Tuesday, 7 June 2022

Economy and Infrastructure Committee

Inquiry into the Closure of the Hazelwood and Yallourn Power Stations

Mr ERDOGAN (Southern Metropolitan) (12:28): Pursuant to standing order 23.29, I lay on the table a report from the Economy and Infrastructure Committee on the inquiry into the closure of the Hazelwood and Yallourn power stations, including appendices, extracts of proceedings and a minority report. I further present transcripts of evidence, and I move:

That the transcripts of evidence lie on the table and the report be published.

Motion agreed to.

Mr ERDOGAN: I move:

That the Council take note of the report.

I am pleased to present the Economy and Infrastructure Committee’s report on the inquiry into the closure of the Hazelwood and Yallourn power stations. The announcement by Engie in November 2016 that production and operation would cease at the Hazelwood power station in mid 2017 was a blow to communities across the Latrobe Valley region. Coal-fired power generation has been an economic and social driver for generations of workers and communities across Gippsland and has shaped its history; skills profiles; economic, social and environmental priorities; and demographics. It has also defined the identity of workers, industry, related businesses and communities.

Last year’s announcement by EnergyAustralia of the 2028 closure of the Yallourn power station, with a 350-megawatt utility-scale battery to be built by 2026, was further confirmation that global markets are increasingly moving away from investment in coal-fired power. Further, the exponential growth in renewable energy has been driven by downward pressure on the costs of production and management, the rapid pace of advances in renewable energy technology and increased consumer appetite. These changes have necessitated a comprehensive social and economic transition for the Latrobe Valley region, alongside investment in the development of existing communities and improvements in educational, health and other outcomes.

With such a short notice period provided by Engie, it was imperative that all levels of government worked together with a sense of urgency and collaboration. The Victorian government established the Latrobe Valley Authority, or LVA, with responsibility for business, community and worker support in the first instance, alongside program and service delivery and local projects to facilitate economic and social transition. The LVA is the first body of its kind in Australia. It is influenced by the approach taken in countries that have faced similar challenges following transition from coal-fired power generation, such as Germany and Spain.

The LVA’s initial focus was mostly direct, helping affected workers find new jobs in the power sector through negotiation of worker transfer schemes with other operators or industries, and providing businesses with transition and development support or access to new infrastructure projects. The organisation’s focus has since evolved to building capability, aiding long-term regional growth and transformation. As the committee’s report discusses, the LVA is the first to agree that it has more work to do in developing and maintaining community trust and awareness, communicating its services and measuring the financial and social benefits that it has delivered.

The LVA is adapting and improving as it grows and learns more about how it could best work with the community. Importantly, the LVA is staffed by Gippslanders working for Gippsland. It is of significant importance to a region that has been neglected by governments in times of great need and uncertainty, including following the privatisation of Victoria’s power industry in the 1990s and the Hazelwood mine fire in 2014. As such, the importance of building trust and fostering optimism across businesses and communities should not be underestimated as transition and development continues over the coming years.

As this inquiry also found, a combination of regional assets and state government support has led directly to improved social and economic outcomes. New opportunities for long-term and sustainable growth are gathering momentum across Gippsland, whether in large energy projects or in other priority industries such as health and allied care, food and fibre, tourism and manufacturing. It is widely accepted that the notion of working for one large employer in a job for life is a thing of the past. Gippsland’s economy is becoming a vibrant, modernised presence, characterised by an increasingly diverse variety of businesses and a highly skilled workforce.

For an increasing majority of the community, the shock, anger and frustration of 2016 is evolving into a shared determination to collaborate and succeed as global industries continue to change. The transition will take time. Investment and engagement from all levels of government will be required, as will social licence and preparedness of communities to move from describing the problems and losses of the past into opportunities that can, through the LVA, be identified and deployed to maximum effect.

The committee had the opportunity to tour the Hazelwood power plant site during early March, and seeing it up close gave us a real sense of the scale and complexity of this infrastructure. I would like to acknowledge the work of my fellow committee members throughout this inquiry: deputy chair Mr Finn, Ms Shing, Mr Barton, Mrs McArthur, Mr Quilty, Mr Tarlamis, Ms Bath, Mr Meddick and Mr Gepp. I would like to particularly acknowledge those committee members from Eastern Victoria, whose strong commitment to the communities of the Latrobe Valley and Gippsland was clear throughout this inquiry. Thank you also to our secretariat staff—Justine Donohue, Jessica Wescott, Sam Leahy, Kieran Crowe and Patrick O’Brien—for their assistance in producing this report. I would like to acknowledge my own staff, in particular Chris Jervis, who assisted throughout this inquiry. I commend this report to the Parliament.

Ms SHING (Eastern Victoria) (12:34): This is an inquiry which, I think, is an important contribution to the conversation about transition and about development. Across the Latrobe Valley region we have seen decades of transition and change occurring in a very specific way, moving from the development of coal-fired power stations in the Latrobe Valley—their construction, their operation and the concentration of jobs and economic growth into one sector in particular—through to privatisation in the 1990s and then, as is indicated in the report, the announcement by Engie and Mitsui in 2015 that production would cease at the Hazelwood power plant in 2016.

Following the extraordinary sense of grief, frustration, rage and indeed disappointment associated with Hazelwood’s decision to exit coal-fired power generation, we want to make sure that we provide for the greatest possible length of notice, which has occurred with the Yallourn power station in its seven-year notice period—the longest in Australia—but also that we are providing localised support in order to effect long-term change. Transition and development will take many, many years. The Latrobe Valley Authority has been central to the work not just in allocating initial financial assistance, programs and support but also in developing a narrative around where we want to see the Latrobe Valley region in five, 10, 20 and 30 years. We want to make sure that the opportunities that exist for people in the valley now, for their families and indeed for people who will move to the area are enhanced as a consequence of progressive government decisions, and the Latrobe Valley Authority’s work has been central to creating this narrative. On that basis, I commend the report to the house.

Ms BATH (Eastern Victoria) (12:36): I would like to add my thanks to the secretarial staff—Patrick O’Brien, Kieran Crowe, Justine Donohue, Jessica Wescott and Sam Leahy—for their contributions and to Hansard for coming down and walking around and through the valley and into the coalmines. I would also like to acknowledge the chair, Mr Erdogan, for conducting the hearings in a respectful, responsible and professional manner, and the other committee members.

The people of the Latrobe Valley are and have been in a state of transition. For the past 100 years their ingenuity and hard work have kept the lights on in Victoria and powered the state. People cannot halt the transition, but they deserve a government that is responsive to and responsible for the needs now and future investment in the region. They deserve to be heard. The announcement of the closure of the power station at Yallourn was the impetus for my bringing this inquiry into Parliament. The Labor members across the bench and Mr Meddick voted against this inquiry. They voted against having locals have a voice in the valley. They voted against this inquiry.

What I want to also say is that we very much thank the people who put in submissions: people, industries and businesses who came and provided content and value. The Labor members and Mr Meddick blocked every single amendment that I tried to make to this report. But here is the thing: the deliberations happen to be in the report. Now, in the budget this year, $7.5 million is available from the government for this year; $5 million of that is going to go to bureaucrats’ wages and $2.5 million is going to fund recommendation 8. I ask and call and invite the rest of the committee to read the Liberals’ and Nationals’ minority report to give a voice to other people in that inquiry.

Motion agreed to.