HIGH electricity prices are forcing some irrigators to change the way they operate to stay in business.
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Quality Fruit Marketing executive chairman Michael Trautwein said his business had made irrigation changes, and was considering more cost-saving measures, due to high power prices.
Financial year Regional Reference Prices in Tas ($72.84 a megawatt hour), NSW ($71.66/MWh), Vic ($70.87/MWh) and Qld ($65.67/MWh) pale in comparison to SA ($262.97/MWh).
SA's peak RRP soared to $1832.37/MWh on July 7, more than ten times the peak highs experienced by other states. The peaks have prompted QFM to carefully consider its power use.
Mr Trautwein said installing solar panels on the packing shed had been one of the ideas discussed.
“We’re looking at options, whether it’s different refrigeration equipment that's lower cost to operate or an ability to store energy on off-peak rates,” he said.
Mr Trautwein said one of SA’s energy problems was the closure of the power station at Port Augusta.
“That has created a bottleneck in delivery of energy into our state,” he said.
Mr Trautwein said the state government agreement with ENGIE - to run the Pelican Point Power Station until the Heywood interconnector was at full capacity - was a positive, but would like regulations changed in relation to how friction losses are calculated.
National Electricity Market generators are given an individual transmission loss factor that reflects the cost of transporting electricity from their site to the regional reference node, which is multiplied by the region price to determine the revenue they receive from the market.
Minister for Energy and Resources Tom Koutsantonis said there were no proposals to change the way the market calculates loss factors.
Mr Koutsantonis said having an additional 240MW of capacity available from the Pelican Point power station would help to stabilise electricity prices, though he was unable to provide price drop estimates due to the market's “volatile” nature.
“Electricity prices are notoriously difficult to predict due to the range of factors that impact prices,” he said.
“Due to the privatisation of the state’s electricity assets there is very little the state can do to ameliorate the price volatility.”
“But the government is doing what it can to try and protect businesses and stabilise energy prices during this period.”
Member for Chaffey Tim Whetstone said he was concerned about the competitiveness of SA businesses on a national platform, and the future of Riverland irrigators.
“With the electricity spot price market the way it currently is, Riverland irrigators are questioning whether they can afford to pay the bill every time they switch their pumps on and that’s of major concern.”
“The reality is that irrigators can’t pick and choose when they irrigate, permanent plantings require water all year round depending on seasonality of varieties and conditions.
“We cannot afford to see businesses looking at the price of power and deciding they could save money and improve profitability by setting up an hour down the road, interstate.”
Mr Koutsantonis said the recent state budget included $500,000 towards a feasibility study to explore options for greater energy interconnection with eastern states.
“Commercial agreements between customers and retailers that deliver a reliable power system is the government’s preferred outcome,” he said.
The Clean Energy Council has called for a national summit on energy market reform and wants to “start a conversation” about practical reforms to support a transition to clean energy in SA.
CEC chief executive Kane Thornton said the energy situation in SA was complex and there was a broad range of vested interests involved.
“We have been calling for several years for a more strategic approach to energy market reform that can deliver a 21st century energy system driven by renewable energy,” he said.
“Unfortunately it has taken recent events in SA to highlight the importance of long-term strategic energy planning.
“We are calling for major stakeholders, industry and government representatives to come together and lay the groundwork for sensible and considered changes in the energy market that will serve power users better.”
Mr Thornton said renewable energy was not the root cause of the electricity issues in SA and a lack of competition in the state’s energy market was an issue.
“Stronger competition and diversity in energy technologies is key to keeping electricity prices low in SA and throughout the country,” he said.
