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Ag manufacturers looking for energy policy certainty

by Beef Central, 17 July 2018

AN alliance of red meat processors and other agricultural manufacturers sees a push towards bipartisan political support is a positive step in ensuring that energy generators and retailers, and their customers, have a level of policy certainty around the energy market in which they participate.

The Australian Agricultural Manufacturing Alliance (AAMA) represents red meat and smallgoods processing, sugar milling, oilseeds processing, stockfeed manufacturing, protein rendering, poultry processing, cotton processing and wine makers. More than 100,000 jobs are contained within these industries, mostly in regional areas, with a further 300,000 in ancillary fields.

In a statement issued this morning, the AAMA said it supported the aim of the National Energy Guarantee, to solve the “energy trilemma” of clean, cheap and reliable energy.

The alliance supported the certainty that the NEG will bring to the Australian energy market, and looked for ongoing commitment from the Commonwealth and State Governments to ensure the viability of agricultural manufacturing in Australia and the communities that its members help underpin.

The AAMA said it supported the resetting of the Australian electricity market as outlined today by the ACCC, which can be achieved with bipartisan support for a strong National Energy Guarantee.

“AAMA strongly supports increased certainty in the Australian energy market, provided by a strong NEG, and looks for ongoing commitment from the Commonwealth and State Governments to ensure the viability of agricultural manufacturing in Australia and the communities that our Members help underpin,” the group’s statement said.

“AAMA notes that an affordable and reliable energy supply is absolutely vital to the ongoing operation of our industries. The third arm of the “energy trilemma” addressed by the NEG, emissions reduction, is also expected to benefit the production of raw materials supplied to Australian agricultural manufacturers.”

Competition in energy generation and retail was of particular concern to energy users like AAMA members in rural and regional Australia, where the presence of just one retailer meant being ‘at the mercy of a monopoly market,’ the group said.

“Our members are commonly the largest employers in rural and regional towns and their ongoing viability is vital for employees, farmers, supporting industries and businesses, and wider community.”

The four key focus areas identified in the Retail Electricity Pricing Inquiry – Final Report, released by the ACCC on Wednesday – boosting competition in generation and retail; lowering costs in networks, environmental schemes and retail; enhancing consumer experiences and outcomes; and improving business outcomes – were all ideals that were of benefit to agricultural manufacturers, the AAMA said.

“Government must note that within the last few years there has been a big change in the way agricultural manufacturers manage their energy use, including on-plant solar and novel energy sources like methane capture and re-use. These are solutions that only a few years ago would have had payback periods of close to a decade, but are now closer to three to four years, as they offset the much higher energy prices,” the alliance said.

AAMA suggests that the priority must be on the energy user, and that supply is an essential service that must be government-guaranteed.

“Increasing prices for electricity, gas and other energy sources provide benefits to the energy generator, and retailer profits support their shareholders, but they also have a deleterious effect on all Australians, including agricultural manufacturers and their employees,” it said.

 

Source: AAMA



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