The dirtiest power station in Australia, the 1.5GW Hazelwood brown coal generator in Victoria is to close in five months after its owners finally bowed to the inevitable.
Staff at the Latrobe Valley generator were on Thursday morning that the facility would close on March 31 next year. Its majority owner, the French energy giant Engie, is also looking to sell the nearby Loy Yang B coal plant also in Victoria, as well as the Kwinana gas power station in WA – although it will remain in Australia to focus on gas and retail markets, as well as large-scale wind and solar and battery storage.
Hazelwood is not the first coal generator to close in recent years, but it is the most symbolic because of its size, its history and its critical role in providing 20 per cent of the state’s power. But age has caught up with the 50 year-old facility, and so have technological advances and environmental concerns.
Engie, nearly one-third owned by the French government, could no longer tolerate the reputational damage of operating such a dirty power station. With no economic option to clean it up, and no buyer, it had no option but to close the facility.
New CEO Isabelle Kocher has recognised that within a few decades, half of all electricity demand will come from local sources – rooftop solar and battery storage paramount among them.
This is why Engie is committed to ditching its entire fleet of coal-fired generators. Its own plans are a microcosm of what is happening around the world and what will happen in Australia.
The loss of capacity from Hazelwood will be taken up by other generators in the Latrobe Valley and black coal plants in NSW, and that likely means higher wholesale prices in those states.
Some suggest the wholesale price jump could be 25 per cent, others say much less. Bruce Mountain, from Carbon + Energy Markets, says it will be much less and the impact of these rises on households will be “negligible” -at less than $1 a week, with bills projected to rise by about $44 in 2017 and about $35 in 2018.
Photo: Pat Scala
© 2016 Solar Choice Pty Ltd
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