The federal government has intervened to support a large-scale renewable project that aims to connect mainland Australia with the island state of Tasmania. Under the agreement, the Labor government has increased its stake in the joint venture to 49 percent and secured nearly half of the project’s initial funding. The Victorian government will own a third of the equity, while the Tasmanian government will own 17.7 percent.
The decision to provide funding comes after the Tasmanian government announced a significant cost increase in the project in August and threatened to withdraw from it. Federal Energy Minister Chris Bowen described the new agreement as a “game-changer,” emphasizing its importance for renewable energy, Tasmania’s energy security, and job creation. He also noted that the changes in funding reflected rising global costs.
Tasmanian Premier Jeremy Rockliff expressed satisfaction with the agreement, highlighting its fair terms and the benefits it would bring to the state in terms of jobs, economic growth, energy security, and lower power prices.
The Marinus Link Project, which aims to turn Tasmania into the “battery of the nation,” involves the construction of two 750-megawatt cables and fiber-optic cables that will connect electricity generation and storage facilities in Victoria to Tasmania. This will allow excess energy from the mainland to be transferred and stored in Tasmania’s hydro storage, releasing it during times of high demand in the National Electricity Market. The project is expected to save up to 140 million tonnes of carbon dioxide equivalent by 2050 and generate economic stimulus of over $2 billion, along with more than 2,400 jobs.
Although the project has not yet started, it has faced financial challenges. Initially estimated to cost around $3 billion, the Tasmanian government announced in August that it would be subject to significant cost blowouts. However, the new agreement revealed that the first stage of the project alone would cost around $3-$3.3 billion, which aligns with the previous estimates. The Tasmanian government is expected to contribute $106-$117 million to the project.
The announcement has elicited different responses from various stakeholders. The Tasmanian Opposition has welcomed the deal, while the Tasmanian Greens criticized it for its lack of transparency. The Bob Brown Foundation, an environmental group, denounced the focus on one cable in the initial phase of the project. Despite mixed reactions, the Marinus Link Project is scheduled to commence in 2025 and be completed by 2028.