Contract for Closure negotiations ceased
On 5 September 2012 the Australian Government announced it would not be offering financial support to close highly emissions intensive power stations under the Contract for Closure program and has ceased negotiations with the electricity generators involved.
About the Contract for Closure program
On 10 July 2011 the Australian Government announced the Contract for Closure (CFC) program as part of the Clean Energy Future Package.
The program sought to support the closure of around 2,000 megawatts of highly emissions intensive generation capacity in Australia by 2020, subject to negotiation with eligible generators.
Contract for Closure was a voluntary process and a component of the Energy Security Fund announced as part of the CEF Package.
The objectives of the CFC program were to:
- negotiate the orderly exit, by 2020, of around 2,000 MW of highly emissions-intensive coal-fired electricity generation capacity
- provide certainty about the timing of closure of this highly emissions-intensive coal-fired electricity generation capacity and provide sufficient time to facilitate investment in replacement lower emissions electricity generation capacity
- minimise the risks to energy security that may arise from an unplanned exit of electricity generation capacity from the market
- achieve a value for money outcome on terms and conditions that are acceptable to the Commonwealth
- ensure that appropriate arrangements are put in place by Eligible Generators to preserve workers' entitlements and meet all relevant State legal requirements, including requirements regarding site remediation.
Expressions of interest
On 30 September 2011 the Government released the Invitation for Expressions of Interest (EOI) for the program (see Related documents). The media release for the EOI announcement is available.
Eligible generators were invited to respond to the Invitation for EOI, with responses due on Friday 21 October 2011.
Negotiations and evaluation criteria
Five generators were invited to proceed to the negotiation phase. These generators were:
- Playford B Power Station (Alinta Energy)
- Energy Brix (HRL)
- Hazelwood Power Station (Hazelwood Power Partnership, 91.8% owned by International Power GDF Suez Australia)
- Collinsville Power Station (RATCH)
- Yallourn Power Station (TRUenergy)
Closure proposals were received by the Department from all five generators in early 2012.
The Government held bilateral negotiations with the eligible generators through mid 2012. The Government announced that negotiations had ceased on 5 September 2012.
Media enquiries on the CFC program should be directed by phone to 0407 198 136.