Agriculture – including the horticulture sub-sector – is an energy-intensive industry. Growers, producers and businesses along the supply chain require significant amounts of energy for production, harvesting and storage. Vegetables Australia investigates how growing operations can keep energy costs down through a demand response approach.

The high cost of energy and the need to reduce carbon emissions will remain major challenges for the Australian agriculture industry. With increasing productivity, the industry has significantly increased its energy consumption – energy costs as a proportion of production costs soared by 100 per cent in the five years to 2018^. Yet, Australia needs to reduce carbon emissions by 26-28 per cent under the Paris Agreement.

Horticultural businesses can improve profitability – while meeting Australia’s climate commitments – by improving the efficiency of their energy usage. Purchasing energy strategically will help maximise productivity and produce quality, better control energy costs, and even create new revenue streams.

Making the switch to wholesale energy is a good first step. As wholesale prices change with factors such as supply and demand, businesses can gain access to low price periods.

From there, businesses can engage in demand response, which is an increasingly popular energy management strategy. Demand response gives businesses the flexibility to match their energy usage to the lowest cost times as well as financial incentives to power down during peak time. In return, demand response maintains power stability of the grid, and it helps lower prices for everyone.

Demand response is a perfect solution for the horticulture industry, which can be flexible with its power usage. Growers can act on market signals to reduce or shift energy use daily to avoid peak prices and power up operations when prices are low or even negative. It can be as simple as running irrigation pumps an hour earlier or alternating the running of pumps rather than all at once.

Supply and demand focus

The Australian Energy Market Operator (AEMO) has designed effective demand response programs for Australian businesses. When there is enormous pressure on the grid, AEMO intervenes in markets to balance supply and demand.

In Victoria, New South Wales and South Australia, AEMO can trigger the Reliability and Emergency Reserve Trader (RERT) to call on, and financially incentivise, businesses that can provide reserve energy at short-to-medium notice to power down or off. Businesses that are contracted for RERT through Flow Power can utilise its kWatch® Intelligent Controller, which can activate on-site generators and ramp down on-site loads to simplify, or even automate, demand response.

In South Australia, the State Government has partnered with Flow Power to co-fund the deployment of kWatch® Intelligent Controllers and deliver demand response capabilities across Commercial and Industrial (C&I) energy users. This funding is currently available for all C&I businesses in South Australia.

Renewable energy is particularly suited to regional horticulture businesses, and Flow Power is making renewables more accessible. For instance, more South Australian businesses will have the opportunity to unlock value from solar power as the business brings two new solar projects into its portfolio: the 3MW Streaky Bay Solar Farm and the 4.95MW Coonalpyn Solar Farm from developer Tetris Energy.

Autumn is an ideal season for growers to review their energy strategy, research market options and switch to wholesale energy, which can help them maximise profitability.

Find out more

Please contact Flow Power on 1300 08 06 08.

^Source: Australian Farm Institute: The Impact of Energy Costs on the Australian Sector