Environment Victoria has rejected claims the state will face power shortages if Hazelwood power station is closed. The plant, near Morwell, produces a quarter of the state's electricity and is likely to be the first to close under the carbon tax.
The State Government claims the closure would threaten electricity supplies.
Energy Minister Michael O'Brien says there may not be enough time to build alternative energy sources to fill the void.
"You can not close down something like Hazelwood without ensuring there is equivalent baseload capacity," he said. "But it's not just about the electricity, it's about the jobs."
But Mark Wakeham of Environment Victoria says the Government is running a scare campaign.
"Given that the Federal Government is planning to replace coal-fired generation over the next nine years, there's plenty of time to be building new renewable energy power stations and combined cycle gas stations," he said. He says there is no threat to the power supply.
"There's already 3,000 megawatts of renewable energy projects approved in Victoria and there's a couple of thousand megawatts of gas projects which are in the process of getting their approvals," he said.
"So these projects are very advanced, they could be built and generating electricity in two to four years."