Victorian government to review state funding program for coal projects

The Advanced Liquid Ignite Development Program, under which three coal development projects in Latrobe Valley, was supposed to be funded, will be reviewed by the Victorian government. The review comes as an effort on the part of the government to ensure the effectiveness of government funding in the coal development sector after a demonstration plant lost out on the funding for failing to attract private investors.

"There is a major question mark over state monies, government funds that have been put to many of these projects and what have they achieved?" the ABC quoted Energy Minister Lily D'Ambrosio as saying. "What have they resulted in? What jobs have been created? And they are legitimate questions."

The project was supposed to produce brown coal briquettes and receive a funding of $25 million, but the funding went to the Shanghai Electric Australia Power and Energy Development Pty Ltd as it failed to meet the key milestone necessary to be eligible for the funding.

D’Ambrosio said the review would focus on how decisions to fund coal projects are taken and also examine how efficiently government funding has been utilised in the past projects to create new jobs and achieve set targets.

“Major energy companies, including AGL, GDF Suez and Origin Energy, have already announced they will not be investing in new coal-fired power stations,” D’Ambrosio said. “Victoria needs to plan for this transition, and the government’s independent review of coal projects will help achieve that.”

The review results would be submitted to the government next year based on which state funding for future coal projects would be planned. The report will also include the findings of the government’s climate change review as well as the Hazelwood mine fire inquiry recommendations.

Victoria is the second largest reservoir of brown coal, and the Loy Yang A power station project was one of the three projects that received funding from the previous Victorian government under the advanced liquid ignite development program.

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