Hazelwood

By Jim Stanford - Centre for Future Work, December 16, 2020

Climate change poses a fundamental threat to the well-being and security of people everywhere. And Australia is on the front lines of the challenge. We have already experienced some of the fastest and most intense consequences of climate change, in many forms: extreme heat, droughts, floods, extreme weather and catastrophic bushfires (as in 2019-20). Climate change is no longer an abstract or hypothetical worry. It is a clear and present danger, and we are already paying for it: with more frequent disasters, soaring insurance premiums, and measurable health costs.

The problem of climate change is global; emissions and pollution do not respect national borders. But to address the global threat, every country must play its part. And Australia has a special responsibility to act, and quickly, for several reasons:

• We are suffering huge costs because of climate change.
  We are a rich country, that can afford to invest in stabilising the climate.
• We are one of the worst greenhouse gas (GHG) polluters in the world.
• In fact, as shown in Figure 1, Australia has the highest GHG emissions per capita of any of the 36 industrial countries in the

Organization for Economic Cooperation and Development (OECD). Our emissions – around 22 tonnes of CO2 equivalent for every Australian – are almost twice as high as the OECD average. We emit 4 times per person more than the average Swede.

Worse yet, Australia has been very slow in addressing climate change with effective and consistent policies. Climate policy has become a political wedge issue, subject to reversals and changes in direction depending on the fleeting political imperatives of the day. After a temporary decline (largely sparked by a short-lived national carbon tax, which was then abolished in 2014), Australia’s total emissions have increased again in recent years (see Figure 2). Under existing policies, emissions are projected to stay at or above current levels over the coming decade.

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By Elizabeth Perry - Work and Climate Change Report, December 9, 2020

After the Hazelwood coal fired power station closure: Latrobe Valley regional transition policies and outcomes 2017-2020  is a Working Paper published in November by the Centre for Climate and Energy Policy, Crawford School of Public Policy, in Australia . Although the paper is a detailed case study, the findings are summarized by the authors thus: “Prior to its sudden closure in March 2017, Hazelwood was the most carbon-intensive electricity generator in Australia. The debate over the future of Hazelwood became an icon in the nation’s ongoing political struggle over climate and energy policy. Employment and economic outcomes in the three years since closure indicate promising initial progress in creating the foundations required to facilitate an equitable transition to a more prosperous and sustainable regional economy. The Hazelwood case study provides support for a number of propositions about successful regional energy transition including that well managed, just transitions to a prosperous zero-carbon economy are likely to be strengthened by proactive, well integrated industry policy and regional renewal strategies; respectful and inclusive engagement with workers and communities; and adequately funded, well-coordinated public investment in economic and community strategies, tailored to regional strengths and informed by local experience.”

Corresponding author John Wiseman, along with co-author Frank Jotzo, previously wrote Coal transition in Australia: an overview of issues ( 2018). Jotzo was also a co-author on Closures of coal-fired power stations in Australia: local unemployment effects (2018). Their latest 2020 Working paper offers a thorough list of references to Australia’s Just Transition literature.

By John Wiseman, Annabelle Workman, Sebastian Fastenrath, and Frank Jotzo - Crawford School of Public Policy, November 2020

This paper reviews and evaluates key policy initiatives and strategies designed to strengthen regional economic, social and environmental outcomes in the Latrobe Valley (Victoria, Australia) in the three years following the closure of the Hazelwood power station. Prior to its sudden closure in March 2017, Hazelwood was the most carbon-intensive electricity generator in Australia. The debate over the future of Hazelwood became an icon in the nation’s ongoing political struggle over climate and energy policy.

Employment and economic outcomes in the three years since closure indicate promising initial progress in creating the foundations required to facilitate an equitable transition to a more prosperous and sustainable regional economy. The Hazelwood case study provides support for a number of propositions about successful regional energy transition including that well managed, just transitions to a prosperous zero-carbon economy are likely to be strengthened by proactive, well integrated industry policy and regional renewal strategies; respectful and inclusive engagement with workers and communities; and adequately funded, well-coordinated public investment in economic and community strategies, tailored to regional strengths and informed by local experience.

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By Anne Martinelli, et. al. - Environment Victoria - September 2016

The Latrobe Valley has a proud history of supplying the electricity that powers Victoria. But coal-burning power stations are ageing and –responding to climate change – the world is moving rapidly to cleaner energy sources. In this shifting context, the Latrobe Valley faces inevitable change. The question is: how will that change be managed?

With recent news that Hazelwood power station may close as early as in April 2017, there is a narrow window of opportunity to ensure that the Latrobe Valley prospers during the transition to a cleaner economy, rather than suffers as it did during previous economic changes.

A ‘just transition’ is a framework for managing the shift towards such new economies, with a focus on inclusive participation for those affected and a fair distribution of the costs and benefits of change.

This report explores what a just, and well-managed, transition process for the Latrobe Valley might look like. As experience from around the world has shown, when industrial change does arrive it can come very quickly, and being unprepared is costly.

In South Wales, UK, where there was little transition planning prior to the 1980s coal-mine closures, the damaging economic and social consequences have been profound and long-lasting. By contrast, Rochester, New York, which started planning its transition two decades before the city’s main employer – Kodak – collapsed, the situation has been more positive.

The first closure of one of the four large coal-burning power stations in the Latrobe Valley could be as early as 2017, and the rest could quickly follow. Tangible action and funding to develop an alternative economic future is required now.

For the Latrobe Valley to successfully achieve a just transition, two equally important processes must occur: (1) an orderly and planned transition away from coal; and (2) a collaborative and inclusive transition towards a sustainable local economy.

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By David Spratt - Climate Action Moreland, June 2015

Hazelwood Power Station (HPS) was built between 1964 and 1971, and comprises 1542 megawatt (MW) of capacity over eight generators. It was privatised by the Victorian Liberal Party Kennett government in 1996 for $2.35 billion.If HPS had stayed in public hands, it would likely have been decommissioned in 2005, but in 2004 the Bracks Labor government extended its operations till 2031, allowing Hazelwood to move a road and a river to access 43 million tonnes of brown coal deposits in a realignment of the mining licence boundaries. The owners have a 30-year mining licence due for renewal in 2026.HPS and the land on which it operates are owned by the Hazelwood Power Partnership. Since 7 June 2013, the four partners have been subsidiaries of International Power (Australia) Holdings Pty Ltd. This company is in turn jointly owned by subsidiaries of Engie (formerly GDF Suez SA) (72 per cent ownership) and Mitsui & Co Ltd (28 per cent ownership). Engie is a global energy company with corporate headquarters in France. Mitsui & Co Ltd is a global trading company with corporate headquarters in Japan.Currently HPS produces more than 10,000 gigawatt hours (GWh) of energy annually and is supplied with up to 18 million tonnes of coal each year from the adjacent Hazelwood mine, releasing around 16 million tonnes of greenhouse gases annually. Today HPS provides approximately 21 per cent of Victoria’s baseline electricity supply.

The Victorian Government has expressed a desire (though it does not yet have a policy) for a significant expansion of renewable energy in Victoria. This has widespread community support and must be done quickly and at a large scale because climate change is already dangerous. Scientists warn that two degrees Celsius of warming could occur in just two decades, so preserving a safe climate and a healthy future requires rapid de-carbonisation.

Expanding renewable energy requires coal-generating capacity to be removed from the market because oversupply is crowding out and preventing new investment. The Australian energy market operator says there are about eight gigawatts of surplus generating capacity across the national market, equivalent to five Hazelwood power stations. This includes up to 2.2 gigawatts of brown coal generation that is no longer required in Victoria in 2015, which is greater than Hazelwood’s capacity. Power companies have been lobbying government for capacity to be reduced, and senior Victorian energy department bureaucrats are aware of the need to close coal power stations in order to roll out renewables.

The Victorian Government has committed to being a leader on climate change. Closing down excess coal generation is a key test of the government’s climate credentials. Coal-fired power stations are the world’s largest source of planet-warming carbon dioxide emissions. Victoria cannot make the necessary emissions reductions without addressing the operations of Hazelwood and/or Yallourn power stations.

Hazelwood power station is old, unsafe and dirty. Based on emissions intensity, it is the third-dirtiest coal power station in the world and the dirtiest in Australia, releasing around 16 million tonnes of greenhouse gases annually, almost three per cent of total Australian greenhouse emissions. The Hazelwood majority owner, Engie (formerly GDF Suez), owns the third-most polluting coal-power station fleet in the world. The full – health and carbon pollution – social costs of Hazelwood totalling $900 million per year are borne by the community, rather than the plant’s owners.

A steady stream of local jobs can be created in the Latrobe Valley with the rehabilitation of mines and decommissioning of plant, which will require a significant workforce stretching well over a decade. The Latrobe Valley needs a strong jobs package and an economic transition plan and new industries because the move from coal to clean wind and solar renewable energy is now both urgent and inevitable.

Hazelwood power station and mine are a health hazard to local residents, exemplified by the autumn 2014 mine fire. The owners of Hazelwood have abused their social licence and forfeited the right to profit from a power station that is now a major health hazard – both to local people and to all peoples who face the uncertainties of living in a hotter and more extreme climate.

In July 2010, the Victorian Labor government promised to start shutting Hazelwood and passed climate legislation providing the reserve power to regulate emissions from existing brown coal-fired generators. Restoring the government’s capacity to regulate emissions would be complementary to actions being taken by other governments, including in the United States and Europe.

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