from service this year due to lower-than-expected electricity demand
October 11, 2012
Unions have reacted with anger to this morning’s announcement that two of the four generating units at Tarong Power Station are to be mothballed for at least two years, effectively halving the station’s capacity.
Union sources say about 135 jobs will disappear: 64 or 65 at the power station and 70 at the adjacent Meandu mine.
Stanwell announced this morning that Unit 2 and Unit 4 would be withdrawn from service in October and December for at least two years, or until wholesale electricity demand improves.
Electrical Trades Union state secretary Peter Simpson said the decision was irresponsible and would put 64 employees at the power station out of work.
It would also remove up to 700MW of electricity from the Queensland market, put upward pressure on electricity prices and increase the likelihood of blackouts, he said.
“The scale of the job losses came as a shock to many workers. Taking 64 mostly skilled workers (engineering, maintenance and production) out of this community will undoubtedly lead to hardship,” Mr Simpson said.
“Our blokes on the ground out there are already getting calls from members saying if they lose their job they will be gone from the area.
“Most of these workers have families that use the local schools, hospitals, shops and the like. This is a huge blow for the South Burnett.
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“There is a strong feeling that this is the company clearing the decks ready for a possible privatisation.
“Taking up to 700MW out of the Queensland electricity market will cut contingencies should there be a catastrophic failure at one of the other stations that could lead to widespread blackouts.
“This is a bad decision for our members, their communities and the rest of Queensland and we will be making our position very clear to the company when we meet with them over the next few weeks.”
Construction, Forestry, Mining and Energy Union (CFMEU) District Vice President Shane Brunker said he was disgusted with the whole process.
“There was no consultation from Stanwell or any of the other companies involved, Thiess or Downer,” he said.
Mr Brunker said enterprise bargaining had been signed off on just last week but there had been no mention about this.
“It’s very shabby the way it has been handled,” he said.
He said rumours began circulating at the Meandu Mine last week which had put fear into workers and their families, but the first he had heard officially was this morning’s announcement from Stanwell.
Mr Brunker said the Queensland public would pay the cost of a reduced power supply.
“Power prices will be driven back up and the Queensland public will pay the cost,” he said.
He said the major unions involved at Tarong and Meandu – the CFMEU, ETU, Association of Professional Engineers, Scientists and Managers Australia (APESMA) and the Together Union – were organising a phone hook-up later today to discuss what has happened and request urgent talks with Stanwell management to work through the whole process.
Member for Nanango Deb Frecklington said Stanwell’s decision was disappointing, but necessary.
She said she had met with Stanwell Corporation executives to discuss plans to place the two units in cold storage until conditions improved.
“I made it abundantly clear just how disappointed I am by Stanwell’s decision to reduce its workforce,” Ms Frecklington said.
“This decision will flow through to the entire region. But I understand the oversupplied energy market has forced down wholesale prices, leaving the major local employer with little choice.”
She said the oversupply had been caused by “economically reckless green initiatives” introduced by State and Federal Labor governments.
Ms Frecklington said the savings from a reduced wages bill and operating costs would “mitigate” the recent rate rise by the South Burnett Regional Council and the impact of the Federal Government’s carbon tax.
“Reducing costs now will shore-up Stanwell’s viability in the long-term, ensuring they remain an integral part of the South Burnett community,” she said.
Ms Frecklington said Stanwell employees would be offered generous voluntary redundancy packages.
“There are a large number of long-serving Stanwell employees who are considering their retirement options at present,” she said.
“People who voluntarily accept redundancies will receive 13 weeks pay, plus three weeks for every year of service and any outstanding long service and holiday leave entitlements.
“Stanwell has assured me electricity supply in the South Burnett will not be affected.”
Tarong Power Station Site Manager Dennis Franklin said the “over-supplied energy market” and lower-than-forecast electricity demand were the reasons for the closure.
“With these market conditions expected to continue for at least the next two years, withdrawing two units from service will allow Stanwell to lower its operation and maintenance costs and reduce its carbon emissions,” Mr Franklin said.
He said the decision would also impact on the adjacent Meandu Mine’s operations and workforce.
A Stanwell spokesman told southburnett.com.au this morning that up to 40 contract positions would not be renewed at the mine however the CFMEU confirmed this evening that 70 jobs, including positions at the wash plant and in the coal crew, had gone.
“Stanwell introduced a fourth fleet in early 2011 as a short-term flood recovery measure. With the coal stockpile now returned to pre-flood levels and the cold storage of two Tarong units, Meandu Mine will return to the normal operation of three fleets in January 2013,” Mr Franklin said.
“Whilst there are some impacts as a result of today’s decision, there will be many long-term benefits as the power station and mine will be well positioned to continue to be a more viable operation well into the future.
“We are consulting with our employees, unions and suppliers regarding the preliminary decision to restructure our workforce at Tarong Power Station.
“Tarong Power Station is a proud contributor to the local economy through wages and social investment, and we intend to continue contributing to the local community for the long term.”
Mr Franklin said while two units would be placed in cold storage, there would still be plenty of activity at the power station and mine.
“We are currently under way on the Unit 1 overhaul, which will result in more than $1 million being pumped into the local economy,” he said.
“Additionally, next year we have the Meandu Mine dragline overhaul which will bring up to 250 contractors to the region, who will be spending money locally.
“We will still need to access coal from Meandu Mine to fuel the three generating units that will remain in service. These units will run at a higher load than they have recently.”
Mr Franklin said there would be no impact on security of electricity supply, because the market was already oversupplied.
Two generating units will remain operational at Tarong power station and one at the adjacent Tarong North station.
[UPDATED: 6:50pm]
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