Dairy farmers go off-grid as power prices surge

The Manns’ electricity costs have more than doubled in five years, from about $200,000 per annum to $500,000.

“It is a pain in the backside,” Mr Mann said.

Due to the high prices, the family will this summer switch to diesel power to run their 116-stand rotary dairy and 14 irrigation centre pivots at Wye in the lower south east of South Australia.

And, as a longer-term measure, they are investigating the economics of installing an on-farm energy solar-diesel-­battery energy generator entirely independent of the mains power grid.

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The Manns are among Australia’s top 10 dairy producers, in terms of volume, milking up to 2300 cows and producing 19-21 million litres annually.

Their move comes as South Australia’s dairy lobby has calculated the state’s dairy farmers paid about 40 per cent more for power than their Victorian neighbours last season.

And it was the peak times that hurt the most.

Mr Mann said during the past summer’s irrigation times, electricity costs “suddenly became 20 per cent of your milk cheque for some months and that just doesn’t work”.

“We have to be mindful about when power becomes expensive, so we’re investigating options to become less reliant on the grid,” he said.

“Its embryonic, but information we have is saying we could get a payback within five years of (setting up a system on-farm) not connected to the grid, a combination of solar, diesel and batteries.

“We’ll work out which way we want to go in the next few months; I don’t know yet if we’ll do it.”

Regardless of the outcome of these investigations, Mr Mann said he was planning on switching to diesel to run his dairy and irrigation pivots this summer.

His dairy has had a diesel back-up system, which has been used intermittently as the reliability of the mains power has fallen in the past five years.

The cost of running diesel-powered irrigation pivots, compared with mains electricity powered pivots, were “line ball” last year, Mr Mann said.

“Power has just gone up again so I suspect this year diesel will be cheaper,” he said.

“It doesn’t look like there will be much relief on power prices coming and that is likely to get worse.”

South Australian Dairyfarmers Association chief executive Andrew Curtis said comparing SA dairy farmers’ electricity prices to those in Victoria’s Dairy Farm Monitor report last season showed SA dairy farmers paid about 40 per cent more per kilogram of milk solids.

He suspected this could rise to 45 per cent more this season, as all power prices were increasing and SA has the “highest prices in the world”.

Mr Curtis said irrigation had traditionally been the largest user of power on SA dairy farms with more farmers now turning to diesel generators as the cost was comparable for modern efficient generators and they could rely on them.

In the past year he said there had been up to 40 dairy farmers who had lost power four-to-six times, with the power out long enough to affect at least one milking, he said.

The cost of power to a dairy farm business is creeping up, with many farmers reporting a doubling in costs in the past year, Mr Curtis said.

He said SA did not have the base-load power generation of other states and this was predominantly due to a mix of power sources, with more than half of its power coming from renewable sources.

 

Source: The Weekly Times

Link: http://www.weeklytimesnow.com.au/agribusiness/dairy/dairy-farmers-go-offgrid-as-power-prices-surge/news-story/3f3b42124b2adef064da266255d03af7

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