February 24, 2015

Khuram Maqsood Managing Director, Middle East Sundrop Middle East Limited

Perhaps it is fitting at a Conference examining in various aspects how agriculture and investment meet, that we take notice of how hard it is to remember what we should probably not have forgotten.

Over 40 years ago, Nicholas Georgescu-Roegen, the originator of Bioeconomics, wrote forcefully “He who does not have enough to eat cannot satisfy his hunger by wearing more shirts” (Unity and Value in Economic Thought 1973). His commonsense approach urged us in the direction of a solar economy, where energy and production were not based on finite resources and where this in combination with the elimination of wasteful energy use, would take humanity off a collision course with resource limitation.

The often quoted energy and water nexus; that has now expanded to an energy-water-food nexus, is a technical and bioeconomic challenge that does require the mobilization of significant capital. We at Sundrop Farms recognize the difficulty in both of these challenges but have initiated a path forward to surmount these difficulties by taking a new approach.

The Sundrop Farms approach is based upon maximization of benefit: of the energy use, the productive process and ultimately, the capital mobilized. The rise of photovoltaic or concentrated solar thermal energy as an efficient energy capture technology for solar radiation raises a pertinent question: “why have the advances in solar energy been almost exclusively directed to the lowest value products in the form of power or transportation fuels?” While it is an obvious thing to rejoinder that a renewable resource can replace the fossil fuel source of energy, that discounts the significant fossil fuel contributions that are typical of high-intensity food production and also discounts the more subtle fact that once renewable energy is utilized in food production, the energy is not immediately destroyed, but is captured in the carbon cycle for further utilization.

To maximize the benefit from energy use, Sundrop Farms have not only re-ordered the priority in the value of the products to which renewable energy is directed, by utilizing this energy for food production, it has done this in a very direct and holistic way. By examining and modelling in detail the fundamental inputs needed for high-intensity horticulture – specifically thermal/electrical energy and water – Sundrop Farms has been able to apportion captured solar energy to these different uses in a fully integrated system that uses the energy directly and more efficiently than conventional systems. This has to a large extent decoupled the Sundrop Farms production from fossil/grid supplied energy, providing a much more sustainable product in the long term, building into the system energy security (in terms of both pricing and availability) and allowing development to occur in site locations which have previously been unviable due to the reliance on favorable climate, soil or water availability.

The direct linking and hybridization of renewable energy generation and horticulture is the focus of Sundrop Farms first flagship project, in the semi-arid location of Port Augusta in outback South Australia, where 20ha of greenhouse and an integrated water and energy system is presently being built. This has followed three years of technology trials at a smaller scale pilot facility nearby. This project will supply the most sustainable high-quality product into the Australian market under long-term supply contracts presently in place.

Since horticultural production is highly controllable, both in terms of growth and internal climate; but also in terms of handling and logistics; as a productive process it can maximize product generation while at the same time limit post-harvest losses. When paired with a highly efficient and integrated energy and water system, these projects can create a new value position in the marketplace for agricultural investment: turnkey food power plants that are no longer subject to the cyclical vagaries of the weather or short-term market movement.

Sundrop Farms is intent upon providing profitable sustainable food solutions and move closer to a solar economy that can be used to its maximal benefit.

Khuram Maqsood is a member of the speaking faculty at Global AgInvesting Middle East in Dubai, 23-25 February 2015.