With all the news about California's rolling blackouts, rising fuel prices and the volatility of our nation's energy supply, many Midwest farmers are concerned about being left in the dark. To protect their operations (and their bottom lines), they are investing in on-site generators that can pick up the load should their utility company shut down.
“It appears the ag community is evaluating more options than they used to,” says Mike Wuebben, electric power market support manager at Caterpillar, the nation's largest supplier of on-site generators. “And just as with the rest of our customer base, they are taking their electrical power security and reliability into their own hands and making it an integral part of their business.”
Sales figures for on-site generators attest to that demand. Generac Power Systems, for example, saw a 400% increase in its generator sales between 1999 and 2000, a rise largely driven by the Y2K scare. Waukesha Engine projects 10 to 15% growth a year in power generation over the next 15 to 20 years.
Producers are taking charge of their farms' energy needs for various reasons. First, as witnessed in California, the nation's energy supply is less reliable than it used to be. A dwindling supply of fossil fuels, aging power plants and a lag in new plant construction are among the factors restricting supply.
“Blackouts are a higher threat, no discredit to utilities,” Wuebben says. “It is their job to keep power on, and they are doing a good job doing so. But that rubber band is getting stretched thinner every day. And there are going to be areas that under the right heat circumstances or should there be some mild natural disasters, they won't be able to keep up.”
Should a blackout or temporary shutdown occur, farmers, in particular, stand a higher risk of a long-term outage because of their remote location. Power is restored to cities first. Rural areas may be a lower priority.
To make matters worse, limited supply is driving up prices of energy. In California, for instance, rates are rumored to be as high as $0.80 to $1.50/kW hr.
Just as supply is tightening, farmers' demand for energy is increasing. Farms are bigger, more automated and more dependent on power than in the past. Grain dryers, milking machines, pumps, irrigation equipment, and computers and other office equipment all need power to operate.
“The tendency we see in other industries is, as industries become more mechanized, more automated, they consume more electricity and become more dependent on electricity,” says Dan Davis, director of commercial low-range generators for Cummins. “So [energy needs are] more today than yesterday and more tomorrow than today.”
To ease that demand, utility companies are starting to offer a “peak shaving rate” program. As its name implies, the program offers reduced rates to consumers who rely on their own sources of power during times when energy use is at its peak. In some cases, the savings are substantial.
For all of these reasons, more farmers are looking at on-site generators to keep their farms running smoothly.
Not your father's generator
Let's be clear. On-site generators used for standby or primary power are not the two-wheel kind you can buy at your local home appliance store. These generators are about the size of a car, only narrower, and weigh from 2,000 to 6,000 lbs.
They can put out anywhere from 3 kW — enough to run an RV or motor home — up to 2,000 kW, which can run half of a small town.
Some are portable. Some are permanently mounted. Some are powered by a tractor PTO, whereas others have their own engine.
The engine-driven units are powered by a reciprocating engine — the same technology found in a bus or a large car. The engine's pistons turn a crankshaft that turns a generator that produces electricity. Most are fueled by diesel fuel, but they also can run on LP, natural gas and propane. And because of the emissions these gases produce, an operator must get a permit to run them.
Their basic look and mode of operation haven't changed much over the last 50-some years since they first became available. However, they have benefited from several technological advancements. According to their manufacturers, on-site generators today are cleaner, quieter, smaller, lower maintenance, more reliable and longer running than their smoke-sputtering predecessors.
Most engine-driven units are now all automatic; that is, they are equipped with an automatic transfer switch (ATS) that senses when utility power is lost, switches the generator on and transfers the load onto the generator in 10 sec., once it is up to operating speed. When the utility power returns, the ATS senses that, switches the load back to the utility and turns off the generator — all automatically, so the owner can leave home without worrying about an outage.
What's more, generator control systems have improved. With the advent of microprocessors and programmable logic controllers, an operator can network multiple generators together, monitor and control all generator and engine functions, and keep track of the last 50 shutdowns — all from a laptop computer.
Programmable logic controls also have brought the cost of switch gear down, enabling operators to interconnect their generators with their utility company to draw power from the grid only when available and, in some cases, sell power back to the utility when it needs it, according to Mike Lobash, editor of Energy Decisions magazine. “The Midwest tends to be lagging behind the Coasts a bit [in doing interconnection] because it has not experienced the shortages that California and the Northeast have,” Lobash says. “But as deregulation continues to unfold, I'd expect the trend to continue.”
Finally, technology has brought a wider variety of generator products to market to better meet the needs of individual farm applications. “They range from the very simple, low-cost, gasoline-powered portable generators for running things like well pumps up to very complex microturbine systems that run on digester gas,” says Cummins' Davis.
Should you buy?
Technology has brought a wider variety of generator products to market to better meet the needs of individual farm applications. “They range from the very simple, low-cost, gasoline-powered portable generators for running things like well pumps up to very complex microturbine systems that run on digester gas.”
Dan Davis Cummins
Buying an on-site generator to produce your own backup or prime power typically will cost more than what you'd pay your utility. As a rule of thumb, depreciation can be figured at $0.02/kW hr. plus $0.10/kW hr. for fuel costs, according to Warren Buchter, manager of applications engineering at Generac. Energy rates charged by utilities, in comparison, range from about $0.05 to $0.09/kW hr., depending on the power company you are connected to, Buchter adds.
However, what you get for that cost difference is reliability. According to Keith Berg, ag sales manager at Katolight, having reliable power is critical to livestock operations. “Modern livestock facilities have ventilation systems that are so dependent on electrical power that if they lose power, you can lose animals in a matter of minutes in hot weather conditions,” he says.
For crop producers, Berg adds, owning a generator is a matter of convenience because a power loss affects their operations less than it does livestock farms unless the term of the outage is substantial.
Energy Decisions' Lobash advises you to analyze how much money you stand to lose if your power is lost. “What are your critical operations?” he asks. “What do you need to continue powering in the case of a utility outage? For example, computer equipment? Processing equipment? And then buy a generator that is large enough to handle those tasks.”
Tim Baker, VGF product line manager at Waukesha Engine, says the best way to determine the economics is to contact your local generator dealer or distributor. “They can sit down with you and calculate your use of electricity and what it costs versus what it would cost to generate your own power,” he says.
If you do decide to buy, there are more than 500 companies that sell on-site generators. To find one near you, search the list of companies published by the Electrical Generating Systems Association on its Web site: www.egsa.org .
Caterpillar's Wuebben says there are not huge differences among generator brands. The biggest difference is in the service. “It comes down to what does it cost, what features do you get and what is it going to be like if you need help?” he says. “It is really that simple.”
He says other questions you should ask a supplier include:
What is your level of generator sales and service? In other words, what do you do beyond selling a generator set? What kind of services do you offer?
Will you discuss electrical systems?
Will you help find contractors?
What is your emergency response level if service is needed?
If your farm doesn't have any on-site power generation capability, a good way to start is with a portable or PTO-driven unit because both tend to cost less than permanent engine-driven models and you can move them around. However, they may require manual intervention to start, whereas most engine-driven systems are fully automatic. That is, they sense when the power goes off and start themselves.
Manufacturers will help you choose and size a generator to meet your load requirements. In most cases, size will depend on how many electric motors you have because they are so numerous on farms and, as a result, draw the most power, according to Generac's Buchter. “The rule of thumb is you need 2 kW/hp,” Buchter says. “So if you have a 1-hp motor, you need a 2-kW generator to run it.” Once you determine the total number of kilowatts you need, multiply that amount by 5 because it takes five times the amount of power to start an electric motor as it does to keep it running.
Caterpillar's Wuebben says renting is a good way to see whether an on-site generator would be a good solution for your farm. “So if the need is just temporary or if farmers simply want to see how a generator would work between themselves and their utility or to test out some electrical applications on their operations,” Wuebben says, “I would encourage rental as a way where they wouldn't have to make a long-term commitment and could just give it a try.”