Farmers and communities to reap billions for hosting wind and solar projects, report finds

Payments to farmers for hosting renewable energy infrastructure will hit a total of $1 billion by 2030, and could reach up to $10 billion by 2050, indicating just how valuable wind and solar farms will be to sustaining farming operations in Australia. 

Farmers in Queensland and New South Wales (NSW) will reap the bulk of the windfalls over time, with payments rocketing to the multiple billions to landholders in those two states alone by 2050, according to the latest report from Farmers for Climate Action and the Clean Energy Council.

The 2030 total for landholder payments – the leases paid to landowners for putting a wind or solar farm on their property – is estimated to be between $900,000 and $1.1 billion.

Another $213 million will be paid to regional communities through community benefits funds and other shared benefits offered by developers. 

The prediction for 2050 – as the country continues through its green energy transition – could result in landowner payments of up to nearly $10 billion, with a ten-fold increase in community payments and benefits totalling nearly $2 billion.

Payments to both farmers and communities are breathing new life into struggling communities, says Clean Energy Council CEO Kane Thornton. 

“[The economic side is] a piece of the story that hasn’t been well told to date,” he told Renew Economy.

“Take Ballan for example, in Victoria. It’s amidst about four wind farms which have been built in that area over the last two or three years. You can see the change and you can feel it in that town, compared to four to five years ago. It has a vibrancy to it, there’s more shops and businesses in the main street.

“They now talk about the flow-on benefits of the volume of workers coming into town to eat lunch, the number of cars coming in to fill up at the petrol station in town. Ballan was, for much of the last two or three decades, a town in decline and now it’s vibrant and prospering because of the benefits that have come with some pretty big renewables products.”

Farmers typically host renewable projects for 25 to 30 years. 

Currently, payments for wind farms are usually calculated on a per megawatt (MW) basis although some use a per turbine payment. These typically work out to annual payments ranging between $5500-6500 per MW. 

Modern turbines now have a capacity of 7 MW.

Solar farms are calculated on a per hectare basis with a rate of $750-1250 per hectare. 

The factors that decide whether the rate paid is higher or lower include the quality of the wind or solar resource, distance to a transmission connection point, the pre-existing value of the land and its productive potential for agriculture, and electricity market conditions such as whether the wind or solar resource matches up with times of high electricity demand.

But they also rely on non-local conditions, such as whether the site is easy to get materials to, whether there are already people in the area available to work on the project, access to housing, and of course, what kinds of planning conditions are put on the project during the planning assessment process.

The contentious nature of wind projects – their height alone means they’re more of an imposition on the landscape and on community psychology – is partly behind the higher payments required for turbines.

It also means wind “farmers” reap the highest benefits as renewable energy hosts. 

Luke Osborne has been farming merino sheep under the Capital Hill wind farm in NSW since 2008.  He says the income and infrastructure has allowed him to double the number of stock on his property in that time. 

“The wind farm opened up a lot of country on the St George flats that was arable but inaccessible,” he told Renew Economy. 

Access tracks means Osborne can now get large machinery into those areas to replace weed-infested pastures, and more easily get stock in and out. 

In Victoria, grain cropper Susan Findlay-Tickner says the RES Group developed the Murra Warra wind farm to literally line up the turbines to enable efficient cropping. She says the turbines are lined up in rows while roads have been placed efficiently for dual wind and cropping farm use. 

“We have a reliable income and guaranteed income and I think the concept of that is probably more important than the monetary amount. We can’t predict what our income from our grain enterprise will be, but we do know what our turbine income will be and that allows us to make decisions on a year by year basis,” she says.

The two stage Murra Warra wind farm has an annual $100,000 community fund and has 14 permanent roles, the impact of which is felt in the community as it’s replaced at least one job lost by the closed Stawell gold mine. 

Payments to landowners start with an access agreement to let the developer assess the site. These are annual payments but may also include a one-off bonus to get the deal across the line. 

Then comes the option to lease – a continuation of annual payments to hold the site while the developer goes through the planning process. It can also feature one-off bonuses. 

And then there is the final lease agreement which lasts for up to 30 years. 

The report, Billions in the Bush, only totted up the value of the last set of payments in the long term lease, meaning the total value to farmers of hosting wind farms will be much larger.