The Australian Government has abandoned its Contract for Closure Program, announcing that  it will not be offering financial support to close emissions intensive power stations under the Program and ceasing negotiations with the electricity generators involved.

 

Five generators participated in the Contract for Closure Program discussions:

  • Alinta Energy (Playford B in Port Augusta, South Australia);
  • HRL (Energy Brix in Morwell, Victoria);
  • Hazelwood Power Partnership (Morwell, Victoria) (91.8% owned by International Power GDF Suez Australia);
  • RATCH-Australia (Collinsville, Queensland); and
  • TRUenergy (Yallourn, Victoria).

 

 Minister for Resources and Energy, Martin Ferguson, said the Government could not be satisfied that entering into such arrangements would achieve value for money against the Contract for Closure Program objectives.

 

“The Contract for Closure negotiations have taken place constructively and in good faith, but there remains a material gap between the level of compensation generators have sought and what the Government is prepared to pay,” Minister Ferguson said.

 

“Recently published forecasts for lower energy demand in Australia presented serious questions around the value for money evaluation of proposals. The recent announcement to link with the European emissions trading scheme and remove the price floor did not alter this outcome.

 

“I have said throughout this process that we had a set envelope of funding and were not willing to enter into contracts at any cost – this is about the responsible expenditure of public funds.

 

“I recognise that there has been some uncertainty around the Contract for Closure program and appreciate the patience of electricity generators and surrounding communities while negotiations have been underway.”

 

Minister Ferguson said the Regional Structural Adjustment Assistance package will remain available to assist regions that may be significantly affected by the introduction of the carbon price.

 

 

Further information on the Contract for Closure Program is at www.ret.gov.au.