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How green energy will change the agricultural sector

One of the most important components of the “green revolution,” slowly but surely happening in world energy, is the growing role of biofuels. Gasoline is now growing in the fields — or rather, motor and other fuels are already extracted nowadays from vegetable oils and other plant raw materials. Very soon farmer, as well as governments of many countries, will face the most important question: if you have a plot of land, should you raise food or fuel on it?

Land shortages?

In the US, biofuels already cover 5% of total energy consumption. Over 40% of American corn is used to produce biofuels. According to the study of Absolute Markets Insights consulting company, in 2019, the global biofuel market amounted to $136.2 billion. It is expected that in 2027 its volume will reach $165.4 billion, while the volume of international trade in wheat is about $43 billion, and part of wheat is used to produce biofuels.

Agriculture can turn from energy consumer to energy producer, first of all in the form of liquid fuel (ethanol, methanol, HAS) as well as gas (biogas, methane, hydrogen),” — forecastt of the head of the department for the development of new business areas of Toshiba Rus LLC Vladimir Maksimov.

Co-founder of Aravana Capital Management Ivan Kladov is sure that the build-up of biofuel production may eventually lead to a shortage of fertile land. According to the UN Food and Agriculture Organization (FAO), over the past 50 years the area of ​ ​ cultivated land in the world increased by 12%. Today, over 40% of the land surface is occupied by the needs of agriculture. But these lands are already being reoriented for the tasks of green energy: wind farms, solar farms, areas for growing crops on biofuels.

Part of the land used for food production will be used for cultivation of biomass for biofuels,” — said Ivan Kladov.

Energy autonomy

However, the distribution of RES has another side – it will contribute to re-equipment of the agricultural sector. According to Vladimir Maksimov, transition to RES of the most energy-consuming equipment in agriculture — various pumps, motors, refrigerators and lighting — will provide high autonomy for farmers and large agricultural holdings.

“Now energy costs account for about 15% of the total costs in rural agriculture, therefore eliminating the factor of fluctuation in oil and gas prices in pricing will make agriculture more efficient,” — predicts Vladimir Maximov.

Thus, it will be easier to obtain electricity in remote settlements.

“Green energy sources are needed by farmers, also, to save money, as stretching the line for a few kilometers can be very expensive and not always possible, — indicates expert in the field of electric power Sergey Sizikov, — for example, in Russia sometimes farmers have connection to networks, but there is no opportunity to increase capacity, so you have to look for additional sources such as diesel generators. However, diesel fuel is not cheap, so gradually, in Russia too, farmers switch to alternative sources of electricity or biofuels.”

Greenhouses and robots

Ivan Kladov reminds: creation of “agriculture 4.0” based on robotics, digital technologies and telecommunications is now on the agenda. However, the widespread adoption of all these technologies requires high energy security. Exactly therefore, renewable energy will allow to develop “agriculture 4.0” not only in energy surplus regions, but also in remote areas where there are even no power lines.

Oleg Shevtsov, General Director of Transenerkom LLC, told Invest-Foresight that one farmer from Arkansas (USA) installed on a 1950 Ford tractor 8 batteries, charging them from solar panels. As a result, carbon dioxide emissions from the operation of equipment decreased by 30%, as did the value of the products sold by the farmer. In addition to transport, solar panels can be used as an energy source for the drying process of fruits, herbs and vegetables; wind farms can be used for pumping water, grinding grain, since the efficiency of panels is 7 times higher than the generation of energy on biofuels.

RES will ensure energy autonomy of both agro-enterprises and individual mechanisms and machines through the use of solar panels and modern energy storage,” — said Ivan Kladov.

If the development of renewable energy leads to the situation when energy will really become cheaper and more affordable for agricultural producers, this will allow to allocate even more funds for cultivation of greenhouse crops. According to Ivan Kladov, an example here can be greenhouse farming in Holland, developing with the use of RES. According to the ITC, which is the agency of both WTO, and UN, Holland ranks second in the world in terms of food exports. In a number of Dutch provinces, about 80% of agricultural land is occupied by greenhouses, which would be impossible without the active development of RES.

Plan Zero

We must not forget that the agricultural sector itself is a source of environmental danger. Agriculture and forestry account for 24% of greenhouse gas emissions to the environment. The International Energy Agency has adopted the Clean Zero Plan to ensure by 2050, zero balance on carbon emissions to the atmosphere.

That is why developed countries, primarily the United States and the EU, are transferring agriculture to a new energy base that does not imply harmful emissions. For example, in Germany 1/5 of the total capacity of solar power plants (SPP) works for agriculture. Great Britain intends to achieve zero balance of the agricultural sector by 2040.

“Based on new environmental standards, developed countries will regulate import and export of agricultural products while protecting local producers and solving environmental problems,” — Vladimir Maksimov is sure.

Simply put, in 10–15 years to import into Europe a tomato produced using fossil energy sources (respectively, having a carbon footprint), you’ll have to pay a fee. Such products will be specially marked and allocated on shelves of stores – with understandable consequences for producers of “green” and ordinary tomatoes.

Use of renewable, energy sources in the work of the agro-industrial complex will not only reduce CO2 emissions, which by 2050 could increase by 30%, but also reduce the cost of products, reduce the cost of electricity, as well as of fuel for transport, and ensure stable energy supply, independent of interruptions in common networks,” — says Oleg Shevtsov.

The future has not yet arrived

Of course, all this is still a matter of the future.

“In most countries, renewable energy projects are still unprofitable due to huge capital expenditures, high cost of energy transfer and recycling. Most large-scale projects appeared thanks to the assistance of the state. The situation is unlikely to change in the near future radically,” — says Ivan Kladov.

Perhaps in the coming years, the source of financing (except for state support) will be global carbon tax, which will be charged for each ton of CO2 released into the atmosphere.

“In the EU, the agricultural sector and other producers are switching to renewable energy under the pressure of the so-called carbon tax, — says Sergey Sizikov, — producers are being obliged to reduce annually carbon footprint, otherwise you will have to pay large duties. In Russia, development of green energy among farmers needs state support, which is not yet provided.”

Author: Konstantin Frumkin

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