The big news for the Latrobe Valley has been AGL’s decision not to go ahead with their planned demerger and hiving-off of their coal assets, due to the pressure mounted by the now largest shareholder and software billionaire Mike Cannon-Books. Cannon-Brookes, after having a takeover offer rejected by the AGL board, continued his opposition to the demerger and with his share purchase and getting other large shareholders onside, effectively blocked it. He is now in a position to direct the board along the lines of actions that are compatible with the limiting earth’s warming to the 1.5 degree target of the Paris Climate conference.
This effects Gippsland as AGL are the owners of the Loy Yang A power station and the Loy Yang brown coal mine. The latter provides fuel for both the Loy Yang power stations, covers about 6000 ha, and has a licence to operate until 2065. Recently the AGL board reduced the projected closing date of Loy Yang A from 2048 to 2043. Their website fails to account for the urgency in the climate crisis when stating “Loy Yang is committed to an orderly, respectful, and smooth transition for the Latrobe Valley away from coal-fired power generation” and will give 5 years notice of closure.
Currently Loy Yang A provides about 2 Gigawatts, or 30% of Victoria’s power. Renewables provide about the same and Yallourn and Loy Yang B the rest. 2 Gigawatts is about the size of Star of the South offshore wind, projected to come online in 2028. I have been unable to find out how many people Loy Yang A employs but the smaller “Loy Yang B employs up to 152 full-time staff and another 40 contractors. It is Victoria’s newest and most efficient brown coal-fired power station and can generate approximately 17% of Victoria’s power need”. Sudden closures, even with years notice will have a drastic effect on the Valley.
It is not clear what will eventuate from the Cannon Brooks ‘unofficial’ takeover. Certainly there will be a major expansion of activity in renewable energy – most likely solar and batteries. Planning will be paramount, aiming for a just transition for the workforce, and maximum efficient use of the Valley infrastructure. What is certain is that the closure date of Loy Yang will be brought forward at least to 2035 and possibly a lot earlier.