Electricity prices are heading in one direction, and Farmlands FLEX founder Pegs says farmers who wait are leaving money on the table.
About 20% of New Zealand's daily electricity generation currently relies on brown coal, says Andrew Pegler, better known as Pegs, founder and chief executive of FLEX Energy. He says demand is outpacing the ability to build new generation infrastructure, which pushes costs down the line to whoever is at the end of it, including farmers and growers.
"We just can't build this stuff fast enough to keep up,” he says.
Farmlands FLEX is a joint venture between Blackcurrent and Farmlands, built around solar and battery installation, but Pegs says the product is not a solar company in the traditional sense.
"We're essentially a trading desk.
“What we've built is a piece of software that an individual farmer and grower can put solar and batteries on their farm, and then FLEX comes in and actually optimises that usage.
“But then any excess energy we trade — it turns it into a saving money exercise and then a new revenue creation line."
Pegs says battery costs have dropped sharply. Fourteen months ago, installation was running at $1,000 to $1,200 per kilowatt hour. It is now about $600 per kilowatt hour — a reduction of 40% in most cases. That shift has changed the financial case for battery storage, cutting payback periods rather than extending them.
For beef and lamb operations running a water pump, Pegs says the average payback period is six to six and a half years, with a return on investment of 13 to 16%. The best result he has seen was 21%, on a farm pumping water uphill for 18 hours a day. Some installations are now breaking into a five-year payback, though freight cost increases mean that figure is unlikely to hold in the near term.
The software manages all energy decisions automatically — whether to use power on site, store it in the battery or trade it into the spot market, which moves every 30 minutes.
"The last thing they need is someone coming along saying, 'Hey, become an energy trader.' So the software has been designed to make those decisions for you."
Farmers who have existing solar installations can access the platform through a product called Get FLEX, which adds the trading and optimisation layer without requiring a full reinstall.
Chat to your local Farmlands rep to learn more, or enquire online at flexenergy.co.nz
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