Second bailout puts pressure on Australian carbon tax

• 12 years ago (2012-06-26)
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A second Australian coal-fired generator has been forced to ask shareholders for a multi-billion dollar bailout to stay afloat ahead of the launch of Australia’s new carbon tax.

Hazelwood power station in Victoria has received a bailout from its parent owner worth A$650 million after banks reportedly refused to refinance the brown-coal generator on terms acceptable to Hazelwood's owners.

Hazelwood supplies 25 per cent of Victoria's power, and as one of Australia’s dirtiest generators it will be hit hardest by the carbon tax.

This new bailout comes only a short while after power firm Intergen had to bailout its Queensland black-coal generators Callide and Millmerran after banks refused to recognise a government loan to the distressed stations.

“There will be a rationalisation of generation capacity because we have too much, and what the carbon price will do is influence which of the existing generators remains competitive and which does not,” Ross Garnault, adviser to the Multi-Party Climate Change Committee, said.

“The market will decide that some of it should cease production,” he commented.
Opposition energy spokesman Ian Macfarlane said the bailouts showed power generators are in “survival mode” and will be hit hard by the carbon tax

“This is a big vote of no-confidence by the finance sector into the carbon tax,” he said.