Mark McHenry

This research reviews existing climate change literature and quantifies the climate change mitigation and adaptation potential of specific agricultural diversification activities at an individual farm level. It comprises modelling and simulations of net emission reductions and discounted market values of a range of small-scale renewable energy and carbon sequestration projects. The research aim is to enable private agricultural entities and governments to compare alternative investment options for both climate change mitigation and adaptation in the southwest of Western Australia. The research includes an analysis of ten small-scale renewable electricity systems and a range of sub-scenarios. In addition, six forestry sequestration projects are modelled, and one analysis of displacing fertiliser by using biochar are assessed. The results indicate that privately-owned, small-scale, grid-connected renewable energy systems were not competitive adaptation options for private entities relative to sourcing electricity from centralised renewable electricity generators connected to the network. The total discounted capital and operating costs, and the relatively minor mitigation potential of the small-scale energy systems resulted in very high mitigation costs. The overall discounted values of the systems were relatively insensitive to the magnitude of the existing subsidy mechanisms, either capital subsidies or feed-in tariffs. The forestry sequestration project results for the higher rainfall region show large differences in total discounted project costs over time. These costs were highly dependent on the project financing arrangements, while the tree species selection, and the previous land use were primary determinants of the biomass growth and the total carbon sequestered. The results indicate that the most productive agricultural lands in the region might be permanently retired from food production and replaced by single species tree plantations, although the viability of this option is dependent on future carbon market eligibility rules and carbon values. The biochar sequestration modelling results indicate that a reduction of phosphorus fertiliser use in low-rainfall cropping regions was possible when applying large quantities of biochar to the soil. The cost-effectiveness of using biochar in cropping systems was found to be insensitive to phosphorus fertiliser price or carbon market values. In contrast, the commercial viability of this option was highly dependent on the price paid for biochar, rather than the carbon price.

Total renewable energy capacity in Stand-alone Power Supply (SPS) systems has increased dramatically over the past few years in Western Australian remote off-grid agricultural regions. Capital cost subsidies provided by governments has allowed the replacement of aging diesel generators with photovoltaics and wind turbines, which are known to be as reliable as traditional systems in addition to providing 24-hour availability of electricity. Over the last 30 years renewable energy SPS system technologies have seen some notable developments. However, in many respects they have also failed to live up to the expectations of many people in regional areas. There are still many technical, social and economic barriers to the use of renewables in SPS systems in Australia. A significant collaborative research and development (R&D) approach in regards to small renewable system integration into conventional power systems in Australia is literally non-existent. The last 10 years of energy policies has seen institutions that promote and provide R&D into renewable energy, such as the Energy Research and Development Corporation (ERDC), Australian Cooperative Research Centre for Renewable Energy (ACRE), and the Commonwealth Scientific and Industrial Research Organisation (CSIRO) endure renewable energy funding cuts or have been discontinued. This research illustrates that the performance and reliability of remote SPS systems in pastoral regions of WA has improved slowly in the past 30 years. This research also explores the strengths and weakness of government and industry policy approaches over time and their relationship to performance of SPS systems in pastoral Western Australia. The recommendations provide direction for policy makers to improve the utilisation of taxpayer funds to achieve climate change, energy, social equity and technological development policy objectives.