Energy roundup in the farming industry

With all the uncertainty this year around what Brexit means for the UK, the future of farming is continually under discussion. More than ever, farmers need to look at their succession planning, technological advances and diversification projects if they want to stay ahead of the game.

But before we leave everything to the younger generation, which – let’s be honest may be more willing to adapt to the changing environment – it’s important to look at just what developments are currently happening in the sector.

The Agriculture Bill

The Queen’s speech on 14 October highlighted how the government would implement new regimes for fisheries, agriculture and trade, seizing the opportunities that arise from leaving the European Union.

The new Agriculture Bill will fundamentally change direct payments to farming, which will only be made on the basis of the provision of public goods which are aimed at protecting and enhancing the environmental impact of food production. The Bill has a strong focus on sustainability, with emphasis on soil health, biodiversity, flood protection, plant and animal welfare, cultural heritage and public access to the countryside.

Energy Performance Certificates (EPCs)

Last year the law surrounding Energy Performance Certificates (EPCs) changed. Now, landlords can no longer let out properties that fall below the minimum energy efficiency rating ‘E’ on their EPC. EPCs rate properties on a scale from ‘A’ (most efficient) to ‘G’ (least efficient), and a certificate usually remains valid for 10 years.

The EPC does recommend that cost-effective improvements can be made to improve a property’s energy efficiency, but ultimately properties with an ‘F’ or ‘G’ rating may no longer be legally marketable. Failure to comply with the Standards will lead to civil penalties, including financial penalties which can extend to 20% of the value of the rateable property up to a maximum of £150,000.

Growth of renewable energy

There has been consistent growth in the use and production of renewable energies on farms in recent years, with an increase in the range of technologies used in diversification from agriculture to renewables. The NFU states that expanding into renewable energy offers stable and predictable returns and makes the agriculture sector more resilient.

Renewables offer an opportunity to improve efficiency, cut costs and increase profits. Due to the changes to government policy already mentioned, landowners should ensure they are aware of the financial support available to them for wind and solar farms. Anyone looking to introduce renewable energy onto their land should also be aware of the current planning policies in place, as well as any restrictions on the use of their land within the title deed or existing tenancies and obtain planning consents. In particular, tenant farmers need to carefully consider any expansion into renewable energy and ensure any security under their tenancy is not compromised as a result of such diversification.

Biomass

With the recent announcement that the NFU is supporting a campaign to boost the UK biomass industry – which follows on from the launch of the NFU’s own blueprint vision to cut carbon emissions to net zero within agriculture by 2040 ­­– renewable energy and particularly biomass is becoming an important part of the farming sector. Biomass is generated from burning wood, plants and other organic matter, such as manure or household waste. When burned, it releases CO2 but considerably less than fossil fuels. Biomass is a proven solution to decarbonising heat in rural areas which can also create sustainable rural economy, employment opportunities and business growth in agriculture.

As the UK moves away from fossil fuel, it’s important to stay ahead in your knowledge of the most prevalent energy sources replacing coal. According to the Department for Business, Energy and Industrial Strategy, during the UK’s longest spell of electricity generated without coal, biomass only contributed around 4% while other green options like wind and solar accounted for 11-12%.

It’s likely that diversification into renewable energy in farming will only increase. Diversification in itself is not a new concept, but the regulations and policies governing renewable energy have changed over time so it’s important to consider this changing legal framework.

This article was first published in the November 2019 edition of South East Farmer.

This content is correct at time of publication