Power generation at Yallourn was first proposed in 1919 when the Victorian Government appointed a committee to investigate the use of coal from the Latrobe Valley. The plant was operated by the State Electricity Commission of Victoria, and the first sod was turned at the Yallourn Power Station site in 1921. Along with the power station, the town of Yallourn was constructed nearby to house workers of the plant. Coal was moved from the open cut mine to the power station by the Yallourn 900mm Railway, a narrow gauge electric railway running along temporary tracks in the mine. The Morwell Interconnecting Railway was later provided to the Morwell power station and briquette works for the transfer of Yallourn coal to the briquette works, as Morwell mine (now called Hazelwood mine) coal did not briquette satisfactorily.