Media Releases | 17th Oct, 2012

Yallourn windback may signal beginning of Latrobe Valley power clean up

Wednesday, 17 October 2012


Environment Victoria has welcomed news this morning that the Yallourn power station will reduce its operating capacity by one quarter. The news follows persistent problems at the Yallourn mine site which collapsed on 6 June and which has limited coal supply to the power station.

Environment Victoria’s Campaigns Director Mark Wakeham said today:

“This is a welcome move that could see greenhouse pollution fall by 4 million tonnes every year. It’s a sign that the carbon price is starting to influence business decisions, though falling demand and a failing mine are likely to have been equally important at Yallourn.

“It is unclear at this stage if the unit closure at Yallourn is temporary or permanent.

“The recent failure of the contracts for closure process has meant that government has less control over the way in which power stations will close, with the likely outcome being messier and more unpredictable. Closure decisions will be purely market-based which gives affected communities much less time and ability to plan for the future.

“We may also see more power stations being mothballed temporarily but brought back on line if market conditions change – this uncertainty was what contracts for closure was supposed to avoid.”

Mr Wakeham said that in a perverse outcome Yallourn would continue to receive compensation payments of almost $260 million each year for 5 years in cash or free permits, despite the fact that the power station has reduced its output.

“The Federal Government needs to urgently review the $5.5 billion compensation payments to our dirtiest power stations. The package is ill-conceived and a massive waste of taxpayers’ funds. Power stations like Yallourn and Hazelwood are likely to be making windfall profits because of the excessive compensation payments.”

Update: Energy Australia confirmed this morning that the closure of one unit of Yallourn may be temporary and they have not ruled out operating all four units of the power stations again if circumstances change.


For further comment:

Mark Wakeham, Campaigns Director Environment Victoria 0439 700 501