Governments have pledged almost $100 million to help the Latrobe Valley cope with the closure of the Hazelwood power station but there are fears up to 750 ageing workers won't be able to find new jobs.

French majority co-owner Engie on Thursday announced it was "no longer economic to operate" the mine and power station and all eight generating units would be closed by March 31.

The station, jointly owned with Mitsui, is more than 50 years old and currently provides more than 20 per cent of Victoria's electricity.

Prime Minister Malcolm Turnbull on Thursday said "this is a very, very tough time for the valley".

The federal government announced a $43 million assistance package including $20 million for new infrastructure projects in the region and $20 million for the Latrobe Valley to become the country's 10th regional jobs and investment project.

There'll also be $3 million for job assistance, retraining and financial services support for affected workers.

Engie Australia chief executive Alex Keisser said the company had set aside $150 million for entitlements - an average of $330,00 per worker.

"Our sympathies go out to the workers and to their families," federal Energy Minister Josh Frydenberg told reporters in Melbourne.

He's spoken to the head of the Australian Energy Market Operator who provided an assurance that the reliability of the national electricity market "would continue despite the closure".

The federal government has also written to the Australian Energy Regulator to ensure the closure "does not lead to unjustified price increases".

Victorian Premier Daniel Andrews says the AEMO had confirmed "there is more than enough supply to deal with all of Victoria's demand" post-closure.

"They are the facts," he told reporters in Morwell.

"There will be others who run scare campaigns (but) that is what they are -scare campaigns."

The Victoria government says retail prices will increase by less than four per cent in 2017 as a result of the Hazelwood shutdown. That's less than $1 a week for households.

The state has committed $22 million for TAFE training and financial and emotional counselling.

A further $20 million will go towards establishing an authority - based in Morwell - that will work to attract new businesses and opportunities to the region.

Mr Keisser said the company was committed to fully supporting its 750 Hazelwood workers - comprising 450 direct worker and 300 contractors.

Some 250 people will still be needed for rehabilitation works at the coal mine and power station site between 2017 and 2023 with Mr Keisser insisting existing workers would be "given privilege".

The federal government has set up a ministerial committee to coordinate its response.

A joint Commonwealth and state task force will ensure both governments work together in a "collaborative way", Mr Turnbull said.