A new deal has been struck to keep the Victoria/Tasmania Marinus Link undersea power cable project – central to the “battery of the nation” dream – afloat.
In a joint announcement on Sunday, the federal and Tasmanian governments said they were “acting with a new deal to keep the critical Marinus Link project plugged in – driving economic growth and putting downwards pressure on prices across Tasmania and the national east coast grid”.
The project, which was to deliver a connection via more than 300 kilometres of undersea and underground high voltage cable between Tasmania and Victoria’s Latrobe Valley, was originally estimated to cost between $3.1 billion and $3.8 billion.
However, the financial burden of the project saw the Tasmanian government announce last month it wanted to renegotiate the terms of the deal.
Today, in a joint statement the federal and Tasmanian governments said they had “worked closely to ensure the project continues” – with amendments made to the deal including:
- The original vision of two cables downgraded to one, with “negotiations to continue on a second cable”
- Tasmania’s contribution towards construction drops by almost half, with the Commonwealth’s share to increase and Victoria’s to stay as originally negotiated
- Tasmania to “have the option to sell its stake to the Commonwealth upon commissioning of the project”
Marinus Link is part of Tasmania’s “battery of the nation” strategy and is also listed among the Australian Energy Market Operator’s top five priority projects.
Tasmania has enough green hydro energy capacity to power the entire state and also has five wind farms, with several other wind projects under consideration.
However, some analysts have argued that as Victoria invested more in its own wind farms and battery storage, it made less business sense to fund an expensive multi-billion-dollar cable between the mainland and Tasmania.
Tasmania has long argued the largest benefits of the project go to the mainland and Tasmanians should not pay a disproportionate amount.
Today, both governments conceded Marinus Link was “competing in a global market with tight supply chains and is facing similar inflationary pressures to other major energy and infrastructure projects around the world”.
Stage one of the project, the proponents say, would “deliver economic stimulus over $2 billion and over 2,400 jobs, with around 1,400 in Tasmania”.
Minister for Climate Change and Energy Chris Bowen said it was “a game-changing project for both Tasmania and the mainland and this updated agreement will not only deliver the benefits of Marinus Link, it will be cheaper to Tasmanians”.
Tasmanian Premier Jeremy Rockliff said it would mean “jobs, economic growth, energy security and lower power prices with Tasmania investing its fair share and no more”.
The governments said they were “working towards a delivery time frame as close as possible to 2028, or earlier if possible”.
In a statement, Marinus Link’s chief executive Caroline Wykamp said today’s announcement was “a signal of confidence for the project, which stood to deliver significant environmental, economic and social benefits”.
“Marinus Link is more than an interconnector; it’s an enabler,” she said.
(ABC)
