Greenhouse gas emissions from Latrobe Valley's brown coal fired generators have fallen about 13 per cent, indicating a significant scale back in power generation over the past year.
According to data released by the Australian Energy Market Operator, Victorian generators connected to the National Electricity Market produced more than 28 million tonnes of carbon emissions over the second half of 2012.
This is down from almost 33 million tonnes of carbon emissions produced over the same period in 2011, representing a significantly larger drop than the 8.6 per cent national average.
The reduction has been attributed to an overall decrease in electricity demand, a widespread uptake in solar panel use and impact of the Federal Government's price on carbon, according to a statement from Climate Change and Energy Efficiency Minister Greg Combet.
The Valley's power generators, Loy Yang A, Loy Yang B, Yallourn, Hazelwood and EnergyBrix power station – which now only provides marginal contributions to the electricity grid – generate about 90 per cent of the state's supply.
While Environment Victoria's Mark Wakeham welcomed the news of the reductions, he said the carbon price still had significant barriers from reducing emissions further.
"A lot of people were talking about carbon price (before its introduction) sending them broke, but that talk has now disappeared completely; the Federal Government's carbon price compensation packages (for brown coal generators) has had a big impact on that," Mr Wakeham said.
A report by Carbon + Energy Markets released last month by EV suggested generators had been able to pass on all their extra carbon price costs, effectively turning $1 billion in carbon tax compensation, awarded to Valley generators last year, into pre-tax profit.
"The compensation has lead to brown coal generation not falling more than it has; in fact production from black coal generators has fallen much more, but that's the skewed nature of the compensation package," Mr Wakeham said.