The Australian and Tasmanian governments have acted a new deal to continue the critical Marinus Link project.
The Marinus Link is an essential project for Tasmania and Australia as it will drive economic growth and put downward pressure on prices across the State and the East Coast National Electricity Market (NEM) through cleaner and cheaper energy.
The project will unlock renewable energy generation and storage for the mainland through Tasmania’s Battery of the Nations project. It will also unlock the next wave of renewable energy development in the State, boosting investment and jobs.
“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,” Minister for Energy Chris Bowen said.
With the Marinus Link project competing in a global market with competitive supply chains and facing inflationary pressures, the Tasmanian and Federal Governments amended the original project agreement to ensure it continues.
“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,” Tasmanian Premier Jeremy Rockliff said.
The new amendments to the Marinus Link agreement include the following:
- The Marinus Link project will focus on one cable in the first instance while negotiations continue on a second cable, to be considered after FID on cable 1. The Australian Energy Market Operator (AEMO) ISP modelling finds the majority of the project’s benefits are attained from the first cable. Additionally, Tasmania will get more energy security benefits from cable one, providing critical redundancy for Basslink.
- Working towards a delivery timeframe as close as possible to 2028 while still seeing a value for money and lowest cost outcome.
- Increasing the Commonwealth’s equity share in a joint venture entity to 49%, while Tasmania’s equity share will be around 17.7% and Victoria’s remaining share is at 33.3%.
- Tasmania will have the option to sell its stake to the Commonwealth upon project commissioning.
- Increasing concessionality of Commonwealth debt financing via the Clean Energy Finance Corporation (CEFC)—subject to CEFC independent decision-making and due diligence, delivering lower costs for consumers.
The Federal Government will also collaborate with the CEFC to provide low-cost debt for the Battery of the Nation Project at Tarraleah and the North West Transmission Developments (NWTD).
“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,” Minister for Housing, Homelessness, and Small Business Julie Collins noted.
The amended agreement would significantly lower the cost to Tasmanian consumers and the Tasmanian budget despite increases in the material project cost.
The latest cost estimate of the Marinus Link project shows that the first stage of the project, which will deliver two-thirds of the economic benefits, will amount to about $3.0-3.3 billion. According to the amended arrangements, the Tasmanian Government investment is estimated to be around $106-117 million.
According to an updated economic analysis from Marinus Link Pty Ltd, stage one is expected to deliver an economic stimulus of over $2 billion and create over 2400 jobs, 1400 of which are in Tasmania.
“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,” Tasmanian Minister for Energy and Renewables Guy Barnett stated.
The agreement with Victoria will also be revised to increase the concessionality of Commonwealth debt financing via the CEFC of the Victoria to New South Wales Interconnector (VNI) West project.
