Hazelwood closure to effect electricity prices around the country

Yesterday’s announcement that Victoria’s Hazelwood power station was closing down for good came as a huge blow to workers, but now the ramifications are set to be felt around the country.

The station was a major player and the energy market and now Federal Energy Minister Josh Frydenberg says there will be a knock on effect from its demise.

New modelling released by the Victorian government show power prices will rise in the state by 4 to 8 per cent, while the rest of the country will also be impacted.

It’s estimated the average residential power bill nationwide would rise by $44 per year, reports the ABC.

“I think there will be a price impact in neighbouring states as well because there won’t be that cheaper form of generation, particularly brown coal, which is what Hazelwood does produce, going into those other states,” Mr Frydenberg said on Lateline overnight.

“And the minute you start supplying either black coal or gas or renewables, costs do go up.”

The closure of Australia’s dirtiest coal-fired power plant in Victoria next year could force up prices interstate and will have a “major impact on supply”, Federal Energy Minister Josh Frydenberg says.

Mr Frydenberg told Lateline the station’s closure means Victoria would have to import electricity — black coal from New South Wales and hydro power from Tasmania.

“I think there will be a price impact in neighbouring states as well because there won’t be that cheaper form of generation, particularly brown coal, which is what Hazelwood does produce, going into those other states,” he said.

“And the minute you start supplying either black coal or gas or renewables, costs do go up.”

He said 22 per cent of Victoria’s power capacity will be eliminated by the Hazelwood closure, which will have national consequences.

“The closure of Hazelwood will have a major impact on supply, not just in Victoria but also across the national electricity market because Hazelwood made up about 4 per cent of supply across the national electricity market, helping to supply power into South Australia, into Tasmania, and also into New South Wales,” he said.

“Victoria will now go from being a net energy exporter to becoming a net energy importer and at times of peak demand,”

“For example in the January/February period in 2018 after the closure — in the hot summer months where there will be increased peak demand — very close attention will need to be taken to ensure that there is the stability and security of supply.

While prices in Victoria will the hardest hit, at up to 8 per cent, Mr Frydenberg said “the impacts might be slightly less in other states”.

How will you cope if the price of your power bill goes up? Does more need to be done to stop this kind of thing from happening?