Media release – Project Marinus, 28 June 2021

Two new independent reports released today confirm Project Marinus will put downward pressure on wholesale electricity prices and that its benefits to consumers in the National Energy Market (NEM) will outweigh its costs.

The Project Assessment Conclusions Report (PACR) is the final step in the RIT-T process, required under the National Electricity Rules, and shows that Project Marinus satisfies the regulatory investment test for transmission (RIT-T).

The Wholesale Pricing Report, supported by independent analysis undertaken by international experts FTI Consulting, demonstrates that customers will benefit from lower wholesale energy prices in a future grid with Marinus Link, compared to a future grid without it.

The $3.5bn ($2021) Project Marinus interconnector is a proposed 1500 megawatt undersea and underground electricity and telecommunications connection between Victoria and Tasmania called Marinus Link, plus supporting transmission network developments in Tasmania’s North West.

The cost-benefit analysis undertaken for the PACR indicates that Project Marinus delivers significant positive net economic benefits to the National Electricity Market from its earliest commissioning timeline of 2027 for the first 750 MW stage, and 2029 for the second 750 MW stage.

Along with price savings and increased reliability, Project Marinus will also cut emissions, deliver 2800 direct and indirect jobs in both Tasmania and Victoria, attract billions of dollars in regional investment to both states and unlock a pipeline of future renewable energy development.

The independent modelling conducted for the PACR, completed by Ernst & Young, also supports the establishment of regulated revenue streams for Marinus Link and North West Transmission Developments, with the project providing greater benefits to the NEM than its cost.

The independent Wholesale Pricing Report shows Marinus Link is able to exert downward pressure on wholesale electricity prices because it enhances the NEM’s access to Tasmania’s low cost, high volume dispatchable energy resources including latent hydro capacity, high quality wind resources, and deep energy storage capability.

Bess Clark, General Manager of Project Marinus at TasNetworks welcomed both reports as they confirm Project Marinus’ crucial role in a transforming NEM.

“Australia’s transition to renewables is happening quickly. The National Electricity Market needs access to affordable, ‘on-demand’ energy and long duration deep storage to ensure the lights stay on and power bills stay low,” Ms Clark said.

“Marinus Link is the key to unlocking the deep storage of the Battery of the Nation for mainland Australia – increasing reliability, keeping electricity prices lower and significantly boosting access to renewable energy.

“It will give Australians access to cheaper, clean, reliable energy and transform Tasmania into a renewable energy powerhouse.

“With Project Marinus, businesses and investors in mainland Australia will have the assurance of a stable power supply when solar and wind generation is not available and batteries have run out.

“Along with other major transmission projects, Project Marinus will become the backbone of a reliable, lower emissions National Electricity Market for the next decade and beyond.

“Without access to vast cost-effective storage options like Battery of the Nation, consumers across the NEM will continue to pay more for their electricity.

“Combined, these reports provide a body of detailed, independent data that demonstrates the Project’s technical and economic feasibility, while also outlining its benefits to the NEM and connected energy users.

“Project Marinus will be a significant contributor to Australia’s emissions reduction ambitions, being a cost-effective means to rapidly cut emissions, leading to savings of up to 70 million tonnes of CO2 equivalent.

“The Wholesale Pricing Report clearly shows that all customers in the NEM are better off if Project Marinus proceeds and the costs are shared fairly and efficiently across all NEM regions,” Ms Clark said.

The independent modelling suggests that under the current pricing framework Tasmania and Victoria would pay 100 per cent of the costs for Project Marinus, however they would only receive 34 per cent of the benefits. Allocating the cost of interconnection fairly to beneficiaries would require a change from the current rules.

“Customers in all NEM regions will be better off with Project Marinus, if interconnector project costs are allocated in line with the benefits customers receive,” Ms Clark said.

“A beneficiary pays model is a fairer outcome to recover the Project Marinus costs over its 40-plus year service life,” Ms Clark said.

Jason Mann, Senior Managing Director of FTI Consulting said: “The NEM is undergoing a period of transition where coal-fired generation is retiring, and variable renewable energy is taking its place.

“Accessing the existing spare and refurbished on-demand hydro capacity, along with cost-competitive pumped hydro potential, provides lower-cost on-demand energy compared with other solutions available to the NEM.

“This, together with the new wind resources that are expected to be delivered in Tasmania, puts downward pressure on future wholesale energy prices for all customers in the NEM.”

“The benefit to consumers arising from Marinus Link and additional Tasmanian renewables capacity, in terms of lower wholesale electricity prices, is widely spread across the NEM, with all jurisdictions being better off.

“Therefore it is necessary to develop an approach that recovers the costs of Marinus proportionately from those who benefit from the link,” Mr Mann said.

Both reports can be downloaded from marinuslink.com.au/economic-analysis

Media release – Guy Barnett, Minister for Energy and Emissions Reduction, 28 June 2021

Marinus Link confirmed to drive down power prices

The Tasmanian Liberal Government welcomes the release of today’s TasNetworks reports confirming that Project Marinus is economically viable and will place downward pressure on wholesale electricity prices.

TasNetworks’ Project Assessment Conclusions Report and Wholesale Pricing Report (PACR) includes detailed independent analysis that demonstrates the national benefit of this $3.5 billion project would provide through access to Tasmania’s clean, low cost and reliable renewable energy.

These reports provide further confirmation of the nation-wide benefits delivered by Project Marinus, further highlighting the need for change to the current interconnector pricing rules to ensure Tasmanians pay only their fair share.

Project Marinus and the clean energy it unlocks will be a significant contributor to Australia’s emissions reduction ambitions, leading to savings of up to 70 million tonnes of CO2 equivalent. Project Marinus will deliver downward pressure on electricity prices in Tasmania and across the national electricity market.

In addition to supporting reliable and secure supply, and price savings right across the national electricity market, Project Marinus will deliver 2800 direct and indirect jobs in both Tasmania and Victoria, attract billions of dollars in regional investment and unlocking a pipeline of future investment in renewable energy developments.

We know that delivering cheaper wholesale electricity puts downward pressure on power bills. Just last week Tasmania’s residential electricity price dropped by 7.11 per cent and small businesses benefitted from an 11 per decrease in power costs – this represented a saving of more than $30 million to Tasmanian households.

Due for earliest commissioning in 2027 for the first 750 MW stage, and 2029 for the second 750 MW stage, Project Marinus will also help cut emissions, directly supporting the Tasmanian Government’s commitment to achieve 200 per cent renewable generation by 2040.

Tasmania can be the Renewable Energy Powerhouse of the nation with our natural advantages and ability to generate renewable energy, and we welcome these new reports which show the positive impacts that Project Marinus will have for both Tasmanians and all those connected to the National Electricity Market.

Media release – Bob Brown Foundation, 28 June 2021

Marinus will sock Tasmanians: Brown

Contrary to Guy Barnett’s release today, an independent report written by leading energy experts Professor Bruce Mountain and Steven Percy, released last year by the Bob Brown Foundation, showed that the $3.5+ billion Marinus cable will not compete with mainland generated and stored electricity and will become a cost burden on taxpayers who will pay more overall with the project than they will without it.

“If this is a producer of cheaper power, then let private enterprise pay for it. Surely the Tasmanian and Federal Liberals will follow their own philosophy and have the market sort this out, not sting ordinary Tasmanians with the risk,” Bob Brown said today.

Featured Comment – SOLVE, 30 June

These ‘two new independent reports’ aren’t independent

Like the other two reports TasNetworks paid for, these two have poured more taxpayer millions into private consultancies to provide TasNetworks’ Project Marinus with a figleaf to hide their utterly naked grab for corporate and State funds to prop up TasNet’s dire financial status.

Read the reports for yourselves, but look at the narrow focus and scope, and the carefully disguised assumptions underlying the ‘conclusions’. These reports are clever sales documents. They are narratives using the finest PR techniques to mix fact with half-truth with pure “up to 50% off at Harvey Norman!” sales palaver.

They reference AEMO’s ISP to imply another independent source to justify Marinus, but AEMO are a market operator – they work with and for the corporate for-profit sector to balance their needs against our aging and ramshackle privatised electricity marketplace: it’s a side-effect of all that we have power to our lights, not a prime directive.

The reports are also box-ticking after the fact. Shouldn’t genuine cost-benefit analysis have occurred before committing to a plan which is clearly only going to benefit TasNet and the corporate investors in the renewables gold-rush? The two earlier reports, often claimed by TasNet as ‘cost-benefit analysis’ were merely business risk modelling, and merely indicated that in the current era the average investor in renewables would probably make more than their money back. Duh.

A genuine cost-benefit analysis would include everything these reports walked around or left out entirely – the costs to the environment, the economy and our communities from a massive industrialisation of our North West for private profit. These reports have zero interest in any of those things. Their ‘costs’ deliberately exclude the costs we’ll pay so the State-corporate sector can profit.

Let’s not forget who the lead planner is in all this – TasNetworks. Which State-owned corporation stands to benefit most by covering the north west with old-school High Voltage Overhead Transmission Lines (HVOTLs) to connect private windfarms to the Mainland market? TasNetworks. Who pays for all of this? We do. Who are left with unwanted and damaging infrastructure ripping through farms, forests, critically endangered habitats, communities and iconic tourist spots? Us.

Will we get jobs out of it? No. Like the West Coast saw, around 90% of the jobs will be FIFO during the construction phase. What about when it’s all finished? With all the power and all the profits going offshore, why would any jobs be left here?

Okay, but will we get cheaper power? Nope. Yes, we need more renewables power into the NEM, but ours is only part of what’s needed and planned to replace coal – simply claiming ‘more renewables equals downward pressure on prices’ is egregious and cynical bluff. Potentially, yes, if we cover Tasmania in windfarms there will come a time when the power we buy back from the Mainland MIGHT eventually be slightly cheaper. In the short to medium term, where’s the evidence of an actual price signal? In a privatised market, do you really think we’re going to be the winners, or will we stay the supplicants our neoliberal governments have made us?

Okay, but at least renewables = green energy, right? Nope. Sorry, the bad news is that just because it says ‘renewable’ or ‘green’ on the label, it doesn’t mean it is. The Federal government is still wanting to build more fossil fuel power plants. Our State government wants to use ‘green hydrogen (lol)’ to keep Tassie gas flowing through the pipelines. Windfarms in the wrong spots – like UPC’s appalling proposal for Robbins Island – will slaughter critical and endangered wildlife, and massively impact wetlands and waterways. Worse are TasNet’s hundreds of kilometres of HVOTLs, under which the football field-wide easements will breed weeds and feral cats, destroy critical habitat, and dry out our forests.

If the Marinus Link goes ahead, the power trickling through it will be neither clean nor green.

Marinus is a con. solvetasmania.org for more details.

TASMANIAN TIMES: Project Marinus and Battery of the Nation are ‘Huge $7.1 billion Mistake’.

SOLVE: Community Group SOLVE Respond to Renewable Energy Plan.