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Victorian Electricity Prices to Soar if Hazelwood Closes

It’s very easy to get caught up in the hype of something environmentally topical and financially personal as the closure of Hazelwood power station.

Therefore, journalists have recently enjoyed sensationalising an inevitable event by speculating over the timing of the closure.

Owned by French company Engie, Hazelwood opened in 1971 and owns 72 per cent of the plant. According to French website LesEchos, the Board of Engie decided on 20 October to close the plant on-or-before 1 April 2017.

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Josh Frydenberg, the Federal Environment and Energy Minister, is likely concerned about a potential lack of mutually planned outcomes for Victoria, having witnessed the impact of the Northern Power Station closure in South Australia where forward-thinking, cohesive efforts between the state and Alinta (owner of Northern Power Station) were lacking.

Renewable energy targets, set out by Victoria’s Andrews Government, meet a classic fiscal supply and demand predicament where consumers could be paying for green agendas. There is a middle ground of course, but there is great uncertainty as to if and when it can be found.

Hazelwood generates 25-30% of Victoria’s power. The supply and demand relationship will likely cause the cost of wholesale electricity prices to rise further.

Tim Pallas, Victorian Treasurer, met Engie earlier this month in Paris. This was no doubt to discuss the impact of the power price increases due to continue for at least the next 12 months. Also, Hazelwood employs around 1,000 local people. Therefore, provision for alternative employment will also need consideration.

Don’t panic

Choice Energy are encouraging business owners not to panic, but to work with us to plan a proactive strategy for the procurement and consumption of your power.

We take pleasure in guiding our customers through complex energy environments. Most of all, helping to navigate them towards solutions which cost less and reduce consumption.

It’s not about changing the way businesses operate, it’s about understanding those operations and ensuring the optimum energy solutions, contracts and monitoring measurements are in place.

We are here to protect Victorian business.

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