More than 3000 Gippsland jobs will be lost if two Latrobe Valley power stations close, new economic modelling has found.
The figures are part of a report conducted by the Committee for Gippsland, which looks at the flow-on effect of power station job losses on the community.
Launched yesterday, the ‘Our Region Our Future’ report found 1400 jobs would be lost from the power sector including direct and maintenance contract jobs, however this would result in a further 1771 indirect jobs lost across Gippsland.
“We think that it’s very likely over the near future that one generator will announce a closure,” Committee for Gippsland chief executive Mary Aldred said.
“We think there’s a potential for two power stations over the medium term to announce closure and so we’ve put forward (this) analysis and data.”
The closure scenarios posed in the report have not been endorsed by Latrobe Valley power stations.
The report found the total economic cost of the closure of two power stations was $1.7 billion and there was the potential to lose about 7000 residents from the region. It also highlights a significant impact on wages and salaries, with a total decrease of up to $260 million.
The report highlights the need for a phased closure over time as opposed to the immediate, complete shutdown of an entire generator.
It makes a series of recommendations, including investment in carbon capture and storage technology and funding for project-based learning.
The report recommends a website to showcase the investment benefits of Gippsland, that where possible state and federal government procure Australian-made paper, the State Government looks at decentralising government agencies and basing an office in the Latrobe Valley, and that further consideration is given to the blanket moratorium on onshore gas exploration in Victoria.
Tourism-based initiatives the report recommends include a Gippsland food and wine trail, the opportunity for Lakes Entrance to host the 2021 National Surf Lifesaving Championships, and funding for the PowerWorks Energy Education Centre.
It recommends the establishment of a government-funded transition body.
“The great competitive advantage that Gippsland as a region has is that we do have a very broad-based economy,” Ms Aldred said.
“Even though the stationary energy sector, the power stations and large organisations like Australian Paper provide a significant quantum of jobs and industry, we don’t have all our eggs in one basket and so I think what we’ve tried to do through this report is identify champion industries of the future.”
The report states there is a strong likelihood that with the closure of one power station, retail electricity prices will increase.
It also highlights potential alternate uses for brown coal such as fertiliser.
When asked what made this report different to previous documents relating to the Latrobe Valley’s future, Ms Aldred said 200 small to medium businesses had been surveyed as part of the six-month project.
“I don’t think any of the reports thus far have looked at small to medium businesses as a sector and as a potentially significantly-impacted sector,” Ms Aldred said.
Committee for Gippsland has 90 members including businesses, community groups and education providers.
Industry and Employment Minister Wade Noonan described the report as “terrifically important”.
“Reports such as this underpin our thinking, they shape our thinking and they shape the future,” Mr Noonan said.
In May, Hazelwood mine operator ENGIE denied suggestions its brown coal power station may be shut down early, following comments made by the company’s French chief executive.