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Farming and Energy: What Can UK Farms Do?
Energy is a major running cost for farms across the UK. From smarter purchasing and checking non-energy charges to onsite generation, there are practical ways to take greater control of what your farm spends on energy.
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Practical energy advice for UK farms
Energy is a major running cost for many farms across the UK. However, simply cutting energy use isn't always practical. Machinery still needs to run, buildings need power and farming operations cannot stop because energy prices have increased.
That doesn't mean there's nothing you can do about your energy bills.
The first step is understanding exactly what you're paying for, where your money is going and whether there are opportunities to buy, use or generate energy differently.
Following our Energy Consultancy of the Year Award, we look at some of the areas UK farmers should consider when reviewing their energy costs.
Up to 60% of your electricity bill can be non-energy costs
When you receive an electricity bill, it's easy to assume you're simply paying for the electricity you've used.
In reality, non-energy costs, sometimes called non-commodity costs – can make up as much as 60% of the overall bill.
These include the charges involved in getting electricity to your site and maintaining the wider energy system.
For farms with significant electricity consumption, looking beyond the headline unit rate and understanding the whole bill can help identify where savings may be available.
An energy consultancy can review these charges alongside your consumption, contracts and meter data to build a much clearer picture of what your farm is actually paying for.
Make better use of your land and buildings with onsite generation
Farms can be particularly well placed to generate some of their own energy.
Large roof spaces, available land and significant daytime electricity consumption can create opportunities for technologies such as solar and other forms of onsite generation.
But having the space doesn't automatically make an investment worthwhile.
The important question is whether the numbers work for your farm.
Any project should consider how and when you consume energy, the cost of the technology, potential savings, payback periods and how the project will be funded.
Advantage Utilities recommends starting with a desktop energy audit to identify potential opportunities before progressing to an onsite survey where appropriate.
Fully funded options may also be available, potentially allowing businesses to introduce sustainability projects without committing significant capital upfront.
Could your farm buy energy differently?
There are increasingly more ways for businesses to purchase electricity.
One option farmers may be less familiar with is peer-to-peer energy purchasing.
These arrangements can allow electricity generated by one business to be purchased by another.
For the farm buying the electricity, there doesn't need to be any change to its day-to-day operation. Power continues to arrive through the existing electricity network as normal.
What changes is how the electricity is purchased and where it originates.
With the right arrangement, this can provide an alternative and potentially more cost-effective way of purchasing electricity.
Advantage Utilities can help structure and manage these arrangements, rather than leaving farming businesses to coordinate the different parties themselves.
Why use an energy consultancy rather than simply a broker?
This is an important distinction.
An energy broker will typically focus on finding and arranging an energy contract.
An energy consultancy can look much more widely at what you're spending, why you're spending it and what you can realistically do to reduce it.
Take purchasing as an example.
Wholesale energy prices move constantly, meaning the best opportunity to buy is unlikely to conveniently fall in the week your existing contract expires.
Rather than simply approaching the market at renewal, a consultancy can monitor the market in advance and help determine when to buy, how much to secure and which purchasing strategy suits your farming operation.
Purchasing is only one part of the picture.
A consultancy can also review bills and non-energy charges, analyse how and when energy is being consumed and assess whether options such as onsite generation, efficiency measures or alternative purchasing arrangements make financial sense.
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