The Federal Government has scrapped plans to close down the Latrobe Valley's brown-coal fired power stations.
Federal Resources and Energy Minister Martin Ferguson has announced that Contract for Closure negotiations are off because the government and operators were unable to agree on a suitable price to close down the power stations.
"It was always about commercially best outcomes and on the basis of the outcomes of discussions to date; I simply say there is no value for money for the government in continuing this process," Mr Ferguson told ABC Gippsland's Mornings program.
Mr Ferguson says the decision provides certainty for the Latrobe Valley.
"I must say this gives some certainty to the Valley. The Valley now knows that there is no intended closure of any of the coal-fired power operations in the Valley," he says.
Mr Ferguson says carbon emissions have lowered because demand for energy has dropped.
He says brown-coal fired power stations still have a commercial future.
Environment Victoria has slammed the Federal Government's decision to end negotiations that would have seen Latrobe Valley power stations close by 2020.
"We're gutted by the announcement, it's a betrayal of the carbon price package that had a number of elements to it… Contract for closure and retiring around 2000 megawatt of coal-fired generation was a really important plank," says Mark Wakeham from Environment Victoria.
"You can't have a clean energy future if you've got power stations like Hazelwood operating indefinitely so we're disappointed," he says.
Mr Wakeham says the Federal Government has not had time to negotiate closures since the drop in carbon floor price last week.