NE Business featured an article about why using wood as a fuel can help farm businesses to prosper. Written following an interview with Ben Tansey of re:heat, the article gives an introduction to how a farm can make money by off-setting expensive oil and LPG bills through selling wood grown from within the farm, and by looking at selling heat from woodfuel to tenants.
SINCE the introduction of the Government-backed Renewable Heat Incentive (RHI) in 2011, there has never been a better time for farmers to get involved in the wood fuel sector, according to one company.
Alnwick-based Re:heat says this renewable energy source offers green credentials, reduced fuel costs and the opportunity to create additional income.
However, to avoid unnecessary and costly mistakes, farmers need to decide at the outset which part of the value chain they want to capture, according to Re-heat’s founder Ben Tansey.
“The RHI has most definitely meant that the smart money is moving into renewable heat,” he said. “And of the different technologies available, wood-fired boilers are leading the charge, accounting for nearly 90% of the registered RHI installations in England to date.
“Modern, highly automated wood- fired boilers are well suited as a heat source for the majority of on-farm applications. By releasing the stored solar energy locked into trees when growing, they provide high-grade heat when and where it is needed.
“So with farmers able to choose from a boiler to simply heat the main farmhouse up to those which can heat multiple buildings, some careful thought needs to be given to which particular part of the value chain an individual farm can capture and capitalise on.”
There are three main opportunities for farms – to offset their own energy costs, to act as a supplier and grower of raw materials for the industry or to act as a supplier of heat for homes and businesses on the farm.
A number of properties fed from a single wood-fired boiler are currently eligible for the non-domestic RHI, so it’s ideal for farms with a cluster of heated buildings, such as offices, rental or self-catering properties.
A typical 100kw boiler (which would heat four to five individual farm cottages) could generate an annual return of £11,000 per year, index linked, for the next 20 years. There will also be a significant reduction in fuel costs; wood pellets are about two-thirds of the cost of oil. Wood chip systems and log boilers can be even more cost-effective.
Tansey added: “We have been working with several businesses in the North East on this type of project and a recent project saw us working in partnership with the Centre for Green Energy to install a wood fuel boiler for farmer Peter Carr-Seaman at South Aydon Farm in Corbridge.
“After advising on the models and funding available we decided to install a 70kw boiler powered entirely by wood pellets which provides heat for the farmhouse and the additional buildings.
“As a result of looking into alternative heating as part of its energy mix, the farm received not only an efficient system to reduce fuel costs, but also a new income stream as it now qualifies for the Renewable Heat Incentive.”
There is also the potential for farmers to think how renewable energy can add to their business by providing diversification opportunities.
In order for this industry to have a future, it will be vital to have a local, sustainable woodland and forest resource. Growing, seasoning, processing and supplying wood are all essential components of the wood fuel sector.