generation
on farms, with 60% saying it is a good investment, a quarter being
indifferent, and 16% claiming it would be a distraction from their core
business.
On average, respondents planned to spend £10,260 on reducing energy
costs over the coming year, with 9% expecting to spend £50,000 or
more; 15% between £5,000 and £50,000 and 14% between £1000 and
£5000.
“We are seeing three levels of engagement on energy issues,” says Mr
Kneeshaw. The first is the employment of simple and low-cost money
saving measures, like turning off lights and running heating or cooling
equipment during off-peak tariff periods, which quickly produce big
savings. The second is replacing old equipment with more efficient
alternatives, which can also have a dramatic impact.
The third is generating your own energy, which can still provide an
excellent return, albeit over a slightly longer period of time due to the
high capital investment. “Generating energy is interesting; saving it
isn’t,” he adds. “Often, farmers seem happier to spend £50,000 on a wind
turbine with a 10-year return on investment than spending £1000 on
energy efficient options with a three-year payback.”
Energy supplies
When buying energy, 90% of respondents said they opt for the lowest
cost supplier, with quality of service of key importance to just 36%.
Only 22% demand an understanding of the farming industry; and when
seeking information on how to reduce energy costs, most turn to buying
groups, farming unions, energy advisers and industry publications.
Significantly, 28% of respondents had never changed their energy
supplier; almost half of whom said that was because they weren’t sure
it would be worth it. A quarter of those who hadn’t changed said the
process seemed too complicated, with 14% saying it was too time
consuming.
“If you have a substantial energy bill it is always worthwhile taking
professional advice and considering alternative tariff options,” says
Mr Scurlock. “But it is equally important to have a business plan for
improving energy efficiency – any plan is better than none.”
Farming Express. Page 3