Early coal plant closure to force up prices, cause blackouts, Victoria opposition leader says
Victorians should brace for blackouts as the early closure of a key coal-fired plant is raised, opposition energy spokesman warns.
Victorians should brace themselves for higher electricity prices and more blackouts, according to opposition energy spokesman Ryan Smith, who has blamed the Andrews government as energy giant Alinta foreshadows the early closure of one of Australia’s largest coal-fired power stations.
Alinta chief executive Jeff Dimery says he believes the company’s Loy Yang B coal generator in Victoria’s Latrobe Valley will shut down well ahead of its planned 2048 closure date, citing competition from renewable technology, which is government subsidised.
“What I see today in terms of reductions in cost structures for emerging technologies, or existing technologies for that matter, gives me every confidence that despite any policy hiccups or obstacles we see, the commerciality of these technologies will win out," Mr Dimery told ABC TV.
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Asked whether this would mean an early shutdown for Loy Yang B, Mr Dimery said: “I could see that happening.”
Alinta shut down its Flinders coal-fired power station in South Australia in 2015, amid a state-based renewable energy target of 50 per cent by 2025.
“I see the same situation arising in Victoria,” Mr Dimery said.
“Precisely when that is I don't have an answer. I do know that right now it is critical to keep the lights on and keep energy affordable that Loy Yang B does operate, but that may well not be the case, whether that is in 10, 15 or 20 years I can't be specific but I know it is going to happen.”
Mr Dimery’s comments come as unions representing employees at the Latrobe Valley’s second-largest coal generator, Yallourn, call for a closure deal to support workers ahead of the plant’s planned shutdown in 2032.
Mr Smith said the 2016 closure of Hazelwood, then Victoria’s second-largest coal generator, had already led to higher prices and higher risk of blackouts over the summer months.
“With Labor government policies doing nothing to encourage maintenance investment in generators such as Loy Yang B, it is Victorians who will wear the cost if this station was to close prematurely,” Mr Smith said.
“We have felt the consequences of Daniel Andrews’ failed energy policy. Victorians should brace for things to get much worse.”
The closure of Hazelwood followed the Andrews government’s decision to triple its brown coal royalty and increase the state’s renewable energy target, which is currently 50 per cent by 2030.
A spokeswoman for Victorian Energy Minister Lily D’Ambrosio said private companies were required to give a minimum five-year notice period for the closure of coal-fired generators in the Latrobe Valley.
“We have a proven track record supporting local workers through industry transition, as seen after the closure of the Hazelwood power plant,” the spokeswoman said.
“We’ll continue to support workers in the Latrobe Valley, as we always have, whatever decision is made by privately owned power companies about their future.”
In response to the Hazelwood closure, the Andrews government invested $266m through its Latrobe Valley Authority for a transition package to establish an economic growth zone in the valley to boost local jobs and grow local businesses.
The government says the investment has brought the unemployment rate in the Latrobe Valley down to its lowest ever level of 3.2 per cent, lower than the regional Victorian average.
The Morrison government last year attempted to prevent AGL’s early closure of the Liddell Power Station in NSW, with Energy Minister Angus Taylor recently launching a taskforce to look at the potential impacts.
The Australian has sought a response from Mr Taylor’s office.
