A blueprint on closure and replacement of Australia's most polluting power station by the end of 2012 has found it could be achieved for $320 million a year.
A report commissioned by Environment Victoria found the early closure of the Hazelwood coal-fired power station would cut the state's greenhouse gas emissions by 12 per cent and create hundreds of jobs.
The proposal comes as political leaders search for a way to fill the climate policy void created by the indefinite delay of the Rudd government's emissions trading scheme.
The federal backflip is forcing the state government to rethink its forthcoming climate policies – a climate change white paper and bill and statement on future energy supply.
Environment Victoria campaigns director Mark Wakeham said the consultants' analysis showed that the cost and timeframe were feasible.
"Everyone knows that Hazelwood is going to close at some point,'' he said. ''We think this is a real opportunity for whichever state or federal party that works with the company, International Power, to make it happen.''