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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.

Improving energy efficiency

Learn how to reduce energy use on your farm with DPI's energy efficiency factsheets and about innovative energy efficient vehicles and equipment.

Renewable energy options

Deploying renewable energy solutions on-farm may reduce a farmer's energy costs, exposure to energy price increases, emissions and interruptions to energy supplies. These solutions may also result in increased energy security by reducing reliance on the electricity grid or fuel deliveries and improve farm productivity by avoiding losses caused by energy supply interruptions and tasks such as refuelling diesel tanks.

There are a variety of renewable energy technologies appropriate for on-farm use that are currently in use in Australia. There are also some technologies, such as green hydrogen, that are in development

When deciding whether to invest in a renewable energy solution for your farm it is important to consider your specific circumstances and location when weighing up the pros and cons of each technology.

A selection of renewable energy solutions suitable for farms are described in this section including:

On-farm energy pilot projects

Learn about the NSW DPI energy pilot projects which are demonstrating innovative technologies and practices to improve energy efficiency and generate renewable energy on-farm.

Electricity supply  constraints and opportunities for intensive industries

Intensive agricultural industries are generally highly reliant on electricity in their operations but are sometimes located in regions where the local electricity grid is currently experiencing constraints or is expected to in the future. Learn more about two NSW DPI projects that explored opportunities for intensive industries to improve the reliability of farm electricity supplies in grid constrained regions by improving energy efficiency and deploying clean energy solutions.

Learn more about NSW DPI's Energy Efficiency Solutions and Clean Energy Solutions projects.