The cost of energy as a proportion of production costs in the Australian agriculture industry has significantly increased in the past five years. Businesses have been becoming more energy efficient for some time, however recent energy price rises have outstripped the sector’s ability to match prices with efficiency gains.
However, the horticulture industry has taken a front foot approach to dealing with energy costs.
AUSVEG VIC represents and protects the interests of all vegetable growers in Victoria and assists with their diverse concerns and interests on horticultural matters on farms. Australia’s horticulture industry covers 140 commodities including but not limited to fruits, vegetables, nuts, table and wine grapes, flowers, turf and nursery products.
“AUSVEG VIC understands the increasing costs on power to the horticulture industry is creating a lot of pressure for these businesses to be profitable and viable,” said Tom Cohen, State Manager of Victoria.
“In recent years, energy efficiency gains in agriculture have not been keeping up with those of other sectors such as construction and building.
“Energy efficiency is a must for horticultural production, and we are delighted to have the support of corporate partners such as Choice Energy who are able to provide a range of solutions to assist on reducing these cost burdens,” said Cohen.
Founded in 2013 by Christopher Dean and Alan Gill, Choice Energy services Australia nationally, and has established an enviable track record of helping commercial businesses to substantially reduce their bills through group buying and, where appropriate, switching to solar.
The company’s rapid growth was recognised when Choice Energy won the 2018 Smart Company Smart50 Award.
Choice Energy partnered with AUSVEG VIC to secure a collective energy procurement tender comprised of 10 farms across 17 sites and over $4,709,009 of total contract spend.
“This resulted in $1,239,207 in energy retail savings in comparison to previous contracted rates, an average saving of 26%,” said Dean.
“While wages, exchange rates and commodity prices are set by external factors, direct actions by farmers can help reduce energy expenses as a proportion of the overall agricultural budget.”
With the increasing cost of agricultural inputs, such as water and energy, increasing the efficiency of these inputs remains an important issue for the industry.
“The absence of reliable energy use data, the complex nature of tariff structures and network ad supply charges, and the differences in energy pricing and policy setting across Australian states have made it a very difficult market to navigate for those on agriculture,” said Dean.
“AUSVEG VIC is a compelling case that has led other businesses to get in touch and see how we can save money for their business.
“Initiatives which increase on-farm efficiency will be critical to ensuring the horticulture industry can not only become more productive and profitable, but also improve environmental outcomes,” said Dean.
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