`Closure of power stations on cards'

Australian
Tuesday 30/9/2008 Page: 2

THE chief of one of Victoria's main brown coal power stations has said the plant in its present form would be forced to close under the proposed emissions trading scheme. Graeme York, the chief executive of International Power Hazelwood, said the Hazelwood station was one of several in the Latrobe Valley that could not survive a carbon price in its current guise.

"We accept that Hazelwood, and in fact all of the Latrobe Valley power stations, they are not going to continue to operate for the rest of what would have been perceived to be their life without reducing their emissions significantly," he said. Mr York was commenting after International Power Australia put in a submission to the commonwealth's green paper on emissions trading warning that a charge of as little as $5 per tonne of CO2, emissions would affect the viability of its power stations.

"We fully support the idea of emissions trading, but what we need to have is some sort of transition," Mr York said. "In our own submission we put forward a proposal which identified some of the higher emitting assets for timed closure and (to) have an agreement to ultimately close those assets. "It would be closure of Hazelwood as we know it, and it would be over a period of time. "With emissions trading, the asset is going to need to go through some sort of change and that's why we are investing in projects to try to reduce emissions." A $370 million program to retrofit low-emissions technology to the station is being undertaken at the moment.

Mr York said although the station had fuel to operate until 2036, its lifespan would be more likely to end in 2020 without a soft start to emissions trading. "Our concern is if there's not a smooth transition then we will end up with major shocks to all of the Victoria generators," he said. The Hazelwood station employs 400 workers, while International Power's Loy Yang B station, also in the Latrobe Valley, employs 140. The Victorian Government hopes carbon capture and storage can be quickly perfected to allow the state to continue its dependence on brown coal and the cheap electricity it produces.