Analyzing the costs of energy for irrigation in Michigan
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EmailConsidering annual energy costs in irrigation systems is critical for investment decisions.
Irrigation plays a crucial role in mitigating climate impacts and risk, as well as increasing crop yields, by ensuring crops receive adequate water during key growing periods. In Michigan, where irrigation is significantly expanding (to over 700,000 acres in 2017), knowing the costs associated with irrigation is essential for farmers considering the investment.
Using Michigan data from the 2018 Farm and Ranch Irrigation Survey (FRIS), State of Michigan Energy Reports, Department of Energy Regional Fuel Prices and the Nebraska Pumping Plant Performance Criteria, we estimate the average energy costs to distribute 1 acre-inch of water. Since the most recent estimates from the Farm and Ranch Irrigation Survey are from 2017, all estimates are updated to 2024 rates using the change in reported electrical pricing from 2017 to 2024. On average, Michigan producers apply 7.2 acre-inches of water on irrigated farmland annually. FRIS provides average annual energy costs per year broken down into fuel types and water sources. To calculate the electric pumping costs per acre-inch we use these estimates, divide by annual average water use, and update the values to 2024 prices.
To calculate the diesel pumping costs per acre inch, we use the Nebraska Pumping Plant Performance Criteria, which estimates the cost equivalency between electric and diesel pumps based on performance and efficiency. While the Farm and Ranch Irrigation Survey reports estimates for diesel pumps, experts suggest that these estimates may underestimate the cost of diesel pumping due to under reporting of distribution costs. Therefore, we combine the cost equivalency factor from the Nebraska Performance Criteria with data from the Department of Energy on average diesel prices in Michigan, and Michigan reported average electrical costs for small commercial operations of $0.1655 per kilowatt-hour (KWh) in 2024 and $0.1269 in 2017. We find that, for diesel pumps to have been cost equivalent to electric pumps in 2024, diesel would need to cost $2.34 per gallon. Since the average diesel price in 2024 is $3.80, we find that diesel pumps were, on average, 1.62 times more expensive to operate. Using this multiplier, we apply it to our FRIS electric pumping costs and obtain the diesel cost per acre-inch. Results are shown in Table 1.
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Table 1. Costs per acre-inch of irrigation water, 2017 Michigan data. |
|
|---|---|
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Type of Irrigation System |
Cost per Acre-Inch |
|
Electric Pumps |
|
|
Average |
$5.49 |
|
Surface Water |
$6.44 |
|
Groundwater |
$4.55 |
|
Diesel Pumps |
|
|
Average |
$8.90 |
|
Surface Water |
$10.43 |
|
Groundwater |
$7.36 |
|
Total Average Costs |
$7.19 |
Across all irrigation systems in Michigan, the average cost of delivering an acre-inch of water is $7.19. However, the type of irrigation system contributes to the cost of pumping irrigation water. Electric pumps, which are used for 78.5% of systems in Michigan, have a cost of operation of $5.49 per acre-inch. Diesel pumps (used in 19.4% of Michigan irrigation systems) are more expensive per acre-inch, at $8.90. Since the use of other fuel sources to operate irrigation pumps is negligible in Michigan, we do not report costs for systems using natural gas, LP gas, propane, butane, gasoline or ethanol.
Costs also vary by source of irrigation water. Surface water systems in Michigan typically have higher irrigation costs per inch. Of course, characteristics of the field will partially dictate the type of irrigation system that is eligible to be installed on a field. Proximity to surface water, connectivity to three-phase electricity, pump capacity and efficiency, among others, can constrain the type of irrigation system that can be installed on a field. For location-specific information, talking with neighbors with similar irrigation systems will provide the best information about the local conditions.
To calculate the energy costs of an irrigation system for the year, consider this example. For a 120-acre center-pivot system, irrigating 7 acre-inches a year:
Energy costs = 120 acres*7 acre-inches*$7.19/acre-inch = $6,039.60
Total annual energy costs for the system would therefore be estimated at $6,039.60. The use of low pressure distribution systems and variable frequency drives could reduce this cost. While energy costs are one component of the costs of an irrigation system (installation, maintenance, etc. all play a role), they are a significant piece of the puzzle and should be considered when installing a new system. For more information on the costs of installing an irrigation system, see Michigan State University Extension’s irrigation resources.
