The plant is expected to be shut completely by April 2017, after more than five decades as a producer of low-cost, high-emission electricity. The 1,600 MW plant produces nearly a quarter of coal electricity in Victoria.
Fairfax reports that that the plant, built between 1964 and 1971, required millions in investment, following at least four repair notices from WorkSafe. Remediation following the closure will not be cheap, either, and will reportedly cost hundreds of millions and involve the removal of asbestos material.
The cost to the Latrobe Valley in terms of jobs is significant. Unemployment is already as high as 19.7 per cent in Morwell.
Majority owner Engie of France – which holds a 72 per cent share – has been reportedly preparing to announce the closure. Energy minister Josh Frydenberg, who went to France last week to meet with Engie’s CEO and France energy minister Segolene Royale, responded to the speculation on his return, insisting no final decision had been made.
Both Engie and Mitsui – which owns the other 28 per cent – insist a decision has not yet been made, according to The Australian.
According to analyst Tony Wood from the Grattan Institute, wholesale electricity prices would increase 10 – 25 per cent in the short-term if the plant closes.