With Yallourn threatened with early closure, does Germany’s exit from coal present a blueprint? – ABC Information


Posted

September 21, 2019 06:00:00

EnergyAustralia’s announcement that it could close the Yallourn coal-fired power station in Victoria’s Latrobe Valley earlier than anticipated has some asking whether Australia should look to Germany as a model for transition.

Key points:

  • Latrobe City’s Mayor has renewed calls for a long-term employment plan and new transition funds as Yallourn threatens to close early
  • Community leaders believe the region has so far avoided the gloomiest economic impacts of Hazelwood’s closure
  • The German model of forward funding and overcompensating communities for exiting coal is being watched in Australia

The energy provider said earlier this month the closure could happen before its current end-of-life date of 2032 if the State Government pushes ahead with plans to introduce a statewide emissions reduction target.

When the French energy giant Engie announced in late 2016 it would close the Hazelwood power station in the coal-rich Latrobe Valley, the announcement came as a shock to a community which had grappled with large-scale job losses during the privatisation of the power industry two decades prior.

The day Engie made its announcement, Victorian Premier Daniel Andrews visited the region to announce a $266-million transition package to help the region adjust.

Almost two-and-a-half years later, there is a feeling among community leaders in the Latrobe Valley that the region avoided the gloomiest predictions made about the economic impact of the closure.

They also felt that a large part of that resilience is owed to high-paying employment at the region’s remaining power stations — Yallourn and Loy Yang A and B.

With EnergyAustralia’s announcement, Latrobe City Mayor Graeme Middlemiss has renewed calls for governments to provide a long-term employment plan for the region and new transition funds.

The German experience

Germany has begun its own transition after announcing it would close all of its coal-fired power stations by 2038 and has put long-term planning at the heart of its approach.

The German Government made the decision based on a recommendation from the country’s Commission on Growth, Structural Change and Employment, a transition body featuring representatives from all levels of government, unions, employers, and German coal communities.

It was also accompanied by a commitment of 40 billion euros from the German Government for transition projects, with 2 billion euros available each year.

The Victorian Trades Hall Council’s Just Transition organiser Colin Long said the most important lesson from Germany was the need to start planning “a long time out from when it all finally closes” and for government, business, and unions to work together.

“That sort of cooperative approach is something that’s really lacking in Australia,” Dr Long said, “and governments need to budget large amounts for the long term”.

“But in the end, those amounts are a great investment in the long-term viability of regional communities.

“It costs a lot more if you don’t put in the resources — in terms of community breakdown, health problems, unemployment, and all that sort of thing.”

Creating a national Just Transition Authority was federal Labor policy at the last election, but the proposal has not been spoken about since the opposition’s loss.

‘No-one left behind’

Professor Andreas Loeschel, an economist from Germany’s University of Munster, said the idea of the forward funding was to “overcompensate” communities for the impacts of getting out of coal, even as coal was still producing almost 40 per cent of Germany’s energy.

“The perspective of the German Government is that we have to reduce electricity generation from coal, but this this has to be done in a way that is minimising negative impacts on these coal mining regions,” Dr Loeschel said.

He said the German coal industry now directly employed about 20,000 people and was responsible for the indirect employment of a further 20,000.

The country is still early in the transition, but Dr Loeschel said the impacted regions had been asked to submit projects, which would be funded from the transition fund.

“So they made different proposals on infrastructure investments — that’s digital infrastructure, that is energy infrastructure, and that’s road infrastructure or transport infrastructure in general,” Dr Loeschel said.

He said Germany had put consensus at the heart of its transition.

“So we bring in all these different stakeholders and try to form a consensus-oriented dialogue and that helps, I think, to bring these different perspectives on the table and find solutions,” he said.

Germany’s decision to exit coal-fired power follows its transition away from black or hard coal mining, which began in the 1990s.

Subsidies were reduced after it realised the industry could not compete with imported coal.

The phase-out was completed last year.

It included the transition in the Ruhr Valley, in the north-western state of North-Rhine Westphalia, which once employed about 600,000 coal miners.

The Ruhr Valley has shifted towards new industries in green energy and tourism, with some former industrial sites put to new use as museums or art galleries.

“They are now one of the major German tourism places with a thousand kilometres of bike path and forests,” Dr Loeschel said.

One site, the Zollverein Coal Mine Industrial Complex in Essen, was declared a UNESCO world heritage site in 2001.

The Hazelwood transition

When the Hazelwood closure was announced, the Victorian Government set up the Latrobe Valley Authority as a one-stop shop to oversee its response.

The Victorian Government spent millions on sporting facility upgrades and has a deal with electric vehicle manufacturer SEA Electric to open a factory in the Latrobe Valley in 2021.

An Australian-first Worker Transfer Scheme was set up to create jobs for displaced Hazelwood workers by offering early retirement at the remaining plants, but in its first year it only created 77 jobs instead of an expected 150.

And figures released by the Victorian Government show less than half the participants in a scheme to help transition from Hazelwood are in full-time work more than two years after the closure.

Australia and Germany ‘different’

Mary Aldred travelled to Germany to look at its power industry and its approach to transition in 2017 in her former position as head of the Committee for Gippsland advocacy group.

She found there were similarities, and differences, in the two country’s situations.

She said the German Government was “very serious and very genuine” about engaging with its coal communities, but Germany had a larger industrial base to assist with its transition.

“It really emphasised to me that in transitioning the community in the Latrobe Valley we really need to push ahead with development in our existing industry base and investment attraction on the back of the existing resources,” Ms Aldred said.

“It’s great to be talking about local community infrastructure, but there’s got to be an economic plan to create large-scale, high-paying technical jobs off the back of the resources we’ve already got there.”

Cr Middlemiss said he was not sure if Germany would quit coal by 2038, but Australia could learn from Germany.

“Look, I think we could gain a lot from following the German model,” he said.

“The Germans seem to take the people who are displaced when the power industry closes and trains them for a working future.”

Topics:

coal,

industry,

climate-change,

government-and-politics,

muswellbrook-2333,

churchill-3842,

morwell-3840,

germany



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