In an environment where making farming and growing profitable is becoming increasingly hard, any way to cut input costs is worth investigating.
In farming and horticultural businesses, although energy costs may only be a small percentage of turnover, reducing them can increase competitiveness and ultimately farm profits, as well as lowering your carbon footprint.
Managing energy on-farm
Did you know?
- A 20% cut in energy costs can represent the same bottom line benefit as a 5% increase in sales
- On most farms, savings of 10-20% of energy costs can often be made with minimal capital outlay
- Heating, field operations, ventilation, lighting, air circulation and refrigeration equipment are the biggest energy users in agriculture, where efficiency improvements can provide the most significant savings
- Dairy farms account for the highest overall energy cost per farm type, with energy costs representing 2% of all costs (2010, CALU)
- The UK is the worst energy waster in Europe
How can being energy efficient help my business?
- Energy costs may only be a small percentage of turnover, but reducing them can increase profits and competitiveness
- It can help reduce your carbon footprint
- It can help demonstrate the business’s green credentials, a requirement now from many product buyers
The importance of monitoring energy usage
In order to look at reducing energy use on-farm, it is important to first know how much you are using. Energy efficiency can be an important step in reducing costs on-farm, and can be achieved relatively simply in many situations. A recent report looking at resource management practices on farms in the south west found that 68% of farms surveyed were monitoring energy efficiency, and 31% were not monitoring energy usage. The graph below shows the breakdown per farm type.
Why be energy efficient?
Energy prices are rising and will continue to rise, and becoming energy efficient will ensure that farm businesses are in a better position to remain resilient to fluctuating commodity prices.
Appraising and improving farm energy use requires far less investment than renewable energy and can generate significant cost savings. It makes good economic sense to use less energy to achieve the same outcome.
As well as the economic reasons, improved energy efficiency is better for the environment, as using less energy reduces the emissions of greenhouse gases into the atmosphere, an issue of vital importance to all of us.
A 20% cut in energy costs can represent the same bottom line benefit as a 5% increase in sales (source: Farming Futures). This can also be fairly easy to achieve. A 10-20% saving in energy costs can be made relatively easily on most farms, often with minimal capital outlay.
In the horticulture sector, in addition to increasing profits, preserving fossil fuels supply and minimising global warming, establishing energy efficient schemes can improve crop quality and ensure compliance with crop assurance schemes. As it is now a common prerequisite to demonstrate green credentials to buyers, being energy efficient also enhances a business. It is important to prioritise the conditions that will maximise crop yields and ensure savings measures don’t conflict with environmental control systems used to maintain crop conditions.
What uses the most energy?
Energy consumed by refrigeration (particularly in the dairy sector) costs approximately £300 million per annum and discharges over 3 million tonnes of C02into the atmosphere each year (The Carbon Trust 2006).
Through implementation of some low or zero cost measures, savings of over 10% can be made.
Lighting accounts for 20% of energy use in agriculture, whereas heating can offer some of the greatest scope for savings and can easily be cut by 20% or more.
Maximising fuel efficiency may also generate large savings especially on farms with large arable enterprises where fuel is one of the main sources of energy use.
In horticulture, heating typically accounts for 90% of energy used in a greenhouse. It is possible to reduce costs by 30% by implementation of some simple energy saving measures such as installing thermal screens. (The Carbon Trust,2006).
What are farmers doing?
There are a range of energy efficiency practices detailed above that will all help allow more proactive energy monitoring on farm. A recent report into resource management practices in the south west has looked at what energy efficient practices farmers are doing to help lower costs and monitor usage.
Energy Units explained
- The standard SI unit of energy is the Joule (J)
- The standard SI unit of power is the Watt (W)
- Power is the rate of using energy – an appliance rated at 1 Watt will use 1 Joule of energy every second (1W =1 J/s)
- A kilowatt (kW) is 1000 Watts
- A Joule is quite small so a kilowatt hour (kWh) is another unit of energy
- 1kWh is the amount of energy that an appliance rated at 1000W will consume in 1 hour.
- If your electric immersion heater has a rated power of 3kW and it is run continuously for 1 hour it will consume 3kWh of energy.
- A BTU is a British Thermal Unit. The amount of energy to raise one pound of water by 1 degree Fahrenheit at about 39 degrees Fahrenheit.
- A BTU is quite a small unit, 1 BTU is about 1055 Joules (J) so there is also the therm (th) which is 100,000 BTU.
Energy Use in Different Farming Systems
The graph below shows the estimates of energy use in different sectors of agriculture.
Source Warwick HRI (2005)
It has been estimated by Defra (2007) that the potential energy efficiency savings that are feasible by 2015 in UK agriculture are around 3,000 GWh (15% of current consumption) and this would reduce carbon emissions by around 175,000 tonnes per annum.
Where should I start?
Good record keeping of energy usage
This is essential to any business. To monitor energy usage you need to be able to measure it. This may be through utilising existing energy bills, or by investing in meters for areas of high energy usage. This will allow you to see what you are using, identify where to make savings and then see if these are being realised as well as detecting any problems or issues with your equipment. Comparing your own farm’s performance year on year using quarterly energy bills should give you options and highlight areas for potential improvement.
A recent report looking at resource management on farms revealed that in general, having an energy efficient management plan seems to lead to increased levels of energy efficient practices amongst farmers.
The graph below shows the number of farms that have an energy management plan in place broken down by farm type.
Maintenance of equipment
Regular checking of automatic controls such as thermostats can be particularly important. If the temperature setting is out by just 1⁰C it can mean an increase of energy consumption of 15% (ADAS, 2010). Regular cleaning of filters and sensors on equipment and servicing machines regularly will help achieve optimal performance and improve energy efficiency. Energy consumption of ventilation equipment can increase by up to 60% if regular maintenance is not undertaken.
This is good to consider for any un-insulated farm buildings. Existing insulation should be maintained and replaced if it becomes wet or damaged. Insulation on pipe work, boilers and hot water tanks is also important and should be replaced where it is damaged or missing.
Cut current fossil fuel costs
It is worth looking at fuel type, supplier and delivery options for fuel. Investment in larger storage facilities may allow for cost savings in bulk deliveries when fuel is delivered in batches, as would bulk buying with a neighbour.
Electricity and gas tariff selection
There are a large number of electricity and gas tariffs and supply arrangements. You need to look at two factors, your supplier – are you getting the best in terms of price and service; and your tariff – are you on the most appropriate tariff for your type of business?
It may be possible to achieve savings of 35% or more through tariff analysis and selection for electricity and up to 15% for gas (CALU, 2010). There are numerous websites that can help you make the decision to switch and compare options (for example www.uswitch.com and www.energyhelpline.com ).
Other areas to look at on your farm
- Lighting – it accounts for 20% of energy use in UK agriculture
- Heating – it offers some of the greatest scope for savings and can be cut by 20% or more easily
- Farm Vehicles -save money by maximising fuel efficiency
- Farm Office – minimise energy use in the office, don’t leave computers and other equipment on standby and turn off lights and heaters.
- Refrigeration – energy consumed by refrigeration costs the UK industry about £300 million per year (2010) and is mainly from the food sector.
Rising energy costs hit farmers and growers especially hard and significantly add to operating costs. Controlling these costs necessitates being aware of energy and learning how to use it more effectively without compromising productivity.