"European farmers face high electricity demand and limited supply, leading to elevated and fluctuating electricity prices. This creates a challenging environment for indoor vertical farms, where energy costs can severely impact profitability," says Dom Behan, Founder and CEO of Agriplay Europe.
For example, the Global CEA Report from 2021 states that it takes an average of 38.8 kWh to grow a kilogram of produce in a vertical farm. With electricity prices as high as £0.22 per kWh in the UK and €0.28 per kWh in mainland Europe, the cost per kilogram of produce can reach £8.54 and €10.86, respectively. These high costs make it difficult for vertical farmers to maintain a sustainable profit margin.
Limited supply at maximum pricing
One of the biggest, if not the biggest as Dom puts it, is the electricity costs on indoor growers' bottom line. According to the Global CEA Report from 2021, it requires an average of 38.8 kWh for an indoor vertical farm to grow a KG of produce. Europe is particularly poorly placed for indoor growers, since the continent has a high demand for electricity and limited supply meaning prices are often high and constantly fluctuating, often in the upward direction.
"In the UK, the current average price per kWh is £0.22 (July 2024), at the aforementioned average kWh amount to KG of produce, that is around £8.54 per KG of produce. In mainland Europe, the average price per kWh is €0.28 meaning you pay around €10.86 for a KG of produce grown at the Global CEA report average. So at these prices, it is fair to say profits per kg will be slim," Dom explains.
"To avoid higher energy costs, energy efficient grow modules using efficient supply like PoE (Power of Ethernet) cabling should be applied," Dom says.
Using PoE power-sourced modules is particularly applicable to the current situation because PoE addresses the core issue of high energy costs since the voltage is delivered at precise and low amounts. Both power and data travel through a single cable. The dual capability of data transfer and power supply through a single cable makes it easier for growers to manage their farms efficiently and reduces the need for complex and expensive cabling, which is crucial in an opportunity for scaling. Hardware scaling is easier and coupled with automation and efficient power supply, the opportunity to maximize farm output is potentially limitless.
The Power of Ethernet
Agriplay uses around 2.3 kWh to produce a KG of produce, which is averaged out over 17 various types of crops. This means you spend around £0.51 per KG of produce grown in the UK and €0.64 per KG of produce grown on the European continent. PoE utilized by Agriplay allows for the transference of live updates on a plant's growing phase and delivery of data regarding everything, from water, nutrients, and current pH levels to a dedicated interface.
Within Agriplay systems, efficient power, in the form of usage and cable layout, a single PoE cable covers two jobs: power and data transmission, which means scalability of an indoor farm is much easier from a cost, as well as a hardware networking and wiring perspective.
"An Additional Caveat to Agriplay grow modules is their proprietary lighting systems allow for highly customizable light profiles, so chosen crops that grow within the modules get exactly the right light amount necessary," says Dom. This often leads to higher yields per square meter than other indoor farming tech options. Married together, effective lighting and power usage are the solution to high electricity costs.
"Eventually, growers can see a return on investment through AgriPlay's solution by significantly reducing their operational costs, particularly in energy consumption and easier access to scalability."
For more information:
Agriplay Europe
Dom Behan, Founder and CEO
+1 587-943-4224
[email protected]
www.agriplay.com