Energy crunch survival tactics

Power price spike spurs savvy energy reduction measures


National Issues
Significant cost pressures have driven mixed cropper Scott Hogan to a range of measures to manage his rising power bills.

Significant cost pressures have driven mixed cropper Scott Hogan to a range of measures to manage his rising power bills.

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Power price spike spurs savvy energy reduction measures

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SOARING electricity prices could push Scott Hogan back to diesel powered pumps, despite a significant investment of time and money from the Coleambally, NSW irrigator in his farm infrastructure.

His predicament is similar to that of many farmers across the country, who are driven to invest in energy savings by costly power bills that have doubled, or even tripled for some, in the past five years.

Mr Hogan’s runs bores to irrigate his mixed cropping business at his properties “Wollombie” and “Kera”.

“The cost of electricity around here for people with bores, who pump or have drip irrigation is huge. We have a leased property where the price jumped up  by eight cents a kilowatt in June, it’s ridiculous,” Mr Hogan said.

​Energy users drawing more than a set figure, perhaps 160 kilowatt hours a year, usually trigger peak rates for an entire monthly billing cycle if there is just one instance of peak usage, meaning high-powered pumping triggers a expensive rates across the monthly billing window. 

Mr Hogan built two turkey nest dams to manage electricity demand charges and minimise the bills when he cops high rates. Even with this work he is considering investing in solar power, or even a return to diesel generation to run his electric pumps.

“Solar power is the future, but it takes time and money to get there. It’s frustrating that government has dropped the ball, pushed clean-green solutions and turned off coal power before it’s time,” Mr Hogan said.

Mr Hogan undertook an energy audit with NSW Irrigators and said the most valuable contribution was installing power factor correction equipment, which monitors the difference between the power a site draws, and what it actually uses. AGL said payback of installation costs can be as quick as one year.

Energy Action chief executive Ivan Slavich said choosing the best energy contracts is difficult, and validating actual consumption against the provider’s charges can lead to significant savings.

“Businesses don’t hesitate to use an insurance broker, yet for some reason they they think they can do energy themselves, even though it’s more complicated.”

More than 15 per cent of Energy Action’s clients were on the wrong tariff, and coupled with bill validation saved $3 million in incorrect billing last year.

Drew Martin, Omega Orchards, grows almonds north of Paringa, in South Australia’s Riverland where he has seen electricity prices double in the past 12 months.

“If we had the almond prices of 2007-10 that increase would have really hurt. For now, the price is good, but it will be damaging when we get the next commodity downturn,” he said.

“The price rises are a significant cut into the profit margins of grape growers and dairy producers.”

Adding to the complexity for Mr Martin South Australia is phasing in demand tariffs, which have seen prices for electricity consumption as much as double in peak and off-peak times, following the Australian Energy Market Commission’s direction to retailers to implement cost-reflective pricing.

Mr Martin installed a new pump to have capacity to be able to pump water he needs from river to his storage in off peak time slot (9pm to noon) and is building a 200kw solar system to run the irrigation across his farm during the costly daytime peak.

Energetics consultant Roger Horwood said farmers often overlook the tariff on their contract.

“Many farmers pay too much. Those who are sitting on the default tariff, which came in on July 1, saw a 20pc rise in NSW, or between 10 to 15pc in other states.”

Retailers can provide tariff fees and network charges, but Mr Horwood cautioned that expert advice may be needed to make sense of jargon. Energy consultants run online reverse auctions, where retailers bid down for energy contracts.

Power strain for dairy, grain

Grain grower and former Grains Research and Development Corporation northern panel chairman James Clark said government policy needs to tackle the water use and labour cost pressures caused by high power prices.

“A lot of people spent the extra money on water efficient mains powered systems, that can be remotely managed to reduce costs, never thinking power prices would run away to such a ridiculous level,” Mr Clark said.

“Now they’re going back to more manual set ups, that either aren’t as water efficient, or require more man-hours to manage.”

United Dairy Farmers chairman Adam Jenkins said power prices impacted investment in industry growth.

“People want confidence to invest and minimise risk, and power is critical to that.

“People fin it hard to access enough capital to build adequate solar capacity, farm profit margins are tight, as well as for the upstream processing sector, which ultimately shifts the impact back to the farm gate.”

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