Latrobe Valley now feeling the brunt of the closure of the Hazelwood power station, but there is a surprising amount of optimism about how this area and others impacted by the transition to a low-carbon economy can produce jobs into the future and provide interesting possibilities. Tim Horton, for instance, says the power station is a “pretty extraordinary site” and cautions, “don’t decommission too much.”

The Latrobe Valley, once home to Australia’s dirtiest coal power plant, is now generating interest from around Australia and internationally as a potential location for renewable energy projects.

Karen Cain

Latrobe Valley Authority chief executive Karen Cain says solar, wind and carbon capture projects are among the jobs creation ideas being developed.

“Certainly energy has been a real focus here in this community,” she says. “What are some of the strengths that we might draw on from the expertise that sits here as we start to have a look at transitioning from coal to renewables?

“We have a lot of interest from the local companies but also within Australia and we’ve had some international interest as well, so that’s looking promising.”

A long-time resident of the Latrobe Valley, Cain took on the role just days after the Hazelwood power station and mine ceased production on March 31 leaving 450 direct employees retrenched and upwards of 500 supply chain and contractor jobs in jeopardy. About 135 workers were retained to support the decommissioning and rehabilitation process.

Cain says it’s been tough for the community – emotionally and psychologically. “People are now really understanding that change and obviously there’s still some concern for the future, which is reasonable.

“The role of the Latrobe Valley Authority is to work locally and to support, work with and advocate for this community through any avenue we can. This is around absolutely job creation but it’s also around liveability.

“I think we’ve probably turned the corner, we’ve got through that really hard period. But for those workers who are still really feeling the results of that we will work closely on worker transition.”

Professor John Spoehr, director of the Australian Industrial Transformation Institute at Flinders University in South Australia, says renewable energy jobs should be an important part of job creation off the back of the closure.

“You would hope that a lot of the skills that have been developed in the industry could be redeployed into the development of a strong renewable energy industry in the region and have partnerships with international firms a bit like we are here in South Australia,” he says.

“The (SA) state government has put out a major tender to seek proposals for the development of the nation’s largest battery storage capability and there’s no reason why something similar could not be undertaken in Victoria to benefit the Latrobe region in some way.”

In a small step forward, the Latrobe Valley has been chosen as one of three Victoria regions for a community power hub. A local not-for-profit or social enterprise organisation will operate the hub receiving resources, legal advice and technical expertise, as well as start-up funding, to implement energy projects such as solar gardens and community wind farms.

It is hoped the hub will boost the reliability of the local power grid, drive investment, create jobs and reduce household electricity bills.

Recognising skills and capabilities

The LVA has been negotiating with other power companies in the region to establish a worker transfer service for 150 of the retrenched Hazelwood staff. Two out of the three companies have agreed to give special consideration to these workers as jobs come up to enable as many as possible to remain in the industry. Negotiations are still underway with the third.

“It may mean they have to do some additional training but we’ve certainly made sure that the process for their consideration and employment there is as strong as it can possibly be,” Cain says.

Spoehr says recognising the skills and capabilities of the existing workforce is a key first step in making a successful transition.

“That’s not a straightforward thing necessarily because it’s not like everyone has a qualification,” he says. “Typically what needs to be done in the early stages is put in place comprehensive recognition of prior learning – programs that will recognise people’s skills and capabilities and give them a formal qualification that makes them much more mobile in the labour market.”

Spoehr says the region needs to utilise the many capabilities, particularly in engineering, electrical and highly skilled trades. “Skills that are reasonably transferrable to a number of other sectors,” he says. “It’s always important to think about industry diversification and growth in a region like that.

Lower dollar opens up possibilities in manufacturing

“While manufacturing is doing it tough at the moment, the lower Australian dollar is making it more possible for those well-positioned manufacturers to diversify into servicing different types of markets – whether it be medical, or disability assisted technologies, or energy storage – a wide range of products and often services,” Spoehr says.

“Manufacturers diversify to become service providers, engineering services and technical services to other companies, which enables them to utilise their skills in other settings other than on their own production lines.”

Education and training will also broaden workers’ options to seek opportunities in new fields that are likely to be significant growth areas such as health, education, aged care and financial services.

Bringing forward infrastructure projects

The Latrobe Valley will remain a significant population to service and Spoehr believes the infrastructure, construction and housing industries will be important over the short to medium term as alternative pathways for energy sector workers.

“Governments are having to consider how they can bring forward major infrastructure projects, major housing and urban development projects, to be able to provide alternative opportunities,” he says.

“So long as those decisions are smart ones. Bringing forward good projects that would have been undertaken anyway, bringing them forward just helps provide a smoother transition. A buffer for those workers while you are embarking on the more complex, more difficult task of trying to accelerate growth of sectors that have reasonable growth prospects.”

Many regional centres that were dependent upon large utilities have experienced an exodus. “Certainly that’s the case here in South Australia where the large generators and coal mines surrounding generators are among the largest employers in the region so they are not easily replaced when they close, but if you don’t have the capacity locally to employ those people then a significant proportion of them will move if they can.”

The Victorian government is keen to stop that happening.

Construction on the $6.5 million Gippsland Tech School in Morwell begins next month. The school is being built as part of the establishment of the Gippsland Hi Tech Precinct, a centre for research, business incubation, product development, start-up support, education and training.

Last week (21 April) Vincent Crisp Architects won the bid to design the masterplan of the $17 million project, which will hopefully drive innovation and bring new jobs and industry to the region.

Industry and Employment Minister Wade Noonan says 80 jobs will be created during construction and hundreds of ongoing jobs once precinct is completed in 2020. It will include a new innovation centre, the Gippsland Tech School, Federation Training and Federation University. Fujitsu will be a major tenant.

The LVA is looking at how to growing some high-level sporting competition in the region. The government is investing $85 million in sport infrastructure and support programs including:

  • $46 million for a new Gippsland Regional Aquatic and Leisure Centre in Traralgon
  • $17 million to redevelop the Traralgon’s Gippsland Regional Indoor Sports and Entertainment Complex
  • $4 million to upgrade Morwell Recreation Reserve
  • $1.7 million to upgrade the Latrobe Sports and Entertainment Complex in Morwell

The projects are expected to create more than 575 jobs through construction and ongoing operation. The LVA is working in partnership with the Collingwood Football Club to maximise the benefit from these facilities. Cain says the hope is to attract national sporting competitions and the associated visitor economy.

Kick starting innovation

Tim Horton, who was appointed Australia’s first commissioner for integrated design to advise the South Australia premier on design, planning and development on major projects, says the Hazelwood power station is “a pretty extraordinary site”.

He says often innovators are looking for big areas of covered space for creativity, for example, light aeronautics or experimental unmanned vehicles.

“Without being too unrealistic you could start to see that it becomes a really interesting place, like nowhere else, that is a mix of small-scale tinkering and maker space but on a massive scale.

“What you need is really large footprints that are undercover, that are well resourced, with a whole lot of the infrastructure that is needed – a men’s shed on steroids. So don’t decommission too much.”

He also draws parallels to Manchester which reinvented itself after the 1996 bombing, with renewal of public housing, boosting of creative enterprises and a coffee scene.

In South Australia, it’s those developing off-beat boutique products

who can cherry pick their staff who prosper

“I think the future for the Latrobe Valley could be a powerful new cultural tourism magnet around the ongoing and long-term remediation of this quite unique place, along with an invitation to come and experiment in a place that is well appointed.”

Horton says small to medium enterprises that are able to scale up will flourish. In South Australia it’s those developing off-beat boutique products who can cherry pick their staff who prosper. “All-terrain recreational vehicles, for example, that are high value, low volume units, where they’re able to control their design and production in the one facility.”

Support for local businesses

The LVA has been working with Regional Development Victoria to understand the Hazelwood supply chain and how other businesses will be affected by its closure.

“The whole supply chain has been mapped and every business that is connected to the supply chain has been contacted and provided with an opportunity to think about how they may diversify or grow their business,” Cain says.

An economic facilitation fund of $10 million is available to businesses that wish to apply for support. So far four businesses – three in agriculture and one in disability services – have taken up the funding, resulting in 145 jobs.

“That’s getting really diverse interest across the community,” Cain says.

Economic Growth Zone funding is also available to help businesses expand or establish in the region.

“We’ve had a lot of interest but we’re working through to make sure that when we get down to the detail of what they want to do, they have a really strong business plan.”

They want to ensure they attract businesses that will reap the benefits of the strengths of the community which include: food and fibre, particularly the timber industry; agriculture and horticulture; dairy; and beef.

“We are having some discussion at the moment about how we attract complementary business here around the food sector,” Cain says. “What that might become, particularly around value-add.”

A slice of the defence pie

Spoehr believes that the region could benefit hugely from ‘a slice of the defence pie’.

In the lead-up to the closure of the automation industry in South Australia, Spoehr says they have developed an economic strategy identifying the prospects for growth and putting in place support packages for companies and workers to transition to the new sectors.

“The governments play a fundamentally important role to the extent that they are both major funders of infrastructure but they are also funders of defence expenditure and major defence projects,” he says. “Different parts of Australia have been beneficiaries of that, particularly WA and SA recently through the submarine project and air warfare destroyer projects.

“It would be of enormous assistance to the (Latrobe) region to have a slice of the defence pie in terms of defence manufacturing that provides a stable flow of funds for very highly-skilled knowledge-intensive work.”

It would have beneficial effects for the broader economy, building new capabilities and attracting a range of companies to support the defence industry.

Given the proximity of the RAAF site at Sale, the LVA is hoping to generate more local defence jobs.

“A lot of discussion about the possibilities of accessing some of the Defence Force development are currently happening,” Cain says. “Whether or not some specialisation might be able to be brought to the Latrobe Valley.

“We’re very excited but also understand the importance of this work, and are very committed for the long haul.”

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