A real opportunity for farmers - green energy

Climate change and global warming may have taken a back seat in the media with the Credit Crunch taking centre stage. However, there are still opportunities for farming and land based businesses to reduce carbon footprints and create an alternative income stream from Green Energy, writes Andrew Atkinson, of Strutt & Parker's Farming Research Group.

The government both in the UK and EU have set out targets of 10% of electricity from renewable sources by 2010 increasing to by 20% by 2020, alongside the long term aim of reducing carbon emissions by 60% by 2050.

Farmers can get involved in meeting these targets through large scale and micro generation of electricity. They can also take advantage of alternative income streams through rents, sale of green electricity and Renewable Obligation Certificates (ROCs).

Micro generation could be done on farms via wind turbines; hydro-electric and small scale Bio Gas from Anaerobic Digestion. The income for farmers will be a combination of reduced costs of electricity purchased, a heat supply, sale of surplus electricity produced and sale of ROCs. Currently Anaerobic Digestion receives 2 ROCs for every Mega Watt produced compared to 1 ROC for energy produced by wind and hydro-electric.

Although the current energy prices have come down from the peaks of last year, securing your own supply for some or all of your requirement will mean one less headache if and when oil and energy prices rise again.

Heat production from ground source heat pumps, heat recovery and bio mass (wood chip) boilers are also being seen as a way of reducing carbon footprint and reliance on fossil fuels. These technologies do not currently receive ROCs, the benefits from this renewable source would come from cost saving and potential carbon reduction.

Most of these technologies have large set up costs and planning hurdles, but with prospective payback periods for some renewable projects at around 4 or 5 years on a project with a 20+ year productive life span and the availability of a number of grants, it could be a sound commercial proposition for some farmers and landowners. For smaller scale developments, for example, Rural Development Programme funding is likely to be available through Business Link North East from June 2009 onwards.