VIC: Brown Coal Power Station loses funding

Brown coal mine in the Latrobe Valley

The federal government has canned a $100 million grant for a new proposed coal-fuelled power plant in Victoria's Latrobe Valley after it failed to meet key funding conditions.

Energy company HRL has been proposing to build a new 600 megawatt plant using gasification technology reducing the emissions of burning brown coal to those of a efficient black coal generator.

Energy Minsiter Martin Ferguson said the company had been given a final chance to meet the conditions of the grant earlier this year.

"It has not done so and, accordingly, the funding agreement between HRL and the Australian Government will be terminated,'' he said.
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The decision to drop the federal grant for the projects mean almost certaintly the Victorian Government is likely to dump its own $50 million grant to the company.

The original federal grant was given to HRL by the Howard Government in 2007 under the Low Emissions Technology Demonstration Fund.

The HRL project - known as Dual Gas - has long been the target of environmentalists who say funding should be instead directed to renewable energy projects.