Renewable energy plants cop caning
CO-GENERATION has been a ‘white elephant’ for Clarence Valley cane farmers.
The farmers, as members of the NSW Sugar Milling Co-operative, are missing out on promised profits as the possibility of receivership of two renewable energy plants on the Northern Rivers looms.
Although the local Harwood Mill is not directly involved in co-generation, Valley farmer Andrew Skinner said ‘we’re all in it together’. Profits from co-generation would have been divvied out to all NSW milling farmers or spent on maintenance at the Harwood mill.
A combination of renewable energy legislation, a shortage of fuel to run the co-generation plants and pressure from lenders who funded the $40 million project at Broadwater and Condong mills means the scheme for farmers is a big disappointment.
Lack of funding also meant that co-generation could not afford two cleaning plants that would ensure efficient separation of the sugar from the cane thrash which powers the energy plants.
“It’s difficult to predict what is going to happen,” Mr Skinner said.
“They are hoping they can trade their way out of it,” he said
“In the three-mill area (Harwood, Condong and Broadwater), a lot of farms have gone out of action and that equates to a lot of tonnes of sugar,” he said
Federal Government policy had led to bulk release of renewable energy certificates onto the market, forcing down the value and making co-generation unviable.
NSW Sugar Milling Co-operative director Ian Causley said the co-generation plants’ financial troubles and the future of the co-op were separate.
“They are separate entities and the financial viability of the mills was not linked to the viability of the co-generation plants,” Mr Causley said.
He said the co-generation plants were not in liquidation, but had been placed in the hands of the banks and there was a prospective buyer of the co-generation infrastructure.
Payments to growers this year had been slow because money had been borrowed to undertake site capital works.
Mr Causley said most of those borrowings had now been repaid and the co-operative was catching up with payments to growers. Growers were also starting to see the results of good sugar prices that had given a floor to their business.