News | 13th Oct, 2010

Dirty coal-fired power shutdown yet to win Fed Govt support

Wednesday, 13 October 2010
Rachel Carbonell, PM

MARK COLVIN: Plans to close Australia's dirtiest power station have hit a difficult patch.

The Victorian Government plans to phase out Hazelwood Power Station. It wants Federal Government support to meet the compensation bill, which is likely to be hundreds of millions of dollars.

But a meeting between the Victorian Premier, John Brumby and the Federal Minister for Climate Change and Energy Efficiency, Greg Combet has failed to produce an agreement.

Rachel Carbonell reports.

RACHEL CARBONELL: Hazelwood Power Station was built in Victoria's LaTrobe Valley nearly 50 years ago.

It generates up to a quarter of Victoria's electricity. In doing so it emits 3 per cent of Australia's greenhouse gases and 13 per cent of Victoria's.

Five years ago the Victorian Government gave the plant the go ahead to operate until 2030.

Now the state government wants to close it, in stages, and replace it with cleaner energy like gas-fired power.

Victorian Premier, John Brumby.

JOHN BRUMBY: It's important to create that investor certainty. It's important to bring new gas and renewable generation on line and it's important to close down Hazelwood because it's the dirtiest most polluting power station in Australia.

RACHEL CARBONELL: He says the Hazelwood plan is critical while the country waits for the Federal Government to make a decision on carbon pricing.

JOHN BRUMBY: The point about Hazelwood is at the moment in the absence of a national carbon price there is no investment certainty in the energy industry and we need to bring forward new investment particularly in gas related infrastructure.

RACHEL CARBONELL: Closing Hazelwood will be costly. The compensation bill is likely to be in the hundreds of millions of dollars. Since announcing the plan Victorian Government has been openly confident of Commonwealth support.

But after a meeting with the Federal Minister for Climate Change and Energy Efficiency, Greg Combet last night, the Premier seemed less confident.

JOHN BRUMBY: I'm not going into the details of the meeting but we've had productive discussions about a range of issues.

RACHEL CARBONELL: Mr Combet declined to speak to PM but a brief comment before yesterday's meeting is unlikely to have inspired optimism in the Victorian Government.

GREG COMBET: Well the Victorian government has its priorities and the Federal Government has our priorities too and I certainly mean no criticism of the Victorian government's efforts to reduce emissions, because they've put forward very strong climate change policy but the Federal Government's priority is in three areas; supporting renewable energy; in energy efficiency and in working towards the introduction of a carbon price, so that's what we'll be focusing on.

RACHEL CARBONELL: John Brumby says his government will achieve its commitment with or without Federal Government support.

JOHN BRUMBY: We would prefer to work with the Federal Government, but if we're not able to reach agreement with them, we will achieve this on our own.

RACHEL CARBONELL: Environment Victoria Campaigns Director Mark Wakeham, says while the State Government may be able to afford to close a quarter of the plant, it's unlikely to be able to close the whole power station without help from the Federal Government.

MARK WAKEHAM: The lack of interest from the Federal Government to date has been really disappointing. They've put some very large amounts of money into some very questionable climate programs. They're also putting $100 million into a new coal-fired power station in Victoria; so they've managed to find $100 million to build a new coal-fired power station and to date they haven't been able to find a cent to retire our most polluting power station.

So that's really disappointing to have that luke-warm response.

RACHEL CARBONELL: So far Hazelwood's operator, International Power, has indicated it's only interested in a deal to shut down the whole plant.

MARK COLVIN: Rachel Carbonell reporting from Melbourne.