Victoria ticks the clock on coal-fired power plants with switch to state control

Tony Wood, director of energy at the Grattan Institute, said more aggressive renewable energy policies had led to coal shutdowns in the past.

“We have already seen the closure of Loy Yang A brought forward anyway, so that may not change. But what we’ll almost certainly see now is Alinta, owner of Loy Yang B, bringing that closure to the fore. I don’t see how it can stay open until 2035 anyway, because otherwise you won’t meet your renewable target.”

The public is said to own a 51 percent stake in the various renewable energy projects run by the revived commission, with the balance of the investment coming from “like-minded entities” such as industrial super-funds. The plan does not suggest that the government would take over private distribution or retail businesses.

AGL recently announced it would close Loy Yang A, the state’s largest power plant, a decade earlier, in 2035. Alinta’s Loy Yang B will officially close in 2047, while EnergyAustralia’s Yallourn will officially close in mid-2028.

Andrews expressed concern about the closure of Loy Yang B and said it was unlikely that Alinta would keep the plant open until the planned closing date in 2047.

“They didn’t say that formally. They’re in the process of selling their business right now, so I don’t know if that’s part of the reason they wouldn’t necessarily make that statement,” he said on ABC radio.

Alinta chief executive Jeff Dimery said the government’s move could cost jobs. “Our immediate priority and focus will be to support our employees at Loy Yang B, who will understandably be shocked by this announcement,” he said.

“We have one of the most advanced pipelines for renewable energy and storage projects, but we need to understand more about how the government plans to control the costs of the accelerated transition, protect communities and workers, and support us to invest in the replacement generation required to keep the lights on in the state,” he said in a statement.

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Professor Bruce Mountain, of Victoria University, said that while the announcement did not include immediate relief for consumers, it should cut bills shortly after the commission is set up.

The government would reinvest profits in generating more power, increasing supply and keeping costs low. Mountain said that was a “perfectly plausible” position.

“I don’t think it will last long [for the benefit to be passed onto consumers] … I hate to ever put a dollar and a time on these things.”

The minority investor is expected to make reasonable returns, but not excessive profits distributed to shareholders.

“Too much of our electricity revenues have gone into unnecessary profits, and I think it can promise us a cheaper future if we reinvest that in cleaner technology,” Mountain said.

The Australian Energy Council, an industry association representing energy retailers and generators, said the plan would hurt market and investor confidence.

Power plants in the Latrobe Valley are likely to close years earlier.

Power plants in the Latrobe Valley are likely to close years earlier.Credit:Bloomberg

“The government should not make direct investments in energy if the private sector has shown that they are willing and willing to do so,” CEO Sarah McNamara said in a statement.

“Our members have announced billions of dollars in investment to support the Victorian and Australian energy transition. [Thursday’s] announcement will destabilize future investment plans.”

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She rejected suggestions that privatization had not served Victoria well and said it helped the state recover from the recession of the 1990s.

Andrews said $20 million would be invested to prepare the revived commission and open an office in Morwell, in the Latrobe Valley, and he doesn’t rule out the possibility of setting up a public retailer at a later date.

The commission was previously a government power supplier and distributor before being privatized by the liberal Kennett government in the 1990s, a decision that Andrews says left consumers in the lurch and pushed up utility bills.

The Queensland government owns $35 billion worth of generator, grid and electricity distribution assets. The federal government owns Snowy Hydro, which owns more than a dozen energy resources, including gas-fired stations in Victoria.

Renewable energy expert Tristan Edis, director of analysis at Green Energy Markets, said the state government deserved credit for its work moving towards renewable energy, but warned the public should not have a rosy view of the old commission, which according to him, it had exposed Victorian taxpayers to significant costs.

Edis also questioned the government’s focus on offshore wind, which is relatively expensive to build and maintain compared to onshore wind. He said future technology could also favor rooftop solar in conjunction with household batteries, which would require less investment in poles and wires.

“We need to keep this in perspective, Edis said. “It’s $1 billion in equity to get into a business, it’s going to be one competitor at best. It’s not going to dominate the power system. But I’m just concerned that the People nostalgia means they don’t appreciate the lessons of the past, which isn’t that the private sector is always right, but that when they screw up, they pay the price.”

Tim Wilson, who was assistant minister for industry, energy and emissions reduction in the former Morrison administration, said a revival of the commission could lead to higher prices, lower reliability and a slower energy transition by crowding out private sector investment.

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“Energy needs two things: the dynamism of innovation through new technologies and a stable environment to encourage investment to increase supply and lower prices,” he said.

“A State Electricity Commission will do the opposite, discouraging new private investment and making decisions based on political considerations, not customers.”

Opposition education spokesman David Hodgett said the coalition will have more to say in the coming weeks.

“We have a plan for reliable, affordable, clean energy and we’ll definitely have more to say about that in the coming weeks,” Hodgett said.

The state opposition has previously pledged to halve emissions by 2030 and fund a $1 billion strategy to support clean hydrogen.

The Labor announcement was welcomed by the Victorian Trades Hall, Electrical Trades Union, Salvation Army, Victorian Council of Social Services, Environment Victoria and the Climate Council for its cost-cutting measures, transitioning workers to new jobs and reducing emissions. Reduce.

dr. Jennifer Rayner, head of advocacy at the Climate Council, said she hoped Victoria will start a “race to the top from Australian states and territories”.

Paul Guerra, CEO of the Victorian Chamber of Industry and Commerce, said the intent of Thursday’s announcement was admirable, but more detail was needed to understand how businesses could be affected.

The Victorian head of the Australian Industry Group, Tim Piper, said he was skeptical of the commission’s revival. He said the original version was being disbanded because it became too expensive, and said the current government would “walk a fine line” running an energy company while maintaining private investment.

As for the renewable energy target, Piper pointed out that by 2035 only about 5 percent of Victorian power would be generated by gas.

“How could that transformation have happened so quickly and what does it mean for those using gas?” he said.

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