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Hazelwood's Closure Is The Government's Doing, And We're All Paying For It

Energy privatisation has meant price increases, job cuts and a failure to look to the future.

31/03/2017 2:33 PM AEDT | Updated 31/03/2017 2:34 PM AEDT

Today the workers at Hazelwood power station will shut down an asset which has supplied power and jobs to Victorians for generations.

They are the victims of short-sighted companies who have spent the past 20 years since privatisation taking profit while failing to invest; and short-sighted governments who have looked the other way.

Twenty years ago we had an efficient, profitable and publicly owned electricity system. We employed hundreds of professionals who planned future investment in generation to meet the needs of our manufacturers and growing population.

Across the country, successive governments -- some Coalition, some Labor -- sold these vital public assets in a dash for cash. We were told we'd get a more efficient operation to the benefit of consumers with commitments to streamline operations -- code for job cuts.

The job cuts happened, but the benefit to consumers did not. Electricity prices have increased so rapidly it's made our heads spin -- they've doubled even after you take out the impact of inflation.

In the meantime, the private asset owners have failed to look to the future, failed to invest in technology and now the electricity industry is in crisis. The cost of these failures is borne by both consumers and workers in the energy industry.

In a debate about how to get to zero net emissions, the only thing we have zero of is political agreement; and the only thing that is certain is more job losses and electricity price rises.

The private owners of the assets built by taxpayers have announced they will all close as they reach their expected design life. Some plants will close earlier than that because of the cost of maintenance and upgrades. The same companies say they will not build any more conventional coal-fired power stations. Neither will any investor.

In gas-fired power, investment has also dried up because prices for gas increased as soon as we built those liquefied natural gas export terminals on the east coast. And state government mishandling of the coal seam gas issue has resulted in uncertainty of gas supply.

The capacity of large-scale battery storage to back up renewable power at an affordable cost is also ambiguous -- at the very least there is uncertainty about when it becomes affordable.

Unfortunately, we have a regulatory framework which has failed so badly that we're in the middle of a wholesale external review of the system. And virtually no-one has any idea what the author will recommend given his views on an emissions intensity scheme have already been rejected by the Government.

So we have no appetite for private investment and a failed regulatory framework. In a debate about how to get to zero net emissions, the only thing we have zero of is political agreement; and the only thing that is certain is more job losses and electricity price rises.

The Prime Minister thinks the solution is to spend taxpayers' money on near-zero emission coal-fired power with carbon capture and storage. The problem is that he is at least a decade too late.

Our union started advocating investment in carbon capture and storage two decades ago. We thought governments had listened when the Rudd Government created a $2 billion carbon capture and storage (CCS) fund and established the Global CCS Institute. Rudd was the political champion of CCS, not Turnbull.

The problem is no project proposal got past the preliminary stages because the coal multinationals predictably failed to invest properly in the future, again.

Turnbull's next proposal to inject $2 billion into more hydro is not going to deliver for another 10 years. In the worlds most arid continent this is hardly a long-term solution.

The Prime Minister knows that without bipartisan support for stable, long-term policies governing emissions, no emerging technology will attract investors. His position on 'clean coal' is all about politics.

While the Federal Government positions itself for the next election, the final responsibility for electricity supply rests with state governments. Government ownership or strong state government intervention will be needed to put the public interest first.

Without political stability the private sector simply won't invest in off-the-shelf technology, let alone emerging technologies.

In Victoria, we now have a groundbreaking Partnership Agreement with the State Government, power station operators and workers through their unions coming together to ensure no-one is left behind with the Hazelwood closure.

Meanwhile, in South Australia, the State Government has announced a major package of reforms that include a focus on a gas-fired plant to secure a more adequate energy supply.

Until we have a bipartisan approach to the energy crisis the private sector is neither use nor ornament. Without political stability they simply won't invest in off-the-shelf technology, let alone emerging technologies.

When we need more power, the states will determine what power is produced and when. After all, while federal governments are knee deep in politics, it is state governments who ultimately remain accountable for keeping the lights on. Perhaps we should employ professionals to plan an energy system geared to the public interest. Everything old is new again?


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