Ivankovich Farms hit with 50 per cent increase in electricity costs as challenges cloud business’ future

A third-generation vegetable grower admits he would consider walking away from the family business after a 50 per cent increase in his electricity bills further increased pressures on his operations. Ivankovich Farms has been operating along the coastal plains of Myalup for 35 years, but rising costs mean its future is uncertain. Owner Anthony Ivankovich said his latest electricity contract, signed late last year, saw the business’ power bills increase by 50 per cent. “We got another 9 per cent increase (last week) on network costs,” he said. “We’re not consuming any more power — we’ve actually reduced cropping a little bit to reduce the labour cost, because the labour costs are so high. “We’ve got a cut off point where we used to be able to comfortably wash and pack and ship 14 containers a week. Now I would not really want to go over seven or eight.” The business already has installed 310kW of solar panels to reduce its bills, but Mr Ivankovich said he had to negotiate with Western Power for more than nine months to allow the system to operate without interruptions. For the excess power the system returns to the grid, the business receives only 2.5c per kilowatt. Mr Ivankovich laid the blame for his increased energy bills on the reduction of baseload power as fossil fuel power generation gets replaced by sources including solar and wind power. He said the grid could not just rely on renewable energy for power generation. “It’s great and it helps offset the load, but it’s not the answer,” Mr Ivankovich said. “You have to have a baseload of power ... I believe nuclear is the way to go.” It is not just electricity costs which are hurting the business. High labour expenses, significant price increases for machinery and issues with produce spoilage during export are also crippling the family-run enterprise. Mr Ivankovich admitted the operation was “just staying above water” with running and maintenance costs and said many in the vegetable growing industry were now at a tipping point. “You can just about talk to every farmer on the strip here (in Myalup) I reckon, and if a foreign company came in and offered what they wanted for the place, they would just say ‘yeah, see you later’,” he said. “It’s not an easy industry to be in. I’ve grown up with it, I enjoy the challenges and all that, but you actually need to make some money at some stage. “Every business has bad years, but it’s just continued for the last three, four years now — you’re just digging deeper and deeper.” Liberal candidate for Forrest Ben Small warned of the potential consequences if electricity costs continued to rise, saying “you can’t eat solar panels”. “Our food security is actually riskier than people imagine because this energy stuff doesn’t just make us feel good sipping lattes in Canberra,” he said. “Businesses actually use loads of it and if they can’t be viable, they’re not producing here.” Mr Small dismissed the findings of a CSRIO report released in May, which found small nuclear reactors — which have been proposed by the Federal Coalition for Collie’s Muja Power Station — are the most expensive form of electricity per kilowatt hour. The same report found wind and solar panels with batteries and other forms of energy storage were the cheapest form of electricity. But Mr Small argued Australia’s power prices were “internationally uncompetitive” and getting worse. “So (Prime Minister Anthony) Albanese and all of his henchmen can bang on about ‘oh, this is the cheapest form of energy’,” he said. “Well frankly it’s not, because these guys are paying through the nose and when we look overseas at the moment, places that do have nuclear power are paying about half of what we’re paying right now.” Analysis of prices charged to electricity consumers in OECD countries in 2022 found Australia has the 10th lowest costs out of the 38 members, with 11 of the countries with higher prices also having nuclear power generation. While Australian customers were found to be paying close to double the costs of those in the United States, Canada and China, consumers in the United Kingdom and the Czech Republic were paying more than double. A spokesperson for Federal Energy Minister Chris Bowen described Mr Small’s claims on electricity costs as “factually incorrect” and said the Federal Government had delivered energy bill relief the Coalition had voted against in 2023. “We’ve also agreed with the WA Government to provide $3 billion in low-cost loans for new builds and major upgrades to transmission in WA’s major electricity grids to ensure consumers can benefit from more clean, affordable energy in the future,” the spokesperson said. “More than 50 large scale battery projects are planned across WA that will store more than 25,000 MWh of energy. When battery and other storage is combined with peaking gas, which can be quickly turned on and off as needed, energy experts agree renewables can meet the needs of households and businesses around Australia. “Increasing levels of renewables in the (WA market) are helping to drive wholesale prices lower, with negative average daily wholesale price occurring four times in the past month alone.” A State Government spokesperson said it had made power bills more affordable for businesses with thousands of dollars in electricity credits since 2021. “These credits were made possible through years of responsible Budget management,” the spokesperson said. “Under the previous Liberal-National Government, power prices increased by more than 90 per cent. The spokesperson claimed the Liberal nuclear reactor plan would send power bills skyrocketing. “It’s the most expensive form of energy, and simply plugging in an uncosted and unfunded nuclear reactor will lead to rolling blackouts in WA – unless rooftop solar was switched off across the State,” the spokesperson said. “It’s a waste of taxpayer money that will drive up power bills for WA households and businesses, destroy investor confidence, and wreck Collie’s economy. “Our energy system needs careful and considered management, and an orderly plan to transition away from coal – which only Labor is delivering. We’re investing billions into renewable energy generation and storage – delivering affordable and reliable energy for WA’s future.” A spokesperson for Synergy stated it provides customers who use less than 50MHh per year with government-regulated tarrifs. “These government regulated tariffs are reviewed each year by the State Government, with the approved pricing reflecting the cost to generate and transport electricity,” the spokesperson said. “Business and residential tariffs increased from 1 July 2024, in line with inflation. Electricity in Western Australia for residential customers and non-contestable customers is subsidised by the State Government which has shielded many customers from increases seen in other parts of the country.”