Energy companies will have to give five years’ notice before closing their ageing Victorian power stations and spend at least 17 years cleaning up, under a new agreement with the state government.

The deal is part of an extension to mine licences of the Latrobe Valley power plants, meaning Energy Australia’s licence for the Yallourn mine will be extended to 2051 and AGL’s Loy Yang licence will go to 2065.

However, mining will not be allowed past 2032 for Yallourn and 2048 for Loy Yang – deadlines already set by the respective companies.

“These extensions support our energy security and provide certainty for workers and communities across Victoria,” Resources Minister Tim Pallas said in a statement.

“The five-year notice period is longer than what the Commonwealth has sought through the Finkel Review and gives local workers and their families confidence to plan for the future.”

But an environmental group says site rehabilitation should not be tied to the mine licences.

“In the 21st century, with what we know about climate science and the imperative to transition as rapidly as possible to 100 per cent renewables, any announcement to keep coal fired power stations open can only be bad news for the climate,” Friends of the Earth campaigns co-ordinator Cam Walker said.

“Rather than extending existing licences to allow for rehabilitation, a better option would have been to separate the licences and issue a stand-alone licence for the rehabilitation.”

He also said the government needs to bring forward coal closure dates to meet its zero-net emissions target by 2050.

-AAP