On May 6, at 11 am, Dredger 9, the last dredger from the Latrobe Valley’s Hazelwood mine, was demolished by a controlled explosion. As the massive 35 metre high, 1565 tonne superstructure slumped into its own dust, the sound of the explosion rang through the valley.
“It was one hell of a blast,” said local resident Ian Martin, whose house shook 27 kilometres away. In the more guarded cadence of international business, Engie, the mine’s French owner, conceded the demolition “signals the end of an era.”
If anyone needed further proof, the Hazelwood power station itself was slowly being denuded of its outer cladding to reveal a sub-structural skeleton and innards of pipes and boilers – yet another relic the symbolises the so called “transition.” But what exactly that “transition” means depends on whom you ask.
The valley has generated electricity from brown coal for a century and many fixate on what is being lost. Local community advocate Wendy Farmer says there is still deep loyalty to coal and the prosperity it once brought “coal is the family and you can’t talk against the family.”
Still fresh are memories of 2016 when Hazelwood Power Station’s 400 workers and 350 contractors were informed that in only five months the station would be closed. Such short notice left unions and employees to cobble together retraining, many ended up in the unemployment queue.
Long-term unemployment has been a regular feature in the Latrobe Valley since privatisation of the power industry in the 1990s. And from it follows the usual indicators of decline – elevated rates of drug use, domestic violence and alcoholism.
Hazelwood serves as an example of transition mismanaged – when an ageing asset is no longer viable, a multinational’s highest obligation is to its shareholders, leaving the local economy and community to absorb job losses and the reality that their future is determined in boardrooms on the other side of the planet.
Since then, the state government has mandated a five year notice period for the closure of remaining power stations. More recently though, the post-coved global race to renewables, and particularly rooftop solar, has reframed the transition conversation from one of managed decline to one of opportunity. Areas with fossil fuel based mining or electricity generation have natural advantages that could be reapplied to renewable electricity generation and manufacture.
In a paper published in September 2020, the climate solutions think-tank Beyond Zero Emissions (BZE) together with World Wildlife Federation, proposed a plan for Renewable Energy Industrial Precinct.
With government support, clusters of manufacturers running on 100% renewables could be attracted to an area, presenting new job and the prospect of reindustrialisation. Amongst the locations that could host such a precinct were Whyalla, the Hunter Valley, Townsville and the Latrobe Valley.
Tom Quinn, BZE’s Head of Policy and Research, says Latrobe’s three main advantages are excellent energy infrastructure, a highly skilled energy workforce and good access to Melbourne. But it needs a plan.
“The best time to start diversifying your economy was yesterday – the next best time is today,” Quinn says. “At the moment the Valley has all its eggs in the coal basket and that’s a very risky proposition in any sector. This is especially pertinent when you’re looking at a fossil fuel like coal – we know it’s got an end date on it.”
Another such end date was given in March, when it was announced that Yallourn W, one of the Valley’s three remaining brown coal fired power stations, would close by 2028. The seven-year notice is in stark contrast to the hurried exit from Hazelwood, and plant owners EnergyAustralia is keen to point out it is taking a more considered approach to transition, and energy chief Liz Westcott cites the planned battery at Jeeralang power station, just a short drive from Yallourn as an example.
“What we’ve committed to build is to have 350MW and have that going for 4 hours,” she says. “That’s still not going to replace Yallourn – but we think it’s the next sizeable investment for us.”
This is transition in its most literal form – a coal based electricity generator looking to build a battery to support renewables. Construction would require 80 people while jobs in day-to-day operations of the battery would be, as Westcott explains, “more modest”. At present, however, Yallourn W employs 500 workers.
A worker transition presents its own logistical challenge: “We’ve got people across the spectrum – some people are going to retire, some are quite early in their career and want a career transition to something entirely different and then the mid-career people are wanting to stay somewhat related to the type of work they are doing,” Westcott says.
And while she concedes that “it is still early days”, the broad framework for retraining staff involves working with the local universities and Tafes to help re-skill … as well as unions.
There is also the matter for the local community and the rehabilitation of the Yallourn mine site. Yallourn W clings to a hillside within well coiffured grounds that end dramatically at a yawning void. This is the mine.
They are big enough to swallow an entire town – and that is exactly what this mine did with the model town of Yallourn, demolished by 1983 to allow access to the resources underneath. Unlike black coal that is more stable, brown coal cannot be transported long distances, as it is liable to ignite at temperatures as low as in the 40s Celsius.
This leaves a key question for the three remaining power stations – Loy Yang A, Loy Yang B and Yallourn – what to do with these mines is one salient question of transition.
Westcott explained in the case of Yallourn there has been a long standing assumption and plan that it would be filled with water – for recreational use. “I think the water scarcity over the last few years has changed the conversation significantly,” she says.
Again, Hazelwood is a example, if nothing else, for potential improvement. The mine’s rehabilitation is struggling to reach any sort of consensus among the community, and there have been fiery exchanges during consultation about Engie’s plans for an arcadian-style water park. The community seems to have a better understanding of the mine’s geological instability, the heavy metals in nearby ash dumps and the immense amount of water that could take up to 500 years to fill.
When asked what they would prefer the mine to become, community advocate Wendy Farmer said she did not want the Latrobe Valley to become the “Valley of fences.”
Broadly, a renewable revolution purports to be a solution to all but the physical mines: a new industry provides new jobs, a new source of electricity, and new direct and indirect businesses. Yet when applied to specific cases, such as the Latrobe Valley, simple solutions rapidly reveal their complexity.
Consider the basic fact of electricity generation: a shutdown means coal generated electricity is removed from the grid, deducting supply that now needs to be satisfied elsewhere. Into this breach is the potential for renewables as well as other energy solutions such as the controversial project for hydrogen from coal proposed for the Valley, a technology that relies on carbon capture and storage.
The largest proposed renewable project, still in the feasibility stage, is Star of the South. Planned for the Bass Strait, and set to be plugged into the grid at the Latrobe Valley, this giant 496 square kilometer offshore wind farm will generate 2200MW of new capacity when complete around 2030.
The project has heavy backers, funded by the Copenhagen Infrastructure Partners and is currently in the process of gaining approval from the Commonwealth Government, a significant regulatory hurdle given this will be the first offshore wind project in the country.
Star of the South’s CEO Casper Frost Thorhauge says the reasons for locating the project in the vicinity of the Latrobe Valley shows that business recognises the same competitive advantages as Quinn. “The natural proximity to the Latrobe Valley to an existing transmission network becomes very attractive,” he says.
Star of the South could also be a substantial new employer. “We are happy to be part of that transition and we believe that the core skills you have developed in Latrobe Valley and Gippsland will also be skills that will be needed in the future,” Thorhauge says, adding that even once built, the daily operation will generate hundreds of jobs, while construction will create thousands.
On a far more modest scale than Star of the South with a locally employed staff of 6 is Alternate Energy Innovations (AEI) in Morwell, the town at the edge of the Hazelwood mine.
Director Stephen Soutar has the unsentimental practicality of an engineer. He is also ambivalent about rooftop solar: “I’m not a big fan of it”. He foresees issues with the placement of solar within the grid, likening it to the human circulatory system. “You can’t put your heart on the end of your finger and expect it to do its job.”
Despite this, the so called “solar duck curve”, with low prices and excessive supply in the middle of the day, has presented AEI with the opportunity to flatten the peak. They sell a “smartbox” which is a sophisticated system for agriculture, that allows farm owners to optimise operations to run when electricity prices are at their lowest. Sensors that monitor the moisture levels in the soil will also factor in electricity prices to run when they are needed and when electricity is cheapest.
AEI is in the process of fitting out a large dairy farm in Sale, 60 kilometres east. While they are being supported by the state government, Soutar, was frank about his frustration with its bureaucracy. “I think they need to approve things quicker. I’m not into talking. I don’t need more talking. Why would I want another meeting?”
The question is frequently posed: who should lead the transition – government or business? Each arrives to the Valley with their own historical baggage. For all their hype about community engagement, outside businesses are often seen as ruthless operators willing to cut and run as soon as profits begin to dip.
The government, on the other hand, is often criticised as motivated by a front-page money shot when a new project is announced, and then follows this with bumbling, slow and bureaucratic actions. Soutar complains he has been waiting two to three months for approval to announce the Sale farm project and is worried the news would become stale.
Similar hurdles were described by SEA Electric CEO Tony Fairweather, who had planned a huge electric vehicle factory in the Latrobe Valley that would create 500 jobs, essentially replacing all those to be lost from the Yallourn closure. SEA Electric’s project is still in limbo.
Wendy Farmer, in reference to a controversial lead smelter that had been approved while renewable projects struggle, commented “When you hear about 500 jobs on the eve of an election and then you end up with a lead smelter then sure people are cynical.”
At the announced closure of Hazelwood the Dan Andrews’ government appointed the Latrobe Valley Authority (LVA) to administer the transition. There is wide ranging opinion as to how successful it has been, but more than not it is considered a net positive influence in the Valley.
Its initial role, in the wake of Hazelwood, was to tackle the Valley’s wide-ranging unemployment. On this point they have been largely successful. Before Covid upset job statistics worldwide, unemployment rates in the Valley had sunk to pre-Hazelwood closure levels.
According to LVA CEO Karen Cain, transition is a process that the entire community goes through: “This is about understanding what these changes have on a community’s psyche and really being cognizant of that. People react in different ways.” Their approach to worker transition is “bespoke” and oriented towards whole families rather than just the workers themselves.
Again, people represent the most complex variable in the transition equation. Time and again, I was told by those with a range of opinions about the future of coal and renewables, that renewables were not a one-to-one exchange from coal jobs.
General President of CFMEU Tony Maher has been deeply involved in worker transition throughout the country including the Latrobe Valley and is skeptical about how well renewables and job creation neatly align: “A lot of the rhetoric about renewables creating millions of jobs – it’s all very interesting and easy to generate on an economic model and let’s face it every economic model is wrong.”
Maher believes in the inevitability of the green revolution. It is the worker transition that has to be managed. “We don’t all have to have green jobs. We have to have jobs first then ultimately in 50 years time they’ll all be in low emissions industries otherwise they won’t survive.”
Maher is particularly critical of the LVA and its inability to attract a replacement for the coal industry: “I don’t see any new industries. There needs to be significant large industries in a regional plan and it has to be led by government.” SEA Electric would have fit that bill.
Cain’ has a different vision of what the solution looks like.
“The days of bringing in big companies that bring in thousands of jobs is probably not the future because then you’re dependent on individual big employers and, given the volatility of the economy now and how companies operate, we’ve gotta future proof this community to grow local businesses,” she says, “We diversify and make sure it’s not a single employer that determines the future here.”
Maher is also dubious about the training workers receive:
“The industry, the generators and the mine owners have an obligation to make sure the workers are not left behind. And governments too…[but] they just chuck a bunch of money on the table with very vague training – how to write your resume training – and walk away.”
Perhaps this is unfair. EnergyAustralia has engaged Federation University, which has a large campus in the Valley, to provide the workers with what the Deputy Vice-Chancellor (Research and Innovation) Professor Chris Hutchison calls “a suite of short courses and micro-credentials which can articulate to various levels of degree options, in order to ensure the workers that will lose their jobs by 2028 will actually have a transition. They [EnergyAustralia] are investing 10 million dollars in transitioning workers. We are just at the start of that conversation.”
While the link between coal jobs and renewable jobs isn’t as direct and seamless as is sometimes made out, Federation University is also pioneering degrees in renewable industries that will be available to ex-workers.
In Ballarat they have a $1.8 million Asia Pacific Renewable Energy Training Centre which includes a 23 metre high wind turbine for future technicians to work on.
What Maher and Professor Hutchinson do agree on is referring to the German example, which, according to Maher, is the “only place that gets a gold star”, citing reports that in the Ruhr Valley 80,000 workers were transitioned from the coal industry over 20 years without a single job lost.
The LVA is also looking to Europe to understand transition, particularly a Smart Specialisation Strategy (S3) that follows the initial remit of ensuring the immediate needs of workers, their families and the broader community. The Latrobe Valley is the only area outside Europe to sign up to the scheme.
“This is a 20 year development approach in the EU that looks at regional development. They look at what is special about that place that provides a competitive advantage,” says Cain.
Yet some are left frustrated.
Earthworker is a local co-operative that has looked at transition in depth and came to the conclusion that private ownership of local businesses by foreign companies poses the greatest threat to a well executed transition. Its solution is to employ a worker owned cooperative model for its businesses of manufacturing high quality solar hot water heaters. This takes the advantages of local skills from the power industry that produced many highly skilled boilermakers.
Yet when Earthworker attempted to engage the state government about sending them business from a government initiative to upgrade the hot water heaters in 1000 public houses in the area, Earthworker only got a single contract. This despite assurances significant business would be directed their way.
“Good policy. Appallingly executed,” says Dan Musil, secretary of the state government’s Sustainability Victoria project, admittedly a different arm of the government to the LVA. “I still think they [LVA] have a huge role to play but I would love them to be more nimble and be better funded and be more empowered to be creative.”
Another alternative vision to the transition being managed from the top down comes from the Heyfield Solar project. In conjunction with three universities and with $1.8 million in federal funding, together with $100,000 from the LVA, Heyfield is a community driven microgrid run for the town of Heyfield some 50 kilometres east of the Valley, on the fringe of the electricity network.
Heyfield has been beset by energy supply issues, leading its 1,000 residents to question the entire model of centralised electricity generation. That’s even them the motivation to generate their own electricity and even sell some back to the grid. The feasibility study of Heyfield will inform other communities in similar positions.
With so much at play it was not clear what the impact of the Victorian state government’s announcement this month to achieve net-zero emissions by 2050, would be on the Latrobe Valley. “Our target of 50 per cent renewable energy by 2030 will create more jobs right across regional Victoria – including the Latrobe Valley,” explained Victorian Minister for Energy, Environment and Climate Change, Lily D’Ambrosio in a statement to RenewEconomy.
Most likely the state government’s targets will renew the note of urgency that the Valley is in desperate need of a well managed transition. This may just accelerate the numerous forces operating in and on the Valley but it also may give rise to new opportunities and problems.
Two things, at least, are certain. Firstly, the instruments that support coal fired electricity generation are slowly being dismantled and with them the slew of jobs in the century old industry will be gone forever.
Secondly, the window in which opportunities presented by the global renewable revolution are available is limited. Ian Martin, an engineer, is looking at the solar industry with confidence. Wendy farmer, when asked what the future holds for the Valley, replied: “They’ll look at the valley and say ‘wow look what happened’, but also ‘wow, look what they’ve created.’”
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