The Victorian Government has announced a Structured Transition Agreement with AGL that will ensure a firm 12-year notice period for the closure of Loy Yang A power station.
The newly formed agreement will help avoid uncertainty where the changing plans of power companies can deter new renewable generation entering the market, increasing electricity prices to customers. It also aims to provide the workforce, community and energy market with confidence that the power station will remain available until 2035.
As part of the agreement, AGL has also provided formal market notifications that Loy Yang A will close in 2035.
The community in the Latrobe Valley is currently undergoing transition within the energy sector workforce, and the Victorian Government is also working closely with AGL to deliver a worker transition package that is over and above the existing obligations.
State Minister for Energy and Resources, Lily D’Ambrosio said that the closure of the power station will allow for the retraining of workers.
“AGL’s decision to close Loy Yang A in 12 years’ time allows for workers to plan, reskill and retrain with our full support as Victoria moves towards 95 per cent renewable energy generation by 2035.”
The agreement is set to balance the requirement to support a safe and reliable energy system whilst delivering investment certainty until Victoria has enough renewables and storage capacity to replace Loy Yang A.
The package will also help to assist AGL retrain, reskill and find new working opportunities for its staff closer to home.
AGL has also agreed to provide a $50 million Community and Economic Development Fund – on top of its rehabilitation obligations – to help repurpose the Loy Yang A site and provide broader community benefits.
The Victorian Government is also investing an initial $1 billion towards delivering 4.5GW of power through new build renewable energy projects as part of the State Electricity Commission (SEC), which is the equivalent replacement of Loy Yang A.
Since 2014, the State Government has invested more than $2 billion in creating thousands of extra jobs throughout the Latrobe Valley and is expected to help the Loy Yang A workers, their families and Latrobe Valley community members with the transition in the coming years.
Member for Eastern Victoria, Harriet Shing, said that the agreement will benefit the community.
“This agreement provides crucial certainty and support for workers, communities, and businesses across the Latrobe Valley – it’s another part of an ambitious and optimistic transition for a region that has a lot to be proud of,” Ms Shing said.