Collage Maker 13 Jul 2023 03 30 PM 6271

Energy for Farmers – Grain Dryers

The UK arable sector is a key component of the UK economy. 

Whether it is producing the grain needed for creating the wonderful spectrum of British food and drink products, painting the countryside in a patchwork of different crops, or even just contributing to the stunning iconic British countryside – the UK arable sector is of massive importance. 

The UK produces some of the highest crop yields anywhere in the world. This is largely due to the drizzly, grey, temperate climate that we all love to complain about. The amount of crop from 1 hectare of land in the UK roughly equates to that of 2 hectares from elsewhere in the world.  

It’s not only food that the arable sector provides to the UK markets. The versatility of wheat means it can be turned into bioethanol which can be used in biofuel – powering cars and pushing us towards our climate change goals.  

Farming plays an ever-increasingly important role in tackling climate change, set against the backdrop of an exponentially increasing world population with exponentially increasing hunger. The NFU recently outlined their aspirations to reach net zero agriculture by the year 2040 – which represents roughly 55,000 British farmers.  

Heavy Seasonal Usage – Price Sensitive Energy Costs 

Farming, as you can imagine, is an industry that varies throughout the year.  

Think of lambs frolicking in the Spring, this is a rarity that doesn’t happen all year round. Neither does the bright yellow blooming of Rapeseed which only lasts about 8 weeks from Spring to Mid-Summer. 

With this seasonality comes an innate variability in the type of labour and activity that takes place on farms across the UK, which will lead to seasonally changing demands for energy throughout the year. 

Energy is rather similar in some regards. 

The cost that consumers will incur for their energy is broken down into different parts – the largest parts being derived from wholesale costs. Other contributors to cost include network costs, environmental and social obligation costs, other direct costs, operating costs, supplier pre-tax margin, and of course VAT.  

Wholesale cost will hold the most sway in determining how much energy will cost consumers. A high wholesale market price paid by your energy supplier will be passed on to you and other customers. It is what has been happening over the last 8 months – an incredibly volatile wholesale market has led to rising energy prices for UK consumers.  

Some of this volatility is somewhat predictable.  

As the wholesale market is influenced by supply and demand mechanisms across the globe, when supply is low (or demand is high) then the price will rise accordingly. An example of this would be seasonal changes in weather affecting the amount of renewable energy produced, or cold winter weather leading to domestic consumers demanding more energy as whole to warm their homes. 

As an arable farmer with seasonally varying demands for energy – there is some degree of risk that you may end up paying more for your energy when you demand the most, and less when you demand the least. 

Sounds frustrating, right? 

Grain Dryers – An Energy Sink  

Our previous description may be a little difficult to understand as it lacks a worked example. For arable farmers, one good way of visualising this seasonal problem would be with a mainstay of the sector. 

Grain dryers.  

Whether shaft or rotary, stationary or moveable, the machine requires a good whack of energy to run. The action of powering a rotating drum to mix grain or powering the heat carrier in itself requires a lot of energy, which is extrapolated over an entire season.  

The more crops you have to dry, the more you will end up spending on your energy. 

So, how do you avoid paying sky-high prices for this? 

A Solution Ready Made for Grain Farmers 

Flexible contracts are a relatively new contract type that helps to pass on the benefits of the wholesale energy market to consumers. The price that consumers will pay for their energy is strongly dependent on the movements in wholesale market, meaning that there are opportunities presented during periods of volatility.  

As you can imagine, flexible energy contracts are exactly that – flexible.  

The predictable portion of customer energy use can be thought of as the bulk of their demand, with most businesses able to provide very accurate estimations of this through smart meters, sub-meters, and even energy audits. The peak is essentially the spike in demand outside of this predictable consumption – this then forms the tradeable volume that is able to be traded within flexible contracts.  

You purchase too much energy and your baseload and peak volumes exceed your profile? Well, just sell the excess back to the supplier. 

You don’t purchase enough energy to cover baseload and peak volumes? Well, just top up with a little extra. 

For those that need that additional seasonal flexibility, it’s a game changer. 

Why Farming and Energy Brokerage go Hand-in-Hand 

One thing that is universal with all sectors of farming is the long hours and physically demanding nature of the job. 

After a long shift the last thing you want to do is to return home and think about energy. Dealing with suppliers, complex calculations, paperwork, long phone calls, complex jargon, and even more paperwork… 

We don’t blame you. 

Wouldn’t it be nice to have someone on your side to alleviate the load when it comes to energy?  

That’s when partnering with an energy procurement specialist comes in handy. Acting as a knowledgeable consultant for everything energy, they’ll keep you on the best possible energy contract available to you. Saving you money and time to spend on whatever else you’d rather be doing. 

Energy Solutions by Us, for You       

At a time of great uncertainty in global energy markets, it is easy to feel lost in it all.      

Keeping up to date with developing situations and the associated ramifications is a tricky and time-consuming job. It is also one that is not likely a priority for you and your business.    

So, what do you do?     

You partner with energy procurement experts to take the load off of your desk.     

Energy Solutions have been trusted brokers for countless businesses for over twenty years, which means we know how to navigate the energy markets during a time of uncertainty.     

 Contact us today to find out how we can help you and your business     

Website: https://www.energybrokers.co.uk/   

Contact Us: Click Here   

Email: nick@energybrokers.co.uk   

Call Us: 0131 610 1688   

WhatsApp: 07757 400 788