EnergyAustralia announced last week it had begun consulting with its employees, and their representatives, on a reduction in generation from the Wallerawang Power Station.

The company not only blamed a lack of affordable coal, but a declining trend in energy demand across the state.

Mining company Centennial Coal’s chief operating officer Steve Bracken said last week that Centennial is not experiencing a shortage of coal and can satisfy all current domestic demand on equitable market terms.

He added that Centennial is the most reliable local coal supplier and, by geographic proximity and its existing supporting infrastructure, remains the natural coal supplier for both Wallerawang and Mt Piper power stations.

“It is well documented there is a declining trend in energy demand across NSW and that Wallerawang is an old and costly power station to operate. Accordingly, outdated technology, coupled with decreasing market demand for coal-fired energy, are fundamental to Wallerawang’s current position,” Mr Bracken said.

“When a mine is owned by a power station, the generator only needs to cover its cost of investment in the mine and its cost of production. Its return on that investment is captured as a reduced cost of supply – i.e. that supply can be bought at cost. 

“This is not the case for Centennial, which needs to ensure a return on its investment to secure both the long-term future of its workforce and local operations.”

EnergyAustralia has announced that it will remove Wallerawang’s Unit 7 from service, while Unit 8 will only remain available until the end of March.

Mt Piper and Wallerawang general manager Luke Welfare said despite the reduction of output, no changes to workplace arrangements will be made until the full impact of operational changes on employees and work practices has been evaluated. 

Member for Bathurst Paul Toole said EnergyAustralia is an important employee in the region and it is disappointing that just last year it denied rumours that it was considering scaling down operations at the Wallerawang plant.

Mr Toole said it was a condition of sale of the Wallerawang and Mt Piper plants that workers’ rights and entitlements be protected by a four-year guarantee. He said there are existing contracts to this effect.

“I have been told they will continue to talk with staff about various options, with relocation or voluntary redundancy an option for those who wish to take it. However, the sale process has ensured their rights are protected by a four-year guarantee of employment,” he said.

While he would not be drawn on whether the cutbacks marked the beginning of the end for the Wallerawang Power Station, he said if it comes to that he will be interested to see what the future holds for that site, including plans for its rehabilitation and potential investment. 

Country Labor candidate for Bathurst Cassandra Coleman said Barry O’Farrell’s privatisation of power stations was in breach of his sworn election commitment, and now looks set to cost dozens of jobs.

“Barry flogged off Wallerawang knowing full well that privatised entities put profits before people,” Ms Coleman said.