Minimizing Risk, Maximising Opportunities
As a farmer, you need to make the best use of the resources you have available, whilst insulating your business from sudden market shocks. These are the reasons why many farmers have invested in renewable energy already, for example, using windfall wood in a biomass boiler to displace oil for heating.
But what of the future? As we come out of recession, oil and electricity prices are set to rise. As energy prices rise, so too, will fertiliser prices (since the main raw ingredient for nitrogen fertiliser is natural gas). There will be short term volatility in the energy market exposing the whole farming community to real commercial risks.
As members of both the NFU and the CLA, we are supportive of the good work they are doing in making the farming community aware of the risks and opportunities, as well as the lobbying work they are engaged in to create the right investment framework. Susenco can add the commercial advice to deliver successful and profitable results.
Process energy use might be year-round (eg for sterilising dairy equipment) or highly seasonal (eg for crop drying). There are usually significant savings from energy efficiency. In terms of fuels, farms are often off the gas network, so are reliant on propane, oil, or electricity. At the same time, farms have other, often under-utilised resources such as wood, water, wind, and wastes that could be digested.
Opportunities abound. But with constraints on capital, what are the priorities? What are the best contractual structures? How far do you need to go to make sure the farm is insulated from rising energy prices, or even carbon prices in future? Which provider of solutions has the best proposition.
At Susenco, we are not tied to any one technology, product or provider. Our impartial audit looks at the energy risks and costs associated with each farm. Any proposed strategy is devised to be implemented in stages, starting with the quick wins, and including a longer term monitoring programme to guide future decisions.
Some operations (like wind, biomass, or anaerobic digestion) can be sized either to meet individual farms requirements, or the combined requirements of several farms and held on a co-operative basis, which could result in the export of significant energy.
Flexible Finance and Investment Solutions
There are a variety of ownership models for investment, starting with the simple arrangement of you investing and owning plant. For larger projects we may take the risk and hassle, and own and run plant whilst paying you a lease for the land. The risk and benefits could also be shared in a Joint Venture.
We would be glad to talk to you about your individual circumstances. Call us today. Click here for our contact details.
NFU President Peter Kendall. The Directive introduces mandatory targets requiring the EU to meet 20 per cent of energy use and ten per cent of transport energy from renewable sources by 2020.