Energy policy: politics and practicalities explained

As the Federal Election draws near, we can expect the Shakespearean tragedy of Australia’s energy policy to remain centre stage. But just how real is this issue for Australian farmers?

Energy policy has been a central theme underscoring a brutal decade of Australian Federal politics. It’s been the justification for many a political knifing, and a growing source of discontent among voters.

But beneath the backstabbing and bloviating that dominates political debate, lies a serious issue eroding the profitability of Australian farm businesses.

AustralianFarmers has consulted with the experts to bring you this ready-reckoner on all things energy.

So, why is energy such a hot topic this election?

For almost a decade the path towards both major parties
agreeing on a set energy policy has been contentious and dramatic to say the
least.

Energy policies were a contributing factor to Malcolm
Turnbull’s demise, with his National
Energy Guarantee proposal
said to be the final straw. And energy remains
an unsolved facet of Australia’s economic and climate policy settings.

“Getting a consensus position, let alone a bipartisan one,
on an energy policy has proven to be elusive for way too long,” says the National
Farmers’ Federation’s natural resource management expert Warwick Ragg.

“At present, both parties are committed to reform and are following some technical pathways, but what remains the most pressing concern is the emissions target.”

Australia is a part of The
Paris Agreement
, through which 174 countries and the European Union
agreed to combat climate change. As part of this, Australia is obliged to
achieve a 26 per cent reduction in carbon emissions by 2030.

The Morrison Government is committed to the 26 per cent
figure, however the Labor Party wants a reduction of 45 per cent in the same
timeframe.

“The 26 per cent target will keep the global temperature
rise at about 2 degrees Celsius, while 45 per cent (if adopted globally) would limit
warming at 1.5 degrees Celsius,” Mr Ragg said.

The Coalition Government, along with the NFF, believe the
Opposition’s energy policy will be detrimental to the economy and agriculture,
either directly or through flow on effects such as more expensive electricity
or additional transport costs.

As for how we achieve these reductions, much of the
political focus remains on energy generation – shifting to renewable energy
sources such as solar panels, wind farms, batteries and pumped hydro systems.

Meanwhile the farm sector has been quietly doing its part, leading the economy by reducing our emissions intensity by 63% between 1996 and 2016.

Why are energy policies
so important to farmers?

Australian farmers rely on sound energy policies for two
critical reasons. The first being the cost of energy and the second is its
reliability.

NFF Climate and Energy taskforce chair and a mixed farmer
from Walpeup, Victoria Gerald Leach knows better than anyone else the realities
of reliable energy policies.

“The cost of energy is critical for Australian farmers in
maintaining our international competitiveness when selling produce.”

Mr Leach said without a bipartisan energy policy Australian
agriculture and the Australian economy will suffer.

“If we are paying more for our energy than our overseas
competitors, we are at a severe disadvantage.

“High energy costs will not only be detrimental to agriculture but also the economy as Australia exports two thirds of what we grow, totalling about $47 billion.”

Areal view of NSW solar farm. Photo: Karen Stark.

Energy reliability is paramount to all farming businesses
particularly irrigators and intensive animal producers.

“The timing of energy use is crucial. For example, if a
power shortage occurs when an irrigated farm, such as a vineyard, needs to be
watered productivity can be reduced, the viability of the crop is at risk and a
lot of money goes down the drain.

“Power outages, particularly for dairy farmers when milking
and air-conditioned sheds for chicken and egg farmers, can also be extremely
costly in terms of animal losses,” Mr Leach said.

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Australian farmers have been working tirelessly for decades
to maintain their status as world leaders in sustainable farming and uphold
their commitment to reduce emissions.

“Agriculture has a great record for emissions reduction. If
you measure our energy use per unit of production in the last few decades, that
energy use has significantly reduced,” Mr Leach said.

In
fact, the red
meat sector, for example, has made significant progress towards reducing its
carbon footprint
by reducing
emissions by 45 per cent between 2005 and 2015.

With the current rate of innovation, research and new farm practices, Australian agriculture is on track towards its target of trending towards carbon neutrality by 2030.

Photo: Meat & Livestock Australia.

What is NFF’s position
and election asks on energy?

Farmers are the ultimate environmentalists, managing around
half of Australia’s landmass and are global leaders in sustainable farming.

“The primary ask from the NFF is for a solid energy policy
that solves the trilemma of affordability, reliability and sustainability,” NFF
President Fiona Simson said.

At the moment energy, including electricity generation and
transport, accounts for more than 70 per cent of Australia’s greenhouse gas
emissions.

“For the upcoming election the NFF is seeking for in the
incoming government to help agriculture transition to renewable and affordable
energy in order to reduce greenhouse gas emissions.

“The farm sector has a target to 50 per cent renewable
energy by 2030 and a 25 per cent cut in the price of power by 2020.

“To achieve this the NFF has asked for the government to
implement the recommendations from the ACCC’s
Retail Energy Pricing Inquiry
and undertake an annual review of how
energy policy is impacting electricity prices and agricultural
competitiveness,” Ms Simson said.

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