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Renewable energy offers good return for farmers despite subsidy cuts

There may be a wave of subsidy cuts set to unravel across the industry, but experts believe the future is bright for the farm-based renewable sector, FG Insight has reported.

The latest Defra figures show more farmers than ever are diversifying to boost their income.

In 2012/13, 58% of businesses in England had some form of diversified activity and renewables formed a percentage of that.

Regen SW chief executive Merlin Hyman said: “In the last quarter of a century, the extraordinary growth of renewable energy has been a ray of hope and 2013 was a ‘crossover year’ when more renewable energy capacity was installed across the globe than fossil fuel capacity.

“The UK has reached 20% of its electricity from renewables. Remarkably, costs have fallen rapidly to the point we can seriously discuss the end of subsidies for some technologies.”

It is a sentiment echoed by experts across the industry.

Vergnet head of sales in Europe and North America Diana Popa said: “Despite the reductions in the FiT, we do not think this will deter continued investment in medium wind. The scheme still provides a very strong internal rate of return as well as support for major energy consumers in the context of increasing energy prices and reducing reliance on fossil fuels.”

Solar and wind have seen the biggest uptake on farms across the country, but biomass boilers and anaerobic digestion are becoming increasingly popular.

Aqua Enviro organics technical manager Dr David Tompkins said the past year had seen a record number of anaerobic digestion plants built in the UK, with numbers dominated by on-farm systems.

He added: “Anaerobic digestion is being integrated into UK farming systems in ever more creative – and climate-smart – ways: ammonia-stripping from high-nitrogen feedstocks such as poultry manure means agronomically valuable nitrogen is retained for fertiliser use, while clean-up of exhaust gases allows CO2 from gas engines to be used in glasshouse crop production.

“In good harvest years where crop prices are depressed, the guaranteed energy revenue from anaerobic digestion can be particularly attractive – and growers are increasingly recognising the benefits of keeping that value within their own businesses.”

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