What is farm energy planning?
A farm energy plan identifies practical energy-saving measures and sets out an investment and implementation schedule. The process of developing a plan is just as important as the plan itself as it helps to engage key staff in the issue, increasing their understanding and motivation.
Rising prices for oil, electricity and gas are a key business risk for every farmer. Energy planning can help you to manage this risk and to orient energy within the farm’s business strategy.
While there are quick energy wins to be made on most farms, achieving deeper savings demands careful analysis of return on investment in the context of your farm business. Significant net savings can be achieved by most farmers in the following areas:
- improving practices and systems,
- changing or modifying equipment,
- switching to alternative, less expensive energy sources, and
- purchasing energy more strategically.
Implementing a planning process for energy helps you to break the problem down into manageable tasks and provides the clarity that’s needed to move forward.
A systematic process
Energy planning is not primarily about specific technologies or solutions. It is a systematic process of organising information, enhancing your understanding of the risks and opportunities, and analysing the cost and benefits of different measures. This process will enable you to develop a rationale for implementing changes in practice and for investing in more efficient equipment.
Engaging staff and advisors
All key staff and advisors should be engaged in the energy-planning process. The planning group could include your accountant, agronomist, and irrigation planner as well as machinery and building consultants.
The resulting plan document should be shared with staff and adopted as part of the general farm business plan.
Don’t overcomplicate the plan
Not all farms require detailed energy planning. An energy plan can be a highly detailed and technical document or it can be a short, simple statement of your current situation, priorities and intentions. The basic requirements for an effective energy plan are that it:
- relates to and helps advance your farm business strategy,
- quantifies major energy-using activities,
- identifies cost-effective and practical actions,
- helps you to set specific targets, and
- includes a process for monitoring outcomes.
Take charge of the process
It is important that you ‘own’ and drive the process as part of your farm business strategy.
Even if you intend to outsource the process, we recommend that you (as farm owner and/or manager) do a first run through, using the resources we have provided under this program and drawing on your existing team and advisors.
This will save money on preparatory steps (e.g. collecting usage data and setting up an assets register) and help you select and manage consultants.
Energy plan template and calculator
To assist you in the energy planning process, NSW Farmers has developed set of software tools. These are:
The energy planning process
Step 1: Audit
An energy audit involves the collection of data from various equipment and energy sources on the farm. Its aim is to clarify exactly why, where and when energy is being used.
Make an asset register
Put together a list of energy-related equipment on the farm. This can be categorised in a number of ways but should include any equipment or machinery that uses a significant amount of energy. Examples of such equipment include irrigation pumps, tractors, heating and cooling equipment, dryers and lights.
If you don’t have exact figures for energy use, broken down by individual equipment, make an estimate based on energy bills, fuel purchasing receipts and your knowledge of the farm’s operational procedures. Failing this, consult an expert who can give you an accurate estimate of expected fuel use. NSW Farmers has also put together a template to help you collect this information. It can be found under the ‘Equipment Register’ tab within the farm energy plan calculator. Alternatively, you may choose to download the equipment register separately from aginnovators.org.au/energyinnovation/equipmentregister
Step 2: Analysis
Examine your asset list and divide the equipment based on what is using the most fuel. Larger items that use more energy will provide greater opportunities for savings. The key part of this step is to ensure you understand the total energy-use breakdown on the farm property.
Step 3: Selection/prioritisation
After going through the analysis process and identifying major areas of energy use, begin to prioritise action items and savings opportunities. Go after big-ticket items rather than focusing on small ones. For example, on a broadacre irrigation farm, you may be able to save 80 percent of your electricity for lighting by simply changing fixtures – however, this may represent only two percent of total energy spend. On the other hand, a measure that can impact 10 to 15 percent of total diesel use (which is likely closer to 60 to 80 percent of total spend) will result in much higher total savings.
As part of this process, separate top energy savings opportunities into short-, medium- and long-term groups. Identify next steps for each, highlighting action items and including specifics such as ‘call supplier’ or ‘perform additional research to identify the best solutions’. Include time lines, and ensure that the steps you identify are realistic in terms of meeting the outlined goals.
Step 4: Quotations and implementation
After prioritising and selecting next steps, it is time for the final phase of investigation. This entails going to the marketplace for quotes and searching for the best available technologies for your needs. Select the technologies that are deemed most appropriate, and implement the changes outlined in your analysis and selection steps. These may include equipment upgrades or replacement, fuel logging and other operational changes.
Step 5: Monitoring
After implementation, the final step in the energy planning process is ongoing monitoring. Ensure that planned changes to equipment and operations are delivering the expected results and savings, then make any necessary changes or adjustments to the new practices.
Implementing a successful monitoring program is essential to the continuing success of energy planning, as regular monitoring will ensure that energy remains a key input cost factor in future operations and farm purchases. Maintaining a high level of awareness also ensures that day-to-day operations remain efficient rather than regressing to the older, less efficient ‘normal’ routine.
Who can help?
Your existing advisors
It is essential to engage your key advisors and service providers in the energy planning process.
Agronomists, irrigation engineers, accountants, electricians, facility designers – all have expertise and data relevant to your energy-efficiency plan. Depending on the specific farm operations, such professionals can be valuable resources, helping you to assess existing systems and potential solutions.
Currently, large-scale agribusiness consulting organisations are unlikely to have dedicated farm energy specialists. However, many individuals working in the agribusiness consulting field have the skills required to assist you in developing a viable farm energy plan.
Planning can start with some basic analysis and prioritisation. For example, Figure 4 shows a prioritisation matrix developed as the outcome of a farm energy audit. It breaks down the range of opportunities, measuring by impact (potential available savings) and effort (money or resources invested), and identifies four distinct types of measures.
- Quick wins are the best opportunities, having a high impact and requiring relatively little effort.
- ‘Leave for now’ are measures that involve considerable effort but result in low-impact savings; they are not currently attractive investments..
- Symbolic opportunities are low-impact and/or low-effort measures that look good but won’t yield much in the way of savings.
- Strategic opportunities are high-impact/high-effort activities that may require additional investigation.
Manuals and other information sources
The manuals provided along with farm machinery such as tractors provide operational guidelines that directly or indirectly address energy efficiency. The manuals we have reviewed vary in quality and helpfulness in this regard. As a starting point, however, we recommend that you review the manuals for your major equipment and incorporate key relevant information into your energy plan.
Vendors of your equipment should also be able to provide after-sales service in relation to energy-efficient operation.
Best-practice guidelines provided by the Department of Primary Industry (DPI) or the Rural Development Council (RDC for your industry may also be good sources of information.
Local experts in the specific equipment
Another place to locate expertise and planning assistance is within specific equipment industries. Pump and irrigation equipment manufacturers, and individuals who work with and run large-scale farm vehicles can be good sources of advice.
Be sure to consult a variety of sources, as individuals may be biased towards particular solutions.
Energy consulting firms
Farms with annual energy bills in the hundreds of thousands may benefit from engaging a specialist independent energy consulting firm. This is particularly the case in the intensive sectors and where new facilities are being commissioned, or where policy changes (for example, changes in permitted animal densities or local government constraints on odour) have energy implications.
Comprehensive energy planning entails considering many interrelated factors and is truly a multidisciplinary process. An energy consulting firm can gather the relevant data, help prioritise options, assemble an effective team of experts, obtain quotes from rival vendors and deliver detailed return on investment analysis. They can also project-manage implementation if that is warranted by the scale of operation.
Developing solutions collaboratively
Most large Australian corporations have undertaken detailed energy analysis and planning and have embedded energy efficiency into their operations.
Naturally, it is much more difficult for small and medium scale enterprises, including farms, to fund the necessary consulting work and resulting change management.
NSW Farmers recommends that where possible, farmers collaborate to co-fund the development of energy solutions. This can occur on a regional or a sectoral basis. For example, a group of intensive farmers could collaborate to analyse the feasibility of a collectively owned and operated waste-to-energy plant. NSW Farmers is working on many fronts to advance opportunities in this regard.
Key elements in a farm energy plan
A farm energy plan document should cover the following key elements:
Farm energy planning template - This template covers the basic components of a farm energy plan and outlines a format that can assist you in compiling and delivering a report on existing energy use and next steps. It can be downloaded through the following link:
Farm energy planning calculator - Available on the NSW Farmers and AgInnovators websites, this is a spreadsheet calculator developed by Energetics and NSW Farmers to help you estimate savings opportunities and plan for future energy efficiency and innovation.
ABARE, 2006. Farm Costs and Returns - Statistics, s.l.: Australian Bureau of Statistics.
Hanna, M. & Ayres, G., 2011. Fuel Required for Field Operations. [Online]
Intelligent Energy Europe, 2010. Efficient20. [Online]
Svejkovsky, C., 2007. Conserving Fuel on the Farm. [Online]
University of Nebraska-Lincoln, n.d. Nebraska Tractor Test Laboratory. [Online]