May 25, 2016 / 7:20 PM / 3 years ago

UPDATE 1-Engie mulls closing Australia's Hazelwood coal-fired power plant

* Engie aims to gradually close, sell or convert all coal plants

* Coal now down to 10 pct of Engie’s energy mix from 15 pct (Adds quotes from CEO, details on Engie’s strategy)

By Geert De Clercq

PARIS, May 25 (Reuters) - French utility Engie said on Wednesday it is considering the closure or sale of its giant Hazelwood coal-fired power plant in Australia as part of its move away from operating any coal-fired plants.

Chief Executive Isabelle Kocher told a French Senate committee on Wednesday that the utility planned a gradual withdrawal from coal-fired power generation in the coming years and that following the sale announced earlier this year of two plants in Indonesia and India the share of coal in its energy mix would fall to about 10 percent from 15 percent.

“For the Hazelwood plant, we are studying all possible scenarios, including closure, or a sale if the state of Victoria tells us that it cannot meet power generating needs without this plant,” Kocher said.

Environmental organisations say the plant - which has a generating capacity of 1.5 gigawatts, accounting for 5.4 percent of Australia’s electricity supplies - is one of the most polluting power stations in the world.

Hazelwood, close to Melbourne, is supplied with lignite coal from an adjacent open-cut mine, which burned uncontrollably for weeks in early 2014.

Engie’s Australian unit was charged in court in February with failing to provide a safe workplace and ensure public safety over the fire.

Engie acquired a majority stake in Hazelwood when it bought UK utility International Power in 2012 and currently owns 72 percent with Japanese group Mitsui & Co holding 28 percent.

Kocher said Engie will also review its remaining coal plants one by one and close those with the most outdated technology.

She said that in recent months Engie had already closed the equivalent of 1.6 gigawatts worth of coal-fired plants in Europe, notably in Belgium and Britain.

She said a second option would be to convert some of its remaining coal-fired plants to burning biomass, which is deemed to be a renewable fuel.

She said that in developing countries like Indonesia which still rely heavily on coal and where Engie has efficient coal plants, it would sell rather than close these plants.

“Nearly half of the world’s power is still produced by coal, it will take years to reduce that,” she said.

The World Coal Association estimates that coal currently fuels about 41 percent of global electricity production.

Kocher, appointed earlier this month, wants to focus the utility on renewable energy, grids and energy services. (Reporting by Geert De Clercq; Editing by Greg Mahlich)

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