Controversial policy may impact Valley

Brown coal power stations may yet benefit from the controversial ‘Direct Action’ policy, according to Federal Environment Minister Greg Hunt amid speculation local generators will be priced out of the scheme.

The passing of the Abbott Government’s controversial policy through the senate last week marks another controversial milestone in a tumultuous few years of federal emissions reduction policy.

However the plan has attracted widespread scepticism towards its value in Latrobe Valley’s power sector, where pollution intensive brown coal-fired generators have cemented the region as one of Australia’s carbon intensive capitals.

The plan’s key feature, the Emissions Reduction Fund, will award grants to businesses which achieve the largest emission abatements at the cheapest prices.

However with only $2.55 billion allocated to the ERF, industry observers and stakeholders are highly sceptical the Valley’s generators will attract any funding at all, due to the capital intensive costs of retrofitting or upgrading the ageing power generators.

Speaking to The Express on Friday, Mr Hunt said there could still be examples in which Valley generators were eligible for ERF grants.

While Mr Hunt would not speculate “on what engineering would be involved”, he said the scheme would allow “flexibility”, citing scenarios in which a business replaced traditional coal-fired combustion with alternative generation technology.

“Now that the ERF has passed through the senate, we are obviously inviting and encouraging the power stations to approach us,” Mr Hunt said.

“Early indications are that there is genuine significant interest from within the brown coal sector (towards the ERF) so I am very hopeful that proposals will come forward, so long as it is about reducing emissions on site.”

The passing of the legislation came after fierce but futile opposition in the senate from Labor and the Greens, as a voting deal had already been struck between the Coalition and the Palmer United Party on Wednesday.

On Friday, Labor’s spokesperson for the environment Mark Butler described the plan as “little more than a dressed up slush fund” that would not make any meaningful impact on Australia’s carbon pollution.

Environment Victoria’s safe climate campaigner Dr Nicholas Aberle said with the ERF unlikely to fund emission reductions in the Valley, the lack of federal or state policy in dealing with brown coal-pollution was an “elephant in the room”.

“With the oversupplied national electricity market, Direct Action could be used to plan a controlled phase-out of one of these generators,” Dr Aberle said.

“Not addressing this now could mean a much more turbulent transition for the community when the power stations eventually shut down.”