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Dairy energy focus

FROM June 22, 2020 dairy farmers across Australia can apply for grants to make their energy use more efficient and to reduce their power bills through the government’s Energy Efficient Communities program.

Grants of up to $20,000 will be available for a dairy farming business to upgrade equipment to reduce energy consumption, invest in monitoring systems to better manage energy use and conduct energy audits to investigate other opportunities for energy efficient activities.

The grants are being distributed on a first come, first served basis, and there will likely be more applications than grants available.

Unlike previous schemes, there is no requirement for the farmer to contribute financially to the proposed project.

The funding for the program is divided on a state-by-state basis and the proportion allocated is linked to the number of dairy farms in the state.

Victorian businesses are eligible for a total of $5.8 million in funding, being 58 per cent of the total $10 million in funding.

In reality, this means there is likely to be only around 300 grants available for the 3500-odd dairy businesses in Victoria.

Energy use in milk cooling, milk harvesting and hot water production is one of the highest overheads in the dairy industry, costing dairy farmers up to $12,800 per 100 cows each year.

For the average western Victorian dairy farm of 280 cows, that is up to $35,000 per year.

In reality, most will take advantage of off-peak electricity rates for heating water and cooling at least one milking of milk, and most don’t have the usage costs required for irrigating that those in the north would.

Electricity bills exceeding $20,000 per year are not uncommon for running of the average dairy in the region.

The program can be utilised for many energy saving projects; including the replacement of inefficient cooling or heating equipment; installation of energy use or water level monitoring equipment; replacing water pumps or other motors; to name a few.

One upgrade that is in demand is variable speed vacuum pumps, which are easily fitted and reduce energy consumption considerably.

Another option farmers are looking closely at is installing heat recovery systems, which utilise energy produced in the milk cooling process to preheat hot water.

Interestingly, installation of solar panels is expressly ruled out as part of this program.

Given the bad press associated with previous solar panel schemes, we can only assume this is the case to avoid a repeat of that situation.

Agriculture, and drought and emergency management minister, David Littleproud said dairy farming businesses were a huge asset to regional economies.

“These grants will provide financial support at a time when so many in the dairy industry are struggling,” he said.

“Supporting the long-term sustainability of our dairy farmers is critical to the sustainability of regional Australia and our food security.

“Dairy farmers are in a price squeeze from an imbalanced market, but thanks to this grants and energy efficiency upgrade program, they will be able to keep more money in their pocket.” 

Energy and emissions reduction minister, Angus Taylor said the program was focused on helping dairy farming businesses to lower their power bills by becoming more energy efficient.

“Farmers have long been at the forefront of innovation to reduce their cost of doing business and their emissions output, but energy costs remain high for many in our dairy sector, especially where farmers are doing it tough on the back of bushfires and COVID-19,” said Mr Taylor.

“The government’s support will help dairy farmers in their efforts to better manage their energy use while also continuing to play a role in reducing global emissions.”

The Energy Efficient Communities program was announced as part of the government’s Climate Solutions Package in the 2019 Federal Budget.

Ten-million-dollars has been made specifically available for the dairy round.

The good news for dairy communities is that most of these grants will be spent locally.

In times where the likes of the local electricians, dairy technicians, plumbers and builders may be experiencing reduced demand due to the economic retraction we are experiencing due to COVID-19, this influx of projects will boost the bottom line for many.

Grant guidelines and application forms for the dairy round are available at business.gov.au, or by telephone on 13 28 46.

Applications close on August 17, 2020.

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