Plans to build a 1500MW undersea cable linking Tasmania and the Australian mainland are once again under a cloud of controversy, with a cost blowout on the massive project raising fresh questions over its economic viability.
The Tasmanian Liberal government last week revealed it had been advised of “material and significant” cost increase for Marinus Link, which the state has agreed to co-fund with the federal government and Victorian Labor.
Tasmanian premier Jeremy Rockliff said the co-funding agreement, made in October last year, was for the island state to provide a third of the equity required for the project, which at that time was estimated at a total of $3.1 billion.
But the cost of Marinus, identified as essential by the Australian Energy Market Operator in its 30-year planning blueprint known as the Integrated System Plan, has been going up, with most recent estimates edging closer to $4 billion, or higher according to the claims of some project critics.
Whatever new number the updated estimates have come up with, the Tasmanian government has been spooked enough to announce a “revisit” of the project, to ensure it remains in the state’s best interests.
“For the right price, Marinus Link is an important project which will help boost additional renewable energy development in Tasmania and support growth in business and industry,” said Rockliff in a statement on Friday afternoon.
“The right price does not mean any price, and from day one we have said that the cost-benefits of this project must stack up in favour of Tasmanians.”
Rockliff says his government has both written to and spoken with prime minister Anthony Albanese about the increasing costs of the project, and asked him to consider alternative funding options.
“Those discussions are continuing, and I am confident that we will reach a good outcome for Tasmania soon,” he said.
“Our state has world-class hydro and wind resources,” added Tasmania energy minister Guy Barnett.
“If other states want this, they should pay for it, or the federal government should step up. We will always put Tasmania and Tasmanians first.”
For its part, the federal government doesn’t particularly fazed by the cost increases for Marinus, with a spokesperson for federal energy minister Chris Bowen saying the project is facing similar pressures to other major energy and infrastructure projects around the world.
“The Albanese government will continue working with the Tasmanian government to ensure its benefits are realised,” the spokesperson said.
But for critics of the project, including former leader of the Australian Greens, Christine Milne, news of yet more cost increases and signs the Rockliff government is going cold on the project come as no surprise.
Milne, now secretary of the board of the Bob Brown Foundation, has long argued that building a new HVDC power cable across the Bass Strait doesn’t stack up economically, and will offer “virtually no benefit to Tasmanians.”
In an editorial published in Tasmania’s Examiner on Friday, Milne invokes the ghost of subsea cable “disaster” Basslink, which she writes “went broke, went into administration and …for which we Tasmanians will pay for decades to come.”
Milne believes Marinus Link will be a case of history repeating.
“The state government has now received updated costs [for Marinus] and I understand the figure is not south of $5 billion, a billion more than budgeted.
“It seems Tasmania has requested the Commonwealth to stump up for the order of the cables,” she says.
Milne’s harshest words seem reserved for federal energy minister Bowen, who she describes as “uncritically evangelical” about Marinus Link and “enamoured” with AEMO’s assessment of it as a priority project for Australia’s shift to 80% renewables by 2030.
“It’s time to reassess the credentials of not just the Marinus project, but those so-called experts and ministers who spin boondoggles,” she says.
