Almost 20 years ago I advised the fund that bought Basslink from the (British) National Grid Company. NGC (and Macquarie) had run rings around the representatives of the Tasmanian people, and it was time to monetise the rivers of gold those hopeless representatives had provided.

Courtesy of representatives of the people of Singapore, NGC’s managers walked away having doubled their investors’ money. Bingo.

Fast forward a decade and the Singapore peoples’ representatives called me to have a laugh about a rumour they had heard, that the Tasmanian Government was intent on building a second interconnector to Victoria.

Could anyone possibly be so stupid, they asked. No, we chortled, impossible! Oh, how we laughed.

Alas, how wrong was I.

Yesterday the caretaker Tasmanian government pressed the button on Marinus Link, apparently egged on by Minister Bowen. Counting Tasmania’s share of the now regulated Basslink, the necessary Tasmanian onshore transmission development and Tassie’s share of Marinus Link, the regulated value of transmission in Tasmania will go up by a factor of about 3.5 and so transmission charges by a factor of about 3.

What will Tasmania get from this? The chance to buy cheaper electricity from Victoria?

But the Tasmanian Government keeps telling everyone that Tasmania has such an advantage, how then is it that power from Victoria will be cheaper?

Maybe its to export the electricity that the Government insists is so cheap in Tasmania? But then how is it that Tasmania can’t even get through a winter (let alone a summer) without importing lots of power from Vic, and why is it that every time an industrialist seeks power in Tas, HydroTas tells them the cupboard is bare?

No, as we know, to make Marinus Link useful a massive repowering of the Tasmanian power system is needed. And, as we know, masses of subsidy will be needed to make this happen: Tasmania has no competitive advantage in electricity production or storage relative to the mainland. Loss-making industries need their hands in their customers’ and taxpayers’ pockets to keep going. Oh, how we laughed.

What about Victoria? With its share of Marinus Link, necessary on-shore Victorian transmission and regulated Basslink, the regulated value of transmission assets in Victoria will increase at least 1.5 times and so transmission charges roughly double. What will Victoria get from this? Greater access to the flimsy Tasmanian system. That’s worthless. But Victoria also buys the hope that massive redevelopment of the Tassie system might mean that one day Tassie might provide a chunk of stored electricity to Victoria.

This is electricity, mind you, that can be sourced much more cheaply in Victoria. Take that to your bank manager for a laugh.

Energy policy in Australia is now a cesspit of rent seeking, overseen by ministers buying failure as quickly as they can, to paraphrase Ross Garnaut.

Oh, the beloved country, how we cried.

Bruce Mountain
01 August 2025

Bruce Mountain is Professor and Director of Victoria Energy Policy Centre at Victoria University; Director of Carbon and Energy Markets (Pty Ltd)

Bruce is the inaugural Director of the Victoria Energy Policy Centre. He is a well-known Australian energy economist whose research and advisory work has focussed on the economic regulation of network monopolies, the analysis of retail energy markets, and the design of emission reduction and renewable energy policies. Bruce has been a long-standing advisor to governments, regulators, market participants and interest groups in Australia and internationally.

His PhD from Victoria University was on the political economy of energy regulation in Australia, and he has a Bachelor and a Masters degree in Electrical Engineering from the University of Cape Town and is qualified as a Chartered Management Accountant in England.

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