Your Resource Efficient Farm. Energy and Materials Assessment Workbook. A Practical Guide to Farm Energy and Materials Efficiency

Transcription

1 Your Resource Efficient Farm Energy and Materials Assessment Workbook A Practical Guide to Farm Energy and Materials Efficiency

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3 Contents About this workbook 4 Why Resource Efficiency? 5 Step 1: What are your business goals? 6 Step 2: Let s look at your RESOURCE use 7 2A: Calculate your MATERIALS use 7 2a.1 Collate your last 12 months bills for all materials inputs 7 2a.2 Identify the 5 most costly resources (materials) 7 Table 1: Example of most costly resources for Farmer John s Dairy 7 2a.3 Map your materials use 8 Examples of Resource Process Mapping Templates 9 Resource Mapping Example for Farmer John s Dairy 10 Step 2B: Now, let s have a look at ENERGY use 11 2b.1 Collate your last 12 months bills for all energy inputs 11 2b.2 Identify the most costly resources (Energy) 11 2b.3 Map your energy use 11 Step 3: The benefits of benchmarks Benchmark and compare your performance Six steps to successful benchmarking 13 Step 4: Identify opportunities to improve your business efficiency 14 Step 5: Putting it into action Assess opportunities to determine energy and materials efficiency priorities 15 Step 6 Proving the Business Case Industry Case Studies 17 Appendices: Worksheets, Tools and Templates 18 Appendix 1: YOUR RESOURCE EFFICIENCY WORKSHEET 18 Appendix 2: YOUR ENERGY EFFICIENCY WORKSHEET 19 Appendix 3: Baseline Data - top 5 costs over 5 years 20 Appendix 4: Resource Efficiency Blank Worksheet (Sustainability Victoria 2014) 21 Appendix 5: Prepare your Action Plan Template 22 Appendix 6: Business Case Template 23 The Smarter Resources, Smarter Central Highlands Agribusiness training program is being supported by Sustainability Victoria s Smarter Resources, Smarter Business program and will be delivered by Cultivate Agribusiness Central Highlands in partnership with Federation University and BREAZE Energy Solutions.For more information about Cultivate Agribusiness Central Highlands Incorporated, see 3

4 About this workbook Over the last decade costs of running a farm business have increased. Whether you want to save money, increase productivity, gain a market edge, reduce your environmental impact or future-proof your business, it makes sense to become more efficient with your energy and materials use. This workbook aims to help you build capacity to understand, plan and implement resource efficiencies on your farm. It wil help you to: Assess your energy and materials use Identify your potential savings Make a plan to implement efficiencies By becoming more energy and materials efficient, you will improve the financial and environmental sustainability of your business. This beginner s workbook is suitable for farm businesses in a range of sectors, such as cropping, dairy, horticulture, livestock and viticulture. For more advanced energy and materials efficiency assessments you should contact a reputable assessor/consultant. The workbook is designed as a self-guided tool. It will take you through a step by step process that will help you identify the basic information you need to become more resource efficient. The notes and worksheets are provided to help you identify and understand opportunities for improved productivity and cost savings; to build a business case to help decide which actions to take; and to implement energy and materials efficiency initiatives. Australia can build a lasting advantage in smart, input-efficient farming which preserves the environment and resources that it draws on. Australia s challenge is to increase productivity per hectare, without raising farm input costs through higher fertilizer and fuel use. Maintaining strong farm finances is essential to allow farmers to invest in new farming practices, and stewardship of natural capital. Farming Smarter, Not Harder: Securing our agricultural economy, 2012 Definition of Resources: For the purpose of this workbook we define resources as the overarching term for all materials and energy inputs to your farm activities. Workbook partners The workbook has been developed as part of a project funded by Sustainability Victoria s Smarter Resources Smarter Business program, and is delivered through a partnership between Cultivate Agribusiness, Federation University Australia and BREAZE Energy Solutions. The project has also involved consultation sessions and workshops with agribusinesses in the Central Highlands Region of Victoria. For more information and links to online resources go to: Cultivate Agribusiness: Federation University: BREAZE: Sustainability Victoria Smarter Resources business Your Resource Efficient Farm - Energy and Materials Assessment Workbook

5 Why Resource Efficiency? Reviewing your farm business and setting efficiency targets are key steps in improving the productivity and viability of your business. Improved efficiency can help you make substantial financial savings as well as savings on energy and materials use and waste. Use Less Reduce the amount you use and eliminate any waste Efficiency is very simply, doing more with less This means decreasing your energy or material inputs to achieve the same or greater output. Or rethinking the way you use your current inputs (or outputs) to produce the same or better result. Do More With Less Avoid uneconomic and ecologically destructive resources and eliminate any waste The net result is that the farm product has used less energy or materials per unit to produce. An efficiency hierarchy is a useful thinking tool for deciding on the fastest and most cost effective changes. The hierarchy suggests where change is most easily implemented and recommends an order of activities from using less to choosing sustainable resources. This efficiency hierarchy framework is used throughout the workbook as you go through the following steps: 1. Set your efficiency goals 2. Gather your baseline data 3. Establish benchmarks (efficiency indicators) 4. Identify improvement opportunities 5. Develop an action plan 6. Write a business case Minimise Unsustainable Resource Use Avoid uneconomic and ecologically destructive resources and eliminate any waste Choose Sustainable Resources Rather than resource and pollution intensive sources 5

6 Step 1: What are your business goals? Look at the big picture of your business and think about your products and processes. This will help you recognise opportunities and goals for savings at each stage of operations. Instructions Take time to consider your current resource (energy and materials) use: inputs, equipment, processes, outputs, final product and waste. Ask yourself what you want to achieve: What are my energy and materials efficiency goals? Notes: Materials may include water, stockfeed, pesticides, herbicides, packaging, fuel and other physical resources. Energy may include mains electricity or gas, e.g. bottled gas, petrol, diesel and biomass (wood). Start by writing down what goals you would like to achieve in an ideal world. You can refine them to make sure they are SMART* goals later. * Specific, Measurable, Achievable, Realistic and Timely. Here is a goal that Tyrrell s Wines made: To reduce our Total Energy Usage, per dozen wines produced, by up to 20% over the next 5 years Write down your Resource Efficiency (Materials and Energy) Goals Your Resource Efficient Farm - Energy and Materials Assessment Workbook

7 Step 2: Let s Look At Your Resource Use 2A: Calculate your MATERIALS use 2a. 1 Collate your last 12 months bills for all materials inputs This is your baseline data to identify your highest costs to measure your savings against. If possible, collate copies of invoices that account for your most recent full year s costs for on-farm and associated inputs. These could relate to the following and any others that apply to your business: Fuel Water Stock Feed Fertiliser Herbicides Pesticides 2a.2 Identify the five most costly resources (materials) Identify the five most costly resources that apply to your business i.e. the 5 Highest Bills and record them on the following table. Please rank the Resources in order from 1 to 5, highest cost to lowest. Estimate what percentage the resource is of your total outgoings. In the following example Farmer John identifies that the top 5 resources for his dairy are as follows. Table 1: Example of most costly resources for Farmer John s Dairy The 5 Most Costly Resources for Farmer John s Dairy Estimated % of Outgoings 1 Water 35% 2 Diesel 35% 3 Fertiliser 15% 4 Hot water 10% 5 Fencing & materials 5% If bills are not available, please estimate a dollar figure. Notes: See Appendices for blank worksheets to detail your workings. Materials efficiency and energy efficiency instructions and worksheets are listed separately for your convenience, but may be done together if you prefer. 7

8 2a.3 Map your materials use Map the usage for each of your top five material resources. By drawing or mapping your production processes and resource usage you should be able to identify where excess resource use or waste is occurring, and opportunities for changing practices to achieve savings. Note: Production process maps will look different for different resources. A few different process map examples are shown on the following pages, and a full size template of Figure 1 can be found in Appendix 4 for you to use. Figure 1 below: Resource Map Sustainability Vic (2014) This is a basic resource map of the inputs and stages in the process of production. The output is the final product (or service). Waste can be identified at each stage. You can also use the map to identify potential savings. Two other examples of materials process mapping are shown on the following page as well as a working example of Figure 1. Materials In Waste materials at each stage of product or delivery or service Product (or services) Out Total waste out Notes Your Resource Efficient Farm - Energy and Materials Assessment Workbook

9 Examples of Resource Process Mapping Templates Nutrient flows on a dairy farm FARM SYSTEM INPUTS Feed Animals Dairy Cows Bedding Seed Pasture/Crops Manure Fertilizer N Fixation Irrigation Precipitation manure Soil Leaching Soil accumulation Gaseous LOSSES Above Right Figure 2: Nitrogen Mapping NSW DPI (2014) Above Left Figure 3: Dairy Water Flows DEPI (2014) Runoff OUTPUTS Milk Animals Manure Crops Silage, Hay Irrigation 9

10 Resource Mapping Example for Farmer John s Dairy This example shows the inputs and stages for water pump use and some possible wastage and efficiency savings. In this example water and diesel were the original inputs. Through mapping his resources, Farmer John realised that he could reduce his fuel input to his pump by changing from diesel to mains electricity input to save $10,000 p.a. (See example in Appendix 6). Further cost savings could be achieved by reusing what was previously considered a waste product, by using manure to feed into a biogas generator to generate electricity and heat. This example shows the inputs and stages for water pump use and some possible wastage and efficiency savings Water Source H O Evaporation Cows Drinking Energy Refrigeration Cows Storage Water PUMP WATER HEADER TANK STOCK TROUGH METABOLISM MILKING MILK Electricity Leaks H O Evaporation / Spillage Manure BIO GAS GENERATOR SOIL AMENDMENT Your Resource Efficient Farm - Energy and Materials Assessment Workbook

11 Step 2B: Now, let s have a look at energy use Agriculture consumes three major forms of energy: general electricity (lighting, appliances), fuel (machinery, vehicles and freight costs, pumps) heating / cooling (especially in subsectors such as dairy, horticulture, piggeries and poultry) While energy use varies across different farming activities, electricity and natural gas account for nearly half of all energy use in horticulture and intensive animal production. Broadacre and pastoral farming accounts for approximately 80 per cent of energy consumption in the sector, with dairy farming accounting for another 11 per cent. Small to medium-sized farming enterprises have experienced significant increases in energy costs over the last 5 years. The National Irrigators Council has identified escalating electricity prices as very worrying for farmers, making Australia uncompetitive in the global food market. (Source: Clean Energy Finance Council Fact Sheet, 2015) 2b.1 Collate your last 12 months bills for all energy inputs This is your baseline data to help you identify your highest costs and against which you can measure your savings. Gather as much information as you can: utility bills, timesheets/schedules, Smart Meter data, and onsite metering data. Collate copies of bills for your most recent full year s costs for ALL of the following forms of energy that apply to your business: Mains electricity Mains gas Bottled gas (LPG) Petrol Diesel Biomass (e.g. wood) 2b.2 Identify the most costly resources (energy) Identify the most costly forms of energy that apply to your business i.e. the highest bills. You may have as many as 5 forms of energy. Please enter them in the worksheet table in Appendix 2 Write the top 5 in order from highest cost (1) to lowest cost (5) down the leftmost column. 2b.3 Map your energy use Then, for each of the top FORMS of energy, list the 3 main ways you use that form of energy in your business by indicating the percentage % use. Note that your percentages may not add up exactly to 100% as you are only listing the 3 main ways you USE energy. If less than 3 uses account for all of the Energy, just leave the Number 2 and/or 3 uses blank. You may also map your energy use in the same way as you mapped your materials use if you prefer. Table 2: Example of biggest energy costs and how they are used Energy source Highest use % 2nd Highest use Mains Electricity Diesel Biomass (e.g. wood, almond shells) % 3rd Highest use % Food-Processing 30% Refrigeration 60% Lighting in Café (Farm Gate Sales) Sowing and Harvesting Heat hot house 100% 70% Transport 30% 5% 11

12 Step 3 The benefits of benchmarks 3.1. Benchmark and compare your performance Business benchmarks are guides that help businesses compare their performance against similar businesses in an industry. Benchmarks are measurable performance indicators that allow you to compare aspects of your farming practices with other similar agribusinesses to help you determine where your business is performing well, and where there are opportunities for improvement. When benchmarking your energy and materials usage, you could use performance indicators such as: yield per hectare litres of water per tonne of production litres of diesel per hectare kilowatts( Kw) of electricity per litre of milk produced tonnes of fertiliser per tonne of production Kw electricity per dozen bottles of wine produced While benchmarking can be a challenging activity to do on your own, particularly as every agricultural operation is different, it is worth the effort to understand how efficient your operations are in relation to other similar businesses. You can ask around to see what others are doing and get some ideas. Some places to look and ask questions include industry field days, government business or agriculture departments, industry publications, rural suppliers, the internet and your neighbours or other local producers. You can also have a look at the case studies and resource list on the Cultivate Agribusiness website - Benchmarks will help you see more clearly which of your top five resource costs have the greatest potential for savings Six steps to successful benchmarking You can use the steps suggested by Business Victoria (2015) to practically benchmark your business against your competitors: 1. Identify what you re going to benchmark Start with targeted and specific questions. The questions should be specific, capable of being explored using qualitative or quantitative research efforts and in line with your business strategy. If you haven t already, it is a good idea to do market research. 2. Identify your competitors Write down a list of who your competitors are. Most businesses benchmark within the same industry. Identify effective tactics used by your competitors, and areas in which their business is performing better and note these down. 3. Look at trends Look at recent statistics to analyse any current trends for insight into how fast your industry is moving and how you can plan ahead to keep your business in tune with customers needs. 4. Outline objectives After the results of the analysis have been interpreted and communicated to the appropriate people, goals should be established. These should be concrete, attainable and in line with your corporate strategy. Make sure you list all your goals in your marketing plan. 5. Develop an action plan for your objectives Define specific, concrete actions to be taken. They should detail the tasks involved and include specific names and dates associated with each task. 6 Monitor your results and implement an action plan Continuously monitor the results of the benchmarking efforts and ensure that the action plans are consistently applied. Use our one page action plan template for help with this. Your Resource Efficient Farm - Energy and Materials Assessment Workbook

13 Step 4: Identify opportunities to improve your business efficiency Efficiency Hierarchy Remember the efficiency hierarchy applies: use less, do more with less, minimise unsustainable resources, choose, sustainable resources. Consider where you can use less energy? What unsustainable practices can you reduce or change? What more resource efficient alternatives are available? Instructions: Look again at your most costly resources. Using what you learned from the mapping exercise, benchmarking comparisons and efficiency hierarchy, make a list of potential savings. Aim to find three ways to improve your current practices for each. The following examples relate to the items identified in Table 1 Example of most costly resources for Farmer John s Dairy. Table 3: Example of 3 potential energy and materials efficiency actions Most costly Resources Three Potential Efficiency Actions 1 Water Fix leak, Cover tank, Replace pump 2 Diesel Replace pump, use solar powered pump, use biofuels 3 Fertiliser Relational cell grazing, manure spreader, soil testing and conditioning 4 Hot Water Insulate tanks and pipework, replace electric element with heat hump, pre-heat with solar collectors 5 Fencing and materials Choosing Alternative Options Electric fencing, temporary electric fencing, keep stock off tracks Look for what will give you the most Bang for your buck. Take action on the items that provide the best financial, environmental and social return. Identifying the highest financial return on investment (ROI) may be the place to start as this will enable you to save funds to implement more actions. Use a Decision Matrix to Prioritise If you have multiple options you may want to use a decision matrix to evaluate your 5 most costly resources to prioritise the most viable actions. The horizontal axis represents the degree of effort the change will take; and the vertical axis represents the financial, environmental and social return. 13

14 Matrix Definitions: Easy wins- these will require minimal effort and can be actioned immediately: others will require assessment as the effort required could outweigh the environmental valued gained Evaluate and Action these will need to be evaluated and assigned and resources and responsibility in order to be actioned as the return is high with medium effort Divide and Conquer these initiatives require dividing into manageable portions, which can be placed into either Evaluate and Action or Park. Park don t proceed with these. However they may be actioned later, when more resources are available. Environmental, Financial & Social Return High Medium Low 6 Low 5 Effort Evaluate & Action 7 3 Easy Wins Medium Divide & Conquer Park In the above matrix the numbered circles represent potential actions identified by the farmer 9 8 High Step 5: Putting It Into Action 5.1. Assess opportunities to determine energy and materials efficiency priorities Instructions: Review your list of potential efficiency actions and do a reality-check on possible savings to see which are really worth doing. Note it can be helpful to revisit your resource mapping by drawing a new map for what you want your operations to look like. Prioritise your actions by taking into account time, money, space, locality and complexity to see if any of these options work for you. Make an action list of your priorities. If the actions require a capital purchase, then you should calculate the payback period (see example in Appendix 6 Business Case Template). Use Appendix 5 Action Plan Template to prepare an action plan. Monitor your progress regularly, e.g. schedule a 6 monthly review into your action plan. Your Resource Efficient Farm - Energy and Materials Assessment Workbook

15 Step 6 Proving the Business Case The final step is to develop a business case for your action list of priorities (see Appendix 6 for template). A business case is primarily a financial evaluation of the viability of your intended project. It captures the reasons, costs, benefits and expected savings of implementing your intended energy or resource efficiency on your farm. It can be used for your own business planning purposes or to provide information to decision makers or funding bodies such as business partners, investors, lenders and government s administering grants. It should include: Action: A brief description of the efficiency action you are planning to undertake. E.g. install a new pump system to reduce your water and/or energy usage. Benefits: Outline the benefits of undertaking the action, i.e. what you will save financially (investment, ongoing costs, saving per annum vs business as usual), as well as environmental and social benefits. Capital Costs: Details of the capital costs. Cost Savings: Outline of the expected annual cost savings. ROI: Calculated return on your investment (ROI). 15

16 7. Industry Case Studies Here are some brief snapshots of how other agribusinesses created resource efficiencies. You can read the full case studies on Cultivate Agribusiness website: Greenwoods Dairy The Greenwoods have been in the dairy business for 20 years. They have a herd of 1100 cows with milking at any one time. The Greenwoods were very keen to reduce their energy costs so undertook a comprehensive energy assessment to identify where they were using the most power. This gave them a benchmark from which they could make improvements. Despite having a massive power bill they are doing better than most farms of their size and type. Savings have been made in small ways by doing the simple things - with energy efficient lighting, switching off unnecessary power and installing a rotary milking system which they find much more efficient than their previous setup. They have identified that bigger savings can still be made and are progressing with their investigation of wind turbines, solar arrays and bioenergy from methane. They continue to make savings. Keldavaigh Beef Cattle Keldavaigh are producers of high quality beef, with 150 Angus cross cattle and a small flock of 40 sheep and a few pigs and some poultry to enable the family to be selfsufficient. When Phil and Lynn established the farm some years back they adopted a holistic approach, with a focus on healthy people, healthy soil and healthy environment. Their specific aims were to minimise debt, keep a high happiness factor, improve the land and produce high quality outputs with no compromise on animal health or welfare. Keldavaigh is now a chemical free property that regenerates its soil through minimal interference. Biological life has increased 5-fold by using inoculants to stimulate biodiversity. This promotes better water retention and penetration to deep roots systems with improved pasture resulting in stock being entirely grass fed all year around. They employed an innovative approach to stocking rates and intensive stock rotation leaving days of regeneration time. Phil and Lynn s use of regenerative farming techniques have significantly enhanced the health, productivity of their farm and eliminated fertiliser and stockfeed costs. They have achieved a degree of work life balance, are managing financially and attest that the happiness factor is working. Your Resource Efficient Farm - Energy and Materials Assessment Workbook

17 Taltarni Vineyards & Winery Insectarium Reducing climate impacts has paid off in resource efficiencies for Taltarni winery. Taltarni Vineyards and Winery is an award winning wine producer based at Moonambel, Victoria. Taltarni has achieved remarkable savings through the adoption of a holistic approach to pest management, which has included the establishment of an insectarium for beneficial insects to help control pest insects and so reduce the requirement for control with chemical pesticides. Insectariums are vegetation corridors designed to establish large populations of beneficial insects to limit the use of harmful chemicals and to increase the availability of flowering plants that can be used as essential or supplementary food resources. The mostly indigenous plants don t compete with the vines for water and nutrients. They are self-sowing and easy to maintain. Taltarni has also been successful in reducing its energy costs through conducting energy assessments and implementing energy efficiency retrofits to reduce the energy consumption of production and storage/ cooling, artificial lighting and the compressed air systems. (Refer to graph.) Jonai Farms & Meatsmiths Jonai Farms are a family of epicurean farmers who believe that we are what we eat, so ethics is a strong focus in their business. Tammi and Stuart raise pasture fed rare-breed large black pigs and a small herd of cattle on their 70 acre property in Eganstown. They butcher pork and beef on farm and sell at the farm gate and through local delivery systems. They run an efficient farm business by reducing the cost of transport, deliveries, fuel and livestock feed. To achieve this, they brought as many of their supply and distribution chains as close to the property as possible. Jonai have significantly reduced the time they spent on the road and increased the time spent on farm. As well as the stock feed reductions and fuel expense reductions the change that was important to them was achieving a work-life balance. Yandoit Farm Water efficiency and energy efficiency were two key areas of focus when Michael and Lisa Jackson purchased 140 acre Yandoit Farm some years ago. With good advice and planning they have abundant water supply and are well on their way to being independent of fossil fuels. Basing their farm on Keyline design principles has proved to be very efficient as a water saving strategy. This has optimised access, catchment and water storage high on the landscape, allowing a slow gravity feed for stock and watering systems. They used a Yeomans plough which lifts and loosens the soil with very little disturbance. Keyline design and the ploughing methods eliminate the need for pumps and fertilizers using a natural process where rain, water, air, sun and soil all help to release minerals vital for healthy soil and plant growth. With an average annual rainfall of 600mm per annum, the farm is effectively operating at the equivalent of mm p.a. 17

18 Appendices: Worksheets, Tools and Templates Appendix 1: your resource efficiency worksheet 1. Gather and collate 12 months bills for all inputs. Water, stock feed, Fertiliser, etc 2. Identify the 5 most costly resources. Rank from highest cost to lowest and estimate these as a percentage of your total outgoings. (See Table 1: Example of most costly resources for Farmer John s Dairy) You can also create the Baseline Data for the top 5 costs over 5 years (See Appendix 3 Template). 1 Top 5 most costly resources Estimated % of Outgoings Your Resource Efficient Farm - Energy and Materials Assessment Workbook

19 Appendix 2: your energy efficiency worksheet 1. Gather and collate your information for all forms of energy. (Mains electricity, gas, wood etc) 2. Identify the 5 most costly FORMS OF ENERGY Rank and identify percentage use Biggest energy costs and how they are used 1 Number 1 Use % Number 3 Use % Number 3 %

20 Appendix 3: baseline data - top 5 costs over 5 years This template can be used to document data for long term planning. Resource type Volume/Cost Year 1 Year 2 Year3 Year 4 Year 4 Tonne (t), kilogram (kg), kilolitre (kl), litre (L) 1 T $ $ $ $ $ $ Kg kl L Etc Your Resource Efficient Farm - Energy and Materials Assessment Workbook

21 Appendix 4: resource efficiency blank worksheet (sustainability victoria 2014) By mapping your usage graphically you can visualise your production process to help to identify where savings can be made. Materials In Product Out Waste materials at each stage Total waste out 21

22 Appendix 5: prepare your action plan template Objective Action Success criteria Completion date Resources required Person responsible Example: Reduce irrigation costs (and greenhouse emissions) Replace existing diesel irrigation pump with comparable (mains) electric pump Reduce energy cost October, 2015 $40, 000 Pump Power line extension (1 km) Your Resource Efficient Farm - Energy and Materials Assessment Workbook

23 Appendix 6: business case template 1. Write a brief description of the efficiency action you planning to undertake. 2. Outline the benefits of undertaking the action. 3. Detail the capital costs 4. Outline the annual cost savings 5. Calculate the return on your investment (ROI) 1. Action 2. Benefits 3. Capital Costs 4. Annual cost savings 5. Return on Investment Replace existing 20kW diesel irrigation pump (operating 2,000 hrs/year) with comparable (mains) electric pump *NB for more information on the details of this example, please refer to data/assets/ pdf_file/0007/35854/energy-irrigation- Diesel-versus-electric-pumps.pdf Improve irrigation efficiency Reduce consumption of diesel Reduce pump maintenance requirements Reduce greenhouse emissions from diesel pump 20 kw centrifugal electric pump - $8,000 Installation of pump - $8,000 1 km extension to power line $15,000 Transformer - $8,000 Total - $39,000 Running costs of diesel pump: $18,000 Running costs of electric pump: $8,000 Annual savings - $10, years 23

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