Special Energy
Farming as an energy source increasingly attractive
The agricultural sector can contribute to the energy challenge in the Netherlands in the coming years. Companies can also benefit from this themselves. Currently, opportunities lie primarily for larger companies that use manure to produce biogas and convert it into green gas.
If the cabinet agrees to the introduction of an actuarial lower limit (RKO) of 1 mol, a larger group of livestock farms can participate. The contribution to the energy issue can also increase, states Lubbert van Dellen, Market Director Agro at Flynth Adviseurs en Accountants.
This additional group of companies can produce both electricity and heat while simultaneously mitigating other problems. Nitrogen emissions decrease, while costs for manure disposal and nitrogen purchase can be reduced. Especially now that energy costs are rising sharply due to the war surrounding Iran, its relevance is increasing.
To utilize the existing potential, the implementation of the RKO is crucial. This will allow nature permits to be issued again and expand the group of companies that can participate, such as PAS notifiers. However, relatively large investments are required for the production of green gas, electricity, and heat from manure.
Getting on board pays off quickly.
For companies looking to benefit from the energy market on a smaller scale, purchasing solar panels remains attractive. Those who use solar panels for their own consumption, such as fans and milking systems, can recoup their investment in two to three years. Generating electricity for third parties is not profitable. The average purchase costs range between 55 and 75 cents per kilowatt.
An alternative is combining solar panels with batteries. Older companies with a relatively large power connection, in particular, can benefit from this. The investment is higher, and the payback period is four to six years.
Battery best with older connector
The combination of solar panels and batteries can be deployed in two ways. Companies can spread generated electricity throughout the day or use batteries to store cheap electricity during the day and deliver it later. This can help reduce grid congestion and respond to price fluctuations. This option is less attractive for companies with a small grid connection. The investment starts at around €100.000, with a portion being tax-deductible.
Smaller wind turbines
Companies can also invest in wind energy. The investment is higher and the payback period is longer. Hardly any locations are available for large wind turbines, but smaller installations of up to approximately 100 kilowatts remain an option. Due to rising energy prices, this has increased its attractiveness. Subsidies are available through tax schemes and green financing, and in some provinces through supplementary schemes.
Green gas for clusters
For large livestock farms with high manure production, there are other options, such as the production of biogas and subsequently green gas, or the use of biogas for electricity and heat via a combined heat and power (CHP) system.
This option is reserved for a limited group of companies. There are few locations at a sufficient distance from vulnerable nature, and projects require collaboration between multiple companies. For instance, a cluster is needed including a location for biogas production and a separate location for upgrading to green gas. The investment runs into the millions, but can be attractive.
New SDE rates are helping well
The recent increase in SDE rates at the end of January improves feasibility. This makes the use of bio-digesters attractive on smaller farms with approximately 150 cows or more. On these farms, it is more appealing to use biogas directly for a CHP plant. This produces electricity for the grid, while the heat can be used for a nitrogen stripper.
Fertilizer costs much lower
The break-even point is €30 per cubic meter of manure. Thanks to the SDE subsidy of 28 to 40 cents per kilowatt, this drops to €10 to €15 per cubic meter. In addition, approximately 20 cubic meters of extra manure can be applied per hectare, as this qualifies as Renure fertilizer.
This option can help companies with profitability, nitrogen reduction, and lower manure disposal costs. The need for artificial fertilizer may also decrease. Additionally, it can contribute to meeting criteria for target steering, provided these are clearly defined. For society, this results in extra electricity, less grid congestion, and lower emissions.
The investment in a biogas-fired CHP unit, a nitrogen stripper, and any barn modifications quickly rises to approximately €600.000. The payback period is estimated to be between four and six years, according to Van Dellen.
RKO is necessary
To enable these developments, it is necessary for nature permits to be issued again. The introduction of the RKO is required for this. No final decision has yet been made regarding this measure, although it is expected that the Minister of LVVN will take it up.
This article is part of the Energy Theme Special. Read here the other articles within this theme.
Klaas van der Horst
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