Lily D’Ambrosio ‘gaslighting’ voters on Yallourn, says analyst Saul Kavonic

Victoria faces pressure to extend the Yallourn coal plant amid pressures on the power grid.

Victorian Minister for Energy and Resources Lily D’Ambrosio. Picture: NewsWire / Valeriu Campan

Victorian Energy Minister Lily D’Ambrosio is “gaslighting Victorians” for claiming the state government had not discussed an extension of the Yallourn power station, energy analyst Saul Kavonic said.

The Australian reported on Tuesday that talks had been held between the Australian Energy Market Operator and Victoria’s Department of Energy, Environment and Climate Action over a mooted Yallourn extension for up to four years.

While Ms D’Ambrosio denied any talks between top officials at the bodies had taken place, sources confirmed the future of Yallourn was discussed in meetings between the agencies.

MST Marquee’s head of energy research, Mr Kavonic, dispute the Energy Minister’s claim.

“Lily D’Ambrosio is gaslighting Victorians when she claims an extension of Yallourn hasn’t been discussed, and she is rewriting her own history when she claims she hasn’t created policy uncertainty or hostility towards gas,” he said.

“Many MPs spin the truth, are selective with facts or deflect hard questions. Those in the know in the energy industry are marvelling at how Lily D’Ambrosio is willing to outright lie on these issues.”

Ms D’Ambrosio has led a push for federal and state authorities to unite on solving a gas shortage problem by underwriting LNG volumes into Victoria and NSW. A Yallourn extension would allay a fresh warning on a gas supply crunch amid concerns over reliability gaps in the power grid.

“The AEMO gas statement of opportunities makes clear that coal generation will need to be extended further as there wont be sufficient gas capacity to deal with coal closures,” Mr Kavonic said.

Although Victoria insists it has no plans to extend Yallourn, energy industry figures said closure of the state’s second largest power station would ignite wholesale electricity prices that would eventually flow through to households.

“I hope Lily is telling the truth in her carefully worded statement. I will make a lot of money if she is but there is no chance that Yallourn is exiting in 2028 unless they want to run the state by candlelight,” said one energy company executive whose company runs coal generation assets.

“The federal election means this issue is extremely sensitive but denying any conversations have occurred is effectively saying AEMO and the Victorian government are negligent.

“There is a deal between the Victorians and EnergyAustralia; Lily is telling us that nobody in the government is checking in about how taxpayer money is being spent.”

Industry sources said the Labor government was unlikely to want to confirm any extension until after a state election, which must be held by November 2026, and posturing from both sides was likely until then.

One source not directly connected to either party said Energy­Australia would need to ensure it had adequately replaced the lost generation capacity from Yallourn to service its customers but that would likely be expensive; it could instead elect to determine that running the coal power station would be cheaper.

It is unlikely to want to tip its hat and will instead hope a sluggish rollout of renewables means Victoria is given little choice but to underwrite an extension.

There are, however, concerns about the capacity of Yallourn to run beyond 2028. The plant’s four units recently had major maintenance at a cost of $400m but traders insist the reliability of the facility is behind its peers.

Any possible extension beyond 2028 would likely require taxpayer underwriting. While there is no legislated requirement for major maintenance, with generators self-determining the schedule, by 2028 all will have been running for at least five years without a significant service. EnergyAustralia has typically serviced each unit every 4-6 years.