Climate Change Minister Greg Combet has challenged the multibillion-dollar buyout demands of the owners of the Hazelwood power station.
While International Power has never explicitly put a price tag on the closure of the Latrobe Valley generator, the company is understood to have flagged a cost of more than $2 billion in previous talks with the Victorian government. More recently, it was reported in July that federal Labor would be asked for $3 billion to shut down the plant.
Under its carbon tax plans, Labor is proposing to pay for the closure of 2000 megawatts of high-emission coal-fired power generation by 2020. Hazelwood - responsible for almost 3 per cent of Australia’s total carbon emissions - has been named as a likely candidate for a buyout.
In an interview with The Age, Mr Combet said it was safe to assume the government disagreed with International Power on the value of the 40-year-old generator.
”To be specific about it … International Power have a view about their asset value,” Mr Combet said. ”They have expressed it publicly. We might not share that view. You could safely assume that we don’t.”
International Power is yet to say if it will tender Hazelwood for the closure program when it opens next month, but has indicated it ”could provide more certainty and reduce the overall impact of the (carbon price) plan on the business.” An International Power spokesman yesterday declined to comment further.
Mr Combet said yesterday the government intended to drive a hard bargain to get value for money for taxpayers from the pay-to-close program.
He said whether a generator would actually continue in the market, the real asset value once a carbon price starts, and issues of certainty for communities and workers, would be considered in the negotiations.
”In any negotiation, and you would expect it to be the case in this one, the arm wrestle is going to be over what that value is,” Mr Combet said.
He also ruled out using future revenue generated by the proposed carbon price scheme - slated to start mid-next year - to meet Australia’s international commitments to help poorer countries tackle climate change. At international climate change talks rich nations have agreed to commit $100 billion a year by 2020 to a fund helping developing countries cope with climate change.
Last year a UN high-level advisory panel, which included former Labor MP Bob McMullan, suggested a proportion of revenue from carbon taxes and trading schemes be used to meet part of the global commitment.
Opposition MPs have been critical of international carbon financing, with opposition finance spokesman Andrew Robb telling Parliament in March that committing revenue to the UN fund ”was like throwing the money away”.
