Second Bass Strait power cable underpins $3 billion wind farm investment

A renewable energy company says Federal funding for a second Bass Strait interconnector gives it confidence to invest $3 billion in Tasmanian projects.

A RENEWABLE energy company says the Federal Government’s commitment to a second interconnector across Bass Strait has given it confidence to proceed with three major projects across the state’s North and North-West worth $3 billion.

UPC Renewables CEO Anton Rohner on Thursday said his company would commit to full development of its Robbins Island and Jims Plain wind farms — expected to generate a combined 1000MW, employ about 400 people over four years and create 75 ongoing jobs — as well as another 1200MW project in the North-East.

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Mr Rohner said Marinus Link was a “generational investment” that would also help other projects in Tasmania, “push prices down lower” and contribute to the National Electricity Market.

However, an initial feasibility study found the economic value of Marinus Link was tied heavily to accelerated shutdowns of coal-fired power on the mainland.

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Energy Minister Guy Barnett, left, and UPC Renewables CEO Anton Rohner. Picture: CHRIS TESTA

The TasNetworks study, published this week, found the costs of the interconnector would likely outweigh the benefits until about 7000MW of coal-fired power was retired from the National Electricity Market (NEM) — likely to happen from the mid-2020s.

“As that transition continues across the national electricity market, Tasmania's energy product will become more and more important,” state Energy Minister Guy Barnett said.

The report also said most of the energy market benefits would be realised in mainland states linked to the NEM.

Asked how the State Government would ensure Tasmanians didn’t foot more than their fair share of the bill for Marinus Link, Mr Barnett said customers “overwhelmingly mainlanders, overwhelmingly from Victoria” would pay.

The feasibility study said government grants or changes to the existing pricing framework could ensure Tasmanian customers didn’t disproportionately pay for the interconnector.

UPC’s announcement came a day after Prime Minister Scott Morrison confirmed the government would spend $56 million advancing Marinus Link, which will send more Tasmanian renewable energy to the mainland.

Opposition energy spokesman Mark Butler said Labor would match the government’s commitment if it wins the upcoming election.