Research article

Going (almost) off-grid

The key to self-sufficiency is understanding the site’s demands


Savills Energy has simulated several scenarios of renewable energy adoption on a small dairy farm. The farm uses around 60,000 kWh of electricity per year with daily consumption being concentrated around a constant baseload demand of hot water and refrigeration need as well as two milking times forming two spikes in demand each day; one between 5:00 and 10:00, peaking around 8:00, and another between 16:30 and 20:00, peaking around 18:00. This profile is repeated consistently throughout the week and throughout the year.

Solar photovoltaic is deployed across all eleven scenarios ranging from 10 to 70 kWp, the most that could realistically be supported by a 50 kVA connection to the grid (connections to the grid typically become more complex beyond 50 kVA). Solar PV is often the technology of choice for farms when pursuing self-sufficiency due to being comparatively inexpensive and deployable on large barn roofs. Four scenarios feature battery storage co-located with the solar PV.

Definitions

  • kWp: the peak power of a solar PV system, indicating the rate at which it generates energy
  • kVA: the measure of power that the system is capable of delivering to components that consume electricity
  • kWh: in the case of batteries, kWh indicates how much electricity can be stored by the unit
  • Solar fraction: the amount of energy initially derived from solar technology

Wind and micro-hydro solutions can prove valuable as their dissimilarity to solar PV can provide added benefit and resilience. However, these technologies are often more difficult to deploy, being more site-specific in their requirements than solar PV. A tailored approach to each site and its attributes will ensure the best possible outcome from investing in on-site renewable energy.

By first understanding the demand profile of the operation over various timeframes (monthly, weekly, daily, hourly), renewable energy solutions can be tailored to fit that demand profile

Andrew Teanby, Associate Director, Rural Research

The values used in this case study are approximate and unlikely to be seen across all sites. However, the relative values demonstrate the importance of a well-considered project that accounts for the effects of scale and consumption on farm. Exactly which of the scenarios the farm should pursue depends largely upon the farmer’s objectives, and it is this that will define the case for investment:

  • Lowest payback period: The lowest payback period is not necessarily delivered by the smallest initial investment. In this case, 20 kWp of solar PV without battery storage delivers a shorter payback time than 10 kWp of solar. Beyond 20 kWp, deploying additional solar PV gives increased net cash profit over time but ultimately a reduced return on investment.

    An improved balance between profit and payback period could be found if the farmer made efforts to match the supply of renewable energy to the energy demand of the farm. By first understanding the demand profile of the operation over various timeframes (monthly, weekly, daily, hourly), renewable energy solutions can be tailored to fit that demand profile, reducing the need to source energy from the grid and therefore minimising the cost of energy.
  • Highest solar fraction: The solar fraction is the proportion of energy derived from solar PV, whether directly or first stored through batteries and utilised later. The higher the solar fraction, the less reliant the farm is on energy supplied by the grid.

    To maximise the amount of energy available to offset grid demand, the largest amount of solar PV deployment is necessary. By itself, this situation would deliver the highest net cash profit over 15 years but only offset 45% of the energy used on the farm as much of the energy generated by the additional capacity would be sold to the grid rather than being used to offset on-farm demand. The price of energy sold to the grid is much lower than the cost of purchasing energy from the grid, but if there is no on-farm demand for the energy at the time of generation, there is no other option.

    The benefit of battery storage now becomes apparent. Though battery storage will lead to higher capital expenditure and longer payback periods, the non-financial benefits, including flexibility and resilience, are substantial. Energy can be stored in periods of excess supply, e.g. when the sun shines and no milking is occurring, such as between 10:00 and 16:30. Battery storage can then be called upon to supply the stored renewable energy when supply is lower and demand high, e.g. 18:00 to 20:00. The addition of battery storage means almost two-thirds of the energy used on the farm is derived from renewable energy assets. The payback period is below eight years and healthy profits can still be achieved despite the larger initial capital expenditure


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