Media Releases | 16th Apr, 2012

Time for Gillard Government to pull the pin on HRL coal grant

Monday, 16 April 2012

Environment Victoria today called for the Federal Government to withdraw their $100 million grant to a proposed new coal-fired power station in Victoria. The call follows an announcement today by HRL, the company behind the proposal, that they are stopping work on design and pre-construction activities related to the proposed coal-fired power station.

The proposed 600MW coal-fired power station was recently given the go-ahead following a major legal challenge against the EPA at VCAT. The EPA had previously approved 300MW of the 600MW proposal. HRL won their appeal for a full approval. Environment Victoria had also appealed the EPA approval, arguing that the power station shouldn’t have been approved at all.

However in approving the full 600MW power station, VCAT imposed a condition requiring that HRL is only allowed to commence development if another brown coal-fired power station has signed a contract to be closed under the federal government’s Contacts for Closure program as part of the carbon price.

Environment Victoria’s Safe Climate Campaigner Victoria McKenzie-McHarg said today:

“Environment Victoria welcomes the decision from HRL to halt the development of their proposed coal-fired power station.

“Stopping work on this polluting project is the most sensible decision that HRL has made in the last 6 years.

“We now call on the Prime Minister to confirm that there will be no further extension of HRLs grant funding and to withdraw the $100 million grant immediately.

“HRL is losing money by the day developing this project which relies on inefficient and out-of-date technology, and would keep Victoria stuck in the dark-ages. The project lacks certainty, their costs continue to increase, they don’t have funding, and there are cleaner and better projects on the table and ready to go.

“The only thing certain about this project is that if it goes ahead it will increase Victoria’s greenhouse pollution by millions of tonnes each and every year.

The only publicly acknowledged funding for the $1.3 billion power station is from the state and federal governments. The Victorian Government committed $50 million to the HRL proposal in 2006, and the Federal Government committed a further $100 million in 2007. Despite several funding deadline extensions, HRL have continually failed to meet the conditions of the federal government grant, which has not yet started to flow.

In February of this year Energy Minister Martin Ferguson announced that HRL would be given a final extension to meet the conditions of their grant to 30th June 2012.

HRL is also applying for money from the Federal Government to close their other coal-fired power station Energy Brix in the Labtrobe Valley, under the contracts for closure program.

“HRL’s statement reads like a plea for yet another extension for the company to meet the conditions of their grant money,” Ms. McKenzie-McHarg said today.

“Julia Gillard needs to step up and give some certainty to the community that her government won’t pay HRL to close a polluting coal-fired power station on the one hand, while on the other paying them $100 million to open a polluting coal-fired power station. The potential for this to happen is absurd and will raise serious questions about the government’s credibility on climate change and their budget management.


Read more about our campaign to Stop HRL here