The closure of Hazelwood Power Station is expected to be announced today. As to the impact of its demise on power prices in Victoria, New South Wales and South Australia; opinions clash.
Completed in 1971, the 1,600MW capacity power station supplies up to 25% of Victoria’s baseload electricity. It does this through burning brown coal; one of the filthiest fossil fuels used for power generation.
This single facility generates more than 15 million tonnes of greenhouse pollution annually. This is more than 15 percent of Victoria’s annual greenhouse gas emissions and 3 percent of Australia’s greenhouse gas emissions.
It’s not just the carbon emissions – it also produces 7,800 tonnes of hydrochloric acid and consumes 27 billion litres of water a year.
The impacts on human health from brown coal fired electricity led hundreds of Australian health professionals in March to call on the Victorian Premier to commit to a timeframe for shutting down coal fired power generation facilities in the Latrobe Valley.
The simple fact of the matter is Hazelwood has to go. It’s antiquated and filthy – one of the world’s worst polluting power stations. It has no place in a carbon-constrained world.
Hazelwood’s closure won’t be a shocking new development as the writing has been on the wall for years. So have recommended replacements.
Back in 2010, Environment Victoria published a report detailing how Hazelwood could be replaced with cleaner and renewable energy projects including solar power as soon as the end of 2012.
6 years on and its finally looking like demise of the power station will become reality.
So what will the impact be on power prices? It depends on who you ask.
Roger Dargaville, Deputy Director of the Melbourne Energy Institute says if the hole left by Hazelwood’s retirement is filled by the excess capacity in NSW, “then all things being equal the impacts on the overall costs of running the system would be modest.”
However, Mr. Dargaville acknowledges “predicting what will happen to electricity prices in the future is harder than picking the winner of the Melbourne Cup.”
Modelling released by the Victorian Government indicates residential power bills could increase by between 4 and 8 per cent.
Across the border in South Australia, The Advertiser reports Hazelwood’s closure could boost already high SA electricity bills by a further 10 per cent or more.
Predictions made by others earlier in the year peg price rises as being anything from negligible to 25%; depending on when it happens and where you live.
If the loss of Hazelwood does have significant impact on electricity prices, it will make the installation of solar power systems and battery storage an even more attractive proposition.
Hazelwood Image credit: Simpsons fan 66 at English Wikipedia, CC BY-SA 3.0, Link
Top Right Image Credit: BigStock
