Environment Minister Josh Frydenberg predicts power price rise in Tasmania as Hazelwood plant closure looms in Victoria

VICTORIA’S need to import more energy after the looming Hazelwood power station closure looks likely to strengthen Tasmania’s case for a second Basslink cable.

FEDERAL Environment Minister Josh Frydenberg says Tasmanian electricity prices will rise because of the impending closure of the coal-fired Hazelwood power station in Victoria.

Mr Frydenberg said prices in Tasmania and NSW could rise by as much as 8 per cent because of the loss of cheaper generation.

He said after the March 2017 closure of Hazelwood station, more Tasmanian electricity was likely to be imported by Victoria.

“The Victorian Government has said that the costs for Victorians will go up — between 4 per cent to 8 per cent is the expectation, which is the equivalent of about $86 a year for the average household bill, about $1.65 a week,” he said.

“The impacts might will slightly less in other states.”

Mr Frydenberg said the price impact in neighbouring states would come because of the loss of the cheaper form of generation, particularly brown coal.

The Hazelwood power station, near Morwell in Victoria’s Latrobe Valley, is set to close. Picture: AARON FRANCIS

The Minister said the first peak period after Hazelwood closed would be in early 2018.

That meant the market will have 15 months to respond.

“The expectation is that Victoria will import more black coal-generated power from NSW and indeed some hydro-generated power from Tasmania,” he told reporters in Melbourne today.

“More supply will come into the market [too] and that could take the form of either gas or renewables.”

Speaking on commercial radio during a visit to Tasmania today, Prime Minister Malcolm Turnbull said that Victoria’s need to import power would strengthen the business case for a second Basslink cable.

The Tasmanian Government has been contacted for comment.

Aurora Energy lifted electricity prices in Tasmania by more than three per cent in July.

The Hazelwood station is more than 50 years old and provides more than 20 per cent of Victoria’s electricity. It is set to close before March 31.

The closure forces 750 people out of work in an area already struggling with unemployment.

Originally published as Environment Minister Josh Frydenberg predicts power price rise in Tasmania as Hazelwood plant closure looms in Victoria