Wednesday, July 16, 2008

Latrobe Valley finds new hope

Peter Ker and Miki Perkins 
The Age, July 17, 2008

THE Latrobe Valley could be excused a temporary spike in emission rates yesterday, as the region's 72,000 citizens breathed a collective sigh of relief.

While many in the region - the heartland of Victoria's coal-fired electricity industry - received the Federal Government's green paper with caution, it was clear that, for locals, the future Penny Wong outlined yesterday was brighter than the one Ross Garnaut spruiked two weeks earlier.

Professor Garnaut had advocated that no compensation be paid to coal-fired power stations. The Rudd Government suggested direct support and a more gradual evolution for the industry through an "Electricity Sector Adjustment Scheme".

The green paper argued that support for coal-fired power stations was warranted to sustain investor confidence and the security of power supplies in Australia. It could be delivered as either cash or carbon permits.

"The Government will seek to ensure a gradual industry transition, avoiding the need for sudden, large-scale retirements of capacity before sufficient replacement capacity can be installed," the paper said.

Payments would be a "one-off" and made to generators before the scheme began.

Last night, Prime Minister Kevin Rudd said there would be negotiations with individual generators before the size of payments was set. He hinted that payments would vary between generators depending on factors such as the age of the plant.

Latrobe Council chief executive Paul Buckley said losing a power station would devastate the community. But the outlook had improved since the Garnaut report's release.

"From Garnaut to the green paper, the positive outcome for us is that a transitional regime (for existing generators) is required," he said.

The report noted that some communities were likely to be harder hit than others. It promised increased investment in clean coal technologies to offset harm to local economies.

The Victorian president of the CFMEU mining and energy district, Luke van der Meulen, said research into making coal more environmentally friendly needed to go ahead quickly.

"There's been a whole lot of clean coal pilot plants and geosequestration projects, but what we're saying is let's just bloody get on with it - we've got the workforce and we've got the infrastructure and the Latrobe Valley needs to be consulted on these major changes," he said.

The region's new federal MP, the Nationals' Darren Chester, said he was "cautiously optimistic" that the Government had acknowledged the concerns of the valley's power industries. But he remained concerned that the 2010 start date was too ambitious.

"It is positive that the Government is talking about a transitional period but the jury is still out … we will need to see the detail," he said.

Moe resident Erlinda James said previous reforms to the electricity sector had changed Moe from a buoyant community to a ghost town. But she, like every other Latrobe Valley resident The Age spoke to, said action was needed on climate change.

"Yeah, it's great that the plan will mean that petrol won't go up, but we have to look to the future, in the long term," Ms James said.

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