2010 Victorian election and coal

In the 2010 Victorian election campaign one of the highest profile environmental issues was debate over the future of coal-fired power generation in the state's electricity system and the Hazelwood power station in particular. The election, which was held on November 27, was primarily a contest between the incumbent Labor government, the Liberal Party of Australia, the National Party of Australia and the Greens.

The Labor Party pledged to negotiate for the closure of one-quarter of the Hazelwood power station with compensation for the owner. The Greens pledged to close the whole power station within four years. The Liberal Party and the National Party were muted in discussion of climate policy though some candidates were critical of suggestions to scale back the power station.

At the election the Liberal and National parties won enough seats to form a majority in their own right and also won a majority in the upper House. The Greens retained all three of their Upper House seats but failed to make a breakthrough into the lower house.

Background on the election
For the government, climate policy has been one of its central strategies to blunt rising electoral support for the Greens. (In the 2010 federal election the Greens won the lower house seat of Melbourne at the expense of Labor and won its first Senate seat in the State.)

In the 88 seat lower house lower house, Labor currently holds 55 seats, the Liberals 23 seats, the Nationals 9 seats and one is held by an independent. (The Liberal Party and the National Party members form the Coalition). The Greens currently hold no seats in the lower house though they hold three in the upper house which is elected by proportional representation. If the Labor Party loses 11 seats it will lose its majority while the Coalition has to win 13 seats to be able to form government in its own right.

An opinion poll conducted at the halfway point of the election campaign indicated a swing away from the government with the Greens polling 16% across the state, up from 10% at the previous state selection. The Nielsen poll published in The Age indicated that the Greens were likely to win three and possibly four inner-city Melbourne seats and could hold the balance of power. Based on the poll results, the Liberal Party could win five extra seats from the Labor Party.

However, the decision of the Liberal Party two weeks out from the election to direct its preferences to the Labor Party ahead of the Greens could make it difficult for the Greens can win any seats in the lower house. ABC election analyst, Antony Green, argues that despite the Liberal preference decision the Greens could still win the seats of Melbourne and Richmond if they poll more votes than the Liberals, as they did in the federal election. In his blog Green wrote that "if the Liberal Party has any sense, it will ensure that not one Liberal how-to-vote is distributed in Brunswick, Melbourne, Northcote and Richmond."

In the Upper House Antony Green suggested that the preference decisions of the major parties could result in the Liberals gaining one seat at the expense of Labor, the Greens holding their existing three seats and the National Party gaining at the expense of the Democratic Labor Party. Green estimates the final makeup being Labor with 18 seats, the Liberals with 16, the National Party with three and the Greens with three. "If the above analysis turns out to be correct, Labor would need the Greens to pass legislation, assuming the newly coalesced National Party would not be open to offers on passing legislation. Labor will be in a weaker position than in the current Legislative Council, more dependent on the Greens to pass legislation," Green writes.

In the election campaign, the future of the Hazelwood power station has been a major issue and, to a lesser extent, the proposed Dual Gas power station.

Labor's policy on coal
In July 2010 Labor leader John Brumby released Taking Action for Victoria's Future, the government's Climate Change White Paper.

In a forward to the White Paper, Brumby stated that the government would "set Victoria a target to reduce emissions by at least 20% by 2020 compared to 2000 levels (equivalent to 40% per capita)." Amongst other commitments, Brumby wrote that the government would "commit to reducing the greenhouse gas emissions of Victorian brown coal-fired generators by up to four million tonnes over the next four years, culminating in a total saving of 28 million tonnes by 2020, equivalent to the closure of two units of Hazelwood Power Station".

In a media release accompanying the White Paper, Brumby stated that "the most cost-effective way to clean up our environment and achieve this reduction in greenhouse gas over the next four years is to close two of the eight units at Hazelwood Power Station."

Under the banner of "Moving towards a cleaner energy future" the government committed to cutting emissions from the brown coal-fired power generators by 4 million tonnes per annum by 2014. The White paper stated that the government intended to achieve this through "discussion with all of Victoria’s brown coal-fired generators" and stated that it intended to "conduct a competitive ‘open book’ process in order to ensure that the abatement is secured at least cost for Victoria."

As for new power generation, the white paper stated, the government would "ensure no new brown coal power based on conventional technologies". The White Paper stated that "the Victorian Government commits to no new approvals being granted for new coal fired power stations based on conventional brown coal technologies. Through the Climate Change Bill we will set a target emission level of 0.8 tonnes of C02 equivalent (per MWh) for new power stations – bettering the performance of black coal stations and broadly comparable to the performance of open cycle gas. This measure will provide greater certainty for investors in new, low emissions power stations."

In a speech during the campaign Brumby stated that "with the world grappling with the threat of climate change, I want Victoria to lead by example, like we’re doing by bringing forward the staged closure of Hazelwood Power Station and harnessing solar, wind and other renewables – to make our State the solar capital of Australia."

Liberals policy
The Liberal Party has made little comment on what its policy is towards coal mining or power generation. A search of its Victorian election website yields no results on the Hazelwood power station, climate change or coal mining. Its most specific commitment on renewable energy has been a pledge to impose planning restrictions on the siting of wind farms and the promise of a minor grant to investigate the generation of electricity from green waste in the Ballarat area.

Ahead of the election, opposition leader Ted Baillieu was asked if he supported the Labor government's target of reducing greenhouse gases by 20 per cent. He said "Well we'd like to think that it was achievable. I'm not sure that it will be achieved. It's a target." He was also cited as telling MTR radio that that the Hazelwood powerstation would only be replaced is the federal government put a price on carbon.

Greens policy
At the commencement of the election campaign, the Greens climate policy stated that the party supported "making rapid emissions reductions and supporting workers in carbon intensive industries like Hazelwood power station to re-skill and adjust to low-carbon jobs." It also stated "let’s bury our coal-dependent economy in the ground and transition into a new way of doing business." Sustainable living using renewable resources is within reach. The Greens energy policy stated general support for a "smart energy system", distributed energy generation and energy efficiency.

Subsequently the Greens released a more detailed policy in which it committed to a 40% cut in greenhouse gas emissions by 2020, a policy it stated which "can't be done without phasing out coal fired power". It stated that "we will use the Environment Protection Act 1970 to license coal fired power stations and set a cap on their pollution. There are fines and daily penalties in the Act for breaching a license, which in this case means emitting more greenhouse gases than your license allows."

In particular, the Greens proposed that "under the conditions of the proposed Hazelwood licence, we will set a timeline to shut down each of the eight 200 megawatt units sequentially over four years." To replace the power from Hazelwood, the Greens argued that "we need to substitute for 1200 megawatts of peak power supply/demand and over a whole year about 10,000 gigawatt/hours of electricity consumption." To meet the gap, the Greens proposed expanding the Victorian Energy Efficiency target to 5,000 gigawatt hours/year within four years. They also proposed establishing a feed-in tariff for each of the different renewable supply options of solar thermal, solar photovoltaic, wind, and geothermal to supply 3000 megawatts/8000 gigawatt hours per year. The party also proposed to create a "Demand Management Project Tender, to fund projects additional to those committed under the Australian Energy Regulator's small existing scheme" to provide 300 megawatts of projects targeting peak summer demand.

The Greens also proposed to stop the HRL Coal fired power station and establish a legislative ban on coal mining for export.

Country Alliance
The Country Alliance, a small party pitching from rural voters, is openly pro-coal. It states that it "will promote the continued use and expansion of alternative renewable energy sources whilst at the same time recognising that at the present time only coal fired generation can provide sufficient base load. Therefore we will promote the development of Clean Coal Technology to enable the State to continue to take advantage of the immense brown coal deposits which will then be an exportable commodity."

Environment Victoria's comparison of the parties policies
In a comparison of the major parties policies, Environment Victoria noted that the Coalition "currently has no clear plan to replace Hazelwood" but has "made a number of comments that are either critical of, or questioning of, the ALP’s approach on this issue." The group wrote that "the Coalition has committed to the state target proposed by the ALP government to reduce Victoria’s emissions by 20 percent by 2020. Achieving such an outcome would require significant efforts to reduce emissions from brown coal. As yet the Coalition is yet to release any policies which demonstrate that they will achieve the 20 percent target or indeed will achieve any cuts to the state’s greenhouse pollution."

The effectiveness of Labor's commitment to close two units of Hazelwood, it noted, depended on what soure of electricity replaced its contribution to the grid."If much of Hazelwood’s current generation is replaced with fossil fuel generation (particularly coal generation) it will be difficult to achieve the ALP’s 4 million tonnes reduction target from brown coal unless more than 2 units of Hazelwood are closed. Similarly replacing part or all of Hazelwood with coal generation will make it extremely unlikely that Victoria achieves its target to reduce emissions by 20 percent by 2020. The ALP has committed to communicating the outcome of their negotiation on Hazelwood in 2011," the group noted.

The Greens, Environment Victoria noted, have opposed the payment of compensation to International Power for the closure of Hazelwood, preferring regulatory mechanisms to require the shut down of the power station. "The Greens plan will require the rapid introduction of EPA powers to regulate emissions, and is contingent upon significant increases to the energy efficiency target and an ambitious new renewable energy feed‐in tariff being passed by the Parliament. The mix of renewable energy technologies driven by the feed‐in tariff will be critical to the ability of the Greens plan to substitute for Hazelwood’s peak power contribution, as will responses by the energy market to the phase‐out of Hazelwood," the group noted.

Environment Victoria did not review the policy of the Country Alliance.

Election results
In a tightly contested election, the Liberal and National parties narrowly won a majority in the lower house seats following the collapse of Labor's vote in suburban areas. The Liberal-National party coalition won 45 seats and the Labor Party 43 seats. There was a statewide swing of 6.8% away from the Labor Party which lost 12 seats. There was a swing of 3.6% to the Liberals but this was enough to win an additional 12 seats. An independent lost his seat to a National Party candidate.

While the Greens polled 11.1% statewide, up 1.1% on their 2006 result, they did not win any of the inner city seats that they had hoped to pick up. In Melbourne, the Greens polled 31.92% but the Labor Minister polled sufficiently well on 35.68% to be elected on Liberal Party preferences. (The Liberal candidate polled approximately 27.97%. In the seat of Richmond the Greens outpolled the Liberals, winning 28.33% of the vote. In Northcote, the Greens polled 29.1% and just over 30.23% in Brunswick.

However in all the electorates, the sitting Labor candidates were comfortably re-elected. In part this was a result of the decision of the Liberal Party to allocate preference to Labor ahead of the Greens. It also reflected the significant focus of Labor campaign resources in retaining the seats. However, the Greens also suffered several stumbles in the last week of the campaign, including one of the pre-selected Upper House candidates publicly opposing the policy of a speedy closure of the Hazelwood power station.

The final outcome of the Upper House election has yet to be finalised.

Liberals post-election statements
Following the election, the new Premier, Ted Baillieu, stated that the government would abandon Labor's plan to shutter one-quarter of the Hazelwood power station if International Power could agree on a compensation package.

Timeline

 * May 27, 2010: Environment Victoria releases Fast-tracking Victoria’s clean energy future to replace the Hazelwood Power Statio, a report it commissioned. The report argues that the Hazelwood power station could be replaced as soon as the end of 2012.
 * July 26, 2010: Labor Premier John Brumby releases Taking Action for Victoria's Future, a White Paper on energy policy.
 * November 6, 2010: Rally to Replace All of Hazelwood in Melbourne.
 * November 27, 2010: Election

Related SourceWatch articles

 * Victoria and coal

Environment Victoria archive on Hazelwood

 * Environment Victoria Replace Hazelwood Archive, accessed November 2010.