RHI Government incentives making biomass worthwhile on-farm
25 April 2013 | By David Burrows
Until recently, the idea of using straw as a fuel instead of oil seemed far-fetched. Not least because of the prohibitive cost of a biomass boiler. But the introduction of a new Government subsidy scheme has changed this.
The Government has been targeted to have 12 per cent of all heating coming from renewable sources by the end of the decade.
This is why it was important for the uptake of technologies such as heat pumps, biogas and biomass boilers, to receive a boost similar to the one their renewable cousins wind turbines and solar panels were already enjoying.
In September 2012, the Department for Energy and Climate Change (DECC) finally launched the Renewable Heat Incentive (RHI) and the first to benefit from the scheme are commercial premises, including farms.
John Seed, director at Berwickshire-based Topling Biomass Energy Systems, says: “It has changed the whole nature of the business.
“We have been lagging behind the likes of Germany and Denmark in using biomass for heating, but the RHI should help us jump ahead.”
Ambition to reality
It is this payment which could turn renewable heat technologies such as biomass boilers from green ambition to commercial reality.
For Mr Seed, as a director of a company which sells biomass boilers, the RHI has helped kick-start his business. It will also boost his own farm in Berwickshire on which he installed a biomass boiler two years ago.
In 2011, he dried 3,000 tonnes of cereals, beans and oilseed rape, which would have used more than 60,000 litres of oil costing about £30,000. In addition, heating the poultry shed and houses would have cost a further £8,500.
Using straw in a new 450kW biomass boiler, the process cost him just £2,000. And now the RHI is in place, Mr Seed will not only be saving money but he will be making it too – about 5.1p for every kW of heat he produces.
He has already convinced neighbouring farmers to follow in his footsteps.
Rob Cowe farms 30 minutes away in Oldcastles and grows 566 hectares (1,400 acres) of wheat, winter and spring barley, oilseed rape and beans.
Recently, Mr Cowe decided to update his ‘antiquated’ drying shed and install two 600-tonne grain drying floors with an 850kW biomass boiler and heat exchanger from Topling.
He says: “It was usually at harvest time when I would start haggling over 0.5p per litre on quotes for diesel, but now I do not have to make that call.”
Last year, Mr Cowe burnt 47 tonnes of straw to extract 108 tonnes of water from his 1,350-tonne wheat harvest.
The grain moisture content was 27 per cent. His boiler holds two tonnes of straw at a time and is serving him well, especially in the heat-hungry period when grain is being dried.
As well as fuel savings, there are labour benefits too, Mr Cowe adds.
At first, Mr Cowe was concerned he would spend all his time topping the boiler up. But he found it can easily be loaded in ‘well under 20 minutes’ using a tractor with a front-end loader or a forklift.
Mr Cowe’s system has a flexi-controller and an accumulator tank. The controller optimises efficiency of combustion within the boiler by adjusting air flow according to oxygen requirement. The accumulator tank is built around the flue to increase overall efficiency of heat transfer even further.
In the past 30 years, the efficiency of biomass boilers has improved considerably. In 1980 it was 35-40 per cent, whereas the system Mr Cowe runs can top 80 per cent.
But this kind of equipment does not come cheap, warns Mr Seed. He says: “When farmers spend a lot of money they tend to like something with moving parts. It is a big investment, but a sound one.”
Mr Seed says the return on investment tends to be between three and seven years ‘depending on the level of investment and amount of fossil fuel being replaced’. His own boiler cost £250,000 and the payback will be five years.
Financial support is a critical step as incentive schemes for renewables have been tarred by the fiasco surrounding the Feed-in Tariff (FiT) for solar energy.
In 2011, the Government cut payments for solar schemes before an official consultation closed. This decision had to be revoked following a High Court ruling.
Because the technology was so popular, the Government ran out of funding for the FiTs scheme, leaving the solar industry in a state of panic for months.
RHI tariffs are already under review, but for the opposite reason – lack of uptake. According to the latest figures from DECC, less than one-fifth of the total £133 million RHI budget for 2012/13 is likely to be paid out.
Mr Seed says the tariffs are fine up to 1,000kW, but the level should be increased to 5,000kW. He says: “There are lots of small rural businesses and communities which have gas and oil systems of this size and cannot take up the RHI due to the 1,000kW cut-off.”
For Kelso farmer Tom Clark (see panel below), a biomass boiler would have been a complete ‘non-starter’ if it had not been for the RHI.
Unlike Mr Cowe who opted for the technology as a ‘purely financial decision’, Mr Clark started thinking about it for environmental reasons.
Other circumstances, including a workforce reduction, a ‘frightening’ £14,000 fuel bill in 2011 and the new subsidy, saw him bite the bullet and invest in a 450kW system in August.
Mr Seed says: “It is clear many farms, rural businesses and communities have become over-dependent on fossil fuel derived inputs and have lost their ability to cope with sudden increased input costs.
“Farmers are hemorrhaging money when it comes to fuel costs. So if you can cut those and make your farm more efficient, you are better equipped to deal with the vagaries of the weather and other challenges. The RHI runs for 20 years, so this is a chance to fix your energy costs until 2033.”
Case study: My new biomass boiler by Tom Clark, farmer in Kelso, Scottish Borders
LAST year, one of my men came down with a heart problem and was advised to give up work. This got us thinking about the whole business.
We are tenant farmers and have 202 hectares (500 acres) of cereals, 81ha (200 acres) of grass and 24ha (60 acers) of potatoes.
The potatoes are a very labour and fuel-intensive crop so it seemed to be a sensible part of the business to cut, but we had to replace the income.
We have invested in a 450kW biomass boiler, which we use to heat the nine cottages we rent out and the farmhouse, as well as the grain store.
We have not done a whole year without the potatoes yet, but we are hoping the savings we will make on oil, as well as the revenue we will get from heating the rented cottages, should make up for it.
Dozens of different things played a part in our decision. We have had a few teething problems but we have got it working pretty well. Even though the straw is a lot cheaper than the diesel, we do not want to waste it, so it is just a case of timing the loads right.
Source: Farmers Guardian http://www.farmersguardian.com/home/renewables/government-incentives-making-biomass-worthwhile-on-farm/54802.article