November 10, 2009
A secret report commissioned by the Rudd Labor Government has warned of a grim future for coal-fired power stations and vindicates growing fears of job losses in the Latrobe Valley as a result of the proposed Carbon Pollution Reduction Scheme (CPRS).
Leading investment bank Morgan Stanley gained top-level access to the balance sheets of Latrobe Valley power stations and found they will need billions of dollars in extra compensation to survive the introduction of a CPRS in 2011.
The Nationals Member for Gippsland Darren Chester has challenged the Government to release the full details of the report after media coverage claimed Victoria faces power shortages and possible closure of Latrobe Valley power stations if the CPRS proceeds as planned.
The Morgan Stanley report has hit the media a day after a new gas-fired power station was touted for Yallourn.
It was reported TRUenergy would build a new gas-fired power station in the Latrobe Valley to provide cleaner power to about 1.2 million homes. However, the project’s viability was under a cloud also because of the Rudd Labor Government’s CPRS.
“This scheme poses a huge threat to the Latrobe Valley economy and particularly the jobs of the 1,705 people employed in the electricity supply sector,” Mr Chester said.
“My greatest concern is that, despite massive pain in the Latrobe Valley, there will be little environmental gain.
“Australia’s emissions are just 1.4% of the total global emissions, so anything we do here in Australia without global cooperation will not be able to deliver any significant environmental benefit.
“The Labor Government with Latrobe Valley residents and release the full details of the Morgan Stanley report so that locals know how they will be affected.
“It is outrageous that the government is continuing to hide the truth from the Latrobe Valley.
According to media coverage of the report by Morgan Stanley it indicated widespread blackouts across Australia and supported industry calls for extra assistance.
Mr Chester said current compensation levels were $7 billion short of the predicted asset value loss.
“We need Latrobe Valley power generators to remain financially viable and to invest in the research and the technology required for a cleaner coal future,” Mr Chester said.
“If the power generators are not financially viable under the Labor Party’s CPRS, we are all in for a shock in terms of the reliability of our baseload power supply.”
The Latrobe City Council commissioned its own analysis, an independent report, on the economic importance of the Latrobe Valley coal and electricity industries. The report was prepared last year and showed that the coal and electricity sectors provide $802 million per year or 21.2% of the gross regional product of the Latrobe Valley.
“There are 125 people employed in the coalmining sector and 1,705 people employed in the electricity supply sector. The flow-on impacts or flow-on benefits from these industries provide enormous opportunities for private contractors and the overall wealth of the Gippsland-Latrobe Valley region and the broader Victorian economy,” Mr Chester said.
Recently speaking in Federal Parliament Mr Chester branded the legislation “an enormous con”.
“There is support for action on climate change, but Australians are being conned into believing that this is the answer. There is no Australian solution to climate change in isolation. There needs to be a global commitment,” Mr Chester said.
“It makes absolutely no sense whatsoever to pursue this legislation before we have a clear understanding of what action, if any, our major trading partners and the rest of the world are prepared to take.
“I fear that without a global agreement we are voting to give foreign companies a competitive advantage over our own companies.
“We are voting for more expensive power and transport costs. We are voting to increase costs for all our small businesses. We are voting for a massive tax on every part of our lives.”