A brown coal-fired power station and briquette factory in Victoria's Latrobe Valley will close next month, two years after receiving a $50 million Federal Government bailout package.

The operator of the Energy Brix facilities, HRL Limited, blamed falling electricity wholesale prices and a reduction in demand for brown coal briquettes for the closures.

About 70 people will lose their jobs.

Gippsland Trades and Labour Council assistant secretary Steve Dodd said the job cuts would hurt the local economy, which is already struggling to recover from this year's Hazelwood mine fire.

"That's a significant amount of jobs that are taken out of the region and that means that people are going to have look for employment elsewhere," he said.

HRL wound down its Morwell operations over the past two years after receiving the Government bailout package, which expired last month.

The package was established to give Energy Brix customers enough time to switch to cleaner sources of energy.

Energy Brix has since lost at least three of its customers including Australian Char and dairy co-operative Murray Goulburn.

The company also drastically reduced its wholesale supply to the National Energy Market.

The company said the closure of the Morwell facilities was "temporary" and dependent on a commercial viability of a project to repower the briquette factory with a new steam supply.

But Environment Victoria chief executive Mark Wakeham said it was unlikely the facilities would reopen.

"It is the first coal-fired power station to close in Victoria for decades but it won't be the last," he said.

"With energy demand falling quite significantly we're likely to see closures at other coal-fired power stations in the months and years ahead."