Extract from The Guardian
Hazelwood has become a symbol of many things: the government’s
wavering commitment to climate change, our reliance on coal, and now,
the massive structural transformation under way in the energy market
Can
we be clear on this? The closure of Australia’s most polluting power
station, Hazelwood, was inevitable and in terms of doing our modest bit
to militate against climate change, desirable. That doesn’t for a moment
minimise the impact on the 750 workers who will lose their jobs, nor on
the thousands of people in the Latrobe valley, one of the most
disadvantaged communities in the country.
This ageing, groaning, hulk of a power station is serviced by a giant open-cut coal mine just a few hundred metres from the town of Morwell, east of Melbourne. That a mine with a perimeter of about 18km was dug so close to residential houses was itself a shocking decision symbolic of the sacrifice coal towns have made to keep industry and consumers’ energy needs satisfied.
Over the years, Hazelwood has become a symbol of many things. It symbolised governments’ wavering commitment to seriously reducing our carbon emissions, and our own psychological dependence on cheap, reliable coal. Now, it’s a symbol of something else. This is a “red letter day”, as the Melbourne Energy Institute’s Roger Dargaville puts it, a tangible sign that a massive structural transformation is under way as the world shifts away from fossil fuels to deal with the dangers of climate change.
Hazelwood’s French owners, Engie, are well aware that the future for coal is bleak, and have already shut or sold off power stations in countries such as India and Indonesia. The footage of the Hazelwood coalmine fire in 2014 that spewed ash over Morwell residents for 45 days didn’t help its image as a company committed to phasing out coal assets in favour of cleaner technologies.
Shutting Hazelwood was a commercial decision, one influenced by the cost of maintaining the 50-year-old behemoth. It has also decided to sell its other brown coal power station in the Valley, Loy Yang B.
All this has a global context – last year’s Paris agreement to commit to keeping the global temperature rise below 2c compared with preindustrial levels. To get anywhere near that goal, greenhouse gas emissions need to be net zero by the second half of this century, and that means urgent action, including leaving coal in the ground.
The immediate impact of Hazelwood’s closure is likely to be modest – it is what it represents that is most crucial. It alone produces a quarter of Victoria’s base load electricity needs, and provides about 5% of the nation’s demands. But its closure won’t mean power shortages. Electricity demand has decreased in recent years, and there is a surplus of electricity generating capacity among our remaining power stations. But if another station closes soon, and another soon after that, we are likely to have a problem with reliability if we haven’t planned for it.
For now, Victoria’s demands are likely to be supplied by ramping up supply from the New South Wales cleaner black coal-fired power stations – which will mean a welcome if modest reduction in our overall greenhouse emissions. Electricity prices are likely to rise a little because black coal generation is more expensive than brown coal.
Victorian government modelling estimates that average residential power bills could rise by $44 a year, or 85 cents a week as a result of Hazelwood’s demise. As the Grattan Institute’s Tony Wood says, power bills will inevitably rise in this era, and it is “a great pity that political leaders have been loath to acknowledge this reality”.
More importantly, the closure of Hazelwood means that we need a plan. As Dargaville argues, we can wait for old power stations to fall over one by one, as they will, but that will have a big impact on power reliability if companies decide to shut down several at once.
“Just letting the market determines who exits is a bit of a random approach. We have no policy to assist with the orderly departure of coal-fired power stations.” It’s tricky – we want them to close but not until there is a reliable replacement for the energy they supply, and that requires planning.
Wood argues that what is urgently needed is a credible national climate change policy consistent with the government’s 2030 emissions reduction targets. Those targets are too low to achieve the Paris goals but they can be scaled up to meet tougher targets in the future. Wood says that if we had such a policy the owners of coal and gas power stations could factor it into their planning with confidence. For now, there’s uncertainly all round.
There is uncertainty in the Latrobe valley, too. The state and federal governments on Thursday announced big transition packages to help workers retrain and to encourage new investment in the valley. The workers themselves are in their mid-50s on average and their union, the CFMEU, has negotiated generous conditions and redundancy packages over the years. They are likely to receive more than $300,000 on average in redundancy.
But unemployment is high in the valley, and skilled jobs rare. Wendy Farmer’s husband, Brett, has worked at Hazelwood for more than 20 years. Farmer is the spokeswoman for community group Voices of the Valley and asks simple pointed questions. Why, when state and federal governments knew that Hazelwood would close sooner rather than later, is there no transition plan already in place? Why is it just starting now when Hazelwood’s closure is a mere five months away?
It’s a question the country could be asking, too. Hazelwood won’t be the last power station to shut, after all, and the people of the valley won’t be the last community to need help.
This ageing, groaning, hulk of a power station is serviced by a giant open-cut coal mine just a few hundred metres from the town of Morwell, east of Melbourne. That a mine with a perimeter of about 18km was dug so close to residential houses was itself a shocking decision symbolic of the sacrifice coal towns have made to keep industry and consumers’ energy needs satisfied.
Over the years, Hazelwood has become a symbol of many things. It symbolised governments’ wavering commitment to seriously reducing our carbon emissions, and our own psychological dependence on cheap, reliable coal. Now, it’s a symbol of something else. This is a “red letter day”, as the Melbourne Energy Institute’s Roger Dargaville puts it, a tangible sign that a massive structural transformation is under way as the world shifts away from fossil fuels to deal with the dangers of climate change.
Hazelwood’s French owners, Engie, are well aware that the future for coal is bleak, and have already shut or sold off power stations in countries such as India and Indonesia. The footage of the Hazelwood coalmine fire in 2014 that spewed ash over Morwell residents for 45 days didn’t help its image as a company committed to phasing out coal assets in favour of cleaner technologies.
Shutting Hazelwood was a commercial decision, one influenced by the cost of maintaining the 50-year-old behemoth. It has also decided to sell its other brown coal power station in the Valley, Loy Yang B.
All this has a global context – last year’s Paris agreement to commit to keeping the global temperature rise below 2c compared with preindustrial levels. To get anywhere near that goal, greenhouse gas emissions need to be net zero by the second half of this century, and that means urgent action, including leaving coal in the ground.
The immediate impact of Hazelwood’s closure is likely to be modest – it is what it represents that is most crucial. It alone produces a quarter of Victoria’s base load electricity needs, and provides about 5% of the nation’s demands. But its closure won’t mean power shortages. Electricity demand has decreased in recent years, and there is a surplus of electricity generating capacity among our remaining power stations. But if another station closes soon, and another soon after that, we are likely to have a problem with reliability if we haven’t planned for it.
For now, Victoria’s demands are likely to be supplied by ramping up supply from the New South Wales cleaner black coal-fired power stations – which will mean a welcome if modest reduction in our overall greenhouse emissions. Electricity prices are likely to rise a little because black coal generation is more expensive than brown coal.
Victorian government modelling estimates that average residential power bills could rise by $44 a year, or 85 cents a week as a result of Hazelwood’s demise. As the Grattan Institute’s Tony Wood says, power bills will inevitably rise in this era, and it is “a great pity that political leaders have been loath to acknowledge this reality”.
More importantly, the closure of Hazelwood means that we need a plan. As Dargaville argues, we can wait for old power stations to fall over one by one, as they will, but that will have a big impact on power reliability if companies decide to shut down several at once.
“Just letting the market determines who exits is a bit of a random approach. We have no policy to assist with the orderly departure of coal-fired power stations.” It’s tricky – we want them to close but not until there is a reliable replacement for the energy they supply, and that requires planning.
Wood argues that what is urgently needed is a credible national climate change policy consistent with the government’s 2030 emissions reduction targets. Those targets are too low to achieve the Paris goals but they can be scaled up to meet tougher targets in the future. Wood says that if we had such a policy the owners of coal and gas power stations could factor it into their planning with confidence. For now, there’s uncertainly all round.
There is uncertainty in the Latrobe valley, too. The state and federal governments on Thursday announced big transition packages to help workers retrain and to encourage new investment in the valley. The workers themselves are in their mid-50s on average and their union, the CFMEU, has negotiated generous conditions and redundancy packages over the years. They are likely to receive more than $300,000 on average in redundancy.
But unemployment is high in the valley, and skilled jobs rare. Wendy Farmer’s husband, Brett, has worked at Hazelwood for more than 20 years. Farmer is the spokeswoman for community group Voices of the Valley and asks simple pointed questions. Why, when state and federal governments knew that Hazelwood would close sooner rather than later, is there no transition plan already in place? Why is it just starting now when Hazelwood’s closure is a mere five months away?
It’s a question the country could be asking, too. Hazelwood won’t be the last power station to shut, after all, and the people of the valley won’t be the last community to need help.
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