The Federal Government’s white paperrecommends companies charge consumers more during peak times, sending a price signal to use more in off peak, and also to end cross-subsidisation.
But Noel Campbell, chairman of the Australian Dairy Industry Council, (ADIC) said farmers don’t have a choice about when to use electricity and expects their costs to rise.
The paper recommended that, «cost reflective electricity tariffs give consumers better price signals about how they use energy. Consumers will increasingly be charged according to what it costs to supply energy at the time they use it.»
«We can’t vary the time of day that we use electricity,» said Mr Campbell
«We operate at particular times of day as dairy farmers. Processing plants can’t stop and start. We’re concerned about the total cost to our industry.»
In its submission, the ADIC had argued dairy companies are among the top 300 energy users in Australia, and are trade exposed.
Mr Campbell said he was worried the recommendations would have ‘perverse outcomes’ for rural businesses and he said the Energy White Paper offered no solutions to unreliable power.
«In processing, especially where they’re drying milk, if there’s a flicker or some unreliable power, they will have to stop the operation, completely clean the drier before restarting. That can be many, many hours.»
«We want better infrastructure. In lots of areas of Australia, like in south western Victoria, we don’t have the power requirement we need for new type dairies.»
Dairy farmers have seen an increase of between 30 to 100 per cent in the price of electricity in the years between 2010 and 2013.
ABARES reports dairy farmers spend 2.4 per cent of their operating costs on energy, more than double that used by broadacre farmers.
Forty-three-thousand people are employed in regional Australia, and Mr Campbell said cost increases would damage those jobs.
The Government removed the renewable energy incentives funded by the carbon tax, and replaced it with direct measures, like the Emissions Reduction Fund (ERF).
The first auction for the fund will open on Wednesday 15 April, 2015.
But Mr Campbell said it will be priced too cheaply for dairy farmers to benefit.
«We don’t think there is anything in it for the dairy industry and farmers.
«For us, we would need to get $23 per tonne of reduced carbon dioxide
But the Government is talking about $11 or 12 per tonne of buybacks.
«So it’s not likely to give us anything back at all.»
Source: ABC