French electric utility company ENGIE has announced that its Hazelwood brown coal power station in Victoria, Australia, the dirtiest coal-fired power plant in Australia, will shut its doors in March 2017.
Following months of rumors and speculation, ENGIE announced on Thursday that it would close the Hazelwood coal power generation station and its adjoining mine in March of 2017. “The closure of Hazelwood is in line with ENGIE’s strategy to gradually ends its coal activities,” the company explained in its press release announcing the closure, having already sold or closed coal assets worth over 5 GW.
ENGIE will transform the mine into a lake, handing it back to the community as a natural resource.
“As a responsible actor, we are committed to supporting our employees and to work now on the rehabilitation of the site, in close cooperation with all our stakeholders. ENGIE will remain an important actor in Australia,” said said Isabelle Kocher, CEO of ENGIE. “With more than 1,500 employees, we will continue our development towards low carbon activities.”
Additionally, ENGIE claims that Hazelwood has been operating in difficult market conditions, with lower electricity prices and a surplus of electricity supply in Victoria. ENGIE chief executive in Australia, Alex Keisser, explained that running the power station any longer was simply not economically viable.
“ENGIE in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation,” explained Keisser. “Given current and forecast market conditions, that level of investment cannot be justified.”
The power station employs some 750 people, including 450 ENGIE employees and 300 contractors. Up to 250 employees will be required to stay on to manage the decommissioning process, but ENGIE is making sure its employees don’t leave empty handed, paying out an average of $330,000 (AUD) to each employee.
Unsurprisingly, the closure has been met with equal parts disappointment and praise.
One worker, Gary Sevenson, was quoted by ABC News as saying the decision was “pretty heartbreaking”. Meanwhile, Australia’s Energy Minister Josh Frydenberg has warned that the closure could affect electricity prices in Victoria and neighboring states, which benefit from electricity exported from Victoria.
On the other side of the fence, however, the news was welcomed throughout the energy industry in Australia by clean energy players.
“Like a car, the older these power plants get, the more it costs to keep them running and the less reliable they become,” said Kane Thornton, chief executive of the country’s Clean Energy Council. “A large proportion of our coal plants are already at or beyond their expected retirement date, and they will close one way or another in the decades to come.”
“This again highlights the need for a more strategic approach to deliver a clean, smart and reliable energy system.”
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