The ditching of the Federal Government's 'contract for closure' scheme will have far reaching ramifications for the Latrobe Valley and Australia.
That was the assessment of Environment Victoria, which said the decision announced yesterday was a "devastating blow" to Australia's clean energy future.
"The Gillard Government has just abandoned a very clear and public commitment to retire our most polluting power stations, which seriously damages the credibility of their Clean Energy Future package and Australia's prospects for cleaning up our power supply," EV campaigns director Mark Wakeham said in a statement.
Mr Wakeham backed calls made by Federal Greens leader Christine Milne yesterday to review the $5.5 billion in compensation money being paid to brown coal fired power generators as they transition to carbon price obligations.
He also said yesterday's decision had compromised the Valley's plans to diversify its economy away from a dependence on brown coal fired power generation, and put a question over the Valley's share in a $200 million Regional Structural Adjustment Assistance package, designed to assist regions strongly affected by the carbon price.
Coming only a fortnight after the government announced it had abandoned a floor price for an Emission Trading Scheme, Mr Wakeham said yesterday's decision raised questions of trust of the government.
"The fact the announcement comes so soon after the floor price changes suggest they may have been planning this for some time, and might not have been fair dinkum about (contracts for closure)."