Blog | 10th May, 2011

from big decisions about Victoria’s energy future

At 4 pm yesterday, at a time when half the nation’s journalists were in Federal budget lock-ups, the State Coalition quietly announced that they’ve stopped negotiations with International Power to secure the partial closure of Hazelwood power station.

I was just leaving Parliament House, Canberra, where I’d been in discussions for the past two days with Federal pollies and advisors about the future of power stations like Hazelwood under a price on carbon.

The Baillieu Government’s announcement was clearly timed to avoid media scrutiny, but the timing was extraordinary for another reason. In the next 10 weeks the details of the price on carbon package will be agreed by the federal Multi-Party Committee on Climate Change.

Negotiations are taking place on key issues such as whether the coal industry receives compensation for the introduction of a price on carbon, or alternatively whether revenues from the scheme are used to close and replace polluting power stations like Hazelwood.

The future of Victorian communities in places like the Latrobe Valley will be greatly influenced by these decisions, and by the structural adjustment packages that are developed as part of the price on carbon package. And yet the state government is silent on the price on carbon, silent on the future of Hazelwood and is taking its bat and ball and going home. It has no plan to reduce the state’s emissions and no plan to develop new jobs and industry in the Latrobe Valley.

This leaves the heavy lifting of climate policy to the Federal Government to deliver the emissions reductions required to meet Victoria’s legislated target to reduce emissions, a target supported by the Coalition. And yet we know that Ted Baillieu’s colleagues in Canberra are promising to tear up any price on carbon legislation. To make matters more confusing remember that the Coalition’s Federal Shadow Climate Minister, Greg Hunt, told us that the Coalition’s direct action policy would be used to close power stations like Hazelwood and Yallourn? Confused? So are we.

Clearly we may be waiting for some time for a coherent climate policy or Latrobe Valley transition package from either the state or the Federal Coalition. However the reality is that by evacuating the climate policy space the Coalition will have little influence over deals that will be negotiated by the ALP, Greens and Independents that will determine Victoria’s energy future.

We’re confident that the price on carbon negotiations offer a real opportunity to put Victoria and the rest of the nation on the pathway to a clean energy future. We’re doing our best to ensure that the package leads to the replacement of power stations like Hazelwood but also invests in new jobs and industries for coal regions like the Latrobe Valley. By refusing to pursue a conversation about Hazelwood’s future that its owners, International Power, are keen to have, the State Government is burying its head in the sand and ignoring the world around it.