PLANNING AND ENVIRONMENT Agenda Item 6.1 COMMITTE

1 March 2005 NOTICE OF MOTION: CR BRINDLEY, HAZELWOOD

Motion

1. That the Planning and Environment Committee recommend that the Lord Mayor:

1.1. write to the Premier, the Minister for Environment and the Minister for Energy expressing its concern with the proposed expansion of the mining lease for the Hazelwood Power Station, especially in the context of the City of ’s Zero Net Emissions by 2020 policy; and

1.2. raise this issue at the next Capital City Committee.

Moved: Cr Brindley

Background

Attached are copies of articles from The Age Newspaper:

· The dirty state we’re in, February 14 2005;

· Reprieve for dirtiest power plant, February 14 2005; and

· Editorial – with the terminal costs of global warming more apparent the nuclear power option should be debated, February 15 2005.

Attachments: 1. The dirty state we’re in, February 14 2005; 2. Reprieve for dirtiest power plant, February 14 2005; and 3. Editorial – with the terminal costs of global warming more apparent the nuclear power option should be debated, February 15 2005 050214 - The Age - The dirty state we're in.txt The dirty state we're in February 14, 2005 - 12:00AM

Under a cloud: coal-fired power stations such as the Loy Yang plant in the produce 90 per cent of the state's electricity. Related 's abundant reserves of brown coal once seemed such a blessing. Now, with scientists warning of the impact of global warming, that's not so clear. Liz Minchin examines the state's power dilemma. Victoria likes to promote itself as a clean, green state, leading the way on environmental initiatives. But the truth is much grubbier. In fact, Victorians are among the worst greenhouse gas polluters on the planet. Every year, each of us is responsible for producing an average 24 tonnes of greenhouse gas emissions; to put that in a global perspective, even the average American produces fewer emissions - 21 tonnes - than we do. And there are no signs of that changing, as more of us move into larger homes and go to work in offices reliant on massive energy use. So how did the Garden State become the Carbon State? A large part of the answer can be found two hours east of Melbourne in the Latrobe Valley, where the coal fires never stop burning. Drive east along the Princes Freeway and, as you approach , a row of eight tall chimneys emerges over the horizon, pumping out a steady light grey cloud of water vapour, fine ash and carbon dioxide. Advertisement AdvertisementIt's the first glimpse of Hazelwood, the oldest of the valley's five coal-burning power stations, where conveyor belts rumble day and night to feed Victorians' appetite for energy. Every time you flick on a switch, this is where your electricity is coming from. All the coal stations use the same basic process for producing electricity: tonnes of coal are dug up, pulverised and burnt, heating giant water boilers; once hot, jets of steam spurt out of the boiler, turning fan blades connected to a generator. Together with another plant in Anglesea, these plants produce more than 90 per cent of Victoria's electricity (supplemented by small amounts of gas, wind and hydro power). They also produce 55 per cent of the state's total greenhouse gas emissions, about 62 million tonnes a year, equivalent to the exhaust from more than 15 million cars. And each year that figure keeps climbing - between 1990 and 1999, Victoria's total emissions from electricity generation jumped 41 per cent, largely after we joined the national electricity market in the late nineties. On Wednesday the Kyoto Protocol, an international agreement to cut global-warming gases, becomes law. The deal was signed by 128 nations in 1997. is not one of them.There are coal-powered plants in almost every Australian state, but what sets Victoria apart is the type of coal we rely on: brown coal, which is like damp crumbly soil so you have to burn a lot more of it than black coal to generate the same amount of heat. Deep seams of brown coal can be found just about everywhere beneath the Latrobe Valley's grassy slopes and for more than 80 years it has been celebrated as a cheap source of power, helping build a manufacturing industry in Victoria worth $23 billion a year. But today many question whether the benefits of cheap electricity outweigh the costs to the environment. It's a tough job for the Victorian Government, trying to juggle the demands of environmentalists who want swift action on climate change and powerful business interests who want no action at all. According to state Energy Minister Theo Theophanous, the Government has managed to strike a balance between the two positions with its Greenhouse Challenge for Energy paper, which was released two months ago and is open for public comment until Friday. The paper sets out a four-pronged strategy to reduce Victoria's huge greenhouse gas emissions through greater energy efficiency, renewable energy sources, technology to make brown coal "cleaner" to burn, and a national emissions trading scheme. But the coal generators can rest easy; as the paper and the minister make abundantly clear, the Bracks Government has no plans to dramatically change the Page 1 050214 - The Age - The dirty state we're in.txt way Victoria is powered. "I don't make any apologies for the fact that Victoria has about 500 years' supply of brown coal, which will be the future for our children in providing energy to this state," Theophanous says. "That energy will be provided using newer, more efficient and cleaner technologies, and we are committed to helping bring that about." The clearest evidence of the Government's unapologetic support for brown coal is its decision to allow Victoria's oldest and heaviest polluting power plant, Hazelwood, to extend its operating life by 20 years to 2031 by giving it access to more coal. While the deal has not yet been finalised, subject to Hazelwood agreeing to further emissions reductions, Theophanous told The Age he was confident that an agreement would be reached soon. To be fair, there are no quick or easy solutions to Victoria's power dilemma. Using current technology, natural gas is the only other potentially reliable source of power for the state, but there are limited supplies of it in Victoria and huge new plants would need to be built. Renewable energy options such as wind and solar power can't guarantee constant supply, for obvious reasons: the wind doesn't always blow and the sun doesn't always shine. That's not to mention any of the political obstacles, such as the huge community protests that have often greeted attempts to build new wind farms along Victoria's coast. And then there is the n-word - nuclear power, which most politicians, environmentalists and power industry leaders don't even want to say aloud, let alone discuss seriously, despite Australia having 40 per cent of the world's uranium reserves and its widespread use in Europe, Japan and the US. The Bracks Government is strongly opposed to considering a nuclear power plant in the state. Ultimately the Government and electricity industry are pinning their hopes on emerging technologies such as geosequestration, an as yet commercially unproven method of burying greenhouse emissions underground. The Latrobe Valley coal generators were understandably nervous about attracting media attention in the lead-up to the Kyoto Protocol coming into force this Wednesday. But after some hesitation, a representative of the valley's five generators agreed to meet The Age for an interview and tour of the state's largest electricity station. At the end of a long, winding road outside , the Loy Yang A plant sits overlooking Australia's biggest coal mine, a massive brown pit 30 times the length of the MCG and 10 times as wide. We're standing at the rim of the pit on what feels like damp soil but is actually the remains of a 30 million-year-old rainforest, which over time turned into brown coal. Mixed among the smaller crumbly lumps of coal are intact logs and trees stumps that, despite their age, could be mistaken for ones felled and buried only a few years ago. Seeing how vast these coal supplies are, it's easy to understand why the Government and industry are so reluctant to give up on a coal-driven future. But even the spokesman for the Latrobe Valley generators acknowledges that their current levels of greenhouse gas emissions need to be cut. "All the generators have been dealing with this, and between 1996 and 2003 more than $400 million was spent on greenhouse gas abatement across the Latrobe Valley," says Loy Yang Power's general manager of power and environment, Richard Elkington, speaking on behalf of the region's generators. "Over that time there was also a 5 per cent reduction in carbon intensity and we planted nearly one million trees collectively." So if the generators are going to the trouble of trying to cut their greenhouse gas emissions, does that mean they believe climate change is a real global phenomenon, which humans are accelerating? Well, not necessarily. "We all have individual opinions about the worth of the Kyoto Protocol or whether at the end of the day any of this is going to influence the climate, but we're dealing with a strongly held view of the public that climate change is real, and therefore that's what we have to deal with," Elkington says. "We have to deal with a perception, which ultimately in most minds is reality." Page 2 050214 - The Age - The dirty state we're in.txt But any implication that climate change is still scientifically dubious is firmly rejected by climatologists at the Bureau of Meteorology and the CSIRO. "People can clutch at minor inconsistencies they might find here and there, but you can't question that global temperatures have increased over the last 100 years and there's strong evidence that temperature increase is highly unusual in relation to natural fluctuations," says Dr Penny Whetton, the leader of the CSIRO's climate impact group. "What has also occurred is increased greenhouse gas emissions due to human activities and basic physics tells us that if you increase greenhouse gas levels the climate will warm. The evidence is really very strong." What isn't yet clear is whether the temperature change is linked to other weather patterns, like the violent storms that lashed Melbourne two weeks ago. Local environmental groups hope the state's recent wild weather will be a wakeup call to Victorians and motivate them to lobby politicians against investing so much money and hope in brown coal. "The Victorian Government has made some positive in-roads towards reducing the state's greenhouse pollution, such as introducing five-star energy homes, promoting wind farms and pushing for a national emissions trading scheme. But these successes will be meaningless if we don't kick our addiction to brown coal," says Environment Victoria's executive director Marcus Godinho. "It's absolute policy schizophrenia to make these huge positive gains and then have them wiped out by coal." While Victorian electricity generators do contribute more than their fair share of Australia's greenhouse emissions, it's only part of an alarming national trend. Federal government research shows that by 2020, skyrocketing demand is likely to have pushed energy emissions up more than 30 per cent compared with 2002. Environment and business groups have different views on how to tackle the problem, but one of the few things they nearly all agree on is that the Federal Government hasn't shown enough leadership on climate change. "From the industry's point of view, we are really looking for a long-term, wholeof- Australia policy on greenhouse gas abatement, rather than all these competing state and federal schemes," says Brad Page, chief executive of the Energy Supply Association of Australia. "We need a single greenhouse policy to tell us what we're all trying to achieve over the next 40 to 50 years because the kind of investments we make in this industry, particularly power generators, have lives of 40 to 50 years." The State Government predicts that to keep up with our current levels of energy use, Victoria will need more big, reliable, baseload power generators within the next decade. Unless there are major scientific breakthroughs in that time, the odds are that any new electricity plants will be built in the coal-rich hills of the Latrobe Valley. Whether we like it or not, Victorians either have to start changing their energy-hungry ways, or accept that the Latrobe Valley's coal fires will keep on burning for many more decades to come. Cleaning up our act - the search for alternatives Three methods of making the state's brown coal cleaner have emerged. COAL DRYING Brown coal's high moisture content leads to high levels of carbon dioxide being produced. Drying the coal could reduce emissions by 30 per cent, back to the levels of black coal. The technology, developed as a combined government and business initiative, could be fully tested by the end of the decade. GASSIFICATION Dried coal could be turned into gas and burnt in a combined gas and steam turbine generator 50 per cent more efficient than current power stations. Research and commercialisation timeframes mean a power station using this technology could not be built before 2015. GEOSEQUESTRATION This process involves removing greenhouse gases from power station flues and injecting them into permanent underground storages, probably old gas fields in Gippsland. Industry sources believe it could take from 10 to 25 years to make this method viable. A range of technologies are already being used to create energy with low or zero

Page 3 050214 - The Age - The dirty state we're in.txt greenhouse emissions. WIND POWER Australia has 253 megawatts of wind power in place with another 300 megawatts under construction. The State Government wants to install 1000 megawatts by 2006 but a low federal renewable target is thwarting that. GEOTHERMAL Listed company Geodynamics has drilled two wells, one almost 5 kilometres deep, in the Cooper Basin in central Australia. The company plans to pump water through hot rocks deep in the earth to produce steam for turbines. If successful the process offers the potential of base-load power. SOLAR Solar panels produce about 50 megawatts of power in remote areas. Solar power is expensive but prices are falling and a large export industry has developed bringing Australia $100 million a year. One company, Enviromission, plans a one-kilometre high solar tower near Mildura that will generate 200 megawatts by convection. LANDFILL GAS Gas produced from old garbage dumps powering small generators produces about 100 megawatts of energy nationwide, with the potential for more. BIOMASS Burning wastes from sugar mills, papermaking and crops already produces 500 megawatts of power. Significant expansion potential exists in the sugar industry, the growing of dedicated fuel crops and forestry. NUCLEAR POWER There are no plans to build any nuclear power plants in Victoria, with the State Government firmly ruling out even considering it as an option because of the risks of radioactive spills and difficulty in disposing of nuclear waste. Australia has no nuclear power generators, despite having 40 per cent of the world's uranium reserves and the relatively widespread use of nuclear generators in the United States, Japan and Europe. Nuclear power is not fully renewable but has low emissions. LINKS Victorian Government Greenhouse Strategy www.greenhouse.vic.gov.au Sustainable Energy Authority of Victoria www.seav.vic.gov.au Australian Greenhouse Office www.greenhouse.gov.au Environment Victoria www.envict.org.au United Nations Framework Convention on Climate Change www.unfcc.int Top of Page Page Tools Email to a friend Printer format Our Advertisers Related Greenhouse gas emissions

Page 4 050214 - The Age - Reprieve for dirtiest power plant.txt Reprieve for dirtiest power plant By Liz Minchin and Rod Myer February 14, 2005

The State Government will extend the life of a polluting brown-coal power plant to 2031. The State Government will allow Australia's worst greenhouse polluting power plant to operate for another 20 years. The decision was made before findings on its environmental impact have been properly assessed. Hazelwood Power, near Morwell, is Victoria's second-biggest electricity generator and produces higher levels of greenhouse gas emissions per megawatt than any other power station in the country. For almost two years, Hazelwood has been locked in negotiations with the Government to be allowed to mine more coal, which would enable it to stay open beyond 2009 to 2031, in return for reducing its greenhouse gas emissions. Energy Minister Theo Theophanous has now told The Age that the Government is almost ready to sign a deal to keep the plant open. "The Government has decided that we will provide the additional coal to allow Hazelwood to operate through to 2031, but we want meaningful reductions in their (greenhouse gas) emissions by the introduction of appropriate technologies," Mr Theophanous said. Advertisement Advertisement"Hazelwood . . . will continue through to 2031, and I'm confident of that because I'm confident of reaching an agreement." The Government's decision appears to overlook the fact that an independent panel has been examining the environmental impact of Hazelwood's proposed mine expansion, but has not yet given its findings. The only obstacle to Hazelwood remaining open until 2031 is now the size of its greenhouse gas reductions - the Government originally asked for a 30- million-tonne reduction, spread over 20 years, but it now looks likely it will be only 25 million tonnes, or a 6.8 per cent cut on current levels. Hazelwood was built in the 1960s. It is the state's oldest power plant and produces 18 per cent of Victoria's electricity. For every megawatt it generates, Hazelwood produces about 1.54 tonnes of greenhouse gas. This compares with 1.2 tonnes for more efficient brown coal plants, 0.86 tonnes for black coal and 0.45 tonnes for modern gas-fired plants. The pollution rate would only fall to 1.43 tonnes per megawatt hour even with the proposed greenhouse cuts. A spokesman for Hazelwood's owner, International Power, said the company had spent $400 million on emissions reduction and efficiency measures at the plant since it was privatised in 1996. Environment groups accused the Government of selling out the state's long-term interests. "Other states and countries are already outpacing Victorian business in energy-saving technologies and alternative energy resources, and our economy will be the big loser if Hazelwood is allowed to keep operating past its use-by date," Environment Victoria executive director Marcus Godinho said.

Page 1 050215 - The Age - A generation gap in Victoria - Editorial - With the terminal costs of global warming more apparent the nuclear power option should be debated.txt A generation gap in Victoria Editorial February 15, 2005 With the terminal costs of global warming more apparent, the nuclear power option should be debated. The development of Victoria's electricity supply system, centred on the massive reserves of brown coal in Gippsland, was largely the work of one of the nation's great heroes, Sir John Monash. Work on the grid, which replaced a hotchpotch of local schemes, began in the 1920s. The State Electricity Commission, until it was dismantled in 1993, held a state monopoly over the generation, transmission, sale and control of electricity. It was also a different era and different values prevailed over the role of government, economics and the environment. So to journey to the Latrobe Valley today is to witness Victoria's greenhouse emissions problem writ large. Here is the unavoidable evidence of the state's record of pumping a cocktail of fine ash and carbon dioxide into the atmosphere. The gas clouds are visible night and day, the ongoing price of cheap, reliable power that Victorians have enjoyed for generations. Advertisement AdvertisementThe legacy of Sir John Monash and the SEC presents a fine example of the problem of achieving a shift in thinking from an era when resources were there to be exploited with little thought to the consequences. Victoria's reserves of brown coal are enormous and the state has been considered lucky to benefit from them. Yet it has long been appreciated that this is a relatively dirty fuel. And while Victoria may be well ahead of the Federal Government in both its actual and rhetorical commitment to the elimination of greenhouse gases, it is simultaneously committed to allowing Australia's worst greenhouse polluting power plant at Hazelwood to remain in operation until 2031. In the absence of viable renewable alternatives, such as hydro, wind or solar power, the State Government and the electricity industry are left to hope, perhaps vainly, that some new technology such as geosequestration or a more efficient burning process will emerge. But what of nuclear power? Despite having 40 per cent of the world's uranium reserves, Australia's states have uniformly shunned nuclear power generation. Business heavyweight Leon Davis, the deputy chairman of miner Rio Tinto, has called for a national debate on the use of nuclear power. The suggestion is not unreasonable, for it may be that climate change and its inevitable destructive impact has altered the balance of the argument between nuclear and coal-fired power.

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