Re: International Power Hazelwood's West Field Project EES.

This submission is made by:-

The Hon Peter Hall MLC
Member for Gippsland Province
190 Franklin Street
TRARALGON VIC 3844

and

Mr Peter Ryan MLA
Leader of The Nationals
and Member for Gippsland South
54B Cunninghame Street
SALE VIC 3850

This submission is prompted by our dual interests in representing much of the Gippsland region in the Victorian Parliament, and of our interests in the overall needs of Victorians and the Victorian economy.

We have attempted to present our views in this succinct written form and do not at this point of time see a need to make a further presentation to the independent panel. However if it is that the panel request further elaboration on any of the points we have made, we would of course be only too pleased to make ourselves available to do so.

HAZELWOOD MINE AND POWER STATION -
SOCIAL AND ECONOMIC SIGNIFICANCE

Hazelwood mine and power station has for nearly 40 years had a major impact on the local Latrobe Valley economy and been a vital contributor to Victoria's social and economic fortunes.

Under its previous SEC ownership, Hazelwood provided employment for literally thousands of Latrobe Valley based families over several generations. Its current owners, International Power Hazelwood (IPRH) employ some 500 staff, provide direct permanent employment for some 300 contractors and numerous indirect employment opportunities. As well as being a very significant employer, IPRH is actively involved in supporting a large number of cultural, sporting and community organisations and events.

The value of IPRH to the well-being of the Latrobe Valley in both a social and economic sense is immeasurable.

Hazelwood Power Station contributes around 23% of Victoria's base load electricity. This also represents about 5% of base load electricity sold in the National Electricity Market. While we are well aware that some submissions to this EES process will use it to argue against the continued reliance on brown coal as an energy source, the simple fact is at least for the foreseeable future, there are no viable alternatives.
The Federal Government's recent Energy Statement made it abundantly clear that while renewable energy sources should be further developed, Australia will continue to rely on coal for our base load energy needs for many years on.

IPRH is currently mining in the West Field and has a reliable supply of coal until 2009. We are aware that the company is reliant on a new mining licence to enable mining in the remainder of the West Field. We are advised that the granting of a new licence will enable an uninterrupted supply of coal to the power station for the nominal commercial operating life of the business to 2031.

We submit that the granting of this licence is essential if Victoria's future energy needs are to be met. We are aware that NEMMCO has predicted Victoria and South Australia will be close to or below their nominal required reserve margin over the next few years, with overall demand exceeding supply in 2008/09. While we are aware that current brown coal exploration permits may result in future energy production, this will not occur in time to meet Victoria's increasing demand. We are also aware that while Basslink and other upgraded interstate connections are planned to increase availability in the next few years, this increase will not go anywhere near making up for any reduced output from Hazelwood if that were to occur. Further, the State Government's plans to have in place 1000MW installed capacity which equates to 300MW of actual output of wind energy by 2006, will only contribute to meeting increasing demand rather than replacing any reduced output from Hazelwood.

We are also aware of ongoing works being undertaken by IPRH to reduce greenhouse gas emissions. We consider the use of new technology to reduce such emissions has been successful and has the potential to improve further. We believe the Victorian Government is requiring reduced green house gas emissions as a condition on any new licence being granted. While we support this general direction, we would urge the Government to be reasonable and set economically achievable targets.

We strongly contend that the continued 1600MW capacity from Hazelwood is absolutely vital if Victoria's demand for electricity is to be met in the foreseeable future.

THE PRACTICAL CONSIDERATIONS OF THE NEW MINING LICENCE BEING SOUGHT.

Phase 2 of the West Field mining area requires the boundaries of the previous licensed mining area to be changed. We are aware that this will necessitate a further diversion of the Morwell River and minor diversions of Eel Hole and Wilderness Creeks. We are also aware that a deviation of the Strzelecki Highway is required as well as the closure of Brodribb Road west of Yinnar Road and an up-grading of the Yinnar-Driffield Road.

River and Creek Diversions

We believe it is important to note that the Morwell River has been the subject of
4 previous diversions. Some of these diversions have been major including the undergrounding of a significant section. It is our belief that the local community have generally accepted these diversions as being necessary for the greater benefit of accessing required coal.

The 5th Morwell River diversion proposes to do away with the 3.4km section of the river currently undergrounded. We believe that bringing the river back to surface level together with the completion of the proposed vegetation and bank stabilisation works, will be a major boost to the river's health.

We are also of the view that the deviation works proposed for Eel Hole and Wilderness Creeks will not have any significant environmental impact.

Our confidence in IPRH successfully undertaking these river and creek diversions to appropriate environmental standards, is boosted by the work they have undertaken in establishing the wetland areas visible from the Princes Freeway. The birdlife that this area now attracts is clearly demonstrative of the improved environmental health of the river environs. Aesthetically and environmentally this area has been much enhanced and IPRH are to be commended for their efforts in this regard.

Road Issues

We are well aware that road deviation and closures have an impact on those using those routes regularly. This project is no exception and we are aware that some will be disadvantaged by those roads proposed to be closed. While in the end, the merits of the entire project will be weighed against the disadvantage borne by some, we urge the panel to listen to those who will be disadvantaged and recommend what is possible to ameliorate any anticipated difficulties.

On the positive side, we see some benefits to road users with the upgrading of the Yinnar-Driffield Road and the deviation of the Strzelecki Highway potentially improving road safety.

In considering these road changes, we are mindful of the recent fiasco when the Hyland Way was re-routed through the Loy Yang power stations. The deviation occurred prior to the new road works being completed resulting in significant delays for road users for several months thereafter. We urge the panel to ensure that any required roadworks be scheduled in such a way as to reduce the impact on road users.

CONCLUSION

As Parliamentary representatives of the Gippsland area, we urge the panel to acknowledge the social and economic importance of IPRH to the Latrobe and Gippsland regions. It is our strong belief that those whom we represent share our view that Hazelwood is essential if the levels of employment and economic prosperity we currently enjoy are to be maintained.

Further we believe that if Victoria is to maintain base load electricity supply security and enjoy competitive electricity prices, the continued operation of IPRH is essential. We are convinced that without a new mining licence being granted, IPRH's future beyond 2009 is extremely doubtful.

We believe IPRH has clearly demonstrated a commitment to achieving environmental improvements. We believe the river and creek diversions have been planned to produce the best environmental outcomes and we have complete confidence in IPRH delivering in the manner they propose. We acknowledge road closures will inconvenience some and hope that any such difficulties can be minimised.

We are grateful for the opportunity to make this submission and we wish you well in your deliberations.

PETER HALL MLC                               PETER RYAN MLA