29 February 2012

Power groups face huge carbon bill

Victoria's major power generators have emerged as some of the biggest carbon emitters in the country and will pay hundreds of millions of dollars under the carbon tax - costs that will largely be passed on to consumers

David Wroe | The Age | February 29, 2012
Hazelwood Power Station.Hazelwood Power Station. Photo: Pat Scala

Government figures released yesterday under the National Greenhouse and Energy Reporting Act show Great Energy Alliance Corporation, which owns Loy Yang A station, pumped out 19.4 million tonnes of carbon dioxide in the 2010-11 financial year.

International Power, which owns Loy Yang B and Hazelwood power stations, emitted 16.8 million tonnes. Both will be eligible for compensation under the government's carbon price.

But with the starting price on July 1 set at $23 a tonne, hundreds of millions of dollars are likely to be passed on to electricity retailers and then consumers.

A spokesman for Climate Change Minister Greg Combet said electricity generation was one of the most emissions-intensive sectors of the economy and needed to change.

''It is essential that Australia begins to transform this sector so our economy remains competitive as the world moves to tackle climate change by reducing carbon emissions,'' he said.

The government is to give the most emissions-intensive generators $5.5 billion in assistance to help transform the sector and ensure energy supply stability and security.

Matthew Warren, chief executive of the Energy Supply Association of Australia, said the total emissions figures released yesterday masked the most pressing issue for energy companies - that forward-dated carbon permits needed to hedge carbon costs would have to be paid for in advance. He said this could cost the sector hundreds of millions of dollars.

''That is hundreds of millions of dollars in costs to energy providers for no good reason other than the federal government's hunger for cash,'' he said.

Copyright © 2012 Fairfax Media

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