By Jamie Storry

Dulas Ltd

THE UK has some of the highest animal welfare standards in the world and, governed by EU law, these high standards have been elevated and preserved by cross-sector support and government subsidies to offset the higher cost of production.

The House of Lords recently published a report that raised the issue of Brexit uncertainty and echoed the concerns about the future of subsidy support that we’ve been hearing from farmers and business owners alike. At the core of these concerns is that, in a post-Brexit landscape, the reduction or removal of subsidies will force farmers to consider severe cost-cutting methods, or look to secure new sources of income.

In July, Dulas exhibited at the Game and Wildlife Conservation Trust's Game Fair at Scone Palace. While we were there, we had many conversations with rural business owners and noticed a significant change in awareness of the possible financial benefits from on-site renewable energy generation.

It is no coincidence that this volume of interest comes at a time of increased political and economic uncertainty. Rural business owners around the country are looking at ways to future-proof their business against the possible outcomes of Brexit – and the ability of clean energy technologies to contribute to these efforts.

During our conversations at Scone, the technologies we spoke about were as varied as the businesses that are keen to utilise them; from solar and battery storage on an east coast arable farm for cold store and drying equipment, to a small hydro facility at a Highland activity centre for powering log cabins.

We learnt that more and more rural business owners are seeing the long-term rewards of being more energy self-sufficient and are wanting to learn how they can install these schemes to reduce running costs and secure their energy supply.

Although the dismantling of renewable energy subsidies in recent years has seen development of large-scale renewable energy schemes wane, utilising small-scale renewable energy systems can still be used to offset incoming energy costs.

Therefore, for a farmer concerned about sustaining margins after Brexit, renewable energy offers many options to off-set lost subsidies without compromising on quality standards.

Thinking carefully about how energy is used, and sizing a scheme to suit individual needs, is imperative for successfully incorporating renewables into a business. Any farmer or land owner looking towards renewable energy needs to know the different options available, and should seek expert advice to help them select the scheme and technology type that best suits their resources and site conditions.

Power Purchase Agreements (PPAs) with local renewable energy assets, for example, are a valuable option as a scheme for both parties, and create an additional revenue stream for a rural business. Even setting the financial benefits of PPAs aside, many businesses are under pressure to reduce their carbon footprint and disclose their green credentials, but may not have the land assets to generate their own renewable power.

For example, installing a ground-mount solar development of 500 kW would deliver a return on investment of less than 2% if the entire generation was exported to the grid. If, however, 80% of the power generated was used locally under a PPA, that return would rise to over 10%.

Choosing the right technology is also fundamental to generating the best rate of return. The nature of renewable energy is incredibly site-specific, and this is all the more true when working with small scale, on-site schemes.

Too often, we have seen the financial and personal implications of choosing a technology that isn’t right for the site because someone has become fixated on using one particular type of technology. For instance, a farmer’s land might be in a shaded glen with limited access to suitable feedstock, meaning wind, solar and biogas are unlikely to supply enough resource to generate enough power. On the other hand, a burn running through privately owned land could be capable of powering a 30 kW hydro scheme. This 30 kW scheme might not be viable as a stand-alone project exporting directly to the grid, but could generate cost savings of over £9000, with a feed-in tariff contributing almost £8000.

Considering that this year’s ScotGov Farm Business Survey estimated the average Farm Business Income to be £12,600, the opportunity to bring over £17,000 into the business represents an excellent return on investment.

Once a scheme is in place, there are multiple ways to optimise the efficiency and improve the return on investment. We always recommend having a synergised approach to production and consumption as one way to maximise efficiency. While this might mean adjusting schedules to allow the flexibility to carry out energy-intensive operations when energy production is at peak levels, it will also create further cost savings.

Combining technologies is another way to ensure the most efficient approach. Roof-mounted solar, for example, has always been a popular choice for dairy farmers, but typical farming practices mean there is often a misalignment between peak energy consumption and peak energy production. Milking before sunrise, for instance, isn’t an energy efficient use of solar technology. However, combining solar PV with a battery storage system ensures that the energy generated can be drawn down on demand, enabling solar schemes to realise their full potential.

Regardless of our politics, Brexit will have deep and meaningful implications for business owners nationwide, and the extent of the changes we face may not be known for some time. It is therefore crucial that business owners are proactive in seeking out new opportunities and ensuring that the resources available to them are fully utilised. The Scottish agricultural sector has long been characterised by its resilience, and harnessing the natural resources available to it will ensure it is powered securely well into the future.

While it is imperative that the Government gives its full support to the agricultural sector both now and into the future, individual farms, businesses and landholders can do their part to pro-actively increase cost savings and efficiencies – helping to maintain the levels of quality assurance that Scotland is rightly so proud of.