Hazelwood power station closure: Jeff Kennett says we should be alert and alarmed

THE closure of the Hazelwood power station will have serious negative consequences for Victorians, including the very real threat of power shortages, writes Jeff Kennett.

WITH closure of the Hazelwood power station in the Latrobe Valley there are going to be three serious negative consequences for Victorians.

Loss of jobs (not just in the Latrobe Valley). Massive increases in electricity and gas prices for Victorian households and consumers. And the very real threat of power shortages in Victoria in the future.

The fact is that Hazelwood supplies 20 to 25 per cent of Victoria’s base electricity load.

Once removed there is no immediate or identified future replacement source.

The Alcoa Portland Aluminium Smelter relies on base load to power its operations. That smelter is now at serious risk, hence jobs directly and indirectly in Western Victoria.

While Hazelwood could be fired by gas, and reduce omissions by more than 50 per cent, the reality is Victoria is running out of gas so that supply cannot be guaranteed at prices that would make the operation viable. LNG gas would have to be imported, probably from Queensland at world or international prices which are much higher than we currently pay.

The Hazelwood power station will close in March. Picture: Aaron Francis

The Victorian Government has banned all exploration for new sources of gas on shore, horizontal (fracking) or vertical.

If we found more gas Hazelwood could be kept operating to allow the current boilers to be replaced over time by more efficient boilers.

But that would probably require a contract with the Victorian Government and sovereign risk issues would come into play.

All states are rushing independently headlong into this renewable age with targets that do not respect the future energy needs of the community.

No one should be opposed to reducing emissions but it should be done in a managed way that does not have unintended consequences.

We are not just about to cut off our nose to spite our faces, we are garrotting head from body!

Hazelwood power plant worker Bruce McLure after finding out he will lose his job. Picture: Rob Leeson.

That we in Victoria have got to the point of Hazelwood being closed because of unrealistic greenhouse demands and increasing production costs is going to be felt and paid for by the Victorian community in ways unimaginable today.

People keep talking about the National Grid but it’s “pipes” are already stressed. So there are calls for more “pipes” to be added to the grid to even out the power that is generated from any source and pumped into the Grid.

But that will cost billions of dollars and who pays, consumers, households and businesses. If for instance the wind blows and turbines can consistently provide energy into the Grid, the Grid might not be used for 60 per cent of its life.

If Victoria is to avoid the massive price increases of the future and the risk of blackouts it must quickly allow vertical drilling for gas onshore.

After all minerals are the assets of all Victorians. I personally am not opposed to fracking, but let’s first allow vertical drilling to take place. And urgently.

Without new gas finds and production, Victoria will very quickly price itself out of the market for industry and jobs. All of that will start to occur once Hazelwood is allowed to close.

We must secure a base load of electricity.

We need innovative leadership very quickly. We need to make some tough but necessary decisions. We need our leaders to tell us why tough decisions are necessary.

The hour glass has almost run out. The time to act is now