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Energy Australia announced on March 10 that it will close Victoria’s largest power station in mid-2028—four years earlier than scheduled.

The move has raised concerns from the federal government over electricity prices and reliability in the national power grid.

In a statement, Energy Australia Managing Director, Catherine Tanna, said the company approached the Victorian Government with the plan to retire the Yallourn power station, and to transition to cleaner energy.

“While the announcement may have surprised some of our people, its context didn’t,” Tanna told reporters. “We are acutely aware that the world of energy is rapidly changing as we transition to cleaner forms.”

In response, Energy Minister Angus Taylor said power reliability and prices will be affected if the plant’s closure is not adequately replaced with dispatchable energy.

“We have already seen this happen with the closures of Northern in South Australia and most recently Hazelwood in Victoria, where wholesale prices skyrocketed by 85 percent,” Taylor said in a statement.

The Hazelwood power station shut its operations in 2017 with less than six months’ notice.

“As an essential service, the Commonwealth Government expects the market to step up to deliver enough dispatchable generation to keep the lights on and prices low once Yallourn closes,” he said.

Yallourn power station currently supplies 22 percent of Victoria’s electricity and 8 percent of the national market.

For years, the power station has been under pressure to meet the Victorian government’s emissions reduction goals, such as the goal of net-zero emissions by 2050.

Closing the plant will instead reduce Energy Australia’s carbon emissions by 60 percent, Tanna said.

Victorian State Shadow Minister for Energy and Renewables Ryan Smith has criticised the Victorian Labor government for having no plan for the state to transition out of coal, thereby leaving Victorians “in the dark.”

“Labor’s lack of planning means will be more susceptible to blackouts over our hot summers and Victorian families will pay more on their energy bills,” Ryan said.

Another concerns is the loss of 500 jobs, which Victorian Minister for Energy, the Environment and Climate Change Lily D’Ambrosio says can be managed given the early announcement.

“The 2028 closure date announced today by EnergyAustralia gives us time to do that—and it gives us time to manage this transition properly for workers, including contractors and casuals,” D’Ambrosio said.

“Seven years notice will mean our people at the power station and mine site will have the time to plan, reskill and retrain.”

To compensate for the loss, Energy Australia said it will build a 350-megawatt battery near one of its gas power plants by 2026 as it transitions to more renewables.

AAP contributed to this report.

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