Chris Bowen MP, Minister for Climate Change and Energy; Julie Collins MP, Minister for Housing, Homelessness and Small Business; Jeremy Rockcliff MP, Premier of Tasmania; Guy Barnett, Tasmanian Minister for Energy and Renewables, 3 September 2023

Investing in the future of Tasmanian energy with Marinus Link

Today the Albanese and Rockliff Governments are acting with a new deal to keep the critical MarinusLink project plugged in – driving economic growth and putting downwards pressure on prices across Tasmania and the national East Coast grid.

MarinusLink is an incredibly important project for Tasmania and Australia, reducing cost of living pressures for Tasmanians and the east coast National Electricity Market (NEM) through cleaner and cheaper energy.

Marinus will unlock renewable energy generation and storage for the mainland through Tasmania’s Battery of the Nation projects, and unlock the next wave of renewable energy development in Tasmania, attracting investment and jobs in the state.

But the project is 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.

In recognition of this, the Albanese and Rockliff Governments have worked closely to ensure the project continues, with the following amendments to the original MarinusLink agreement:

  • The project will be focused on one cable in the first instance, with negotiations to continue on a second cable, to be considered after FID on cable 1. AEMO ISP modelling finds the majority of the benefits from Marinus Link are realised from the first cable – close to two thirds. In addition, Tasmania will also get an added energy security benefit from cable one, providing critical redundancy for Basslink.
  • Working towards a delivery timeframe as close as possible to 2028, or earlier if possible, while still seeing a value for money and lowest cost outcome.
  • Increasing the Commonwealth’s equity share in a joint venture entity to 49 per cent, with Tasmania’s equity share to be approximately 17.7 per cent and Victoria’s remaining at 33.3 per cent, significantly reducing costs to Tasmania.
  • Tasmania will have the option to sell its stake to the Commonwealth upon commissioning of the project.
  • Increasing concessionality of Commonwealth debt financing via the CEFC- subject to CEFC independent decision making and due diligence, delivering lower costs for consumers.

The Commonwealth will also work with the CEFC to provide low-cost debt for the Battery of the Nation Project at Tarraleah, and for the North West Transmission Developments (NWTD), which will increase the capacity of the network in Tasmania.

Importantly, the updated agreement would significantly reduce the cost to Tasmanian consumers and the Tasmanian budget compared to our agreement 10 months ago, despite material project cost increases in the meantime.

Marinus Link’s latest cost estimates indicate that stage one of the project will cost in the range of $3.0-3.3 billion, which will deliver two-thirds of the economic benefits of the project. Based on the updated arrangements the Tasmanian Government estimates its investment to be $106-117 million.

Updated economic analysis from Marinus Link Pty Ltd demonstrates that stage one is projected to deliver economic stimulus over $2billion and over 2400 jobs, with around 1400 in Tasmania.

Adjacent to this, the agreement with Victoria will be revised to increase the concessionality of Commonwealth debt financing via the CEFC of the VNI West project, further lowering costs.

We’ve worked carefully and closely on this new deal to ensure its benefits are realised.

Both Tasmania and Victoria will be the big winners from the Albanese Government’s action – with more jobs and security for Australian manufacturers – while the whole National Electricity Market will benefit from lower cost renewables and storage.

This investment in cheaper power will reduce cost of living pressures for Tasmanians and all Australians – it’s good for households and good for businesses.

Quotes attributable to Minister for Climate Change and Energy Chris Bowen:

“This is a game changing project for both Tasmania and the mainland and this updated agreement will not only deliver the benefits of MarinusLink, it will be cheaper to Tasmanians.

“The Albanese Government’s commitment is a win-win-win – for Tasmanian consumers, for Tasmanian energy security and to put downwards pressure on energy bills.”

Quotes attributable to Minister for Housing, Homelessness and Small Business Julie Collins:

“This commitment shows that the Albanese Government will always back Tasmania. We will always work hard to deliver vital investments and major projects to secure Tasmania’s future.

“MarinusLink is just another example of the Albanese Government delivering for Tasmania.”
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Quotes attributable to Tasmanian Premier Jeremy Rockliff:

“This is a great outcome for Tasmania. It will mean jobs, economic growth, energy security and lower power prices with Tasmania investing its fair share and no more.

“I’m very pleased we’ve been able to land this on the right side of our line in the sand. I want to thank the Prime Minister and his Minister for Climate Change and Energy for coming to the table and working with us to achieve this outcome.”

Quotes attributable to Tasmanian Minister for Energy and Renewables Guy Barnett:

“Marinus is crucial to unlocking new renewable generation in Tasmania and brings with it growth in industry, assists with new developments and jobs and helps more Tasmanians electrify.

“This agreement is a big win for Tasmania. It means we can continue to progress the project toward making a final investment decision in 2024, while ensuring Tasmania is only paying its fair share.”

Rosalie Woodruff MP, Greens Leader, 3 September 2023

Tasmanians Treated Like Mushrooms on Marinus

The Liberal Government’s announcement of a Marinus breakthrough treats Tasmanians like mushrooms, and does nothing to mitigate the ballooning project costs that will be paid by Tasmanian consumers through power bills.

Despite months of parliamentary pressure about the Marinus deal secrecy, and his government plunged into minority, the Premier’s announcement today continues to avoid the top concern about true costs to consumers.

The Premier appears to have renegotiated the government’s share of the cost it would carry, but there is no change to the 80% of project costs Tasmanian consumers would be slugged through power bills for decades to come.

With speculation the construction bill for Marinus and NW Transmission has doubled to well over $5 billion, Tasmanians deserve to know the updated project costs. Today’s announcement was for stage one of Marinus link only, but not the updated NW transmission line costs. Tasmanian consumers will be repaying a percentage share of the Clean Energy Finance Corporation debt, but still have no idea how many hundreds of millions, or billions this might be.

Given the concerns expressed by both experts and the community and the failure of Energy Minister Guy Barnett to adequately respond to parliamentary requests of cost disclosure, announcements about how the excessive costs of this project are carved up are meaningless without knowing how much those costs are to be.

Instead of transparency about the biggest infrastructure investment in the history of Tasmania, today’s announcement continues to hide the cost to the budget, and importantly to electricity consumers.

With some Tasmanians already forced to cut off power to juggle the cost of living, the Greens will continue to call for full transparency about government decisions worth billions of dollars to consumers.

Dean Winter MP, Shadow Minister for Energy and Renewables, 3 September 2023

Marinus bailed out

Tasmanian Labor has said it supports Marinus if it is in the best interests of Tasmania.  Today’s announcement means more Chris Bowen and less Guy Barnett – and that is the best news Project Marinus could hope for after 10 years of non-delivery by the Tasmanian Liberals.

This month marks 10 years since the Tasmanian Liberal Party first announced it would build a second interconnector.  In the following decade the Liberals have laid no cable, have no approvals, scrapped their own funding deal and still cannot answer basic questions about what the impact will be on Tasmanians’ energy bills.

Now, Guy Barnett and Jeremy Rockliff have effectively been stripped of responsibility for delivering Marinus.  It is a nationally significant project and it needs serious people delivering it.

Under the arrangements, Tasmania relinquished nearly half its equity share to the Australian Government because Tasmania’s budget could no longer afford it.  That is clear in the letter to the Prime Minister.

Tasmania will pay less because it will own less.  The Victorian and Australian Government’s will own 82.3% of the asset.  Tasmania’s liability will be 17.7% of $3.3 billion which is almost $600m.  On top of that Tasmania still retains responsibility for building the north west transmission line which we believe will cost between $1 and $1.5 billion – but which the government is refusing to provide an update on.

The fact is, Tasmanians remain on the hook for $2 billion to deliver Marinus – and Jeremy Rockliff’s refusal to be honest about these costs is deeply concerning.

The Premier and the Energy Minister should outline exactly what the real upfront cost of the total project is, whether Tasmania’s reduced ownership share means more of the revenue will go to the mainland, and most importantly, what the ongoing impact on Tasmanians’ power bills will be.

Media release – Hydro Tasmania, 3 September 2023

Energy future bright thanks to Marinus deal

Hydro Tasmania welcomed today’s announcement by the Australian and Tasmanian governments on a new deal to secure the first Marinus Link cable, as well as low cost-financing for the redevelopment of Tarraleah Power Station and the North West Transmission Developments.

Hydro Tasmania CEO Ian Brooksbank said the projects would deliver jobs, energy security and economic growth for the State.

“A century ago, our hydro pioneers set the State up for economic success with a bold vision for homes and industry powered by clean, green energy,” Mr Brooksbank said.

“Marinus Link and redevelopment of Tarraleah will underpin economic growth for another century to come. Today’s announcement is a good outcome for Tasmania and for Tasmanians.”

Mr Brooksbank said Tasmania had a head start over mainland states when it came to renewable energy infrastructure, but significant investment was needed to meet future demand.

“Electricity consumption in Tasmania is set to almost double over the next 30 years, with our lives and our businesses undergoing rapid electrification.

“We need new sources of renewable energy, more efficient hydro infrastructure, more flexible capacity, and more transmission if we are to meet the energy needs of a modern, low-carbon economy.”

Hydro Tasmania is proposing to redevelop the Tarraleah Power Station, breathing new life into the 85-year-old scheme. The preferred redevelopment option will generate 30 per cent more energy from the same amount of water and deliver an additional 100 megawatts of peak capacity (190 MW in total).

It will also make the scheme more flexible, able to start generating almost at the flick of a switch. That will be critical in a future energy system with significant wind and solar resources, allowing hydro power to fill the gaps when the sun isn’t shining, and the wind isn’t blowing.

A preliminary business case has identified the preferred option for the redevelopment with an early estimate of around $1.05 billion. Hydro Tasmania is now preparing the full business case with detailed cost estimates. A Final Investment Decision is planned for late 2024.

A second flagship project aimed at maximising the State’s hydro capacity and supporting the national transition to renewable energy is long duration pumped hydro at Lake Cethana.

Mr Brooksbank said these projects, together with Marinus Link and new wind developments, would drive growth in new and existing industries and deliver more jobs for Tasmanians.

“Marinus Link is the linchpin. It will attract the new wind developments needed to meet the future energy needs of Tasmanians and industry, and it will deliver the energy security needed for business confidence.”

Media release – Bob Brown Foundation, 3 September 2023

Have I got a Deal for You? One for the Price of Two: Marinus Debacle.

In yet another breathless announcement from Premier Rockliff, Tasmanians were told today that the two 750MW Marinus Link cables will now be reduced to one for the same price we were told would pay for two, $3-3.3billion.

“One for the price of two, what a bargain!” said Christine Milne, spokesperson for the Bob Brown Foundation.

“The one thing Tasmanians can be 100% certain about is that our power bills will go up to pay for this Marinus Link and Battery of the Nation debacle. Having been told two cables were essential for the ‘jobs and growth’ to flow and to power the mainland and the hydrogen hub, we are now told, they are not. One will suffice. This is the never ending story, Tasmanian style.”

“First we were told Tasmania had so much energy we could be the Battery of the Nation, helping the mainland get off coal and gas. All we needed was a shiny new Marinus Link, 1,500MW extension chord and big $$ profits would flow. Then in a 100% reversal, we were told that Tasmania didn’t have enough power and we would have power shortages unless we imported power from the mainland.”

“Now we are told, in yet further mission creep,  that we can do without two chords and can settle for one, in part to hedge against Basslink redundancy. But Basslink is not redundant, we are about to pay for it again as the Tasmanian Government has assured the new owners that the Tasmanian Government will back Basslink becoming a regulated asset so that Tas Networks can charge us more in our power bills to pay for it.”

“Why are we even contemplating this debacle? No one seriously believes that the mainland needs Tasmania’s energy so why are we pursuing this financial millstone and reconfiguring our Hydro system for everyone but Tasmanians?”

“When will we use our energy to electrify transport and agriculture on Tasmania?”

“Guy Barnett talks ‘jobs and growth’ but growth for whom? All that will happen is that Tasmanians will subsidise the growing profits of yet more overseas owned windfarms, just as we have for Granville Harbour and Cattle Hill. We need answers,” stated Christine Milne.

“Tasmanians will have new Basslink charges,  plus one $3.3 billion 750MW cable, plus NW transmission extension borrowings of $ 1 billion plus borrowings to finance Tarraleah and Cethana and whatever else Hydro builds. Tasmania is borrowing 80% of the total cost of Marinus Link, which the Government now says is $3.3billion. We are also paying 17.7% of 20% of equity in the project.”

“The Government needs to come clean on the total costs and explain why we should pay exorbitant power bills to finance it. The so-called benefits are a mirage,” concluded Christine Milne.

Editor’s note: Media releases added to this post in order received.