Blog | 4th Nov, 2016

Turnbull government must take back control of our energy future

Last week, federal Environment and Energy Minister Josh Frydenberg racked up the frequent flier points jetting to Paris to meet his French counterparts and energy producers.

It was an unedifying spectacle to see Australia’s Energy Minister heading to the other side of the globe in an effort to work out what the partly French government-owned multinational Engie plans to do with Hazelwood Power Station, in which it holds a 72 per cent stake.

Thursday’s announcement of its closure by Engie is reflective of how much we’ve let go of the reins of energy and climate policy in Australia – right now the Turnbull government has no plan.

The fate of our energy system and regional communities such as Latrobe Valley is not being determined in Australia, but instead by foreign corporations and governments.

Hazelwood, now owned by Japanese corporation Mitsui in partnership with Engie, was built in the 1960s. It is the most polluting power station in Australia, and by some accounts, the developed world.

Responsible for 50 per cent more pollution than the average black-coal power station in NSW or Queensland, Hazelwood emits 14 per cent of Victoria’s annual greenhouse gas emissions and 3 per cent of Australia’s greenhouse gas emissions.

What’s more, burning coal is responsible for about 95 per cent of air pollution in Latrobe Valley, according to the Victorian Environment Protection Authority. To put that in perspective, air pollution contributes to the premature death of over 3000 Australians every year.

Originally scheduled to be retired at the end of the 20th century, Hazelwood is well past its use-by date.

But for the lack of a credible climate policy and national energy plan to phase out the old and invest in the new, on it has rumbled, leaving us passively waiting on a French utility to determine our future.

Hazelwood’s closure will precipitate overblown fear-mongering of higher electricity prices and potential blackouts from the fossil fuel lobby and elements of the Coalition, but the impacts are unlikely to be severe in terms of price and supply.

As Bret Harper, associate director of research at RepuTex explained: “The closure of a large coal generator is likely to have a negligible impact on residential electricity bills.”

This is consistent with analysis by academics at the Australian National University, which found closing a large brown-coal power station would have only a very small impact on prices.

Nor will the lights go out. In 2015 it was estimated that Victoria had 2000 MW more power supply than required, while Hazelwood accounts for 1600 MW.

But that does not detract from the fact that having our energy policy dictated to us by Paris, or Tokyo, or anywhere else, is just poor government. A well-managed phaseout of old technology is the best way to avoid shocks.

Even the Business Council of Australia has said as much, stating: “Victoria needs a managed transition away from coal-fired electricity generation.”

But this isn’t just about energy and climate policy. It’s also about ensuring that we have a plan in place for the communities affected by the transition.

While the Victorian government has provided a $40 million transition package, the federal government is yet to provide an extra cent to stimulate new jobs and investment in the Valley. What we need is long-term support for the region and a clear plan to diversify the economy as we transition to clean energy.

The time has come for the Turnbull government to take back control of our future and develop a coherent plan to clean up our energy supply, replace outdated and polluting power stations and invest in the communities in need.

It’s our future and it should be decided at home, not left to executives in a French or Japanese boardroom.

Mark Wakeham is chief executive of Environment Victoria. This article first appeared in The Age.