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Energy hikes has wine industry worried

Energy hikes has wine industry worried

The South Australian wine industry has had rising concerns with the increasing electricity prices as Barossa wineries are already seeing the effect on their energy bills.

Energy costs have been a hot topic in South Australia, with many arguments in the political sphere about what is the best for the state. 

South Australia has the most expensive electricity in Australia with projections of electricity prices to increase over the next year before possibly plateauing in 2018/19.

Yalumba Family Vignerons, Angaston, is one of the wineries that has seen the dramatic increase in electricity costs over the last two years.

The winery recently finished their installation of one of the biggest solar photovoltaic (PV) systems at any winery in Australia in December last year.

Mr Nick Waterman, Yalumba CEO, said that the solar energy definitely has the ability to drive up to 20 percent of their electricity needs which will help them make some savings in the future.

“We looked at the projected increase over the last two years. In essence, from 2015 projecting to 2017, over a two-year period with current usage over a 12-month period, two years of price increases will mean about a 85 per cent increase in our electricity costs,” said Nick.

“That will be impacted somewhat by the solar. So there are some savings there, even when you factor those savings in, it’s still a 60-65 per cent increase two years. The electricity, in terms of our total costs of producing wine, it’s not a huge percentage. We are worried that when it goes up by 85 per cent, you have to recover that cost somewhere.

“For us, our view would be not to cut costs through cutting people, we would look to put through pricing increases in market, and in some markets that is more challenging than others. At the end of the day, the consumer, who is buying our wine, is the one that is going to pay for the increased costs of electricity to an extent if we can’t find savings elsewhere.”

Yalumba decided to take up the solar panel option last year since they are focussed on sustainability and environmental responsibility. There were obvious commercial positives that made the project more appealing.

For the full story see this week’s edition of The Leader.