When Mark Davidson set out to reduce his business’s energy consumption a year ago, he did so knowing a carbon price was a high probability.
So when the legislation passed through the Senate yesterday, Mr Davidson knew the Hunter Valley winery he part owns would be better protected than most from electricity price rises as a result of the new tax.
”Even though it has been a political hot potato, it was clear to anyone that this was something that would affect any business,” Mr Davidson, the managing director of Tamburlaine Organic Wines, said.
Treasury modelling shows the carbon price will drive electricity prices up by 10 per cent, but by slashing his business’s energy use by more than half, Mr Davidson’s Tamburlaine winery will continue to save money, despite the tax.
”We’ve now built in some protective savings in the business,” Mr Davidson said.
Under the tax, businesses that increase their energy efficiency or buy renewable energy will pay less than those that don’t.
Grants to encourage businesses to invest in clean technology will be available, while compensation for rising electricity prices will be given to residents based on their income.
Through an energy audit subsidised by the NSW government sustainability program, Mr Davidson found many ways he could reduce energy consumption. To date, he has saved more than $100,000 in electricity costs.
One of the simplest changes was to stop high-energy pieces of equipment, such as water pumps and nitrogen generators, running during peak periods if they were not needed.
The winery also re-engineered equipment such as refrigerators to make them more efficient.
”It wasn’t old technology, it was just badly engineered in the first place,” Mr Davidson said.
”Our investment has been substantial but the payback period is relatively short.”
A lot of small- to medium-sized businesses do not take the time to measure their energy consumption, said Mr Davidson, who was surprised at the savings his company had made.
”You just don’t believe it until you take a closer look,” he said. ”We could see it was not just future-proofing against the prospect of a carbon tax on the business but there were simply a significant amount of dollars to be saved.”
Most wineries do not produce enough carbon dioxide to make them directly liable to pay the carbon tax.
Tamburlaine and others could be entitled to part of the $200 million Clean Technology - Food and Foundries Investment Program, which provides grants to businesses to invest in energy-efficient equipment and low-pollution technologies.
