Biogas could bring stable earnings

One of the first is connection to the National Grid, through which the enterprise earns its main monetary return via sales of electricity generated from biogas.

According to Tim Evans, managing director of joint venture firm Renewable Zukunft, a connection could cost anything between £11,000 and £660,000 in his company’s experience, the average being £90,000.

One arable farmer with a 500kW biogas project undergoing planning permission, who asked not to be named, said connection was going to cost £50,000. “We have to pay this nine months before its installation,” he added.

To make farm biogas pay, Russell Mulliner of Marches Biogas said operators had to reduce fertiliser costs by making full use of nutrients in digested residue.

It was clear establishing a farm biogas unit is more than just another capital expenditure project. It involves investing a six- or seven-figure sum and requires planning and risk management.

Earnings from electricity sales are particularly sensitive to gas yield from the anaerobic digester, and running time and efficiency of the generator.

Gas yield depends on several factors, including the feedstock. For example, slurry from 200 dairy cows needs augmenting with 5,000 tonnes of forage maize annually - 100ha at 50tonnes/ha 247 acres at 20 tonnes/acre) to make it viable, said Masstock Farm Consultancy’s Roger Hellawell.

Planning permission could take many months, said Tim Evans, and may require £100,000 to £200,000 of expenditure before construction can begin.

Despite the obstacles, the arable farmer quoted was motivated by the stability of returns.

“There isn’t a crop we can grow that offers a guaranteed price for 20 years,” he said.

Tim Evans said a well planned and efficiently run unit could achieve a return on investment in five to eight years.

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