HRL said a feasibility study into repowering the Latrobe Valley-based briquette factory with a new steam supply would be finalised by year-end.
If the briquetting business is subsequently revived, HRL expects 30 direct jobs to be created – a few positions less than the current operation.
“The current manufacturing operations at Morwell will temporarily cease at the end of August 2014, with the majority of Energy Brix’s 37 employees to leave on redundancy packages,” HRL said on Tuesday.
“This decision has been made due to a reduction in demand for briquettes due to the loss of three major briquette customers and the current poor outlook for wholesale electricity prices.”
HRL said the Energy Brix power station was running at a reduced capacity since the carbon tax was introduced in mid-2012 and was mainly used to supply steam for briquette manufacturing.
The business change was also prompted by the expiry of a two-year, $50 million federal government bailout package for Energy Brix on June 30.
According to the ABC, this funding gave Energy Brix’s customers time to switch to cleaner sources of energy with Australian Char and dairy co-operative Murray Goulburn being two of the customers lost since.
Environment Victoria chief executive Mark Wakeham reportedly said it was unlikely that Energy Brix’s facilities would re-open.
“It is the first coal-fired power station to close in Victoria for decades but it won't be the last," he reportedly said.
"With energy demand falling quite significantly we're likely to see closures at other coal-fired power stations in the months and years ahead."