Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

This is further to an answer to a question Senator McKenzie asked me in my capacity representing Mr Ferguson regarding power station closures. It was a question on 21 June. Minister Ferguson has provided more information supplementary to the answer given. I think he has sent that to Senator McKenzie today, but I would like to incorporate that into Hansard, with the permission of the Senate.

Leave granted.

The document read as follows—

Dear Senator

Thank you for your interest in the Government's Contract for Closure program. I appreciate and understand your concerns about the potential consequences of this program to the Latrobe Valley region.

As you may be aware, on 5 September 2012 I announced the Government's decision to cease negotiations with those highly emissions-intensive coal-fired electricity generators eligible for the Contract for Closure program. The Government will not be funding the closure of any eligible power stations as it could not be satisfied that entering into such agreements offered value for money.

The Government has consistently stated throughout the negotiation process that a finite envelope of funding would be available and that closure payments would not be agreed at any price. The decision was taken to cease negotiations as a material gap remained between what generators were seeking and what the Government was prepared to pay.

The Government remains committed to making structural adjustment assistance available to support workers and regional communities that may be significantly affected by the introduction of carbon pricing, The Regional Structural Adjustment Assistance Fund has been set aside for this purpose, which will be managed by the Department of Regional Australia, Local Government, Arts and Sport.

The Government has an ongoing commitment to supporting the Latrobe Valley region and is working in partnership with all levels of government and local leaders to develop a plan for economic diversification, such as responding to the Latrobe Valley Transition Committee report.

Furthermore, the Australian Government is providing over $1 billion to support the Carbon Capture and Storage Flagships CarbonNet Project, which aims to capture emissions from electricity generators and industrial processes in the Latrobe Valley and store emissions in the geological substrate. The Government has also recently committed to jointly fund the $90 million Advanced Lignite Demonstration Program with the Victorian Government. This initiative is supporting the demonstration and deployment of emerging technology to reduce greenhouse gas emission intensity of lignite (brown coal) and improve the economically recoverable return from lignite.

Thank you again for your interest in the Contract for Closure program. I trust this information is of assistance.

Yours sincerely

Martin Ferguson