The Victorian government has announced an independent review of coal development projects after a demonstration plant in the Latrobe Valley which was set to receive federal and state funding failed to attract private investment.
The project to make brown coal briquettes for export to China was withdrawn less than 12 months after Shanghai Electric Australia Power and Energy Development Pty Ltd was awarded state and federal government funding.
The $25m will no longer be handed over for the plant at Loy Yang A power station because it was conditional on key milestones being met, including attracting private investment.
Victoria’s energy and resources minister, Lily D’Ambrosio, said the independent review would examine how decisions were made to fund coal projects, and would also examine past projects to see how government money had been spent, whether jobs had been created and targets had been achieved, and whether they should have been considered viable.
“Major energy companies, including AGL, GDF Suez and Origin Energy, have already announced they will not be investing in new coal-fired power stations,” D’Ambrosio said.
“Victoria needs to plan for this transition, and the government’s independent review of coal projects will help achieve that.”
The findings would be given to government next year and would be used to develop a state government coal policy for the approval of future projects. It would also incorporate findings from the government’s climate change review, and the Hazelwood mine fire inquiry recommendations.
Victoria has the second largest brown-coal deposit in the world.
The Loy Yang A power station project was one of three funded under the advanced liquid ignite development program, implemented by the previous Victorian government to upgrade brown coal to higher value products, such as fertiliser and synthetic oils.
All the projects will be assessed as part of the government’s independent review.
