Victorian coal-fired plant Yallourn could close early amid growing fears over Andrews Government’s green policy

Workers at one of Victoria’s biggest coal-fired power stations have been warned about its future, with fears Yallourn could shut years earlier than expected as the state pushes on with its radical renewables plan.

The Latrobe Valley’s Yallourn power station could shut down by 2025.

One of Victoria’s biggest coal-fired power stations could close within six years as Victoria’s radical, go-it-alone bid to slash carbon emissions and ramp up renewables hastens its demise.

There are growing fears within the Latrobe Valley community, unions and industry that the ­Yallourn power station may shut well before its slated closure in 2032, placing increased pressure on the energy grid, prices, and leaving more than 500 people at the plant ­unemployed.

It is warned a further 500 jobs could go from small businesses across the surrounding region.

The Herald Sun understands EnergyAustralia briefed workers earlier this month and conceded growing policy uncertainty, particularly the Victorian Government’s 50 per cent renewable target, could lead to it being closed ahead of schedule.

Premier Daniel Andrews said this morning that the owners of Yallourn were required to give the government five years’ warning if the power station was to be closed earlier than 2032.

While he said the government had not been informed of any early closure plan, Mr Andrews told the ABC the government would hold EnergyAustralia to that requirement “if those plans change”.

Asked if Victoria’s energy grid could handle Yallourn shutting down, Mr Andrews said it “would be challenging” but that the government was investing heavily in renewable energy, including its $1.3 billion rooftop solar scheme.

The 1480MW plant provides about 22 per cent of Victoria’s electricity and about 8 per cent of Australia’s National Electricity Market — equating to powering about two million homes a day.

Latrobe City Council has ­increased pressure on the state and federal governments, calling on them to fast-track planning for worker transition projects and to ensure the gap in the energy market is ready to be filled by as early as 2025.

Concerns were raised after an independent panel recommended the Andrews Government set a 2025 target to cut emissions between 32-39 per cent below 2005 levels and by up to 60 per cent by 2030.

The report, under consideration by the Victorian Government, acknowledged the target would “amplify concerns over the potential closure of further coal-fired generation capacity in the Latrobe Valley”.

In a statement to the Herald Sun, EnergyAustralia said its plans were to run the plant to 2032 “or for as long as policy and regulation permit, and there’s not a substantial change in the market”.

“We have promised our workers and the local community that, should things change, and circumstances remain within our control, we will give at least five years’ notice before closing Yallourn,” it said.

The company said it continued to talk to stakeholders, including workers and the community, to support opportunities and plan for the transition already underway in the Latrobe Valley.

Loy Yang A was one of Australia’s least reliable coal plants last summer. Picture: AAP Image/Julian Smith

The valley’s Loy Yang A and Yallourn W were the least reliable coal plants in the country last summer, suffering breakdowns which led the Australian Energy Market Operator to switch off power to thousands of Victorian homes.

EnergyAustralia’s value was written down by $1.3 billion by parent company, Hong Kong-listed CLP Group, to cover the expected impact of new government schemes to lower default market prices.

Victorian Energy Minister Lily D’Ambrosio said the independent emissions recommendations would “not close a single power plant or cost a single job” in Victoria.

“It is a report to government, not government policy,” she said. “We have always stood with workers in the Latrobe Valley and we always will.

“We will always work with industry, unions, environmental groups and the wider community in setting these targets and taking real action on climate change.”

Generators must give at least five years’ notice of closure under new state government regulations.

Latrobe City mayor Graeme Middlemiss said the region was “at the crossroads”, and growing speculation over the future of Yallourn would add to that.

“Unless we make plans now, with the federal government, unless investment certainty is provided, Latrobe City will be at some risk,” Mr Middlemiss said.

Environment Victoria Campaigns Manager Dr Nicholas Aberle said the Yallourn power station was the dirtiest in the country and one of the most unreliable.

“It is responsible for around 15% of Victoria’s greenhouse gas emissions,” he said.

“If we intend to do anything about the climate crisis facing us, Yallourn and other coal-burning power stations like it will need to close much sooner than currently anticipated.

“The key now is to ensure we are building enough renewable energy and storage capacity to replace Yallourn’s output before it closes, and to scale up efforts to create new sustainable jobs in the Latrobe Valley.”

The loss of 500 jobs at Yallourn could also lead to another 500 positions slashed from small businesses across the community, it is warned.

Mr Middlemiss met with Deputy Prime Minister Michael McCormack last week to again raise the issue with the Morrison Government.

The region suffered more than 900 job losses from Hazelwood power station and Carter Holt Harvey timber mill two years ago.

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New figures released by the Victorian government show that of the 850-plus workers to take part in a job relocation scheme, only 306 are in full-time work, with 307 in casual work and 35 are working part-time.

Energy Minister Angus Taylor said the Morrison Government’s priority was to get power prices down, keep the lights on and ensure it met its emissions targets.

He said a “piecemeal approach” by state and territory governments was unhelpful, would drive up prices, reduce reliability and drive investment and jobs offshore.

“The Andrews Labor government should immediately clarify what its position is to prevent continued uncertainty,” he said.

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