Electric Farms

For decades farming has played a significant role in New Zealand’s economy. Electrifying our farms presents a real opportunity for farms and rural communities to reduce their costs, diversify their income and play a significant role in New Zealand’s renewable energy system.

The Big Finding

Early generations of farmers had to learn to be self-sufficient and make the most of the resources they had around them. And what farmers have around them now is plenty of land, lots of sun, increasing demand for renewable electricity and a need to save money and diversify their revenue streams. Using, creating and storing more electricity on New Zealand’s farms is in the best economic and environmental interests of the rural and energy sectors and New Zealand as a whole.

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Report highlights

Farmers can immediately save on energy costs by electrifying their fossil fuel machines

The agriculture sector spends around $700 million on diesel each year. Shifting away from diesel machines is a huge economic opportunity for farms because electric machines are so much cheaper to run. When powered by solar and batteries, farms can dramatically reduce their energy bills and improve their resilience.

Farmers can create new revenue streams by installing solar panels and batteries

With the right conditions, farmers can invest in assets that save money on operational costs and can also create an additional revenue stream by producing and storing solar power and timing export perfectly for when it is most valuable. There is also potential for farms to play in a role in the national electric vehicle charging network.

New Zealand needs more renewable electricity and farmers are perfectly placed to provide it

Farms are in a unique position to provide mid-scale renewable electricity solutions that can bolster the country's energy security. They have greater buying power than individual households; they have the land and space to install much larger systems than households; they are usually owner-operators who can make their own decisions and are not burdened with cumbersome consenting processes; and they often have access to finance and are generally well-placed to take on long term investments, especially those that will save money.

Electrification is the low-hanging fruit of agricultural emissions reduction

A significant amount of on-farm emissions come from fuel use. Farmers can make a difference right now - while also reducing the country’s dependence on increasingly expensive carbon offsetting - by electrifying their fossil fuel machines.

Data spotlight

$40,000

Forest Lodge Orchard saves around $40,000 per year on operational costs across the farm and home through electrification of its fossil fuel machines.

$20,000

Forest Lodge is also expected to make around $20,000 per year by producing and storing cheap power and timing export perfectly for when it is most needed by the grid - and most valuable for them. There is also potential for farms to play a role in the national electric vehicle charging network and create another revenue stream.

Two thirds

If each of the approximately 50,000 farms in New Zealand installed mid-scale solar systems they could generate an additional 28-33,000GWh of electricity each year. This is equal to between 63-75% of the country’s current total electricity consumption.

Two hours

If each of these farms also installed 300kWh of batteries - and even if only half of these batteries were fully charged - they could provide around two hours of 3,750MW peak support or nearly 50% of the country's current peak demand. This would significantly reduce the need for fossil fuel electricity generation during winter peaks.

45%

Forest Lodge Orchard uses 900% more electricity than the previous farmer, but rooftop solar and a battery bank provides about 45% of the farm’s electricity needs and the peak drawdown from the grid has remained low. No more local distribution infrastructure and no new poles and wires were required.

20

Forest Lodge can export over 100kW of electricity back to the grid, which is enough to offset the peak demand of around 20 local homes.

$700 million

The agricultural sector in New Zealand spends around $700 million per year on diesel. While there are significant upfront costs, electrifying is a huge economic and environmental opportunity for farms because electric machines are so much cheaper to run and have much lower emissions.

4,500

New Zealand currently has about 10,000 new solar setups installed each year. If we were to increase this tenfold to 100,000 per year, this would add around 4,500 solar installation jobs to the industry, not to mention the additional demand for electricians and maintenance workers

What's an electric farm?

Modern farming is heavily dependent on diesel machines like tractors, motorbikes, pumps and harvesters. An electric farm swaps some or all of those fossil fuel machines for electric equivalents and powers them with a combination of solar panels, battery banks and New Zealand’s highly renewable grid. If enough generation capacity is built, electric farms can also play a role in the energy system and create a new revenue stream for farmers by selling renewable electricity to the grid during times of peak demand.

Case study: Forest Lodge Orchard

Forest Lodge Orchard is making on-farm cost savings through electrification that can be realised by all farms.

Forest Lodge Orchard in Central Otago has installed 45kW of solar panels on rooftops and 120kWh of batteries to power the home and farm. It has also electrified all of its on-farm machinery, including two electric frost fighting fans, electric golf carts and New Zealand’s first electric tractor. Rooftop solar and a battery bank provides about 45% of the farm’s electricity needs, so although electricity use has increased by about 900% and it requires a lot more electricity from the grid than the previous farmer, the peak drawdown from the grid has remained low. No more local distribution infrastructure has been required and no new poles and lines needed to be built.

After electrification, the farm saves almost $40,000 a year across the farm and home from avoided costs of diesel, avoided electricity network lines charges and by exporting excess power back to the grid when prices are high. For example, diesel frost fans burn large amounts of fuel and can cost over $10,000 a year to run, whereas Forest Lodge Orchard’s two 30kW electric frost fans are more efficient at 20% the operational cost. Similarly, the 40hp electric tractor does the job of a 80hp diesel equivalent thanks to the benefits of electric power, and costs a fraction of the price to run.

Through an innovative trial with the local Electricity Distribution Business (EDB), Aurora Energy, Forest Lodge Orchard estimates it will earn about $20,000 of extra revenue by providing power back to the grid during peak periods. With smart use of their batteries, it can ensure it is supplying energy to the grid when it is most needed. This is the first step in creating an electricity system that rewards farmers for contributing to reduced peak pressures on large-scale generation and distribution.

‍Find out more about Rewiring Aotearoa CEO Mike Casey’s electrification journey here.

FarmCharge

Could an answer to New Zealand's lack of electric vehicle charging infrastructure be found on farms?

We believe there is potential for farmers to play a role in fulfilling National’s promise of rolling out 10,000 EV chargers across the country. Farmers investing in mid-scale solar and battery systems could not only power their own machines much more affordably and earn money for sending electricity back to the grid at peak times, but they could also become part of an extensive national charging network and create another new revenue stream.

Farms are usually very close to the medium voltage networks, meaning they can scale up renewable systems without physical constraints or undue overloading risks to the distribution networks.

Here's what we need to turn farms into future power plants.

Recognise the role farms can play in the energy system

Rooftop solar is now the cheapest source of delivered energy for New Zealanders and large-scale infrastructure continues to increase in price, so the case for more focus on customer generation has never been stronger. This must be incorporated into the decisions we make about future investments in our energy system.

Develop farm-focused finance for electrification

Providing low-cost finance to farmers to de-risk the upfront capital cost of electric machines and on-farm generation and storage is critical if we hope to speed up adoption.

Fairly reward farmers for their contribution

A battery in a farmer’s shed needs to be seen as a competitor to any other electricity supplier and if it is cheaper to access the farmer’s energy, then that infrastructure should be prioritised. Incentivising investment will require farmers to be compensated fairly for their contribution.

Develop mid-scale products for farmers

Rooftop solar and battery installations that suit farms should be brought to the market and targeted at farmers. Rural retailers could play a crucial role here.

Remove unreasonable restrictions on farmers

All District Plans should allow mid-scale ground-mounted solar installations as a permitted activity; farms located in an Outstanding Natural Landscape should be allowed to install solar on roofs and on smaller ground mounted systems; micro-hydro schemes that are non-consumptive should not need a resource consent; and multiple electricity connections on one farm should be able to be grouped together for billing purposes, something known as net metering.

Push electrification for emissions reduction

By enabling more New Zealand farms, homes and businesses to electrify without putting undue pressure on the electricity network, installing mid-scale generation and storage on farms will reduce energy emissions in the agriculture sector and across the country.

About Rewiring Aotearoa

Rewiring Aotearoa is an independent non-partisan non-profit. It is a registered charity working on energy, climate, and electrification research, advocacy, and supporting communities through the energy transition. The team consists of New Zealand energy, policy, and community outreach experts who have demonstrated experience both locally and internationally.

We're in it for you. We’re always fighting for the New Zealanders who use the energy system. Our work gives households and businesses the information and inspiration they need to make decisions that will reduce their costs and their carbon emissions.

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By combining research, communication and demonstration, Rewiring Aotearoa will accelerate climate action and transform the energy system to benefit all New Zealanders.

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Rewiring Aotearoa is a group of New Zealand leaders who work within the climate, energy, policy, data and storytelling space. We believe the cross section of these skills will help us rapidly electrify Aotearoa New Zealand.

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Rewiring Aotearoa’s New Zealand-based team is primarily funded by a group of New Zealand-based philanthropists, with a small chunk of funding generated through projects and donations from supporters.

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