6.0 Renewables and Cheshire’s Agricultural Sector

In a fast changing and expanding energy market, renewables offer new opportunities for agriculture, providing rural jobs, farm diversification and sustainable development. The agricultural sector needs to be a major partner and implementer of renewables in order to provide an adequate range and source of supply for Cheshire. On a local level energy crops and biofuels can provide a constant supply of fuel, unlike other sources which may be intermittent such as wind and solar. There are a number of government grants and other incentives available which obviously impinge on the cost and other benefits in determining which of the renewable options are viable and appropriate. Development of renewables in Cheshire, as with other regions, will also be dependant on effective partnerships and assistance for rural areas with the provision of advice and practical information disseminated to the agricultural sector. These actions will overcome identified and perceived barriers for the development of renewables, i.e. lack of infrastructure, links to markets, public perception, lack of awareness etc..

6.1 Government policy drivers

Climate change (Kyoto obligations), renewable energy 10% by 2010, sustainable development, farm diversification, rural jobs . This sector has global support – 1987 World Commission on environment, 1997 Euro Commission white paper, 1998 Kyoto, changle protocol, EU’s green paper ‘Towards a European Strategy for the Security of Energy’

Current Capital Grants for Developing Renewable Energy (Jan 2003)

6.2 Options for Agriculture:

Energy Crops Development
To meet targets, 125,000Ha of energy crops will be required by 2010.
Selected energy crops are willow/poplar and miscanthus supported by the Energy Crop Scheme ESC
Other criteria:

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Biofuels
Biofuels can be solid(for combined heat and power CHP), and liquid for biodiesel and bioethanol.

Liquid biofuels can be derived from existing crops such as oilseed rape, wheat and short rotation coppice.

Solid biofuels include short rotation coppice miscanthus and the use of agricultural and forestry wastes, which can be burned, gasified or pyrolysed for energy production.

Slurry
Although they class as solid fuels this category does include wastes such as slurry. There could be potential for biogas in Cheshire with its large diary sector, whereby slurry is chemically digested to produce methane to be used to fuel a gas engine for electricity and heat. There is further potential for methane production by adding crops to the fermentation process

Forest Wastes
Within the UK contracts are allocated under the NFFO (non fossil fuel obligation) to produce electricity from forest residues. The use of forestry residues in other European countries to produce wood pellets for use in boilers to heat individual homes has expanded in recent years and in the UK there are several companies producing boilers for wood pellets. The use of waste wood mitigates the longer lead times required for short crop rotation and provides a market for a waste product.

Given that there are already existing power stations operating within this area and technical problems are being resolved there is potential for these biofuels to fulfil some of the UK target electricity demand.

Willow/poplar
In the case of willow an engine or turbine converts 25 – 30% of the energy into electricity and the remainder to heat. This heat can be utilised in a combined heat and power, CHP system, increasing the overall energy efficiency to 85% or above. The first crop from willow would be in 3 or 4 years, standard gross margins are difficult to predict so economists calculate a value known as the Equivalent Annual Value to compare with other crops. The EAV for short rotation coppice is £203 - £287/Ha (SAC, 2002 and Mortimer et al 2002). These calculations take into account establishment grants and existing subsidies.

Miscanthus
Is a genus of perannial C4 grasses, which forms natural grasslands in Asia. It was introduced into Europe in 1935. Interest in miscanthus as a potential biomass crop for electricity generation began in the 1990’s. It is a high yielding, low input crop that is suitable for production across large areas of the UK. It grows on an annual cycle, the stems emerge from an underground rhizome complex in March/April, (reaching its maximum height of 3 metres end of August), by early spring the cane is ready for harvest, using a forage harvester. With the onset of cooler temperatures the stems die back in Autumn.

Energy Production
• 1 MW of power needs 6000 – 8000 tonnes
• 1 MW supplies 2500 homes
• Miscanthus yields 15t per Ha
• So one Ha can supply up to 3 houses with electricity for lighting and small power all year

Interests from farmers for miscanthus:

6.3 A commercial enterprise – Biomass Industrial Crops Limited – BICAL
Dr Mike Carver Chairman - ‘There are many novel crops and ideas in agriculture but the difference is that this one is working!’
BICAL was established in 1998 by a farmer group in Somerset to promote, develop and produce miscanthus as a viable UK crop, to at least compete with current crops. It is now one of the largest producers and growers of miscanthus in Europe. Crops are grown with long term contracts of 15 years ( the life of the crop), with typical margins of £700/Ha net. The specialist planting and harvest machinery have been developed in conjunction with Cranfield University and Dti’. A further aim of BICAL is to provide security and add value to end products either on farm or within a cooperative. Miscanthus has many end uses, BICAL has focussed on a number of them to develop markets for the crop in the future.

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Current Market Situation

Type	Current Area (2002)	Predicted Area (2004)
Rhizome multiplication	> 300 Ha	> 750 Ha
Energy Cropping	<100 Ha	> 5000 Ha
Alternative end uses	< 100 Ha	> 1000 Ha

End Uses for Miscanthus and prices/tonne

Alternative Uses	£/tonne
Power Generation	20 - 40
Equine Bedding (on Farm)	45 – 70
Equine bedding (Bagged)	160 - 200
Organic straw	70
*Biodegradable composites	60
*Industrial fibres and composites	70

All prices taken from contracts offered to BICAL
* other end uses: MDF boarding, paper pulping, ground mulch, chicken bedding, roof thatching, mushroom compost, composite plastic filler, bio-ethanol feedstock.

For power generation the price is low as there is currently a surplus of straw in the UK which is a waste product. However problems with security of supply, storage and price variation will increase the demand for miscanthus.

6.4 Cheshire Market for biomass production

In order to introduce biomass production in Cheshire, there needs to be an adequate local demand for fuel supply. Currently, there are a number of proposals for biomass plants in Cheshire, and there is more interest and consideration being made to this form of energy from a number of different organisations. There are currently no large producers of biomass in Cheshire, however there are opportunities to supply wood from existing woodland management and other waste wood productions. In order to achieve a successful supply it would be appropriate for a wood chain or cooperative of suppliers to be identified. A proposal for a biomass plant at the lion saltworks has secured funding from the rural recovery programme to identify existing local wood supplies. There is also DEFRA funding (50%), available to set up such a supply and to invest in the infrastructure that would be required. A further option is for large landowners or farmers to utilise the crops for their own heating and electricity requirements.

Lion Salt Works – Biomass Energy Supply
Lead Officer: Andrew Fielding, Salt Museum

Aim:

The project is to identify and establish a supply chain for a wood fuel plant at the Lion Salt Works in Northwich.

The Lion Salt Works is the only remaining traditionally-run saltworks from a Cheshire legacy which was at the centre of the British salt-making industry for nearly 2000 years. It is proposed to restore and develop the site, both as a working industrial museum and as an eco-centre, which demonstrates practical sustainability principles through the employment of a bio-fuel combustion system. The project will assist with the uptake and promotion of bio-fuel technology in mainstream industry by demonstrating the viability of bio-fuel as an economic alternative. By establishing a supply chain model which identifies and connects timber providers with potential customers the project will help to generate a local market network for the bio-fuel industry in Cheshire.

Partnership Organisations:

Energy Projects Plus
CREI
Mersey Forest
Forestry Commission
Centre for Alternative Technology, Powys
Vale Royal District Council
Cheshire County Council

Delivery:

Identify specific combustion equipment for the Saltworks Bio-fuel heating plant in Northwich based on existing design recommendations and matching selected plant to the availability of bio-fuel outlined below. Investigate local and national opportunities for obtaining green and dried timber for the Saltworks fuelwood heating plant and other proposed bio-fuel schemes in Cheshire including sources from woodland management, short rotation coppice, and sawmill waste. Research and analyse successful supply chain models for biomass collection and distribution in the UK and abroad and based on the findings, establish a local market design model with specific reference to the Lion Salt Works in Northwich. Disseminate information to industries and new businesses considering investing in bio-fuel technologies or in becoming bio-fuel providers and suppliers.

Benefits:

Local Industry will be provided with advice and information for potential investors in bio-fuel technologies. Information can be provided to potential wood-fuel suppliers and providers. Opportunities will be stimulated for new business establishment or diversification of an existing business as a conduit between bio- fuel suppliers and customers.

Opportunities will be created for local landowners and farmers for agro-diversity through the production of biomass as an alternative land use.

Forestry contractors, Landscape contractors and arboriculturists will experience employment opportunities by benefiting from the creation of a market for timber as a bio-fuels source.

Local people will see the successful restoration of the Lion Salt Works which will improve the image of Marston village. New employment opportunities will arise at the Lion Salt Works for a range of skills; including salt making, interpretation, plant maintenance, cleaners, front of house services as well as opportunities for employment in an integrated shop and café within the associated Visitor Centre.

Economic, Environmental and Social Factors

The economic, environmental and social impacts of the project include :

Economic :

Environmental :

Social :

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6.5 Agricultural Cooperatives

South West Fuels Ltd
An agricultural cooperative has been set up in the South West of England, it consists of woodland owners, farmers and owners of companies producing biomass residue (eg sawmill owners, tree surgeons, and forestry contractors). It has the ability to supply wood chip locally to heating sites from a number of independent sources.

Exmoor Wood Fuel Project
Also set up a cooperative with a machinery ring and bought a wood chipper. Included in the project was training for heating engineers and foresters. It has facilitated the installation of 5 automatic wood chip boilers with a total capacity of 400kW

Conclusions from the two projects are:

6.6 Biomass Case Study

H J Berry Furniture makers, based at Chipping in Lancashire.
The dust from the sawmill and waste wood from the furniture manufacturing is used to stoke the Talbott boiler plant (in the picture). The heat produced is used for timber drying and the main office complex. The success of the original system has prompted the organisation into reviewing the plant and installing a new updated system.

Carlshead Business Project.

An award winning office conversion in the north east is promoted as best practice implementation. A 100kW biofuel boiler using around 120t of woodchips provides heat for two farm conversions. The waste woodchip is provided by 60ha of willow coppice grown adjacent to the farm office complex. The boiler provides underfloor heating and radiators and hot water. Installation costs were 50k. Maintenance of the system is limited, although the woodchip hopper has to be refilled weekly.

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6.7 DEFRA ‘Report on Farm Restructure’
Farm incomes have fallen by 70% from their 1995 peak. The average farm is losing money, what is keeping many farms afloat is sales of assets, land and property, off farm incomes and for a minority. Lloyds TSB survey 2002 – 37% of farmers reported working in a continually stressed state.
Energy Crops contribute to DEFRA’s sustainable farming objectives

CAP Reform Proposals for the Common Agricultural Programme
Abolish non-food regime on set-aside
NFC’s included in single decoupled payment
Area restrictions on fibre crops disappear
New carbon credit

6.8 Economics of Heating Fuels

A) Wood chips at £30/t at 25% mc (moisture content) H) LPG “Low”
B) Wood chips at £40/t at 25% mc
C) Wood chips at £50/t at 25% mc I) LPG “High”
D) Wood pellets @ £80/tonne

E) Heating oil at 15p/litre J) Avge domestic gas tariff

F) Heating oil at 20p/litre K)Using off-peak
electricity
G) Heating oil at 25p/litre

6.9 The Heat Entrepreneur Model
This model overcomes the barriers of higher capital cost of equipment and extra work to organise fuel supply. An organisation or agent for installers would carry out the following:

Sources ( not mentioned in text)

Melvyn F Askew
Head of Agricultural and Rural Strategy, Central Science Laboratory, Sand Hutton, York
BICALBruce Clark
Senior Agricultural Manager
Llloyds TSB David Clayton
Agri-Industrial Materials
Organics, Forestry and Industrial Crops Division DEFRA

Money to Burn Conference, speakers notes:
Jim O’Neill, Forestry Commission
Fred Dumbleton Future Energy Solutions
Robin Cotton, Renewable Heat and Power Ltd
Chris Hughes Talbotts Ltd
Andrew Berry, H J Berry Ltd

Materials
Power to Prosperity – Sustainability Northwest
UK Energy White Paper Feb 2003
Town & Country Planning newsletter feature ‘Alternative Crops – the future for Agriculture

Acknowledge – Cheshire County Council John Pearson, and CREI members on local resourced information

Cheshire Contacts

Jane O'Brien Business Development Manager: 01270 760974 jane@epplus.org

Cheshire County Council – John Pearson 01244 603191 john.pearson@cheshire.gov.uk

For free energy efficiency advice call Cheshire Energy Efficiency Advice Centre 0800 512012

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