Power price hits dairy

By Alana Christensen on September 26, 2017
  • Power price hits dairy

    Gayle (pictured) and Laurie Clark installed a 30kW solar system at their Katandra West dairy several years ago to curb their power costs and help the environment.

Dairy farmers are being crushed under the weight of power prices, with climbing power bills impacting their ability to stay competitive.

The rising cost of electricity has hit farmers hard, with Australian Dairy Council figures claiming that dairy farmers spend between $35 and $75/day on electricity to power their dairies, compared to between $20 and $45/day seven years ago.

The power price spike has also hit Katandra West farmers Gayle and Laurie Clark, despite the couple installing a 30kW solar system on the dairy shed roof a number of years ago.

While the system has resulted in significant savings, it hasn’t been enough to avoid climbing power prices.

‘‘The solar system cut our dairy bill by about a third when we first installed them ... unfortunately there has been increases in our power bills lately. No-one gets away without an increase unfortunately,’’ Mr Clark said.

‘‘Looking at it now just sort of cements that what you did was a good decision. At the time is was a tough financial decision to justify.’’

The Clarks have used power generated by the solar system to power their roller mill and drive their irrigation pump in the recycle dam, with the savings seeing the solar system paid off within a couple of years.

Yet while the Clarks have been able to ease their power price pain, Katunga dairy farmer and Australian Dairy Farmers natural resources and management group chair, Daryl Hoey, said he has heard instances of farmers’ bills doubling in recent months and has called on the federal and state governments to do more.

‘‘Significant solutions have to come from government input and it appears at the moment the government is on a complete freeze on thinking on this and don’t know how to react,’’ Mr Hoey said.

‘‘Prices will continue to go up until they start to come up with some real solutions rather than just token gestures.

‘‘We’ve got an embedded high cost in our system. Until governments completely rethink their distribution network and start to provide real alternatives to bring down the prices, there’s no real light at the end of the tunnel.’’

Katamatite East dairy farmer Iwan Van Den Berg, who operates an 800ha farm with his wife Melissa, and his brother Erwin and partner Julie, milking about 1250 cows, echoed Mr Hoey’s claims and said his electricity bills had been climbing for some time.

‘‘They’re not quite double but they are certainly a lot higher (than they have been in the past),’’ he said.

‘‘We’re trying to research all sorts of new ideas however there’s nothing getting done about it from higher up. We won’t be the only ones that would suffer as a result of the prices.

‘‘We need someone in Canberra with a vision and to work towards it rather than squabbling about nothing.’’

Gas industry responding

The Australian Energy Market Operator reported in March a projected decline in gas production could lead to a shortfall of gas-fired electricity generation, pushing up the risk of 2019 summer blackouts in Victoria, NSW and South Australia.

AEMO warned this was because exports of liquefied natural gas were being put ahead of shoring up domestic supplies.

The prime minister has been seeking to put pressure on the gas industry to ensure there is enough domestic supply, holding out the option of export controls from January 1, 2018, if adequate action is not taken.

But Federal Finance Minister Mathias Cormann on Friday said ‘‘significant steps’’ were being taken by the gas industry to address the shortage.

‘‘The market has already responded, exports are already being diverted into the domestic market and wholesale gas prices have started to come down,’’ Senator Cormann said.

The government had given itself until November 1 to seek advice from the Australian Competition and Consumer Commission about the appropriate market information needed to ensure the scale of any restrictions was right.

Pulling the so-called gas trigger was not the government’s preferred course of action, Senator Cormann said.

Industry sources suggest the forecast will be revised to show no shortfall for the summer of 2018-19, but a potential problem in 2021.

Meanwhile, the head of the competition watchdog has warned governments there is no single ‘‘silver bullet’’ policy that can fix electricity affordability and reliability and cut emissions.

‘‘The affordability problems have been a long time in the making and, unfortunately, they will be a long time in the solving,’’ ACCC chair Rod Simms said.

By Alana Christensen on September 26, 2017

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