On-farm energy efficiency and renewable energy

Energy is a crucial input into all farming systems. However, farmers are subject to increasing and volatile energy costs, eroding profitability and competitiveness.

Australian farmers are highly dependent on diesel with more than 80% of energy consumed on-farm coming from diesel. This leaves farmers highly exposed to the volatility of the global oil price, and importantly, with about 90% of Australian diesel supplies imported, almost completely reliant on imported diesel, exposing the sector to the risk of supply interruptions. In addition, the electricity grid in some rural and regional areas can be unreliable, especially for farmers at the fringe of the grid, or non-existent in remote areas. Furthermore, both retail and supply chain customers, domestically and in export markets, are increasingly preferencing products with a lower carbon footprint. These factors - energy costs, security of energy supplies and sustainability - are major drivers for farmers to improve energy efficiency and adopt renewable and low carbon energy solutions in their operations.

Efforts to improve on-farm energy management should start with the easiest, lowest cost action of adopting energy efficient practices and equipment. Energy efficient practices are often low or no cost, e.g. inflating tyres to optimal pressure. Investment in more energy efficient plant and equipment may initially incur a higher capital cost than the less efficient alternative, but over a lifetime of use, will often result in lower total lifecycle costs.

If you are considering investing in renewable energy technologies on your farm, it is important to improve the energy efficiency of your operations first, so you don't install (and pay for) more renewable generation capacity than you need. The most common renewable energy technologies that are suitable for farm use, such as solar PV, produce electricity so consider where it makes sense to electrify your operations e.g. light vehicles and irrigation. With currently available technologies, heavy vehicles and machinery such as tractors are difficult to electrify, though in the future, electric models may become available using technologies such as hydrogen fuel cells. In the shorter term, low carbon fuel alternatives to petroleum diesel such as renewable diesel are likely to become available, reducing emissions from the operation of the existing fleet of heavy vehicles and machinery.