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Farmers turn to renewable energy to generate extra income

Posted on 26 July 2012

A record £5m has already been loaned just to Welsh farmers this year, by one bank alone, to fund renewable energy projects.

While some farmers were protesting yesterday about the price they
receive for milk from supermarkets to farming minister Jim Paice and
environment secretary Caroline Spelman at the Royal Welsh Show, others
there were celebrating a new form of income.

Farmers are increasingly turning to wind turbines, hydro schemes and
solar energy projects to supplement their agricultural income.

Speaking at the Show, one of the largest agricultural events in the
UK, Euryn Jones, HSBC’s regional agriculture manager for Wales. said
that his bank has this year seen a strong increase in interest in
renewable energy from the Welsh farming community.

So far in 2012, its Agriculture Team in Wales has already provided
more than £5m for its farming customers to fund wind turbines, hydro
schemes and solar energy projects, with a further £1.8m approved.

Almost two thirds of this investment to date has been in wind energy.
One fifth is allocated to solar panels and 15% of funding for other
forms of renewable energy, primarily hydro schemes.

A further £1.8m has been approved for loans to be drawn down as
projects are completed, most of which is allocated to wind energy, with
some for hydroelectric projects. Interest in solar photovoltaic
electricity has tailed off as a result of the reductions in the feed-in
tariff.

Tegwyn Jones, based in the Dyfi Valley UNESCO Biosphere area in mid
Wales, is one farmer who has taken advantage of the opportunity. He
chose to install a new hydroelectric scheme on his farm last year. The
£500,000 scheme produces 100kW a year and complements his first
hydroelectric scheme, which was installed 10 years ago and produces 93kW
a year.

Mr Jones introduced the schemes to ensure the farm remained
sustainable, otherwise his two sons would not be able to continue to
farm the land and continue the family's tradition. "My family has a
history in hydroelectricity, as my grandfather was an engineer and
developed schemes in Wales," he said.

He estimates that the new scheme will generate income of £75,000-£100,000 a year, so after five years will be seeing a profit.

Tegwyn did not find it easy to develop the project, due to the amount
of red tape he had to deal with from many public organisations,
including Welsh Government departments, the Environment Agency,
Snowdonia National Park officials and highways officers.

He complained about this to Lord Dafydd Elis Thomas, chair of the
Welsh government environment and sustainability committee, which is now
trying to make the process easier.

Emyr Jones, president of the Farmers Union of Wales, commented: "I
think every farmer in Wales should consider installing renewable
energy".

Another farmer who has taken the venture is Alwyn Roberts of
Rhydycriw farm, Llanegryn, near Tywyn, Gwynedd. He has invested in an
Evance R9000 wind turbine, that will produce around 12-14MWh a year.

This was installed by Paul Burrell, of Machynlleth-based Anemos
Renewables LLP, who gave the following advice to farmers considering
such a step: "There are three financial benefits from installing a wind
turbine. Firstly, you will be paid a fixed rate for every unit of
electricity that you generate over the next 20 years, the prices for
which are Retail Price Index linked.

"Secondly, any electricity you don’t use can be exported to the
National Grid with an additional payment for every kWh that you export,
in addition to the generation tariff.

"Thirdly, as the electricity from your turbine is being generated by
the wind, the power can be used in your home or business, so your
electricity bills will be substantially reduced.

"Location is very important for wind turbines. It has to be a good
unobstructed site to make sure you get maximum performance from the
turbine."

Back at the Royal Welsh Showground near Builth Wells, Euryn Jones
said that a significant number of Welsh farmers were thinking about
installing renewable energy technology on their farms: "In addition to
the £6.8m that we have agreed to fund so far, we are discussing several
more wind and hydro projects with farmers, both customers and
prospective customers.”

At the Show, there is no shortage of stands being run by businesses
trying to sell renewable energy technology to the farming community,
from ground source heat pumps to anaerobic digestion, as well as the
more traditional wind, solar and hydro technologies.

Farmers are spoiled for choice; the only real problem is the source
of finance. However, there are specialist banks besides the HSBC such as
Troidos and the Co-operative, which look favourably on renewable
energy.

The pattern of diversification into energy production is being repeated all over the United Kingdom.

The country's largest solar farm opened this week, covering a
whopping 30 acres on the Cadland estate in Fawley, Hants. At 5MW, it
will produce enough electricity to power 1,000 homes from 1,800
photovoltaic modules mounted on 5.6 miles of frames.

The farm also still produces traditional outputs like wheat, maize,
potatoes and some livestock. Being near the south coast, it should get
plenty of sunshine.

Not every farm would want to go to this extreme, or be able to afford
to. But with supermarkets forcing food prices down for farmers,
renewable energy is increasingly becoming the way to keep the farming
community alive all over the country.