The price of milk is a constant source of worry for dairy farmers, as often factors outside of their control can affect the price paid for milk. A recent article in Farmers Weekly on 13th October indicated that dairy prices may fall as exporters ramp up production.
However, there appears to be an opportunity for UK dairy farmers to stabilise their income and increase the amount they earn for each litre of milk produced.
How is this possible?
By looking for alternative ways of making money from their herds, UK dairy farmers can future-proof their businesses against volatile milk prices. They can achieve this by installing a micro scale, slurry only, anaerobic digester on their farm. Dairy farmers can then create electricity and heat by extracting methane gas or “Biogas” collected from their cow’s slurry.
The methane is then used to power generators that create electricity for the farm, which can be used for free instead of buying electricity from the grid. The by-product of running the generators is the heat that this creates. This heat can be used on the farm in a variety of applications, which can be tailored to the farm. The most common applications of the heat is to heat the drinking water of the cows and heat the water used for washing. Both of these applications are eligible for the renewable heat incentive (R.H.I.) payments from the government, and any surplus electricity generated that is not used on the farm can be sold back to the grid.
Where does the 3p per litre figure come from?
When calculating the financial benefits of installing a slurry only AD system, it is essential to look at how much the farm currently spends to service its electricity and heating needs, and how much they can potentially earn from the renewable heat incentive payments from the government. By utilizing the heat output of the system.
In a farm that has over 320 cows and can use most of the heat and electricity produced by a larger system, the combination of savings and income generated by the system are calculated at approximately £88,000 per annum. This herd size would produce on average 2,850,000 litres of milk per annum. Based upon the current price of milk over 30p per litre, the total revenue generated for the herd would be approx. £860,000 p.a.. The additional £88,000 represents an additional income of 3p per litre, or in other words a10% uplift in revenue.
Who makes small scale slurry only AD digesters?
The digesters are made by a Belgian company called Biolectric. The idea originated in 2009 when engineer, Philippe Jans, attempted to improve upon the large Anaerobic Digestion installations that had been received with a mixed reception by the farming industry. He developed a smaller more efficient unit that worked purely on cow's slurry rather than "grown-to-rot" crops.
In the following years, various patented technical advances ensured that the Biolectric technology became more reliable and significantly reduced the labour required from the farmer.
The product has now been fully tested and its output is reliable. Biolectric has won a variety of international agricultural and environmental awards and Biolectric AD systems are common in Belgium, France and The Netherlands where over 150 have been installed. In the UK the technology is relatively new, to date, there are approximately 14 units installed and working, with new applications being made as the advantages of the technology are becoming more well known.
Who has installed a Biolectric Unit in the UK?
Adam Chippendale is a dairy farmer with a lifetime of experience and a keen interest in renewable technology managing the family-owned Wharton Hall Farm in Kirkby Stephen, Cumbria.
“We had always been keen on the idea of creating energy from our cows slurry, after all, slurry had always been a problem for us and to turn it into something useful would not only be beneficial for the environment but good for our farming business too.
The Biolectric Micro slurry AD machines were different to other cropping AD systems that we had looked at because they work using cows slurry as its only form of fuel. We favoured not feeding a ‘grown to rot crops’ AD plant and the Biolectric option was also smaller and less expensive.
Since installation, we have been impressed with the output and potential of the Biolectric unit. Our previous electricity bills are now being exceeded by our own generation. In fact we now export the surplus electricity back to the grid.
On our farm we also have a requirement to dry our own logs and other materials, so we are currently evaluating various options for using the heat that the Biolectric AD system creates, so as to receive Renewable Heat Incentive payments which we estimate could amount to circa £14,000 annually.
We are hoping that the combined savings on our electricity bills, the free use of heat, and the ROCs and RHI payments equate to getting our capital expenditure back in under 7 years giving us another 13 years of incentives. We sense electricity prices are only going one way so expect that the cash savings to increase over time and not stop after 20 years like the incentives.
Installing a Biolectric Unit on our farm has been a great decision for us, and I suggest other dairy farmers explore the idea for themselves, especially if they have good options to use the heat that the system generates as that is harder to utilise than electricity consumption.”
What type of dairy farms would be suitable for a Biolectric Stystem?
The system would be most suitable for farms that use a lot of electricity and heat as they stand to maximise the cash savings from the technology. Dairy farms with larger herd sizes will mean that they are able to power the largest system that Biolectric manufacture, meaning that they can fully exploit the methane that their larger herd has produced.
Where can I see one working, and would it work on my farm?
Saving Energy Group, who are authorized to sell the Biolectric Micro AD system in the UK, can arrange for interested farmers to see a working system, and can organize an independent farming consultant to calculate the financial benefit for each farm, as each of farm is unique.
Click here to contact the Saving Energy Group to arrange a free consultation for your farm.