New power station could be built in the Valley: Southwick

The Coalition says it would freeze coal royalties until 2030 in an attempt to secure the future of Yallourn Power Station, if elected. file photograph

The Coalition says it would freeze coal royalties until 2030 in an attempt to secure the future of Yallourn Power Station, if elected. file photograph

A new power station could be built in the Latrobe Valley if the Coalition wins next weekend's election in a move which could save the average household more than $350 a year.

Opposition spokesman for energy and resources David Southwick said it would be "very likely" a new power station would be built in the Latrobe Valley if the Coalition wins the November 24 election.

He said the region's proximity to transmission lines and infrastructure would ensure the Latrobe Valley remained the "home of energy generation" in a plan which the Coalition hopes will win votes across the state.

Under the plan, major government services such as rail and hospitals would be packaged together and the Coalition would seek a tender for a 500 megawatt contract of supply.

Mr Southwick said the station could be solar or gas - or potentially coal - depending on what the market determined was the most viable.

The Coalition's proposal has been met with criticism from Labor and Environment Victoria who described the election pledge as "outdated thinking".

"We haven't ruled out anything other than nuclear. We really want the market to come back to us to provide the best solution of affordable and reliable power," Mr Southwick said.

"With the amount of renewables that have already been injected into the market, we need additional 24/7 power to back that up and help reduce prices.

"I think that obviously when coal's mentioned, it tends to scare a lot of people, particularly scaremongering by Greens and Labor to win the inner city seats."

The station could include hydro, wind, solar gas or coal or a combination, provided it is new capacity and is available to supply electricity 24/7.

Mr Southwick said the Coalition, if elected, would also freeze coal royalties until 2030 in an attempt to improve certainty for power generation workers in the Latrobe Valley - including at Yallourn Power Station which is slated to close in 2032.

"We understand it will take a few years to build ... the issue for us is that the modelling we've had done shows a potential early exit of Yallourn under Daniel Andrews within a few years," Mr Southwick said.

"We will actually freeze the coal royalty the Andrews government imposed which was the straw that broke the camel's back for Hazelwood's closure."

However, Labor candidate for Morwell Mark Richards, who worked his way to unit controller at Hazelwood over a 25-year period, described the announcement as a "false" promise and an "insult to our local community".

"If they're talking a gas power station, they're talking Mortlake which is the other side of the state; no local jobs will come from it, there's no time frame and no national energy policy," Mr Richards said

"With gas you need storage - because the gas is injected into an underground storage location so it's not likely anything will be built in the Valley if it was a gas station.

"We talked about converting Hazelwood [Power Station] to gas about 15 years ago and it wasn't feasible then and since then gas prices have tripled."

Mr Richards said without a change in government at a federal level, a new power station in Victoria would "never happen".

"[The Coalition] have had months of campaign time to come up with a policy and all they've got is a last minute pretend promise," Mr Richards said.

Environment Victoria chief executive Mark Wakeham raised concerns about the Coalition's election pledge and described a new power station as "outdated thinking".

"[Opposition Leader] Matthew Guy is promising to build a 500 mega watt fossil fuel power station but scraped plans to meet Victoria's renewable energy target which is projected to support 5400 megawatts of new generation by 2025," Mr Wakeham said.

"Clearly they're proposing to add a lot less energy than under Labor's plan and given that both new coal- and gas-fired power stations are more expensive than renewable energy with firming such as batteries, the Coalition looks like they are planning to lock us into higher energy prices indefinitely.

"That's likely to be incredibly expensive and there's a real risk that we would need to be compensating both Yallourn and whoever builds the new coal of gas-fired power station in the event that Australia gets serious about introducing a carbon price."

Mr Wakeham said the Coalition's plan to also keep Yallourn Power Station open until 2032 regardless of Victoria and Australia's greenhouse pollution reduction target was irresponsible.

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