Hazelwood FAQs

Image: Gippsland Solar

Contents

What is Hazelwood?

Hazelwood is a 1600 megawatt (MW) brown coal-burning power station in Victoria’s Latrobe Valley. When it was built, the engineers thought it would be closed by the year 2000.

Hazelwood-closure-reported-1971small-white

  • The supply of coal comes from the adjacent Hazelwood mine – 150 metres deep and more than 3 times the size of the Melbourne CBD
  • Both the power station and mine are owned by ENGIE, a major multinational energy company, whose biggest shareholder is the French government
  • Australia’s oldest power station – construction began in 1964 and it was originally scheduled for retirement in 2005.
  • In November 2016, owner ENGIE announced that Hazelwood will close on 31 March 2017

How polluting is it?

Hazelwood has the highest emissions intensity of any coal power station in Australia, and possibly in the developed world.

A Latrobe Valley resident wipes toxic coal dust from their windowsill.

A Latrobe Valley resident wipes toxic coal dust from their windowsill. Source: Latrobe Valley Express.

  • Australia’s ‘dirtiest’ power station – Hazelwood produces more greenhouse gas emissions per unit of electricity than any other power source in Australia.
  • It emits around 16 million tonnes of CO2 every year – 14 percent of Victoria’s annual greenhouse gas emissions and 3 percent of Australia’s.
  • It’s the biggest source of toxic dioxin in the country.
  • It’s Australia’s biggest source of toxic fine particulate matter (PM 2.5), which causes death of an estimated 18 people every year in Gippsland.
  • It uses 27 billion litres of water a year – as much as Melbourne uses a month!

In 2014, the mine that supplies Hazelwood power station caught fire. It burned for 45 days, blanketing the surrounding area in toxic smoke. It was one of the worst pollution events in Victoria’s history. A government inquiry found this fire was linked to the deaths of at least 11 people.

 

Read more in our Hazelwood closure media briefing paper

Why is it closing?

Hazelwood is old, out of date and hasn’t been maintained. ENGIE has estimated it would cost $400 million get it up to safety standards.

Out-dated? This is what computers looked like at the time Hazelwood was built.

Out-dated? This is what computers looked like at the time Hazelwood was built.

  • Hazelwood owner ENGIE has stated it is “making climate a priority” and has committed to closing its most outdated coal plants.
  • The shift from coal to renewable energy is happening – 9 coal power stations have closed in the last 5 years in Australia.

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A just transition for the community

The Latrobe Valley deserves a “Just Transition” – to transform to a clean and sustainable economy in a way that is fair for workers and the community.

The Hazelwood transition deal gives my wife and me a future in our hometown | Mark Richards

I was thrown a lifeline last Friday. Along with at least 150 of my work colleagues, and hopefully many more, I will be given the opportunity to continue to work in the Latrobe Valley power industry, despite the closure of the Hazelwood power station, my workplace of the last 28 years.

  • The state and federal governments have committed around $300 million to support economic diversification in the region.
  • Around 350 Hazelwood workers will be employed across other power stations and in decommissioning and rehabilitation of the site.
  • There are other economic opportunities open to the Latrobe Valley beyond coal.

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What does the energy industry say about phasing out coal?

Calls for a plan to actively manage the phase-out of coal-burning power stations are coming from diverse sources.

AGL: “A planned phase-out of coal plants is needed to reduce the risk of blackouts, because it will send a signal to the market that more renewable energy should be built.” (AFR March 5 2017)

EnergyAustralia (owners of Yallourn power station): “We need an orderly, realistic transition from large, older coal-fired power stations.” (AFR, March 5 2017)

The Business Council of Australia: “Victoria needs a managed transition away from coal-fired electricity generation. Given the profile of Victoria’s coal-fired generation fleet, a more managed transition policy would seek to minimise the risks of this transition on system security and individual communities throughout Victoria.” (BCA, September 2016)

What do unions say?

Many in the labour movement are calling for a Just Transition, meaning a process to retire coal power stations and shift to a renewable economy in a way that is just and fair for workers.

A particularly comprehensive articulation of this vision is the Australian Council of Trade Union’s Policy Discussion Paper.

How will we meet our energy needs when Hazelwood closes?

UPDATE: In response to recent media reports, the Australian Energy Market Operator (AEMO) has confirmed "the closure of Hazelwood will not compromise the security of the Victorian electricity system nor the broader National Electricity Market (NEM) next summer".

Hazelwood closure won’t impact reliability, says AEMO

The March 2017 retirement of Victoria’s Hazelwood coal power plant should have a negligible effect on the reliability of the Victorian and South Australian grids, a new report from national electricity market operator AEMO has found.

Energy surplus

  • AEMO’s media statement on 23 March 2017 said there are power resources not currently being used “that can be made available to replace the power currently supplied by Hazelwood”. “These resources exceed the 1600 megawatts (MW) capacity of Hazelwood.”
  • On 24 March, Prime Minister Malcolm Turnbull told reporters, “‘There is more than adequate unused capacity in our electricity generation system across the National Electricity Market to make up for the loss of the generation from Hazelwood.”
  • In 2015, it was estimated that Victoria had 2000 MW more power supply than was needed. Hazelwood power station has a capacity of 1600 MW.
  • Victorian Energy Minister Lily D’Ambrosio recently told The Australian “Victoria’s oversupplied energy market will be able to cope with the closure of the Hazelwood coalmine”.
  • Under Victorian government’s Renewable Energy Auction Scheme, 5400 MW of new renewable energy will be built in Victoria alone by 2025. This could deliver approximately 30 percent more energy than is currently provided by Hazelwood.

A flexible grid of the future

  • Renewable energy, together with storage systems, efficiency and smart demand management can provide clean power 24/7.
  • Australia’s electricity needs to move towards a more flexible grid that can better support renewable energy – where renewable energy can be transported from places it’s being generated to ones where it’s not.
  • The Victorian Government has just announced a 20MW battery storage system, likely to be Australia’s first grid-scale battery storage facility.

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Power costs

The major cause of recent power bill rises is energy companies gaming the system and exploiting flaws in the market for profit.

  • While the closure of Hazelwood is likely to have some effect on prices, building more renewable energy helps push down power prices, because the sun shines for nothing and the wind blows for free.
  • Renewable energy is also now the cheapest source of new electricity generation – building anything other than renewables will push power prices higher than they need to be.
  • Power bills are also determined by how much electricity is used, not just how much each kWh costs. Energy efficiency retrofits for homes can lead to savings of around $1000 per year on power bills – more than offsetting any short-term increase in prices. Businesses also have many efficiency measures available to them to stop energy waste and cut costs.

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What needs to happen next?

Hazelwood mine rehabilitation

Hazelwood mine over Melbourne CBD (to scale).

Hazelwood mine over Melbourne CBD (to scale).

  • ENGIE are under legal obligations to repair the damage caused by their mining activity, which means rehabilitating the mine to a standard acceptable to the community.
  • Proper rehabilitation of Hazelwood could create around 250 jobs in the Latrobe Valley, mostly employing current Hazelwood workers.
  • Mine rehabilitation also has the potential to help create something positive for the community, which could provide on-going sources of employment or public amenity – if done well. Poor rehabilitation could leave the community with a large industrial wasteland.

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A national transition plan

  • As global temperatures continue to rise, it becomes more and more urgent to curb our climate pollution. This means the rest of the coal power stations in Australia need to be phased out soon and replaced with clean energy.
  • Australia needs a national plan to phase out power stations in a way that supports communities and workers and that meets our international commitments to keeping global warming well under two degrees.

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Header image provided courtesy of Gippsland Solar