Article
Marinus Link – An Economic And Environmental Disaster
This article, contributed by John Devereaux, offers a critical perspective on the proposed Marinus Link project, challenging the prevailing governmental narrative that it is “good for Tasmania, good for the nation.”
Devereaux, now retired, brings over 30 years of extensive experience in the energy industry to this analysis, having held senior executive roles, including with the Hydro Electric Corporation and Aurora Energy, as CEO of Energy Networks Australia and as an energy consultant to the Australian Energy Regulator (AER).
Drawing upon this deep sector knowledge, his article asserts that for Tasmania, the Marinus Link, is a “financial and environmental disaster in the making.”
It focuses on the escalating costs (now over $5.2 billion for half the initially proposed capacity) and the resulting adverse impacts on Tasmanian electricity consumers. This contribution calls for greater accountability and transparency from the Tasmanian Government and the AER, questioning how such significant and long-term financial burdens on consumers can be justified.
Overview
Marinus Link has been described as “good for Tasmania, good for the nation”. For Tasmania it is in fact a financial and environmental disaster in the making.
It was first mooted as a $3 billion project to construct a 1500MW cable, delivering net market benefits (that is – with purported gross market benefits exceeding the $3 billion cost).
At latest count the total cost is expected to exceed $5.2 billion, for a 750MW cable, (half the capacity of the original proposal) and still deliver net market benefits – a remarkable expectation.
The additional Tasmanian transmission infrastructure to enable Marinus Link will cost in excess of $1.3 billion. (The value of the entire Tasmanian transmission system as at 30 June 2025 was $1.45 billion).
Marinus Link (stage 1 alone) will see a dramatic increase in Tasmanian electricity transmission charges of over $150 million per year, to be borne by all Tasmanian electricity consumers, including Major Industrials (MIs), and the wholesale cost of electricity will also increase by between 6% and 59% (from the government commissioned Deloitte study) contrary to statements made by the Tasmanian Government.
(Right now customers seeking long term contract renewals are already seeing prices for 2029 showing a 50% increase).
Marinus Link will provide no direct benefits to Tasmanian electricity consumers.
(It will provide additional energy security, but previous expert reviews made it clear that additional security in the form of a second interconnector is not necessary).
The proposal must be approved by the Australian Energy Regulator (AER) and its final decision will be handed down on the 6 February 2026 – Marinus is not yet a “done deal”.
Tasmanian electricity price outcomes
From a Tasmanian electricity consumer perspective, the significant impacts will be an increase on overall annual transmission charges of around 100% (more than $150 million per year) and an increase in wholesale energy charges of between 6% (best case) and 59%.
The adverse impacts on Tasmanian electricity prices, arising directly from the Marinus Link proposal, will therefore be very substantial.
From a Tasmanian government perspective, the support for the proposal appears to be based on the cash bonanza to be delivered to state coffers via additional earnings projected by Hydro Tasmania, of up to $690 million per year.
It appears that Tasmanian electricity consumers face a massive increase in electricity prices, to bolster the Tasmanian state budget, which is entirely contrary to the National Electricity Objective, which is:
“to promote efficient investment in, and efficient operation and use of, electricity services for the long term interests of consumers of electricity…”
Increased transmission charges.
The annual impost on Tasmanian electricity consumers because of the transmission charges levied by Marinus Link Pty Ltd (MLPL) for the “cable” and by TasNetworks for the North West Transmission Development (NWTD) will be:
Cable component:
The Marinus Link Pty Ltd (MLPL) revenue proposal to the AER in December 2024 shows that the annual allowable revenue (charges to electricity customers) after concessional finance will be $177 million.
Tasmania’s share, at 27.6%, as agreed by the Tasmanian government, will be $49 million per year.
Tasmanian transmission (North West Transmission Development, NWTD) component:
The Tasmanian Government’s Final Investment Decision Assessment Report, July 2025, indicates that TasNetworks will be able to charge an additional $105 million per year to pay for the NWTD, after taking into account concessional financing. Tasmanian electricity customers, including MIs, would see that added to their electricity bills, in the form of network charges.
Total increase in transmission charges
The total increase in annual transmission charges, to be borne by Tasmanian electricity customers, for 60 years, is therefore: Cable $49 million, NWTD $105 million. Total $154 million (after applying concessional finance).
The total transmission revenue earned by TasNetworks in 2023-2024 was $154 million, therefore Marinus stage 1 will result in a 100% increase in transmission charges, more if costs escalate or concessional financing results in a different outcome than currently projected.
Those charges will be levied on Tasmanian electricity consumers for 60 years, regardless of whether or not Marinus delivers any market benefits to the total NEM over that period.
Increased wholesale electricity prices
The Tasmanian Government’s WOSBC states:
These [transmission] costs are found to be broadly offset by modelled lower wholesale electricity prices compared to “No Marinus”.
That statement is contradicted by the findings of the modelling undertaken by Deloitte (Tasmanian Treasury Marinus Link Electricity Market Modelling Final Report, 17 December 2024):
• In the absence of Marinus Link, limited interconnection through BassLink results in the Tasmanian market to remain protected from rising mainland prices.
• The introduction of Marinus Link (in particular Marinus Link 2) facilitates greater levels of integration between Tasmania and mainland markets; as prices in both markets converge. Thus, Tasmania’s exposure to NEM coal phase-outs and sharply rising load is heightened, resulting in substantial increases in Tasmanian prices (with Marinus Link when compared to no Marinus Link scenarios).”
Recognition of electricity price increases as a result of Marinus
The Tasmanian government explicitly recognizes the electricity price increases which Tasmanian’s face should the Marinus proposal proceed and propose that electricity consumers will be compensated for the resulting, additional costs.
Its Final Investment Decision Assessment Report notes the requirement for – “reinvestment of net financial returns to reduce cost-of-living pressures and support Tasmania’s large energy consumers.”
It is not clear why the Marinus proposal, supported by the Tasmanian government, would be approved by the AER when it will result in significant increases in electricity prices which must be compensated by discretionary and unquantified government action.
Increased energy security
The construction of a second interconnector would provide Tasmanians with additional energy security, however previous expert reviews made it clear that additional security in the form of a second interconnector is not necessary.
The Tasmanian Energy Security Taskforce Final Report, June 2017, indicated:
“… the Taskforce makes the assessment that while a second electricity interconnector would greatly enhance Tasmania’s energy security and provide other benefits, its development is not required to enhance Tasmania’s energy security…”
Risks borne by Tasmanian electricity consumers
The most obvious risk is that electricity consumers (Tasmanian and Victorian) will pay the transmission charges associated with the Marinus Link proposal over its 60 year asset life regardless of whether or not the link delivers any measurable market benefits.
That risk will not be borne by the proponents (Marinus Link Pty Ltd) or generators.
The enormous changes occurring in the NEM at an accelerating rate mean that Marinus Link could become redundant in the very early stages of its life.
The Tasmanian government’s own Whole of State Business Case makes many specific references to the risks involved. Just one of those, in relation to predictions of the Marinus impact on electricity prices, makes it clear that:
“wholesale market modelling is a useful approach to provide a guide to the range of potential wholesale electricity price movements in the NEM arising from the introduction of Marinus Link. Actual decisions and market outcomes may be very different. Investment decisions, in particular, cannot be predicted with certainty as they can be heavily influenced by changing costs, government policies, decisions by regulatory authorities and rapid rates of technical change in the electricity supply industry.
“It is even possible that the NEM regulatory framework could be changed in future decades, such that the market may operate quite differently…”
Environmental impacts
The environmental impacts are less obvious (as water rushes out of our dams, down our rivers, to meet mainland electricity demand, in an era of reducing rainfall) but equally adverse.
The transmission towers which will be constructed to link the Marinus cable to Tasmania’s transmission system will have a significant visual impact on some of the prettiest parts of our northwest coast, as well as restricting farming use of the affected land.
Conclusion
How Tasmanian parliamentarians could support or allow such a massive project to be foisted on Tasmanians, along with its adverse impacts on electricity prices and the increase in state debt, is beyond comprehension.
Those Tasmanian electricity consumers who can afford to invest in solar and battery technologies to avoid the resulting adverse financial impacts will do so. Those of us who remain at the mercy of the government owned electricity companies need to brace ourselves for what is coming.
The Tasmanian state government, and the AER, must explain to Tasmanian electricity consumers how:
· Locking in a 100% increase in transmission charges for 60 years;
· Facilitating an increase in wholesale electricity charges of between 6% and 59%;
· Exposing Tasmanian electricity consumers and the Tasmanian community generally to the risks identified in the Tasmanian Government’s Whole of State Business Case; and
· Reliance on a state government scheme to compensate for electricity price increases, is in their long term best interests.
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