News | 1st Oct, 2011

Power switch-off deadlines

Saturday, 1 October 2011
Tom Arup, The Age

Power plants in the Latrobe Valley would not begin closing until mid-2016 under the federal government's preferred timetable to pay heavy greenhouse gas emitting electricity generators to shut down.

The government yesterday called for expressions of interest for its ''contract for closure'' program – aiming to shut 2000 megawatts of highly emissions-intensive generation capacity by 2020. It is expected to target at least one electricity generator in the Latrobe Valley.

In guidelines for the program released yesterday, the government says its preferred timetable for a full or phased shutdown is between July 2016 and 2020.

But it says it will consider proposals to begin closure earlier. The government wants final contracts with generators by mid-next year, and says it will in part assess bids on value for money and the timing proposed ''in the context of energy security''.

There are four power plants that meet the requirements under the scheme: the Latrobe Valley's Hazelwood, Yallourn and Energy Brix generators, and South Australia's Playford.

A spokesman for Hazelwood's owners, International Power, said yesterday the company was considering an expression of interest.

It is believed $3 billion has been mentioned as a price tag to completely shut down Hazelwood.

Climate Change Minister Greg Combet told The Age in August the government did not share International Power's views on the value of Hazelwood. Energy Minister Martin Ferguson said yesterday the government wanted results, but not ''at any cost''.

The government has put an undisclosed but ''capped'' amount of money in the budget's contingency beyond June 30, 2016, to pay for contract for closure.

Yallourn owners TruEnergy are also considering an expression of interest, and Playford's owners, Alinta Energy, confirmed that it would tender for closure of the plant.

Environment Victoria campaigns director Mark Wakeham said he feared the preferred closure timetable of 2016 to 2020 would leave all the hard work until the second half of the decade. "We could begin the process of retiring turbines at Hazelwood in the next 18 months,'' he said.