Number-crunching by Dairy Australia shows power bills for the state’s 3890 dairy farmers averaged $18,800 annually over the past three years.
There are fears the 20 per cent higher dairy shed power bills experienced in other states over 2017-18 will also be seen in Victoria’s 2018 prices, adding an average $3760 to bills.
DA’s analysis shows energy bills for dairy processors are about $170 million a year, and anticipates increases between 50 and 70 per cent — with flow-on effects expected to hit the farmgate milk price.
The figures come after the Federal Government unveiled its National Energy Guarantee, which includes assurances on reliability and emissions reductions from 2020 to 2030.
Prime Minister Malcolm Turnbull said the NEG created a level-playing field, providing investor certainty and reducing volatility. Household bills are expected to fall by $110 to $115 a year over the decade.
It also comes as the Victorian Government passed its renewable energy target of 25 per cent by 2020 and 40 per cent by 2030.
Australian Dairy Farmers natural resources policy chairman Daryl Hoey said the NEG lacked detail and modelling and did not indicate lower costs in the short-term.
“The potential increases (next year) are going to flow on to the cent per litre that gets paid, so at the end of the day dairy farmers are going to wear this cost,” Mr Hoey said.
Government measures so far this year to put pressure on prices include an agreement from gas companies to ensure there is enough gas for Australia before exports, and increasing scrutiny of energy markets.
The Australian Food and Grocery Council welcomed the Federal Government’s policy, but it was also concerned by the short-term outlook.
“It’s unclear how long it will take for the Government’s announcements to affect the electricity price,” AFGC chief executive Tanya Barden said.
“Many food and grocery manufacturers are due to renew their electricity contracts and are concerned about their viability in the next couple of years.”