Republished from Climate Action Moreland: The official announcement of Hazelwood's future has been made by French company Engie on the eve of the Paris Agreement coming into force and the start of the UN climate conference COP22: Hazelwood will close by end of March 2017.
Hazelwood is Australia's, indeed the industrial world's, most polluting power station.
We should celebrate this as a definite climate win. Climate Action Moreland, along with many other community groups, have been campaigning for closure of Hazelwood with a just transition for the workers and community since 2009.
In comes after rumours over the closure for several months, and Josh Frydenberg meeting representatives of Engie and the French Minister of the Environment Segolene Royal recently in Paris.
Now we need a co-ordinated state and national plan to manage the energy transition to ensure just outcomes for workers and communities. There are more jobs in total in renewables, but they are unlikely to be in the same places as existing coal dependant communities. So we need to assist communities in this transition.
“Hazelwood is now more than 50 years old. It has been a wonderful contributor to the National Electricity Market but we have now reached the point where it is no longer economic to operate,” said Mr Keisser, Chief Executive of ENGIE in Australia, in a statement (PDF).
The closure will directly impact about 450 direct employees and 300 contractors at the plant and mine. The company estimates up to 250 people will be required between 2017 and 2023 to manage rehabilitation and decommissioning of the mine and power station, although numbers in site rehabilitation from 2019 will depend upon the scope of the rehabilitation work required.
The company undertook to work with regulators, unions and the broader Latrobe Valley communities "to ensure an orderly closure, including rehabilitation of the mine and remediation of the power station site.”
ACF’s CEO Kelly O’Shanassy said in a statement “Hazelwood is 50 years old and pumps out more than 15 million tonnes of climate pollution each year, making that one power plant responsible for nearly 15 per cent of Victoria’s and 3 per cent of Australia’s total climate pollution.
“This is a key moment in a transition that is already well underway – the switch from dirty energy to clean energy – and Australia’s energy policy is now at a fork in the road."
A recent report by ACF and the Australian Council of Trade Unions (ACTU), Jobs in a clean energy future, showed that enduring, credible policies on climate change and energy would create one million new Australian jobs by 2040.
Household electricity costs of the closure have been modelled to be less than $1 a week.
350.org Campaigns Director, Charlie Wood said in a statement “More than anything, today’s decision highlights the need for a nation plan for coal closure. We know that to meet our Paris Commitments, Australia’s coal power stations need to be phased out over the next decade. This must be done in a way that allows local communities to plan for the future."
Environment Victoria CEO Mark Wakeham welcomed the announcement and said in a statement: “Rehabilitation of the Hazelwood mine and power station needs to happen to a very high standard to minimise future environmental risks and ensure that the land becomes a community asset. Done well, rehabilitation can deliver strong environmental and social outcomes for the region.
“We’re hopeful that in coming days the state and federal governments commit significant resources to develop new industries in the Latrobe Valley over the next decade. With the right support the Latrobe Valley can be a leader in new industries like energy efficiency and storage and solar hot water manufacturing, creating hundreds of new jobs.” said Wakeham.
Immediate health benefits after closure
The health impacts of closing the power station also should not be ignored and under-estimated. There are immediate health benefits for the local community in the Latrobe Valley, says Environmental Justice Australia in a statement, who argue that 95 percent of air pollution in the Latrobe Valley is from burning coal, and that air pollution from Hazelwood alone causes an estimated 18 premature deaths a year locally.
The pollution emitted from coal-fired power stations causes and worsens asthma, respiratory problems and cancer, especially in children and the elderly.
“For too long, the health costs of generating Victoria’s electricity from brown coal have been unfairly dumped on the people of the Latrobe Valley, with the townships of Traralgon, Moe and Morwell home to Australia’s four most polluting coal-fired power stations,” said Nicola Rivers, lawyer with Environmental Justice Australia.
Collectively, the Hazelwood, Yallourn and Loy Yang A and B power stations emit more than 4 million kilograms of dangerous fine particle pollution (PM2.5), 79 million kilograms of nitrous oxides and 122 million kilograms of sulfur dioxide each year.
“Every tonne of pollution that is avoided will result in immediate health benefits such as lower asthma rates and fewer hospital visits. The entire Valley’s population of 125,000 will benefit once Hazelwood retires and clean energy like solar and wind take its place.”
“Ultimately, if we continue to use coal to generate electricity we will continue to create toxic pollution which kills Australians,” stated Ms Rivers. “There is no technology that can be applied to coal to avoid that. The only way to prevent deaths and disease is to move to renewable energy sources as a priority.”
“The people of the Latrobe Valley should not have to sacrifice their health, and the health of their families, for jobs. The Andrews and Turnbull governments must assist the transition to clean renewable energy in power station communities like the Latrobe Valley to ensure these health benefits are not accompanied by unemployment and social and economic disadvantage.” concluded Ms Rivers.
Grid and energy supply in transition
There are many different energy options to lower the electricity bills and greenhouse gas emissions explained Damien Moyse, the ATA’s policy and research manager.
"Analysts have said Hazelwood’s closure will make little difference to energy bills. It’s time to focus now on distributed energy options like solar photovoltaics, thermal efficiency of buildings, efficient heating, cooling and hot water systems and lighting that will save consumers money in the long-term.
"Large-scale, centralised electricity and gas plants have become redundant as ways to manage consumer electricity costs. There are now many opportunities in demand-side management to lower energy bills and carbon emissions." said Moyse.
Lack of federal planning for net zero emissions
“When giant multinational power companies like Hazelwood’s owner Engie decide that they’re going to get out of coal, it’s irresponsible for the government to ignore the implications,” said John Connor, CEO of The Climate Institute. “Forward-looking businesses are planning for a world with net zero emissions, and it’s time the government did the same.”
Connor argues that the federal government’s reluctance to plan for Australia’s transition to net zero emissions is setting up more shocks for communities, energy users and the power system.
“This decision comes a day before the Paris Agreement becomes international law. In Paris last December Australia joined other nations in committing to limit global warming to 1.5–2°C, and achieve net zero emissions. Australia’s commitment at Paris requires the steady replacement of our coal-fired power stations with clean energy over the next 15 years, and full decarbonisation well before 2050.”
“The federal government can no longer just leave it to the power companies themselves to decide if and when to close coal stations. Nor can it keep clinging to its weak 2030 climate target made in August 2015, which is inconsistent with both Paris goals and global energy trends.” said Connor.
“It’s just a six months since the shock closure of South Australia’s Northern coal station, which caused great disruption to people living and working in Port Augusta. Now it’s the Latrobe Valley. Which coal station in which state will be next? We don’t know.”
“This is why we need a nationwide plan. If we plan and invest ahead of time we are better placed to cope with the challenges of the inevitable transition. Without this our communities will face much more stress, our energy system will face continued shocks and investment in clean energy will face ongoing uncertainty.”
Ged Kearney, President, ACTU commented that "The union movement stands with these communities in this difficult time and is determined that workers in the Latrobe valley will not be forced to go through an extremely difficult process with no plan in place to secure their future employment and the future viability of their communities."
The ACTU has created a detailed blueprint for government action to help workers in industries that are in transition or closing. The plan calls for strong action from the Turnbull Government to adopt a coordinated strategy to ensure that workers have a secure future. The ACTU accuse the government of little or no action from the Federal Government with respect to job creation.
"No one can deny that many Australian industries are changing. In recent months thousands of workers have lost their jobs through closures in car manufacturing, the power industry and potentially more are to come in the steel industry. The challenge is therefore to government to ensure that these changes do not mean disadvantage for workers, their communities and their families." said Ged Kearney.
Premier Dan Andrews announced an immediate $22 million short term support package, including:
- A Worker Transition Centre established in Morwell in partnership with the Gippsland Trades and Labour Council – a one-stop-shop for individual support
- Education, counselling, financial advice and subsidised job-seeker training for workers in transition
- Tailored support for businesses to help them identify new opportunities and develop a transition plan
Closure of Hazelwood will not affect security of the grid supply said Minister for Energy, Environment and Climate Change Lily D’Ambrosio.
A dedicated Latrobe Valley Authority to lead the Victorian Government’s response and manage the transition and the future economic development of the Latrobe Valley has been committed to with $20 million in funding.
The Federal government also announced a $43 million support package that will include $20 million in support for local infrastructure, $3 million to help employees and a $20 million Regional Jobs and Investment Package to help create local jobs and growth, build a highly skilled local workforce, take advantage of export opportunities and diversify the regional economy.
Prime Minister Malcolm Turnbull has established a Ministerial Committee with 5 ministers to co-ordinate and oversee the Federal Government’s response.
Loy Yang B up for sale
ENGIE in Australia also announced the possible sale of the Loy Yang B coal power station (1,000 MW) in the LaTrobe Valley and the Kwinana co-generation (gas) facility (122 MW) in Western Australia, with the first step appointment of a financial advisor on the possible asset sales. If the sales proceed, they are expected to be concluded by late 2017.
Engie before COP21 had announced they were keen to get out of high carbon pollution assets.
The Loy Yang B is a much younger, more efficient brown coal fired power station and closure of Hazelwood will likely increase it's saleability. But eventually Yallourn and Loy Yang A and B power stations will need to close as renewables expand to take their place in the grid and to keep us on track to the Paris Agreement climate targets.
“As the newest and most efficient brown coal fired-power station in the Latrobe Valley, Loy Yang B will be attractive to potential investors. Similarly, Kwinana holds a unique position in the WA energy market that may attract interest from both local and overseas investors,” Engie Australia's Mr Keisser said.
But the impending sale of Loy Yang B also highlights the lack of any national plan to manage the energy transition, and the fate of the other coal fired power stations said 350.org Campaigns Director, Charlie Wood: “This is a real wakeup call for Australia’s biggest carbon polluter – AGL -who runs the Loy Yang (A) power station in the Latrobe Valley. AGL urgently needs to start planning for the closure of their coal fired power stations. They owe it to the community to provide a closure timeline that honours the climate science and includes plans for rehabilitation and post-coal industry in the region.”
Even after Hazelwood's closure we still have a long way to go and we need a co-ordinated national plan for the energy transition to a zero carbon economy. So far the Federal government has failed us in this. Energy and Environment Minister Josh Frydenberg needs to lift his game.
Sadly the Victorian opposition leader Matthew Guy has not been supportive of La Trobe transition.
The Federal government have no national plan to manage the transition in phasing out coal plants with renewables for a smooth transition to a zero carbon economy.