ANU, Crawford School of Public Policy Nov 2017
The announcement by Hazelwood’s owners, French multinational power company, Engie, in late 2016 that it would be closing the plant for commercial reasons, therefore came as somewhat of a shock. We argue that Australia’s political and economic institutions help to explain the autonomous decision of Engie to close the plant, the short notice period, and the lack of pre-closure government transition policy. These institutions discourage long-term policymaking and encourage a disproportionate amount of vote-seeking activity directed at marginal electorates. Straightforward “vote-seeking” is however too simplistic an explanation of the transition policies announced at the time of the Hazelwood closure. Of particular relevance is the fact that, over the last few years, the transition away from coal and towards renewable energy has become a virtual inevitability in the Australian energy sector. One important outcome of this trend has been the shift in position of the Australian union movement towards advocacy for “just transition” policies, bringing it both closer to—and, in some cases, in alliance with—environmental groups.