Features
Energy is an asset now more than ever

Virus, COVID-19, pandemic, masks, vaccines…these are the words that we’re still hearing, almost two years later. It seems unavoidable. Two thousand twenty-two looks like the third chapter of 2020, even worse, if possible, as we all are fed up with this endless situation. But the truth is that there are some other problems occurring, which fortunately or unfortunately (not sure what to say at this point), will be more important than the virus itself: supply chain issues, and energy and fuel costs. The question to ask: is this, or will this affect the aquaculture industry? The answer is easy: yes. The rising cost of energy has put the industry in a tight spot and the consequences will be devastating if the trend does not change in the near term.

The rise in prices of electricity and fuel has caused some companies to make changes. Thus, containing the strain of the energy bill, prioritizing it above the satisfaction of their customers. The impact is especially significant among large industrial consumers, and aquaculture is not an exception. In Spain, the steelmaker Sidenor, announced a 20-day hiatus due to the “exorbitant prices” of electricity. Other companies have joined in this decision and have reduced their production in one way or another, such as Fertiberia (fertilizers), Ferroatlántica, and Asturiana de Zinc. The energy bills have skyrocketed in recent months and have put the margins of the business in check. Employers and unions predict that, if the rise continues, there will be more production stops and closures.

And then the aquaculture sector. The rise in the electricity bill is eating away, at least in Spain and throughout Europe, the scarce margins with which the aquaculture industry works. The current scenario, according to Javier Ojeda, general manager at Spain’s APROMAR, “is something unprecedented for a sector like ours. There is no reference to an upward trend as pronounced and prolonged over time as this one.”

In Spain, the electricity bill from companies and citizens is reaching historical highs. August 2021 closed with the price marking an all-time high, standing at EU€130.53 (approx. US$147) per megawatt. A rise that represents a 70 per cent increase in the average price of electricity in the last year. Consequently, this is causing alarm in the industry especially in land-based recirculating aquaculture system (RAS) companies where, as we all know, the energy requirements are 24/7, 365 days of the year. 

Smolt producers, representing a tremendous market right now since part of the on-growing productions has been shifted on-land, are struggling. If we consider that the cost per juvenile can represent between 25 to 30 per cent of the cost of the final product, we are talking about a significant increase in the invoice. And who is paying that? Who is the one suffering this? At this stage it is the producer, although we all know that as this continues, the impacted will be the consumer. And what comes next? They will go for cheaper products (which then poses concern for acquiring reliable products) or they will decrease the amount of fish they consume. 

The situation is aggravated by the fact that no economic sector escapes this escalation. This means that the impact is reflected throughout the value chain of the aquaculture product, such as feed, transport, packaging or processing. The cost of feed, which can represent 50 per cent of the total cost of harvested fish, is also affected by this increase by impacting both the price of raw materials and the electricity needed to make feed. Although everything indicates that it is a conjunctural issue derived from current geopolitics, this should not be a reason not to act, meaning that energy efficient farms should always be our main target in the sector. How? Through renewable solutions such as solar and wind power. Remember that energy efficiency (including installation of equipment such as variable frequency controllers) allows savings up to 30 per cent in electricity, reaching 75 per cent in certain circumstances.

Although many farms are inherently inefficient in energy consumption, it is true that in recent years a significant effort has been made to modernize the sector. In recent years, some farms have managed to reduce this bill with the implementation of renewable photovoltaic energy, sensors and controls to reduce oxygen consumption and the application of microbubble diffusers.

2021, 2022..what is the trend? 

In the case of energy, the rise in 2021 was 33 per cent; the rise in diesel of 13.1 per cent, and it is expected to be 5 per cent in 2022. What about feed? Feed made from cereals, fishmeal, vegetable oils, legumes, fish and oils, which can represent more than half of the total cost of production, experienced increases of between seven and 20 per cent in 2021. Meanwhile, the rise estimated for 2022 is between seven and 15 per cent. With regards to veterinary products the increase in 2021 was between four and 15 per cent, and the estimate for 2022 is between five and 15 per cent. Lastly, the rise experienced in 2021 in packaging and transport material (pallets, containers, labels) was from three to six per cent, with increases planned for 2022 from five to 10 per cent.

I often say that everything happens for a reason and the arrival of the pandemic has highlighted the need for a resilient and healthy food sector. To satisfy the population’s food needs, it is essential that food companies are efficient and profitable. So maybe it is time to act, and go one step ahead. Let us modernize the aquaculture sector and make it the most efficient. In the end, it is the future’s food industry!

Energy, cost, impacts…another trending topic currently in Europe is the inclusion of both nuclear and natural gas energy as part of the so-called sustainable energy category. Meanwhile, I am currently discussing and asking to myself if there is any real “sustainable energy” and/or if this concept is right to tell. What’s your opinion on this? Keep an eye on my next article and let’s create a debate around it!  

Maddi Badiola, PhD, is a RAS engineer, project manager and co-founder of HTH Full Spectrum, (www.HTHaqua.com // https://fullspectrumaquaculture.com) based in Getxo (Basque Country, Spain). Her specialties are project management, energy conservation, lifecycle assessments, and RAS global sustainability assessments. Email Maddi at mbadiolamillate@gmail.com or contact her through LinkedIn, Instagram, and Facebook.