Right: the controversial Hazelwood plant has been a political issue for many years. Here, the then-Opposition leader - now Premier - Daniel Andrews answers reporters' questions outside the power station gates.
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Background information
(The information below is an abbreviation of the Wikipedia entry titled 'Hazelwood Power Station'
The full entry can be accessed at https://en.wikipedia.org/wiki/Hazelwood_Power_Station)
The Hazelwood Power Station is a brown coal-fuelled base-load thermal power station located in the Latrobe Valley of Victoria, Australia. Built between 1964 and 1971, the 1,600 megawatt capacity power station supplies up to 25% of Victoria's base load electricity and more than 5% of Australia's total energy demand. It is a 'subcritical' pulverized coal-fired boiler. The station was listed as the least carbon efficient power station in the OECD in a 2005 report by WWF Australia, making it one of the most polluting power stations in the world.
International Power plc purchased Hazelwood Power Station and the adjoining mine from the Victorian Government in 1996 with a 40-year life. In 2005 the Bracks Labor Government approved an environmental effects statement (EES) that allowed Hazelwood to move a road and a river to allow access to an additional 43 million tonnes of coal in addition to that allowed under the mining licence boundaries set at the time of privatisation. This was estimated to provide sufficient coal for the plant to operate to at least 2030. The EES also caps its total greenhouse output at 445 million tonnes of carbon dioxide over its life, after which point Hazelwood may be made to cease operation.
Hazelwood is now jointly owned by Engie (formerly GDF Suez), with a 72 per cent share and Mitsui & Co. with a 28 per cent share. As of 2014, Hazelwood directly employed over 500 full-time staff and at least another (full-time) 300 contractors, with hundreds more employed during scheduled major outages.
Privatisation
Hazelwood Power Station and associated mine were privatised by the Kennett government in 1996 after many years of downsizing under a 'structural efficiency' model undertaken by the then state Labor government. It was sold for A$2.35 billion, and it operated as 'IPR-GDF SUEZ Hazelwood', an Australian public company, which is owned by UK company, International Power plc (91.8% share)- part of the GDF SUEZ group - and the Commonwealth Bank Group (the remaining 8.2%).
After privatisation the new owners engaged in capital investment, with A$800 million invested in Hazelwood since 1996, such as replacement of boilers, rotors, turbines and the completion of an A$85 million project to reduce dust emissions by 80%. If Hazelwood had not been sold to private interests, activist groups say the SECV would have shut the station down in 2005.
EES approval
Before privatisation the power station was due to be decommissioned by the SECV by 2005, as had older plants at Newport and Yallourn. However Hazelwood had its mining licence realigned by the Victorian Government along with EES approvals to move a river and a road on 6 September 2005. This agreement ensured security of coal supply to the plant until at least 2030 by allowing access to 43 million tonnes of brown coal deposits in a realignment of Hazelwood's mining licence boundaries that were originally set in 1996. Hazelwood returned over 160 million tonnes of coal to the State Government as part of that agreement.
The agreement requires Hazelwood to reduce its estimated emissions by 34 million tonnes (33,000,000 long tons; 37,000,000 short tons) and caps its total greenhouse output at 445 million tonnes (438,000,000 long tons; 491,000,000 short tons) of carbon dioxide over its life, after which point it may be made to cease operation. However credits for investment in renewable energy and low emission technology will allow the business to operate within the cap and extend its life.
Forthcoming closure
Hazelwood's coal supply would likely have run out around 2009 without the 2005 coal mine extension. This extension, and the associated environmental impacts, has led to significant criticism by environmental groups, and civil disobedience actions.
During 2011 and 2012 the Australian Government considered a Contract for Closure program to complement the Clean Energy Act policy. Hazelwood would likely have been closed under this program had it been pursued. However, this program was scrapped in September 2012 and no plants were closed.
On 3 November 2016, Engie announced that Hazelwood would be closed as of the end of March 2017, citing the company's transformational policy of investing solely in low-carbon and renewable energy, as well lower energy prices and oversupply within Victoria.