Financing Energy Upgrades for Milawa Cheese

Thirty years ago, Anna and David Brown left their jobs in Melbourne and moved to the Victorian High Country where they converted an old Butter Factory in Milawa into their dream cheese-making facility.

Their business, Milawa Cheese, is now known for its production of fine Australian farmhouse cheese made from local goat and cow’s milk.

The Problem

Heating and cooling involved in the cheese making process uses a lot of energy and recent electricity price increases have weighed heavily on the efficiency of their operations.

This wasn’t helped by a thirty-year-old LPG fed boiler, inefficient high bay lights, old style refrigeration and water pumping systems, and an electricity agreement that continued to lock them into high electricity and gas prices.

Being located in the country also meant connecting to a rural electricity grid, where network electricity charges are significantly higher than city areas.

Anna and David knew a technology upgrade would help but didn’t know where to begin and how to finance the upgrade.

The Solution

Milawa Cheese was introduced to Westpac by Verdia to understand if it could access the bank’s Energy Efficient Finance Program, backed by the Clean Energy Finance Corporation (CEFC).

Verdia helped Westpac and the Clean Energy Finance Corporation understand the scope of energy efficiency works proposed for the business and see it was a good fit for the Westpac program.

Victorian based sustainability solutions business, Re-think Sustainability, was invited to complete an energy audit of the Milawa Cheese operations to identify the most cost-effective energy saving projects and when it would best implement them.

The multi-technology solution targeted lighting, heating and cooling upgrades as well as on site solar PV generation. A new electricity and gas agreement sourced via a competitive process also locked in lower prices with a new electricity retailer.

General Manager Asset Finance at Verdia Simon Drumm said Milawa Cheese wasn’t a Westpac customer, however it was still able to access the Westpac Program and benefit from lower finance costs for their upgrade.

“Verdia was able to demonstrate to the CEFC and Westpac that the complex, multi-technology project was a viable solution and suitable for funding under the program.

“We helped negotiate a 10 year-term for the $250,000 loan, which helped the business with their cash flows.”

The Result

The old boiler, which was fed by bottled LPG gas, has been replaced with a modern, high efficiency 120 kilowatt LPG gas boiler. It is used to heat milk as part of the pasteurization process in cheese making, and the new technology has now reduced LPG consumption and costs by 15%.

There was a complete swap out of all old-style high bay, recessed and fluorescent tube lights. They were replaced with super-efficient and low maintenance LED lighting technology. About 110 lights were replaced under the program, reducing lighting costs by 58 percent.

The variable speed drives on 15 refrigeration and water pumping units were upgraded, with the new automation process is helping to save up to 30 percent on power consumption.

Lastly, a 100 kilowatt solar PV system was installed on the factory roof, generating enough power to supply the equivalent of six average homes. After reducing electricity consumption via the energy efficiency improvements, the solar generation offsets the more expensive grid supplied power.

The total package of works has helped reduce Milawa Cheese’s energy consumption by 72.8%, saving the family run business more than $60,000 a year on electricity costs.

The 10 year loan term from the Westpac Energy Efficient Finance Program means Milawa Cheese can access greater cash flows from the efficiency improvements to help its business grow and continue to be as strong part of the regional economy.

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