Conflicting Trends in Agricultural Irrigation Set to Drive Demand for Energy
New research by CoBank provides insights into the evolving drivers of electricity consumption for agricultural irrigation
DENVER (January 09, 2020) — The sale of electricity used to power agricultural irrigation equipment is a significant source of revenue today for many electric cooperatives and other utilities serving the rural U.S. However, future energy demand will be influenced by conflicting pressures that electric utilities should understand and prepare for, if they aren’t doing so already.
According to a new report from CoBank’s Knowledge Exchange division, agricultural irrigation currently accounts for more than one-third of all freshwater consumption in the U.S. and approximately 6% of all industrial electricity sales in Central and Western states, on average. The report discusses factors that will continue placing upward pressure on the consumption of electricity for agricultural irrigation, including increasing use of electric groundwater pumps, falling groundwater levels, and rising water use efficiency (WUE).
On the other hand, the report says several other factors could counter that upward pressure, perhaps leading to negative growth in some irrigators’ electricity consumption. These factors include increased efficiencies in irrigation practices, the potential for well depletion, and ongoing advancements in solar photovoltaic (PV) and battery energy storage system (BESS) technologies. By the late 2020s, the report says, many U.S. agriculture producers could find that it would cost them no more to independently power their electric irrigation pumps with solar and battery storage systems than it would to source power from their electric utility.
Despite these potential challenges, “electric utilities will continue to be well-positioned to help their customers identify the best means of addressing their irrigation energy needs over time,” said the report’s author, CoBank senior economist Tom Binet. “Some electric utilities may conclude that building a solar and battery energy storage project – either in front of, or behind the customer’s meter, could be an appropriate solution both technologically and economically,” he said. Other utilities may find that traditional sources of power generation may better suit their needs, he added.
The full report, “From the Ground Up: The Changing Energy Demands of Agricultural Irrigation,” and related graphics, are available on cobank.com.
CoBank is a $138 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.