From plow to plug

On April 21, 2017, a massive power outage threw the streets of San Francisco into chaos. Traffic lights stopped working, cable cars stood idle and businesses were paralyzed. Had it been nighttime, a satellite image of the city would have shown a big black spot in the middle of an ocean of neon orange.

Such events, and such images, have made us used to the idea that electricity is mostly generated next to urban centers. That idea is proving increasingly wrong. In a number of economies around the globe, a growing portion of what keeps the lights on originates from the countryside. At a time of scarce energy and squeezed incomes, farmers are learning to harness renewable energy, turning themselves from consumers into producers. Most often, the power is used to offset energy costs; in other cases, it is sold into the grid.

UK farmers have been particularly enthusiastic. That owes much to the uncertainty surrounding Brexit: the EU’s subsidy scheme is going away; what comes in its place is not clearly defined. The UK’s agriculture minister has pledged to keep support to its current level until 2024, but with strings attached. Exporting to the EU, Britain’s largest trading partner, could soon become costlier and more complex. Agricultural businesses now see energy as “a sort of refuge,” says Jonathan Scurlock of the National Farmers Union.

Yet this is a reality the government is taking too long to register. Nearly 70 percent of the UK’s solar energy is generated on agricultural land, Scurlock estimates. About 40 percent of farmers surveyed by the NFU now produce renewable energy, up from 28 percent in 2014. But this surge has largely happened despite the government’s actions, rather than thanks to them. “We have struggled to convince our energy ministry that they should expect farmers to become major energy suppliers,” Scurlock says. The agricultural ministry, for its part, still doesn’t quite recognize that producing energy is “a valid activity for farmers to engage in.”

This is a mistake. Bringing more stability to farmers’ bottom lines can only help them produce more grain, fruit and veg. That doesn’t mean government should be handing out money where it is not due: there is a case for cutting subsidies to technologies than are now able to stand on their own two feet, like small-scale solar and wind. But there are other, non-tariff ways in which adoption can be encouraged. These include tax incentives or simple tax accounting procedures, like the possibility to carry over capital investment into the following years.

A more ambitious scheme would provide low-interest loans, or explicit grants, especially when projects involve new technologies. On that front, DEFRA – the UK’s ministry for agriculture, food and rural affairs – is making good moves: it now offers funding for farmers who want to invest in battery storage, provided it is tailored to their own on-site use. Shipping containers housing such devices are becoming more common in the countryside.

But DEFRA could do more. Last month, the government of Alberta unveiled a program that will award a total C$81 million ($63 million; €52 million) to improve energy efficiency at farms and small agri-processing facilities that will cover, notably, the installation of solar panels. Closer to home, Germany has done much to support anaerobic digesters, of which it counts about 20 times more than the UK. In other markets, public support has sometimes taken the form of a capital investment, as was the case when Australia’s Clean Energy Finance Corporation invested A$100 million ($78 million; €64 million) in a Macquarie ag fund last week.

Michael Gove, the UK’s environment secretary, wants to link the provision of future ag subsidies to farmers’ delivery of “public and environmental goods.” Helping make the Britain’s energy mix more sustainable should count.

Write to the editor at matthieu.f@peimedia.com