Natural capital is set to be the path forward for the income and security of NSW farmers and for conservation of the environment, as the agricultural industry aims to reach its $30 billion by 2030 target, says the state’s minister for energy and environment Matt Kean.

As investors around the world and markets move towards decarbonisation as standard practice, NSW is looking to ensure more capital is invested outside its city centres.

In doing so the state government’s road map to energy transition, with its Net Zero Industry and Innovation Program must protect the needs of farmers, land owner and rural communities.

While up until now the introduction of renewables, such as solar farms, has been rather ad hoc in its process this new system aims to prevent past infractions of social contracts with of communities, wherein solar farms were developed on prime agricultural land, based almost entirely on developer interest.

NSW minister for energy and environment, Matt Kean, spoke to NSW Farmers at online seminar to discuss reaching ’30 by 30’ or the agricultural sector’s goal of growing into a $30 billion industry by 2030.

Kean ensured that the government has developed a clear co-ordinated planning pathway to deliver the transition into a decarbonised NSW, where farmers are protected and barriers to entry into natural capital and renewable energies are low, with rules that are simple to navigate.

“I want NSW to be forefront of the push to value natural capital and my department is currently exploring opportunities to develop that further,” said Kean.

“Farmers in NSW’s [input] is going to be critically important to develop the rules around environmental markets and how we develop market based solutions to environmental issues and how we can make sure that farmers and the market are both winners,” he added.

Part of this process will be in the establishment of the Decarbonisation Innovation Hub, which the government requested of the office of the NSW chief scientist and engineer.

This hub, which is scheduled to be completed and operational by early 2022, will support researchers, industry and government stakeholders to work together to increase the uptake in new technologies.

“There is no doubt that we need to rapidly increase the use of new technologies across the board, if we’re going to succeed in decarbonising NSW,” said Kean.

And the hub should make sure that the best technologies are employed in the best places across NSW and where possible are commercialised, allowing NSW to be at the forefront of the market and the first to profit from these new systems.

Recent research claims that climate change has already cost every farm across Australia $30,000 each year in profit over the past two decades, and profits could slashed in half by 2050 due to ongoing environmental changes.

The vast majority of new cleaner and cheaper technologies will be based in regions and more specifically in the five new Renewable Energy Zones (REZ) that were identified by independent market operator, AEMO.

These first REZ will be located in Central-West Orana, New England, the South-West region, the Hunter-Central Coast and Illawarra regions.

These areas will house what Kean describes as “modern day power stations”, running on a combination of new forms of power generation, with renewables that are backed up by battery storage and gas.

The state government has built in mechanisms for protects of these communities into its legislation, ensuring projects have that social licence, are wanted by communities and that they meet the standards of amenity in the area.

According to Kean, in the next 15 years four out of five of NSW’s coal-fired power stations will have to be replaced regardless of their impact on climate change, as they come to the end of their mechanical lives.

“Today the cheapest way to replace our existing forms of generation is with new technologies and that’s a combination of things, it’s a bit of wind, it’s a bit of solar, it’s a bit of pumped-hydro, battery storage — which we know is coming down the cost curve dramatically,” said Kean.

A competitive tender process has been designed for these new generation projects that should protect the interest of communities and land owners looking first towards, community engagement, land-use compatibility and the complimentary/regional economic benefits of any new development.

“Right now, investors across the world are massively interested in investing in transitioning into a net zero emissions economy and in natural capital; in the natural assets and eco systems that make human life possible,” said Kean.

The process of decarbonisation should not only create a secure and profitable future for farmers, but leave NSW with the third cheapest electricity costs in the world and a sustainable future.

This week the latest Electricity Statement of Opportunities (ESOO) shows clean and affordable renewable energy is doing the heavy lifting in ensuring a reliable supply of electricity in the National Electricity Market (NEM).

The Climate Council’s senior researcher Tim Baxter said wind and solar energy are the cheapest way to add new capacity to the grid, and continue to generate clean, affordable electricity.

“Record rates of rooftop solar uptake and massive investments by state and territory governments in large-scale wind and solar are driving a bright outlook. By 2025, we should see the grid being able to handle 100 percent renewable electricity at certain points in time,” said Baxter.

Climate Councillor and Macquarie Law School senior lecturer Dr Madeline Taylor added: “For the first time, AEMO (Australian Energy Market Operator) also examines the role of renewable hydrogen in meeting consumer and industry needs, outlining exciting opportunities for setting up zero-emissions, all-electric industries and creating hundreds of new clean jobs.”

“Consumer behaviour, industry decisions and economic trends all point to one fact: Australia can have a grid powered by renewables, backed up by battery storage and pumped hydro, with the need for fossil fuels to be phased out of the electricity mix,” Dr Taylor concluded.