The Hazelwood power station and mine are now, after 53 years of production, no longer operating. It’s a major milestone for the climate – after all how serious can we be about global warming with one of the world’s dirtiest power stations still polluting? It also a point of no return in the transition to renewable energy.
Twice previously- in 2010 and 2012- Hazelwood looked set for earlier, more orderly closures, but the politics changed and the power station (if not the climate) received a reprieve.
There’s been a lot written about Hazelwood’s closure this week. Most of it has told the important story about the impacts of Hazelwood’s belated, but then sudden closure on communities and workers in the Latrobe Valley. The Latrobe Valley, through no fault of its own, is on the receiving end of a decision made in Paris while our leaders in Canberra are asleep at the wheel on climate and energy policy.
The rest of the media coverage focussed on the implications of Hazelwood’s closure on energy security and prices. In some cases the same media outlets published front page stories raising alarm about energy shortages, only to follow up with further front page leads that dismissed any such concern.
But there hasn’t been a lot of broader reflection about what Hazelwood’s closure means for the climate, air pollution, health of people in the Latrobe Valley, or how well prepared Australia will be for the next, inevitable coal power station closure.
So as the boilers cool here’s 6 things we’ve learnt this week from Hazelwood’s closure:
The world is shifting to renewable energy and Australia will too: Hazelwood is but one of hundreds of coal-burning power stations that have been pushed out of energy markets by global responses to climate change and the rapid rise of renewable energy. That the French Government, and the company they are the major shareholder in- Engie- decided Hazelwood’s fate, rather than an Australian government, is indicative of the shift in global markets towards renewable energy.
It also highlights the degree to which the Abbott and Turnbull governments have dealt themselves out of any influential role in terms of planning for or managing Australia’s energy systems. With no coherent policy to reduce emissions or modernise our energy system they have been reduced to bystanders blaming state governments and running scare campaigns about energy security and prices.
Its also been more than a little frustrating watching politicians like Victorian Opposition Leader Matthew Guy calling for the staged closure of Hazelwood when that was exactly the plan they scrapped when the Baillieu Government was elected in 2010.
Failing to plan for power station closure and leaving it to the market is damaging for local workers and communities affected by sudden closures, heightens energy security risks, and fails to provide the signal to invest in new renewable energy projects. As a Senate Inquiry which reported on Wednesday evening found, we urgently need a national plan for the orderly closure of our remaining 20-odd coal-burning power stations and transition support for coal workers and communities.
With Hazelwood’s closure we now have an example of what a ‘Just Transitions’ package looks like.
The good news is that the 5 month period between when Hazelwood’s closure was announced, and when it actually happened, was well utilised by the Andrews Government, unions like the CFMEU and their representative bodies the ACTU and the Gippsland Trades and Labour Council. One element of the transition package -relocating 150 Hazelwood workers to other power stations in the Latrobe Valley- is an Australian-first and should be a template for future closures.
The Latrobe Valley will also benefit from over $300 million to diversify and strengthen the local economy. More than 80% of that funding came from the Victorian Government, while the Federal Government also made a small contribution of $41 million.
Positive also is that Engie seems to be committed to a thorough job of mine rehabilitation and power station decommissioning- they are keeping 250 workers on site for at least 6 years to undertake this daunting task.
Mine rehabilitation and power station decommissioning is very expensive if done properly.
When the first Hazelwood Mine Fire Inquiry found that the lack of progressive mine rehabilitation contributed to Victoria’s worst ever pollution event, but then failed to make any recommendations about improved rehabilitation, Environment Victoria worked with locals in the Latrobe Valley including Voices of the Valley to have the inquiry reopened.
We were successful, and a second inquiry was initiated by the Andrews Government. We were a legal party to that inquiry (along with the 3 mine power station owners and the State Government) which ultimately recommended a steep increase in mine rehabilitation bonds. Hazelwood’s bond went from $15 million to $73 million. Earlier this year however it was revealed that Engie has increased their rehabilitation provision for Hazelwood mine and power station to the anticipated cost of $743 million.
Here are a couple of questions that the CEO’s of Australia’s electricity generators can expect at their next AGM:
- How much money have you set aside to close your power stations and mines?
- If you had to come up with $743 million for each power station you own would you still be profitable?
- Power stations and mines are only ever one accident away from losing their social licence and closing. Three years ago Hazelwood looked unassailable. It was the most profitable generator in the National Electricity Market and the Coalition had given it the all-clear to keep polluting by repealing the carbon laws. It enjoyed strong local support in the Latrobe Valley. And then this happened:
The coal seam burned for 45 days and spewed pollution over people in the Latrobe Valley. The second Hazelwood Mine Fire Inquiry found that the fire contributed to increased mortality in the Latrobe Valley, that is, it probably killed people.
As someone who has been campaigning for the replacement of Hazelwood since 2005, the mine fire was the turning point. It was the moment community sentiment turned against Hazelwood and people in the Latrobe Valley stood up and demanded a better future. From then on it was really only a matter of time before Engie’s head office dealt with the blot on their copybook that Hazelwood had become.
Power station owners lie about their closure dates
Or, if you want to be more generous in your interpretation, their plans change quickly and dramatically. Last year Engie’s public line was that Hazelwood would operate into the 2030’s. Just days before the closure announcement, Engie managers were recruiting workers with the promise that they would be operating until at least 2025.
Then the truth was revealed. There has been a similar pattern for the other 8 coal-burning power stations that have closed in the past 5 years in Australia. So when Energy Australia says they are planning to operate Yallourn until 2032, or AGL plans to keep Loy Yang A open till 2048, the best approach is to take it with a grain of salt and start planning for the future.
Mark Wakeham is CEO of Environment Victoria, who have been campaigning for the replacement of Hazelwood power station and a just transition for workers and the Latrobe Valley since 2004.