Who benefits from the renewable energy transition? With Tracy Lefroy

0:04Tracey Lefroy: Hello, and welcome to Ag Tech So What? Brought to you by Tenacious Ventures. I'm Sarah Nolette. In Australia, farms and regional communities are increasingly becoming part of the renewable energy transition, creating new opportunities to diversify agricultural businesses, but also raising big questions about land, livelihoods, and the future. And sadly, some of the activities are already dividing communities. I'm not pro-development, I'm not anti-development, but if development is coming, how do we leverage it to the best of our ability to have that legacy impact? Tracey LaVoy is a farmer in Western Australia's Wheatbelt.

0:44Tracey Lefroy: When a renewable energy developer approached her family's farm, she, of course, looked at the business opportunity. But she also wanted to ensure that the whole community would benefit. Instead of negotiating with the energy company individually, Tracey helped bring neighboring landowners together to form a collective. They shared information and negotiated commercially as a group, so they'd have a stronger voice in the process. Tracy has since drawn on that experience, working as an independent consultant to help other landowners navigate similar projects. I heard this story a few months back when I met Tracy, and I wanted to learn more about what it takes to negotiate a renewable energy project on a working farm.

1:21Tracey Lefroy: from the commercial opportunities and agreements to the long-term risks, and why what seems like an opportunity is far more nuanced when it comes to mutually beneficial relationships between developers and regional communities. Because I wondered if it has some parallels to the relationship between ag tech developers and farmers and regional communities. In our chat, we also explore a bigger question. How can regional Australia move beyond simply hosting renewable energy infrastructure to capturing its long-term economic benefits? So here's Tracy. So we are a mixed farming enterprise at Dindi Bindi, which is in the wheat belt of Western Australia.

2:00We're predominantly cropping. We're on 9 ,000 hectares, which is both a mixture of leasing, share farming and ownership. We have canola, wheat, hay, for export oats, some lentils in this year, looking at that whole of system type process. and then we have a merino sheep stud and a flock of merino sheep that works well because our country is not 100 % cropping arable. I kind of feel like I get the best of both worlds in that I get to be a farmer but I also hold quite a few off-farm positions. Someone referred to it as you have a portfolio career, Tracy, and I was like yeah I have heaps of different things I do which is awesome.

2:40So I do a bit of non-executive director work all based within agriculture And over the last few years, I have absolutely loved getting to understand more about the renewable energy transition, what it means for regional community, what it means for farming businesses, and basically what it means for the broader economy outside of metropolitan Australia. Yeah.

3:02Tracey Lefroy: Did you grow up on the property there? No. So this is my husband's family farm. I grew up farming at Dongara, which is about 400 k's north of Perth. lucky enough to grow up on a farm that was 15 kilometers from the beach and I'm not convinced how my husband got me to move 130 kilometers from the coast clearly in the first flush of love that's right to do that that's funny yeah oh that's awesome I guess I probably a lot more common in WA to have some of those properties near the beach and and get the benefit of both oh that'd be epic place to grow up did you actually take advantage of it did you get over the beach.

3:38Oh yeah. So we were the family who we farm literally 15 kilometers inland from the beach and we would holiday in our hometown. So we would literally drive 15 kilometers to our holiday house and had concrete floors that we could fire hydrant out. So yeah, we kept it pretty real, which is great. But farming on the coast also has its challenges in that we're literally sometimes farming on sand dunes. When we get people from the East Coast coming over to our farm at Irwin, they'd be like, so this is where you farm? Yeah. And you grow lupins, you grow tagastasty, anything that will stand up in the sand.

4:18And then we were lucky enough to have some river flats as well. So we had self-mulching clays on those, which supported much better crops. What a fascinating geography WA is. And on the kind of current farm at Cormor, you guys, I think have been pretty keen adopters of technology. Like just tell me a little bit about some of the stuff you've gotten benefits from? Look, really broadly, water is a major constraint for us in terms of we don't have great access to steam and we don't have groundwater. So we actually have a reverse osmosis desalination plant on farm and that's solar carload. That's been developed up in consultation with one of the unis over here in WA.

4:57And that has been huge for us. So it provides livestock water and it also provides our spraying water so for our cropping program and then the brine goes into an existing salty waterway so there's no environmental impact of that but even just there I think it's that thing of identifying a problem and then identifying what solution is going to be most appropriate for that we obviously use whatever's in our tractors so we have auto steer on stuff we we do yield mapping certainly have remote sensors. We have a ridiculous number of rain and weather gauges across the farm and they inform your decision making around fertiliser application, around time of sowing, around what else is happening on the farm.

5:43And then in the livestock operation, we use AI, we use fat scoring on the sheep. We've got NDIS compliant tags and then in the confined feeding system. Everything is monitored within that. We kind of see technology as an enabler and a solution. We haven't actively sought out technology. We've more actively sought out solutions to problems on farms. You've also been or are now a renewable energy host. How did that come about? It's been really interesting. And someone actually introduced the concept to us before a proponent ever came to us. So a few years ago, an economist was at our kitchen table, bought out by our accountant and The Economist was very Sydney based and had huge economic knowledge, but very little farming knowledge, which is actually really good because it gives you a really fresh reframe.

6:33And she just said, how do you guys define yourselves? And we both said, oh, we're farmers. We're fifth generation, Kristen, fifth, fourth generation for me, we produce food and fibre, and we're really proud about that. And coming from New South Wales, where they're a bit further along in their renewable energy journey, she said, well, have you considered being food, fibre and energy producers. And that was one of those, huh, no, that's not something we've thought about. So for us, that was the very start of our renewable energy even thought process. It came back to that thing of knowing that as farmers, we are really flexible, we're really adaptable, we move with the seasons, with commodity prices, with markets.

7:15So the question wasn't for us, whether we can add energy to that identity. It was about, okay, so if we do that, what are the systems around us that make it possible to add energy to our mix in an equitable and fair manner? I don't know if you've seen, Chris Sounders and Sabine Heindel have recently put out an article and talk about this agri-energy framing. And I found that really cool. It's about energy, not as a competing land use, but as a productive input into ag systems. And I kind of like that new framing. So rather than kind of sit alongside my ag, it's less about how do we manage the conflict to how do we design systems that capture the opportunity within agri-energy.

8:00Oh, to actually answer your question, what happened to us is that my husband was actually in the shearing shed and a proponent literally walked into the shearing shed in the middle of hearing and said, oh, hey, do you want to host wind turbines? Something a little more formal. And all the shearers were in there going, tell him to go away. Yeah, yeah. I'm sure that's what I want to say. Yeah, yeah, yeah. That's right. So just to get the terminology right, so proponent, that refers to someone who actually works for the company or are they actually a middleman? Yes, sorry. Yeah, explain who that is for anyone else.

8:34So the proponent to us is the person who first approaches you with regard to potentially being a host of renewable energy infrastructure. Now, keeping in mind that that proponent is not necessarily who builds and manages and maintains that infrastructure in the end. But what struck me first was the asymmetry in the approach in terms of, you know, you've got your landowner or your farmer and you've got the proponent. So the proponent comes, I think for us, there were three people who came at first. This was a team who had done this dozens of times. They'd approach multiple families over multiple years over multiple projects we've never done this so that gap in knowledge and experience and even in project literacy that was real and it was huge and you start feeling a little bit like you're on the back foot so yeah the start of that journey is quite confronting what do you remember what they were wearing when they walked into that shearing shed like were they dressed appropriately to come on farm do you know what they really were jeans boots sure yeah now that we've got to know them quite well over the last year or two you know that they are very real people which I really appreciated I think sometimes that when a proponent comes on who's a bit too slick I think that can perhaps undermine the message they're saying I'm not saying it doesn't mean they're trustworthy because a slick dresser can be trustworthy but yeah if someone comes onto your farm in a suit you're immediately like what are you doing you're Even dressed right.

10:02Totally. Kind of speaks there to that thing of when you're a farmer, you know, we are all running fairly decent sized businesses, but we're also still very hands on within those businesses. So your thinking has to go from like when they came into the hearing shed, you know, Kristen's looking at wool on the table when dad's out, you know, doing really very real, very consequential work. but also then dealing with someone coming in and saying, hey, here's a 30-year business proposition. What do you reckon? So that the spectrum of roles that a farm business owner holds is vast and getting your head around something as, you know, as hands-on as doing your wool classing through to here, make an intergenerational business decision is pretty massive.

10:51Absolutely. I mean, in other businesses, you know, I'm sitting at my desk most of the day And if someone wants to talk to me about something, they're scheduling a meeting. And so then I know that I'm transitioning from this context. And so it always strikes me about agriculture, where the line between both the kind of running the business and being in the business and the line between personal and professional, because you might have moved then from the sharing side to literally your kitchen table as a family to have that conversation. And they're like in your home and using your spare bathroom.

11:16And like, it's the blurriness of these lines is something that's really hard to appreciate in other sectors, because you might have colleagues in another industry that you work

11:23Tracey Lefroy: with for 20 years and you've never been to their house. Yeah. So what was that conversation? Like, what was their goal in that conversation to get you to like, you know, yes, we want to have another conversation or, you know, what was their objective and how did you take it? Yeah, I think I was very lucky in that I did eight years as Shire president or mayor for where we are. And so renewable energy had already been across my desk in that role. And I'd also seen and read some examples where there had been friction between neighbours and Kristen and I are very people first in our business enterprise.

12:00So for me and for us, the most important part was making sure that we could have conversations with our neighbours about this before it went any further. To us, we were like, right, we're really happy to have this conversation with you, but we need you being the proponent. We need you to know that we'll be talking to our neighbours about this. We'll be discussing it with them. So our first step was, yes, we were open to the concept. However, a big fat caveat on that was we are only open to this concept if we can talk freely with our neighbours and other impacted landowners in our area. And as a result, there were 13 landowners involved in our project and 10 of us actually worked together.

12:41So I kind of accidentally ended up heading up this group. So we called ourselves a collective, the landowner collective, and everything we did, we did as a group. So all our communication was joined. All of our commercial negotiations were done in party with each other. So we were not only trying to ensure that as a group or as a collective, we had more agency or influence, but also that as a group, we had transparency and trust between each other and ourselves. When we started the process, we were one of the first groups to do that in WA to work as a collective and to have that legally and formally structured.

13:22And kudos to our proponents for embracing that concept. And I think that our proponents allowing us to work together actually created trust between not only within our landowner collective, but also between the landowner collective and the proponent. You would imagine like from a first principles perspective that that's way more efficient for them too, that they're negotiating with one counterparty, but maybe there was resistance to it or at least it wasn't the paradigm normally. Like how did they take it? It certainly wasn't the existing paradigm. And I think the other part, Sarah, is that the rhetoric coming out a few years ago was all about renewable companies are here to divide and conquer.

14:03So there was kind of this perception that people were being asked to sign NDAs, not search their neighbours, and that they had to sign up to things that were different from their neighbours. So I might be getting$10 and you might be getting$16. So immediately you've got disparity between agreements, you've got a lack of transparency, and that undermines the trust between neighbours. So to my mind, it makes complete sense. You know, in that surely working together smooths out those barriers. And as well, it means if I've got a question about something, I'm pretty darn sure most of my neighbours have got the same question because ultimately we are all farmers.

14:43Certainly these agreements are being done in a pre-competitive phase. It's not like me getting a turbine stopped someone else from getting a turbine. Well, that's what I was wondering because the proponent, what was the driver for that kind of lock up the conversation, you know, NDA, single party? Like I could imagine a bunch of well-intentioned things like, oh, these are people's private land and we want it to be respected. And so it's a private conversation. We don't want to tell other people or it's like a land grab kind of thing. Like, well, I've got this farm and like, is it competitive on their part that they're trying to sort of grab the area?

15:14I'm just interested in the drivers from their perspective. So I think in a funny way, there was almost, and it's not been our experience at all, that there was like this wild west approach where there was land speculation. So slightly less ethical developers, perhaps, were trying to secure bundles of land that they would package up and then potentially sell off to a developer at some point. This is not my experience, so it's, you know, not something I'm super familiar with. But I think the NDAs were about trying to secure as much land as they could as quickly as they could. I think there was this misconception that NDAs were necessary so that there wasn't opposition.

15:56Whereas I kind of feel like an NDA immediately for me raises the red flag because why do I need to keep this a secret? Obviously, there are elements that are commercial incompetence. And certainly our landowner collective has been really aware of the commerciality of what we're doing. But within the 10 of us, we are really comfortable to share that information. Interesting. Let's talk about that commerciality a little bit. Tell me about some of the risks you were managing for and the benefits that you see from an economic perspective and maybe otherwise? Yeah, okay. Look, there's a lot of risks and they can be risks from concern around water runoff around late armpits through to concerns around decommissioning in 35 years.

16:41So that's where it becomes really difficult because it's kind of like that being in the shed and trying to think of a 35-year business deal at the same time. The risks go from very operational, very production-focused, very land-based issues, all the way through to, so in 35 years, if the next owner is here or my children or my children's children are farming this, what's the end of life of this project group like? What's my decommissioning security? How do I ensure that I know that I'm not actually setting up for a horrible mess at the end of 35 years. So that's the man donors that I'm working with at the minute who are just so wonderful to work with.

17:25So I'm doing a separate project altogether as an independent consultant. And they're the very questions that they are asking. You know, they're saying, what happens if in 15 years even, the project goes broke? Who is then responsible for the decommissioning cost? What happens is, because I've got a lay down pad on my farm, there's erosion and it erodes some of my neighbour's farm's paddock. You know, so there's a lot of things and we worked really steadily through your paddock management plan. So that's a really individualised thing. And that document deals a lot with, you know, stuff like your fencing with erosion, with livestock, with gates, biosecurity.

18:05But a big component of what we're now working on is that decommissioning piece. So when do funds start being set aside? Who does the liability for decommissioning sit with? What's the role of federal and state government in terms of legislating to safeguard that decommissioning piece? There's a lot of different models out there at the moment. And I feel like we are a little bit lacking an overarching architectural framework that gives us something to hang our individualised models from. So with the decommissioning at the moment, funds can be put into an escrow account, want for a better term, as late as just five years before the end of the project.

18:47Now, lots of people are not happy with that. They want to pull that back a bit further. Are there risks in terms of, or this is an opportunity really, Sarah, but in terms of economic diversification? So looking at what can we do in terms of given in light of everything happening geopolitically at the moment, what's Australia's sovereign capacity in terms of fertilizer production? 60 % of the cost of producing nitrogen is in the energy. So if we're going to be this renewable energy superpower, both in Australia and specifically in the West, how do we utilize that advantage, competitive advantage to produce our nitrogen on Australian land, basically?

19:27Fascinating. And I should say that you mentioned being an independent consultant. So you've been through and are going through this in your own farm with the Land Oter Collective. But then because of this experience, you've also been asked to help others. It's great because your experience ranges across a couple projects and I'm sure some different dynamics there. Just to back up one sec, like the baseline economic case for a farmer to become a host. Yes. Is that the energy company will pay them. And is that like a one-off fee? First off, you have what they call an exclusivity agreement, whereby you agree to exclusively only have a conversation with this one proponent.

20:03So you're dating your friend and that's normally about five years. Then next you move into your option to lease and then a lease agreement. Six or seven megawatts seems to be about where people are sitting at the moment. So as soon as there has been a notice to proceed, that triggers the option document or payments. Then construction period is normally about two years. From what I can gather, that's the really tricky operational phase for the grower or the landowner, because that's when there's the most disruption to their farming practices. You've got vehicles on and off the farm. So that's your dollars per megawatt per year.

20:41Construction is normally about two years. And then you move into your operational period. the operational period, people have said that that's the bit when you actually go, oh, this isn't as bad as I thought it was fun to be. So you're normally looking at about 2 % to 3 % footprint of the total farm area and you are getting paid dollars per megawatt again. And that's always on main plate capacity, not on generation of electricity. For anyone not familiar. So main plate capacity is basically this turbine, for example, can generate 7 megawatts of power. However, sometimes it may be turned off such that it's only generating two megawatts of power.

21:20That's irrelevant to the landowner. Land only gets paid on what its potential, you know, nameplate capacity is. Presumably because the landowner isn't making that decision to turn it on or off. It's the company and you've still incurred the cost of having the project there. Other things that get written into your contract, which are super important, are things like rate differentials. So if your farming land changes and some local governments are choosing this, your farming land may get rated differently if you are a host of renewable energy. And it's really important that the landowner ensures that written into their contracts is the fact that if there is a change in land rates because of hosting this, that that actually sits with the developer or the proponent, not with the landowner.

22:07Something for growers or landowners to be really aware of is that for some landowners, the renewable energy income can actually change the way that their business is taxed. So you've obviously got your primary production concessions for tax ratings and depending on how you structure your business, that can be changed when you've got this income coming through. And that's something that we speak to the landowners about really extensively at the start is before you've signed anything, have a really good think about how you need to structure your business to accept this income in a way that minimises its impact on your primary production.

22:46I do know that National Farmers Federation are doing some work on this. It's certainly something that I'm watching keenly because it's a really important factor in deciding how to accept this income basically. It is a passive income and it's fantastic and I think it's a really wonderful way of perhaps increasing the resilience of our farming businesses particularly at the minute when input costs are just so enormous It's a bit of a buffer against those, but it needs to be managed wisely. Yeah, makes sense. That kind of community impact is one that I'm really interested in as well. I've heard things like a big challenge has been when projects are going up in regional areas that the labor force actually do the installation.

23:30Is that taking away from local business? And so businesses need to, like proponents need to bring in their own housing and their own staff so that they're not like inadvertently putting the local mechanic out of business. Or just talk a little bit about those kind of community dynamics. And maybe that applies less in WA just given the kind of like size and scale of towns. Like I imagine it's more like per community but not town because of how you guys are set up. Oh, I could go on about this for hours. So it's really complex. so obviously during the construction phase there are a lot more staff or workers needed than during the operational phase so it's kind of this hit in your community for a couple of years and then a release and it's about making sure that during that hit period that whatever housing or we call them trunk works so your water your storage your power those sorts of infrastructure it's about if we've got a workers camp, I'll give an example.

24:27If a workers camp is coming in to my local town of Mora and they need to then have the trunk works in place, it's about developing the design of those trunk works and the design of that workers camp such that when the workers are gone, that infrastructure has used in a different way. So for us, we've looked at, can that be an aged care facility down the track. So aged care or ageing in place in regional areas is absolutely what people are chasing, but we don't necessarily have the capacity for that. I guess it's about making sure that when renewable energy proponents are doing those construction projects, how do we leverage what they're already going to be doing so that it has a legacy impact for the regional community afterwards?

25:13So yes, they're going to have to bring workers into town. I'm accepting of that. when they bring those workers though can we have a conversation about please use the local grocery shop we have one corporate who gets the Woolies truck to drive up from Perth to deliver their groceries and I find that really disappointing because I feel like it's a really easy wing for the community when they're doing their tenders for say I don't know the plumbing can they break that tender down into parts such that certain modules of that tender are appropriate for a local business to have a go at because local businesses might not be able to bite off the entire job, but possibly they can bite off elements of that job and upskill their own crew so that they've got those skills then within our community.

25:57We're training, there's a lot of talk around the skills base that's going to be required, not just during the construction, but also during the maintenance of the renewable energy infrastructure, perhaps any associated data centres, BESS, solar, whatever else is coming, can we locate some of that training, co-locate that training with the construction process so that there's some learning on the job and it perhaps gives some scope to regional kids to not have to leave their hometown to do some learning around what is a really nascent and exciting industry. So I think there's a conversation about regional readiness, which is about, are you ready for 200 workers to come into your community and then regional value capture.

26:40So how are you going to capture the value from these workers actually come in? So there's been a massive focus on getting ready. There hasn't been a massive focus on how do we retain and keep that value long-term. Those are really tangible examples like the aged care facility and the upskilling. And I like that it's both, there's some quantitative stuff there, like the income increases, but there's some qualitative stuff there too, like the training and that kind of piece. It seems like we've been through this before in Australia with coal seam gas, that there's been conversations around land use transition and intersection of energy and agriculture.

27:14Do you feel like we're learning from those examples or is this a little bit of Groundhog Day? Well, sometimes I feel really optimistic. I'm going to nail this. And then other times I feel

27:28Tracey Lefroy: less optimistic. But for me, it's about the governance systems. Have we specifically designed these governance systems to allow for good? Have we designed them such that we can capture this opportunity? An example, when we spoke about the nitrogen fertiliser stuff with 60 % of the cost of nitrogen being energy linked, if renewable infrastructure in agricultural regions can be utilised such that it drives down input costs, that it supports regional processing, that it enables fertilizer production locally. It's a genuine transformation and it's something that mining didn't capture. I think mining was all about extraction and how do we change the renewable energy transition from feeling like an extractive process to actually a collaborative process where if we get the governance right and we can capture the benefits, then we'll get decent regional development.

28:21We will get community benefits and there will be a significant legacy as a result. Governance is one of those terms, right? I do feel like people think it's boring and yet it's so important. I keep moving back to this question, I guess, of the frustration I hear from landowners and from regional communities about some of these projects and how they've gone and how the communities haven't been recognized and how frustrating it's been. I guess I'm interested in your view on what are the drivers for these energy companies that is creating some of this tension? Like the drivers for the landowners are clearly that you want the farm to be looked after, the land to be looked after, and the community to be looked after.

28:59And then more than that for that value capture. On the other side, is it really extractive? Like are they just looking to make a quick buck? I imagine there's some of that, but probably also maybe misunderstanding of agriculture or what do you reckon? I think there are some operators out there who are purely extractors, but I feel like they are the ones who meet with opposition because if you don't take the time to build the relationships with your landowners, with your regional communities, there's going to be a lack of trust and there's going to be barriers put in place. I think one of the really important things is actually getting everyone in the same room.

29:36And also I've noticed that proponents can say, look, trust us, we're the good guys, whilst bagging out another proponent. You think, well, if you guys don't trust each other, if players within the industry don't trust each other, how can you expect the landowners and community to trust you? And I find that really challenging. I also think by virtue of the fact that so much of this is happening in regional communities, we're hundreds, if not thousands of kilometres away from where some of these policy decisions are being made. As I said earlier, I was lucky enough to be the Shire President, Local Mayor, and one of the moments that was a bit of a shivers we need more landowners, regional communities, voices at the table is I was at this renewables forum down in Perth and it was great.

30:24There was a whole session on the importance of engaging with regional communities. That entire session did not have one regional voice involved in it. The facilitator, who's someone who I really, really respect, turned to me and I was just sitting in the audience and asked me to speak on behalf of all regional communities in WA. And I understood why she asked that question and I, you know. It did, but it told me so much. It told me about the gap between saying that engagement matters and actually building that engagement into the process. So that gap between saying engagement matters and actually building it in is huge at the moment.

31:05So for me, I all of a sudden was trying to manufacture representation of the entire regional Western Australia on the spot. That's not engagement. That's the appearance of engagement. It's ticking a box. Yeah. But it's just so important that we have people at the table earlier. And I felt really lucky to work with my neighbours doing our landowner collective. And I learnt so much. But that was completely unpaid. which is fine, but it was unpaid. I was absolutely learning on the job. I was lucky enough to have the support and trust of my neighbours. But we shouldn't be doing 30-year deals on the basis of happening to have someone in the group who's willing to put their hand up and do that additional research.

31:47I don't know how it looks, but I do think there is a role for someone to come in to support these landowners and the farmers and the regional communities who has some experience just to balance up those scales a little bit. It's interesting. Like I don't know the competitive drivers or like the economics on the proponent side, but I could imagine just hearing what I've heard and what little I know that hiring a U to be like the regional engagement manager to basically provide the service that you're doing as part of the cost of doing business in these areas and make sure the community is looked after and to help the grower group facilitate a collective coming up and get the structure set up.

32:26Like that would be really smart business to be under. Look, I mean, Sanis, I'm really lucky. I do some work with Sabine Heindel at the Energy Charter. And so I sit on one of their panels, which I found incredibly interesting. And I am now doing some consulting work back through the Energy Charter where a proponent engages with the Energy Charter. And then I do the consulting work. So basically that coordination role. And I think having that independent third party there with some experience, but also So, you know, I've got a fairly deep understanding of what it means to be a regional community member, what it means to be a farmer, what it means to be a landowner.

33:03I think having someone on your side when you're sitting down with proponents is actually huge. But that process is one that I've had to create. From what I can gather, it didn't exist till I started doing it. And I've just been really fortunate in that the Energy Charter have provided that framework and the architecture for me to be able to provide these services to landowners. And the proponents that I've worked with have all kind of gone, huh, well, that's a really cool idea. And I've embraced it. I'm curious, Tracy, where climate and climate resilience is in this conversation. One of the reasons for renewable energy is both energy sovereignty, but also from an emissions perspective, are there ecological benefits?

33:53Do you guys as the landowner hosting a project get any kind of either environmental benefits or yeah, tell me about where does climate in this conversation? Yeah, really good question. And it's one I pushed pretty hard on and didn't get very far. Trying to figure out if there was some way that the landowner hosting renewable energy infrastructure or renewable energy production could get some green credits or some ACUs or something, but they all go with the electrons. I mean, there is the opportunity to do some offset work, but I feel like, again, this is one of those pieces of the puzzle that needs a little bit more investigation.

34:33So I would really like to see if there is the opportunity to, and I don't have a proper word for it, but to share those green benefits, because there is obviously an impost on your business. And yes, you are being paid a rent or a construction fee or an operation fee, but you are hosting renewable energy production. So how can you get some green license out of that, I guess? And does it come from potentially opportunities for other economic diversification? So as we spoke about with the production of nitrogenous fertilisers or does it power, I don't know, a biodiesel plant. other thing that I think is quite important to note is I've always, when having conversations with landowners or communities or neighbours, is I'm not pro-development, I'm not anti-development, but if development is coming, how do we leverage it to the best of our ability to have that legacy impact?

35:32And I think in communities, you're always going to have those who possibly don't feel that this is the best way to generate power. We don't feel that climate change is an issue for what they are doing. So I think it's important to try and frame it in a way that talks about what are the possible opportunities. There will be challenges, but what are the possible opportunities as a result of the renewable energy transition, independent from and agnostic to what your thoughts are on climate change on wind power, solar power, battery setups. Just because I think if you can find the pieces of the puzzle that are common to everyone and that you have common ground and common understanding and common willingness around, I think you're going to have more constructive conversations than necessarily trying to say to someone, you have to host renewable energy transmission lines because it's good for the environment.

36:28I think that that's quite a hard cell and you almost create that NIMBYism type concept because you can't see what's in it for me, which is a little bit of a selfish comment, but it's an understandable one. When you cast your eyes forward, it seems like the energy conversation isn't going anywhere. The renewable conversation hopefully isn't going anywhere for Australia. I mean, data centres and more energy requirements. I'm curious, what are some of the 5, 10, 15, 20 years out? what's on your mind as potential opportunities or challenges coming there? So I think data centres are in the press a lot at the moment, particularly with the federal government opening their Office for AI.

37:09But with regard to that, I think it's again a space that's moving really quickly. So when we first started talking about data centres two years ago, their requirement for water was mammoth. We're now looking at data centres that are more a closed loop system. So the requirement for water is lower, but as a function of being a closed loop system, the requirement for power is bigger. WA, that's actually awesome because water is our issue. We've got plenty of wind, plenty of solar, so we can create the energy. If the technology is getting to the point where the water requirement is lower, I actually think that that's awesome.

37:45So in terms of opportunity for regional areas, I love the concept that we're decentralising our industry and, you know, data centres in regional areas, I think it really makes sense. I think it would be phenomenal. We have a lot of land, we have a lot of wind, we have a lot of sun. We don't have a lot of water, but what can we do about technology solves for that? One of the ironies of successful farming is that the farm gets bigger, so there's less people there, so your regional community is diminished. Is this the opportunity to revitalise regional communities because we are going to host data centres, because we are going to host renewable energy.

38:23Maybe we're going to host a lot of training centres as well. Maybe we're going to host nitrogen fertiliser production areas. So farming is very much at the heart of this and landowners are very much at the heart of this. But are we courageous enough to welcome economic diversification in our regional areas?

38:43Tracey Lefroy: Huge thanks to Tracey for so generously diving into the details about her experiences setting up renewable energy projects on farms. The first thing that piqued my interest about Tracy's story was her instinctive response to bring neighboring landowners together to approach the negotiation as a collective, from more of a position of strength. It's a reminder that when new forces reshape agriculture, whether technologies, infrastructure, or something else, the hard part is often about developing new ways for people to work together, share knowledge, and make decisions. I wonder what new collective approaches we'll see or need that help farmers move from responding to change individually to having a more active role in shaping it.

39:19Tracey Lefroy: I think there's real potential there. Another thing that struck me is that while a renewable energy project might look like a separate business opportunity, on a working farm, it intersects with almost every part of the operation. Tracy talked about the need for individualized paddock management plans that account for fencing, livestock, erosion, water runoff, and biosecurity, as well as the much longer-term question of who pays to decommission the infrastructure at the end of a project. In some ways, it's a system thinking challenge. A decision that creates value in one part of the business can create risks somewhere else, or some time else, for the next generation.

39:53Tracey Lefroy: The technology might be new, but the real test is how well it integrates with everything else. So farmers need to look beyond the immediate value proposition, the new income stream, and consider how it interacts with everything else. And finally, it's not just the farmers who need to get a say in a renewable energy project. How are local businesses included? How do these projects impact jobs? And how do we ensure that the economic benefits flow beyond the initial construction phase? Tracy's experience highlights the importance of governance, the structures, relationships, and decision-making processes that shape how the development happens.

40:25Tracey Lefroy: But it's also not just renewable energy. When I think about AI and data center demands and climate pressures potentially shifting what makes sense to grow in different regions, there are some big forces at play. And it's clear that communities need to be involved not just in negotiating individual projects or buying individual technologies, but in a broader land use planning conversation about what our regions look like in 20 or 30 years' time. So that's it for another episode of Ag Tech So What? Thank you again to our guest, Tracy LaFroy, and thank you for listening. I'm Sarah Nolette. I'll catch you next time.