RESOURCES Minister Martin Ferguson has scrapped a $101 million grant to a gas-fired power station that would have created hundreds of jobs in Victoria and promised to cut carbon emissions.
Mr Ferguson announced the decision today after months of doubt over the HRL project in the La Trobe Valley, the subject of legal dispute and a Greenpeace campaign to stop it going ahead.
The Gillard government promised the project $101 million under a low-emissions funding scheme launched by the Howard government, but the grant will be cancelled with no money paid to date.
Mr Ferguson said the HRL proponents were not able to meet the government's milestones but he declined to elaborate on whether technology, financing or other factors influenced his ruling.
The minister left room to post a budget saving from the decision, saying he would not allocate the $101 million to any other project under the low-emissions scheme and it would be up to the expenditure review committee of cabinet to determine the matter.
Mr Ferguson rejected the idea that the outcome was a win for green groups that sought to scrap the project.
“I'll defend due process. In accordance with due processes an appropriate professional decision was made,” he told reporters.
The demonstration plant was intended to produce power using coal and gas turbines, while emitting 30 per cent less greenhouse gas than a comparable coal-fired station.
Greenpeace opposed the project on the grounds it would increase carbon pollution by millions of tonnes a year, equivalent to a station powered by black coal.
While Canberra signed a funding deed with HRL in May 2008, it took years for the project to advance to approval late last year by the Environment Protection Authority. While Green groups objected to that decision, the Victorian Civil and Administrative Tribunal backed HRL in March.
Victoria has also committed funding to the project but this could also be in doubt after Canberra's decision.
“In terms of Victoria, they have a separate offer of finance available. To my knowledge they have not made a decision,” Mr Ferguson said.
While job opportunities would be lost as a result of the HRL decision, he said, there would be other jobs created in the La Trobe Valley from other energy projects backed by federal help.
