Environment Victoria says extending Australia’s most polluting power station would pose an ‘unacceptable risk’ to the climate

The Victorian government is considering whether to extend the coalmining licence for Australia’s most polluting power station, Yallourn, in the state’s Latrobe Valley.



A spokesman for the resources minister, Tim Pallas, said the government’s mining industry regulator, Earth Resources Regulation, was assessing the mine licence extension application and was expected to provide advice to the minister shortly.

The existing licence was issued in 1996 and is due to expire in 2026.

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In November the Victorian government legislated for net zero emissions by 2050, and set interim emissions reduction targets at five-year intervals. The CEO of Environment Victoria, Mark Wakeham, said extending the licence would pose an “unacceptable risk” to the climate and to the stability of an ageing electricity grid. He said given the zero-emissions legislation, the government should reject the proposal outright.

“Since the closure of Hazelwood, Yallourn has taken the mantle of dirtiest power station in Australia,” Wakeham said. “Rather than proposing to extend the life of this polluting clunker we should be planning for its closure and supporting the Latrobe Valley community with a fair and just economic transition.

“The Andrews government mustn’t give special treatment to ageing coal-burning power stations that are endangering our climate.”

Yallourn has sought an extension to continue open-cut coalmining operations to 31 December 2032, at which point it has said it will turn its efforts towards mine rehabilitation.

But an honorary associate professor with the Australian National University’s school of public policy, Hugh Saddler, said he did not believe the refusal of license extensions to mine coal should be used as a de facto mechanism for driving the closure of high-emission power stations. The federal government’s proposed national energy guarantee would not adequately support coal stations to transition away from high-emissions power generation, he said.

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“Just because a power station might be granted an extension, it also doesn’t mean they will keep operating the power station until that date,” Saddler said.

“Some years ago the then owner of Hazelwood sought and was given an extension which went way beyond last year when it closed. I don’t think that the refusal of the licence to mine coal should be used as the instrument to plan the orderly closure to high-emission power stations.”

While Saddler said he opposed the extension of Hazelwood’s licence at the time, he said circumstances had changed.

“What is happening now with the electricity system is we are entering into a period of transition which is huge and which is a really historic change, similar to the change away from Telecom to mobile phones,” he said.

“It’s a massive change and it’s clear to everyone the change is being very much driven by new technologies. Apart from the environmental requirements to change, the economics of renewables alone are a powerful driver away from traditional suppliers.

“But that has massive implications to the structure of the electricity grid, which is an enormous asset, and what we haven’t had in Australia is a clear and consistent way to plan for that. We need something better than what the proposed national energy guarantee offers.”

In the absence of a strategy, it was not unreasonable to grant power plants more time to transition through a license extension as a kind of insurance policy, he said.

The proposed national energy guarantee would require energy retailers to commit to a reliability guarantee to meet energy needs in each state from sources such as coal, gas, pumped hydro and batteries, while also signing up to an emissions guarantee to meet Australia’s international commitments to reducing emissions. It would effectively force electricity providers to have a mix of energy sources, including low-emission sources.

The guarantee, which requires sign-on from state and territory governments, has been met with a mixed response, with some experts saying it will encourage investment in low-cost renewables, while others believe it does not go far enough to push providers away from polluting energy sources.

