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Funded-biomass boiler scheme offers cheaper heat on-farm

Halving fuel costs by replacing conventional oil or gas-powered
heating with biomass is undoubtedly an attractive proposition, but the
capital cost required for such technology can be a major hurdle for many
farm businesses.

However, schemes are being developed which put boilers on farms which
then benefit from cheaper heat without the capital outlay of buying the
boilers. In exchange for this, the Renewable Heat Incentive (RHI)
payments are claimed by the developer or funder.

Renewable energy firm Lumicity is currently retrofitting 179
Austrian-made Herz Energietechnik boilers, ranging in size from 151kW to
199kW, on 21 Bernard Matthews turkey farms in Norfolk, Suffolk and
Lincolnshire, providing heat for 248 poultry sheds.

The scheme is part of a drive by the turkey giant to source all
energy from sustainable sources over the next couple of years and it is
hoped that other farm businesses could also benefit from the funded
biomass concept in the future.

“We’re already generating a large proportion of our energy needs from
other renewable sources, including solar and wind, and with the
addition of biomass boilers on our farms, we’re well placed to be
generating 100% of our energy sustainably by 2016,” says Bernard
Matthews executive chairman David Joll.

How it works

Funding worth £24.5m has been secured for the project from the UK
Green Investment Bank’s Energy Saving Investments fund, which is managed
by Equitix. The money is being used to identify potential sites,
design, build and maintain the boilers, with Lumicity leasing land next
to the turkey sheds on which they are placed.

Equitix retains ownership of the assets throughout and also receives
all Renewable Heat Incentive (RHI) income for the length of the scheme
(20 years).

While farmers never own the boiler or receive any RHI income,
Lumicity chief executive Tristan Fischer says they can expect to save
25-50% on heating bills by buying woodchip instead of liquefied
petroleum gas (LPG), with no upfront capital cost for installing a
boiler. For Bernard Matthews, the total annual fuel bill on these 21
farms is expected to be cut from £3.3m to £1.7m.

A peppercorn rent is paid to the farmer for the lease of the land
where the boiler is installed while Lumicity provides an operations and
maintenance contract on the boiler over its lifetime so only minimal
maintenance is required (for example, emptying ash) on the farmer’s
part. Plus it promises significant CO2 savings and some animal welfare
benefits from the “dry heat” system (see box).

Discussions are under way to expand the biomass heating programme to
the remainder of Bernard Matthews’ 51 turkey farms, and Mr Fischer says
the concept could easily work on other farms and with other technology
types, such as solar.

“Whether it’s one shed or 1,000, we can provide a fully funded,
bespoke solution, helping farmers to finance the scheme over a number of

“In Bernard Matthews’ case, Lumicity built on economies of scale, but
of course smaller farms could equally benefit from the financial and
environmental advantages of this technology.”

What’s the catch?

The scheme requires farmers to sign up for a 20-year term, although
there is a break clause after 10 years, the fee for exercising this is
linked to value of the equipment at the time of breaking the agreement.

While farmers can source their own legally-compliant fuel suitable
for the individual boiler, they must follow Lumicity’s specification for
what should be used. In the case of Bernard Matthews’ farms, woodchip
is the preferred fuel type, largely because it is cheaper than pellets.
Total annual requirement is more than 15,400t, with a specification of
G30 chip size and W30 moisture content (20-30%).

In the future, it is hoped that changes to the European Waste
Incineration Directive will allow poultry litter to be burnt to further
reduce bills and cut the cost of transporting litter for disposal.

Mr Fischer says the boilers do not increase fire risk and are
actually lower risk than LPG because they are installed outside poultry
sheds. Any fire risk is carried by the asset owner, who has third party
liability insurance. In the case of this scheme, the asset owner is
Equitix not Bernard Matthews or the farmer.

Welfare benefits

Lumicity says biomass heating systems can improve bird welfare in
poultry sheds as the dry heat produced means humidity is cut from 65%
under LPG systems to nearer 35%, and carbon monoxide emissions are also

The firm says heat circulation is better than with LPG systems and
there is reduced in-house ammonia, lower ventilation requirements and
better litter quality.

These all improve bird health and result in a higher feed conversion
ratio, creating an additional saving on feed costs, suggests Mr Fischer.

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