Major power union wants independent Energy Transition Authority to oversee closure of power stations

The University of NSW study says the likely closure of Australia’s 23 coal-fired power stations by 2050 will be a disaster for workers unless the government intervenes to create an independent Energy Transition Authority to manage the closures and to help workers find new jobs and industries.

Such an authority – and a “Just Transition” for affected workers – was recommended in March last year by a Labor-dominated Senate committee report on the retirement of coal-fired power stations, although all nine of the committee’s recommendations were rejected in a dissenting report by Coalition senators.

The UNSW report – titled The Ruhr or Appalachia? Deciding the futures of Australia’s coal power workers and communities – was commissioned by the Construction, Forestry, Maritime, Mining and Energy Union’s mining and energy division and will be launched in Sydney today by former climate change minister Greg Combet.

The report comes at a crucial time in the energy debate, with the federal government still promoting coal power despite the latest IPCC climate change report and increased confidence that a renewable grid will be able to operate without traditional coal-fired baseload stations.

The Coalition accuses Labor of wanting to force coal-fired power stations out of the grid, but Mr Combet says ignoring the challenges of shifting to a low-carbon economy will not make them go away.

“Australia needs sensible policy settings to achieve the transition to low emissions energy generation,” Mr Combet says.

The report says 8000 workers are directly employed in coal-fired power generation, with an estimated 18,000 jobs depending on the sector.

With the closure of Victoria’s Hazelwood power station in March last year, there have been 10 coal-fired stations shut in Australia since 2012. Although it will likely take until 2050 for all existing coal stations to shut, the report says that most will likely be gone by 2035.

Liddell, which employs more than 300 people, is the next station scheduled to close, in 2022, and the report says power companies have indicated they have no plans to build any new plants.

It says existing law, policy and practice allows power station owners to make all the decisions about the timing of closures, and that experience shows that without intervention in the form of a European-style “Just Transition” program, workers in the industry will bear the heaviest costs with only one in three finding “decent” work afterwards.

“Coal-fired power industry workers and their communities have provided Australia with energy for many decades,” the report says.

“For this, they have also suffered from working and living in polluted or dangerous environments.

“In the absence of sufficient policy-making forethought and attention, they will now also carry the heaviest costs of the new national climate change priorities. Those costs would show up as unwelcome early retirements, unemployment, under-employment, insecure employment and work that is lower paid, less safe and less skilled.”

As the title suggests, the UNSW authors compare “successful” industrial transitions such as Germany’s Ruhr Valley with the lack of government help for the “impoverished” 13-state Appalachian coal fields in the USA to back their case for financial support for power workers and government intervention in power industry transition.

The study also re-examines the 1999 closure of the Newcastle steelworks, finding shortcomings in the process that lead author Peter Sheldon said he had not expected to find.

The report describes the steelworks closure transition policies as “marginally un/successful”, saying “attempts to build new economic development strategies . . . foundered on tight controls the NSW government maintained over decision-making processes”. 

“There is a problem in Australia that we are too reactive and the purpose of this report is to argue that we need to plan ahead, well ahead,” Professor Sheldon said.

The national president of the CFMMEU, Tony Maher, said the policy debate on energy transition was dysfunctional and ignored the impact on workers and communities. 

“This is an omission we can’t afford,” Mr Maher said.

“After all, the costs of investing in a Just Transition need to be balanced against the costs of doing nothing and abandoning whole communities to a bleak future.

“Coal power workers, communities and regions have contributed enormously to Australia’s prosperity and they should not be abandoned to deal with the fallout of energy transition on their own.

“Operators have stated their intentions to close power stations. Workers understand that their industry is changing, but they need and deserve support.”

Mr Maher said an Energy Transition Authority would help co-ordinate and stagger power station closures and support the transition of workers: whether to other power stations slated for later closure, to retraining for other industries, or to early retirement.

In the report, the authors say they were asked to describe a “best practice” structural adjustment program to minimise or eliminate forced redundancies, spread out job losses, help workers find “alternative quality jobs” and encourage economic development in regions losing power stations.

To support affected communities, the report recommends creating geographical hubs or ‘clusters’ for new high-tech industries and services, as well as regional university expansion and greater public sector spending on infrastructure projects to generate employment.

The report is based around the notion of “decent work”, saying it is “imperative” to develop a transition for power workers that “is not built on low-skilled, low-paid and irregular employment or situations where workers lose access to skills development and to core labour rights”. 

The regularly repeated “Just Transition” is described as a notion promoted internationally by the labour movement that “inserts social justice and employment fairness into climate policy”, with backing from the United Nations. In the report the authors say “the lessons from our seven case studies and the international literature” strongly support the creation of an Energy Transition Authority with a tripartite structure involving power station companies, governments and unions.

The report endorses a model drawn up by the ACTU in 2016, saying such an authority should have “the freedom, independence and mandate to adopt a long-term approach” to energy transition, with power if needed to “review the various National Electricity Market regulatory bodies to ensure their performance is consistent with a clean energy transition”.

UNTIL now, the closure of the Newcastle steelworks has been generally viewed as well handled, with BHP giving two years notice of its intention and pouring substantial resources into its Pathways Program for retraining employees.

The closure was also seen as untying the apron strings to BHP that made Newcastle something of a company town, freeing it to develop into the city of today. 

But in a list of seven industrial restructurings, the Ruhr or Appalachia? report puts Newcastle in the middle: more successful than The Valleys in Wales and Appalachia in the USA (both coal industry) and the recent shutdowns of Australian power stations, but less successful than restructurings in Singapore, Germany and the Netherlands.

The lead author of the report, Professor Peter Sheldon, said he expected to find that the Newcastle closure was an unqualified success, but when he looked more closely, he found shortcomings that had not been expected.

“The question the CFMMEU is asking is why should we expect or accept worse treatment for our workers than German or Dutch workers receive?” lead author Professor Peter Sheldon said last week.

 The report says: “(Newcastle) was successful in two ways: operationally in terms of creating the jobs; and in process terms, by getting so many different interests and parties to work together in ways that generated optimism.

“Nevertheless, insufficient company and government funding and lack of autonomy for bottom-up engagement and enterprise undermined the potential for more innovative developments, local entrepreneurship and a shift to a more sophisticated economic structure. 

“Overall then, Just Transition weaknesses included lack of attention to generating alternative decent work and the forced and unwilling retirement of many older workers without adequate compensation.”