Agribusiness’ future is electric

Harry Rozga

KPMG’s Agribusiness Agenda 2026 emphasises resilience, adaptation and long-term systems thinking as essential agribusiness governance concepts in an unstable operating environment. And electrification, argues leading Australian sustainability strategist and futurist Professor Ray Wils, can be a powerful driver of these priorities.  
 
 “The path forward is about fuel security, energy sovereignty and practical self-reliance”, writes Wils in a recent report called Energy Sovereignty for Regional Australia: Protecting Farmers, Powering the Future – an argument that resonates on both sides of the Tasman.

Energy sovereignty

Professor Wils sets out a series of proposals to support a capable, competitive agricultural sector, linked under the idea of ‘energy sovereignty’.  
 
 Exposure to global fossil fuel markets is also a material economic risk, with fuel supply instability compounding the rising overall costs of doing agricultural business.

Energy sovereignty is about addressing these risks by building energy systems that are “reliable, affordable and locally controlled”, with electrification at the heart of this. 
 
The energy transition, in turn, offers an array of downstream payoffs, from innovative operational synergies, additional revenue streams and social licence benefits.  

The case for leadership 

While electrification poses upfront costs, over the longer term it offers an increasingly strong proposition across cost, reliability, productivity and energy security, the report, commissioned by Farmers for Climate Action, argues. 
 
Once installed, electric motors are far more efficient than their combustion-based counterparts, and farms that remain reliant on legacy energy systems will be exposed to risks from stranded assets and regulatory shifts.  
 
The report identifies a number of ‘low-hanging fruit’ options for electrification: standard farm systems such as irrigation and water pumps, refrigeration, sheds, workshops and light and medium-sized vehicles are often relatively easy candidates.  
 
Directors can play an important role in overseeing transition pathways that match local opportunities and address vulnerabilities specific to their operations.  
 
Where firms take the lead on these lower-risk options, they help build the “skills, service capacity and confidence needed for more complex changes.” 

Electrification is already paying off

New Zealand agribusiness already offers examples of the benefits of robust strategic pivots towards renewables. 
 
Central Otago’s Forest Lodge Orchard is a world leader in electrified horticulture. Its rooftop solar, battery storage and electric machinery systems save it more than $40,000 in fuel costs annually, enable new revenue streams by selling excess generation back to the grid, and give it a competitive advantage with sustainability-conscious consumers. 
 
Australian experiences suggest solar and wind infrastructure can provide a significant portion of farm revenue for businesses that adopt them.   
 
Australia’s Clean Energy Council has highlighted an emerging model called ‘agrisolar’. This involves combining agriculture with solar energy generation on the same paddock, with the shade created by panels helping to preserve soil moisture, protect animals from heat stress and even improve wool quality.  
 
Professor Wils suggests fertiliser, another key agricultural input on which New Zealand is heavily import-dependent, could soon be produced locally using clean energy infrastructure, with Australian green ammonia projects already showing promise.

Governing the transition

‘Sovereignty’ is a term traditionally associated with states and governments, and ‘energy sovereignty’ captures the idea that in a fragmented world, local control of energy systems is in the national interest.  
 
Farms are particularly well-placed to help bolster New Zealand’s energy security because of their typically greater access to finance and land than regular households, as Rewiring Aotearoa reports. 
 
With agriculture such a core part of the country’s self-image, the benefits to local energy supply, job creation and emissions reduction could also strengthen agribusinesses’ social licence.   
 
Wils is clear that a range of policy options are open to governments that wish to support farms to electrify. He describes the energy transition as a choice “between competing cost structures and system vulnerabilities for the coming decades”. 
 
Boards are well-placed to lead with a long-term view and capital allocation decisions that address risk across interlocking physical, economic, social and regulatory systems. 
 
And with trans-Tasman experiences demonstrating that renewables can simultaneously offer resilience, competitiveness and greater social licence, electrification looks like an increasingly convincing response to the most critical governance questions facing agribusiness boards today.

Harry Rozga is a writer and researcher interested in the interconnections between climate change, economics and public policy. He holds a Master of International Relations from Te Herenga Waka – Victoria University of Wellington and is now based in Melbourne, Australia.