National Farmers' Federation

OPINION: Farmers call for autumn break in energy debate

The Government’s National Energy Guarantee (NEG) gets its first airing with State and Federal Energy Ministers today when they meet in Melbourne.
Like farmers and the growing season, Australians are looking for an ‘autumn’ break’. A circuit breaker in the stalemate dogging our nation’s energy future.
For too long, getting a solution to our energy ‘crisis’ has been derailed by entrenched positions and politicking. Governments of all stripes need to take responsibility for the problems their uncoordinated and often contradictory policy positions have caused in the electricity market. No-one in this debate has entirely clean hands. But the blame game can’t continue. All consumers, including farmers, need tangible solutions, not more bickering. The pain is real and it is being felt now.
In some cases, farmers are facing up to 200% increases in their electricity costs. They can’t keep absorbing those costs, let alone face even more.
Fruit and vegetable growers, dairies and irrigators all rely on affordable power to remain viable. As do businesses up and down the agriculture supply chain including processors, packers and fertiliser plants.
For some farm businesses, wholesale price spikes and outages can destroy annual returns, in some cases, in the space of a few hours.
The National Farmers’ Federation (NFF) is clear on what our sector requires from a national energy policy – a focus on restoring affordability and ensuring the international competitiveness of the entire agricultural supply chain.
The NEG will only deliver this to the extent that it is supported across the political spectrum and establishes an enduring framework.
We support the NEG’s technology agnostic approach and the caveat that retailers must commit to reducing their intensity portfolio over time. Not backing winners will allow technologies to compete on their merits. Ultimately, the cleanest, cheapest and most reliable energy source will reign supreme.
While all of the focus is on the NEG, our leaders must not take their eye off the bigger picture. There are numerous other problems with our electricity market. Australia’s retail and generation sectors are concentrated and vertically integrated. The NFF is concerned that the proposed downward pressure on wholesale electricity prices that could result from greater investment certainty will not flow through to retail customers. This must not be allowed to occur.
We welcome the NEG’s onus on retailers to guarantee that incorporating low emission but intermittent generation into the nation’s electricity mix doesn’t compromise reliability. The farm sector cannot afford to for their power supply to be interrupted by, for example, extreme weather. But this must not come at additional cost to consumers.
For too long, network providers have used reliability as an excuse to overinvest in their networks and capture excess returns on that inefficient investment. Some State Governments have used these companies as a cash cow. But in doing so, they are damaging their own industries and jobs in regional areas. Ultimately, network companies must bear the risks of their own decisions, just like farmers do.
We call on Ministers to come to Melbourne with an appetite to fix our National Electricity Market. We are asking that Ministers’ take a small, but symbolical step, by providing endorsement for the Commonwealth to continue developing the NEG proposal with the constructive collaboration from all States and Territories. However, the journey does not end there. We also ask that COAG develops a coherent plan to deal with ALL of the issues plaguing our electricity market and restore our nation’s international competitiveness.
Farmers are a patient lot – they are used to waiting long periods to see the fruits of their labour. But their patience is wearing thin. It’s time for our leaders to stop the political games and get on with fixing the NEM.

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