Frydenberg in Hazelwood power station closure talks with Engie in Paris

Rather than just meeting Environment Minister Segolene Royal and discuss the upcoming COP22 in Marrakech, the real reason Josh Frydenberg was in Paris was to meet with the Management of Engie, the owners of the Hazelwood coal fired Power station.

It has been rumoured Hazelwood may close down as soon as April 2017, and Engie is under pressure from the French state to disengage from coal. The French state owns a one third share of Engie.

Engie, trading as GDF SUEZ/ Australian Energy, is listed as the third highest carbon polluter in Australia by the Australian Conservation Foundation. In the 2014-2015 year Hazelwood Hazelwood was responsible for 15.5 MT CO2-e of emissions. It's emissions intensity was 1.4 Tonnes CO2/MWh. (See Australia's Biggest Polluters PDF)

"We're very conscious at the Federal Government level of the heightened speculation about Hazelwood's future," he told 774 ABC Melbourne's Mornings with Jon Faine as reported at the ABC online.


"But as for a formal response from the Federal Government and no doubt from the State Government, that will come when a formal decision is taken and, as I understand it, no formal decision has yet been taken by the two companies."

Frydenberg added that the company needs to consider the 1000 workers directly or indirectly employed at the plant. "What has been underlined to those companies is the importance of looking after the workers first and foremost," he said.

Engie chief executive Isabelle Kocher told reporters this week that finding a buyer for Hazelwood was unlikely. "We are reviewing all the coal-fired power plants in our portfolio one by one," Ms Kocher said. "There are some sites for which we will find buyers, but it does not look like Hazelwood is heading that way." according to a report in The Age.

A report in the French media site Les Echoes, said that although no announcement had been made on Hazelwood's future, a decision in fact had been reached:

"In fact, an agreement in principle has indeed been reached this week at a seminar bringing together the members of the Board of Directors and the Executive Committee on 19 and 20 October. Before announcing officially Engie must still wait for its partner in the plant, the Japanese company Mitsui, which holds 28%, has itself obtained the formal approval of its shareholders." said the translation of the report.

While the current government bond for rehabilitation of the Hazelwood mine is $73.4 million, it is estimated that decommissioning and rehabilitation may be as much as $1 billion.

There will be a small number of jobs for several years to decommission the power station and rehabilitate the mine area.

Hazelwood uses a voracious amount of water, some 14 gigalitres of water a year is contracted from Gippsland water according to the Weekly Times. This water is valued at in excess of $30 million. It could be reallocated for irrigation for farm use and for environmental use.

Engie is also rumoured to be preparing for sale the Loy Yang B coal fired power station. Closing Hazelwood would act to increase the profitability of Loy Yang B and improve it's asset value for prospective buyers, according to a report in The Australian. Loy Yang B is a newer power station with 9.8 MT CO2-e of emissions in 2014-2015, and an emissions intensity of 1.13 Tonnes CO2/MWh.

Two weeks ago Environment Victoria CEO Mark Wakeham outlined:

“There’s understandably a lot of concern about the future of the Latrobe Valley economy and community as coal-burning power stations begin to close. With news reports that French company ENGIE will meet this month to decide on Hazelwood’s future, it’s more important than ever for the state and federal governments to help create a more diverse economy in the Latrobe Valley.

“As case studies in the report show, other regions have gone through similar changes and the communities that plan ahead have the most success coping with it. Future jobs in the Valley could be based on skills and services that benefit both people and the environment, but they will need state and federal government investment to get off the ground.

“We urgently need a Latrobe Valley coal closure transition fund that can support transition over the next decade or more.”

Environment Victoria have publish a report on economic transition titled Life After Coal: Pathways to a Just and Sustainable Transition for the Latrobe Valley (pdf)