$56 million for power link between Tasmania and Victoria

Thursday, 28 February, 2019

$56 million for power link between Tasmania and Victoria

The Morrison Government will provide $56 million to accelerate the second Bass Strait interconnector, called ‘Marinus Link’. This comes after the initial feasibility report, supported by $10 million of funding from Australian Renewable Energy Agency (ARENA), found it would be a strategic interconnection investment providing economic benefits across the National Electricity Market (NEM).

TasNetworks is investigating how Marinus Link could be designed, built and form a key part of Australia’s future electricity and telecommunications grid. The report found the interconnector will unlock new generation and storage in Tasmania helping lower prices, increase reliability in the NEM, boost the Tasmanian and Victorian economies by $1.6 billion and create 1400 jobs. It would also help reduce Australia’s emissions by 25 million tonnes by 2030.

“After a summer of blackouts, the interconnector will mean more reliable power at lower prices for homes and businesses in Tasmania and on the mainland,” said Prime Minister Scott Morrison. “Tasmania has the potential to be Australia’s battery to keep the lights on and running costs down and we’ll be there backing them to get there.”

The report found the Marinus Link could be technically feasible as either a 600 MW link, with an estimated capital cost of $1.3 to $1.7 billion or 1200 MW link delivered in two stages as 600 MW cables, costing about $1.9 to $3.1 billion.

TasNetworks also identified favourable routes that would be likely to achieve environmental and planning approvals and land access. These routes connect a converter station in the Sheffield or Burnie area in north-west Tasmania by high-voltage direct current (HVDC) cable to a converter station in Victoria’s Latrobe Valley. The favoured route will be identified in early 2019 and is subject to community consultation.

The economic feasibility of the second interconnector depends on when existing coal-fired power stations retire, the report said, with potential timings as early as the mid-2020s or in the early 2030s.

Energy Minister Angus Taylor said approximately 400 MW of available dispatchable generation cannot currently be delivered to the mainland, due to constraints on Basslink, the first Tasmania-Victoria interconnector.

“A second interconnector and new dispatchable generation and storage will help alleviate the significant supply and demand pressures we saw across the NEM over summer,” Taylor said.

ARENA CEO Darren Miller said: “Tasmania has vast potential renewable energy resources — including wind and pumped hydro — ready to be developed, and in order to maximise the potential of Tasmania we need to ensure that there is enough interconnection to the mainland.

“There is a lot of work still to be done, but the initial findings are promising and demonstrate how a second interconnector could help unlock Tasmania’s potential as the battery of the nation while also provide grid security and reliable supply to both Tasmania and Victoria.”

The government’s funding builds on the $20 million already invested by the Australian and Tasmanian Governments, through the ARENA and TasNetworks, into the initial feasibility report. Energy Networks Australia CEO Andrew Dillon welcomed the commitment to fast-track the Marinus Link, stating it follows the recent launch of Project EnergyConnect by ElectraNet and TransGrid for a new interconnector between SA and NSW.

“[This] is a worldwide trend towards increasing interconnection to manage growing levels of variable renewable generation and it is pleasing to see growing recognition of that need here in Australia,” Dillon said.

TasNetworks will now undertake further refinement and analysis that will include the service, funding and pricing models needed to inform the final feasibility study report, which is expected to be released in December 2019.

Image credit: ©stock.adobe.com/au/PhuchitAunmuang

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