Media Releases | 20th Apr, 2015

Coal costing Victorians billions in health and environmental damage


20 April 2015

Independent analysis carried out by researchers at Harvard University and released by Environment Victoria has revealed that coal power stations in Victoria are costing the public billions of dollars in health and environmental damage each year.

The research, prompted by the health effects of the 2014 Hazelwood mine fire, calculates the social costs for each electricity generator in Victoria and highlights the importance of accounting for these externalised costs when considering the state’s future energy mix.

Environment Victoria’s Safe Climate Campaign Manager, Dr Nicholas Aberle, said today:

“Victoria’s old and polluting power stations are continuing to operate well past their use-by date. They’ve got every incentive to hold on because they’re cheap to run, but they’re not paying for any of the pollution or damage they create.

“It has been known for a long time that burning coal causes health and environmental damage, but this is the first time research has attempted to quantify that cost in Victoria.

“The modelling shows that the large power stations in the Latrobe Valley are responsible for costs between $500m and $1.2b each in health and environmental damage every year.

“At Anglesea, where the biggest problem is the sulphur dioxide, we see health costs of $170m per year from a very small, and now redundant, power station.”

The report concludes by noting that a failure to price the environmental and air pollution costs “is distorting the market and preventing a shift to cleaner generation.”

The Australian Energy Market Operator announced last year that Victoria has around 2000 megawatts (MW) of surplus generation capacity that is no longer needed to ensure security of supply. As a reference point, Hazelwood and Yallourn power stations are 1600 and 1480 MW respectively.

“We now have more electricity generation capacity than we need in Victoria, which is stalling investment in new renewable energy projects. In the interests of reducing our carbon pollution and our air pollution, we need strong federal and state leadership on how to resolve the stagnation of our energy sector,” said Dr Aberle.

“Generators are reluctant for their power stations to be the first to leave the energy market – it means their competitors benefit, and it will trigger significant rehabilitation costs to clean up the mines left behind. Government intervention and regulation is needed to overcome these barriers.”

Dr Aberle added that extensive government support would also be needed to help coal-dependent communities diversify their economies as power stations are retired.

“The last time we had a big shake-up of the electricity sector in Victoria, the Latrobe Valley was hit very hard with job losses during privatisation. This time around, the region needs to be supported with a broad economic development plan to ensure a smooth transition to a clean economy.”

Read the full report here.

For comment:
Nicholas Aberle 0402 512 121