Fruit and vegetables growers using irrigation in Riverland, south Australia are troubled by high electricity prices, which are making the future of their industry uncertain.
SA's electricity futures contract prices are hovering at about $77 a megawatt hour, after peaking at $90/MW late last year, which is almost double the futures prices of NSW and Vic. Irrigators who renewed contracts late last year have faced rises of up to 100 per cent.
Short-term price fluctuations were expected after the closure of Alinta coal and gas power stations at Port Augusta last year, with Premier Jay Weatherill saying SA would be better off long-term by being a leader in renewable energy.
The short-term is the issue for Riverland irrigators, according to Central Irrigation Trust chief executive officer Gavin McMahon.
“The difficulty a lot of them (growers) have is they're competing on an international marketplace, so their products are being sold at an international market product price and the cost of power isn't factored into that.”
Mr McMahon was disappointed Australia had gone from a low-cost power country to one of the highest-cost power countries in the world.
“In a time of innovation, getting businesses operating and creating jobs, it's a significant handbrake,” he said.
The handbrake has been applied to the Riverland area according to Mr McMahon, who said the fruit bowl region’s status as a leader in water efficiency had been undermined by high energy prices.
Mr McMahon said there was no solid plan for the transition to relying on renewable energy and is sceptical of the states’ baseload energy sources.
Member for Chaffey Tim Whetstone echoed the sentiments of Mr McMahon, saying a lack of government planning was partly to blame.
"For all the dialogue about going to green energy, utilising sun and wind, we are sadly paying the highest power prices and having to resort to fossil fuel power,” he said. “The government has put a high level of uncertainty into the marketplace and their lack of understanding of what it means to be heavily-reliant on power is a concern.”
Exorbitant electricity prices and inconsistent power supply have forced fourth generation fruit producer Will Swinstead to invest significant capital in backup energy systems, and implement sanity-sapping management practices to keep his family's property, Overland Corner Estate, commercially viable.
The watermelon, winegrape and citrus growers have been forced to restructure their operating system, shifting to an on-demand system in which they pay a base rate for electricity.
"We will become exposed there if there's serious drought because I'll still have to pay a certain amount a month whether I use one kilowatt or 1000kW."
With product prices in Mr Swinstead's sector dictated by supermarkets, growers cannot adjust their prices to share the electricity price rise burden with consumers.
“Electricity and water supply are two vital resources we need to produce food and they are becoming less secure due to a lack of planning,” he said.
