Renewable energy could spark up farm incomes

Photo of Rob McCreath

Rob McCreath with the Felton Valley in the background – this prime cropping land was saved from becoming a mine site.

PHOTO: Clarisa Collis

Proposed mining projects that several years ago challenged the future of a whole farming district on the Darling Downs have become the surprise catalyst for farmers to explore their own renewable energy production as part of the farm business


Snapshot

Owners: Rob and Sally McCreath
Location: Felton, Queensland
Farm size: 1000 hectares, cropping 350ha
Rainfall (annual long term): 663 millmetres
Soil types: black, cracking clay
Soil pH: 8.5 to 9
Enterprises: sorghum, chickpeas, mungbeans, wheat, barley, oats and cattle
Planned on-farm renewable energy enterprises: solar photovoltaic, wind turbine generator
and solar-thermal electric technologies 

For Queensland grain growers Rob and Sally McCreath, a proposed open-cut coal mine just 50 metres from their fenceline, plus a petrochemical plant proposal, caused not only sleepless nights but a complete rethink of their farming future.

Initially, it was a straight-up struggle for the survival of their 1000-hectare mixed farming operation at Felton, and through the course of a subsequent district-wide campaign they found themselves reassessing their farming values, practices and enterprise mix.

The outcome is that the McCreaths, and other local farmers, discovered that in addition to grain and livestock they could also produce energy – farm-generated renewable energy that, as it turned out, was able to help negate the case for the mining projects.

Theirs is the story of how a farming community turned a challenge to their livelihoods into a possible new business opportunity on terrain otherwise unprofitable because it is too rugged to crop.

The turning point was when the community group, Friends of Felton, commissioned a 2010 report to assess the viability of a mix of sustainable energy technologies across the district as alternatives to a proposed coalmine.

As part of this assessment, Rob says a visit to their farm, about 30 kilometres south-west of Toowoomba, by Sustainable Energy Systems consultant Trevor Berrill opened their eyes to their own energy production opportunities.

However, at the time the McCreaths were still too preoccupied with the question of whether they would be able to keep farming to pursue the solar and wind energy options outlined by Mr Berrill.

Farm business opportunity

Everything changed when the state government announced the mining and petrochemical proposals would not proceed. This allowed the McCreaths to not only return their focus to cropping, but also to assess the potential for renewable energy as part of their business mix, drawing on the ideas presented earlier.

The McCreaths recontacted Trevor Berrill to start assembling some hard data on the cost-benefits of installing solar photovoltaic (PV) and wind turbine generator (WTG) technologies on the property.

Rob believes renewable energy provides a rare chance to develop a sustainable alternative income source that sits comfortably alongside their cropping program.

Mr Berrill’s appraisal of 150 properties in the district, which forms the basis of what has become the Felton Valley Sustainable Energy Plan, shows that a combination of solar PV, wind turbine and solar thermal electric (STE) systems could power the equivalent of 160,000 average-sized homes using marginal farmland.

The McCreaths have identified 20ha of unproductive country on which to install either solar PV or wind turbine generators.

“Solar PV is a more practical on-farm option because the price of the panels is coming down fast, and it allows us to start up on a small scale and gradually work towards a large-scale system,” Rob says.

“The return on the capital investment could be better than 10 per cent, which means we would be ahead financially after the interest has been paid off.”

Mr Berrill is now investigating a range of options for the McCreaths, such as expanding an existing solar PV system on their farmhouse, installing a 50 to 70-kilowatt solar PV system on their machinery shed, and establishing a one-megawatt system on unused land close to existing electricity transmission lines.

Landlord option

Another option being investigated is that instead of paying for the technology themselves, the family could lease their land to an energy company and be paid either a fixed price per hectare or a percentage of the annual revenue from the energy generated.

Mr Berrill says this approach avoids having to meet the cost of the technology and its installation and could still return to the farmer about four per cent of the total electricity income generated.

At the current electricity purchase price of 10 cents per kilowatt hour, a large-scale PV system spread over 20ha of otherwise unproductive land could add about $43,000 to a family’s annual farm income.

This electricity purchase price is a combination of direct sales to the National Electricity Market (NEM) via a power purchase agreement and payments for large-scale generation certificates (LGCs) under the Australian Government’s renewable energy target.

Solar vs wind

By comparison, if the McCreaths developed a large-scale system themselves, the capital cost for the 26,667 solar PV panels needed to cover 20ha would be about $13 million. Mr Berrill calculates this outlay would return the family about $1 million a year from selling the electricity at the equivalent of 10 cents per kilowatt hour. 

While the McCreaths are leaning towards solar PV technology, Mr Berrill says there is also potential for WTG technology. He says the McCreaths could install three turbines on the area they have earmarked, for a capital cost of $11 million. A single turbine costing about $3.5 million for small wind farms generates about 4530 megawatt hours of electricity a year, which would earn the farm business about $453,000 a year. Three turbines could therefore increase the farm’s income by about $1.36 million a year, allowing them to recoup their investment in less than a decade.

By comparison, if three turbines were erected on land leased to an energy company, the family could bypass the capital costs and earn about $54,000 a year from a percentage of electricity generation revenue.

Mr Berrill says another advantage of a small wind farm is that the surrounding land could still be used for grazing, with the concrete base of each tower occupying an area of only four to six metres in diameter.

A study by Sinclair Knight Merz, commissioned by the Clean Energy Council, further highlighted the economic benefits WTG could provide in the Felton district. The study showed that for every 50 megawatts of capacity, wind farms create five permanent jobs and up to 48 jobs during construction. The report says this level of energy output is already earning farmers who host wind turbines on their properties up to $250,000 a year in land rental income.

Mr Berrill says there is also room for two types of solar energy systems on the roof surfaces of large machinery sheds, with potential for a cost-effective form of solar thermal technology on a shed that the McCreaths use for grain drying.

Rob says making the switch from gas to solar energy for grain drying could save them at least $2000 a year. But this estimate is based on the average cost of drying 200 tonnes of grain a year, whereas in wet seasonal conditions the family typically spends more than $6000 drying 600t of wheat and barley using a gas-powered dryer.

More information:

Rob McCreath,

prestbury@bigpond.com

Trevor Berrill,
Trevolution

Clean Energy Council

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