ENGIE in Australia chief executive Alex Keisser said the Hazelwood power station had been operating in a difficult national energy market for a number of years.
ENGIE in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation,” Mr Keisser said.
“Given current and forecast market conditions, that level of investment cannot be justified.
“Over the past few years a range of options has been investigated for the business, including revamping existing infrastructure, repowering with gas-fired gas turbines or biomass or reducing the number of operating units.
“None of these options has proven to be economically viable and as a result, the extremely difficult decision has now been taken to close all eight generating units by 31 March next year.”
The station employs around 750 workers and the closure will see the majority of them let go. After the closure 250 employees will be kept on to remediate the site, which should be completed in 2023.
Hazelwood produces 12,000 GWh of energy each year, 25 per cent of Victoria’s energy requirement. It uses 15.3 million tonnes of coal from the adjacent mine, which covers 3550 hectares.
It is expected the mine will also close.
Along with the closure of Hazelwood, ENGIE in Australia has announced it will appoint a financial adviser for the possible sale of Loy Yang B coal power station in the Latrobe Valley and Kwinana co-generation facility in Western Australia.
Loy Yang B power station supplies 17 per cent of Victoria’s power needs.
Mr Keisser said Loy Lang B is the newest and most efficient brown coal fired power station in the Latrobe Valley and would be an attractive investment.
Mr Keisser said the sale would be dependent on the value of the assets and if they met shareholder requirements. They expect the sale to be completed by 2017.