Talking Point: Investors need undersea cable certainty

Government must do more than pencil in Marinus Link plans, says Anton Rohner

GET MOVING: Marinus Link undersea cable should be set in concrete to enable renewable energy investment and jobs. Picture: AFP

CONFIRMATION from the Federal Government this week that the Marinus Link is one of 15 priority projects nationwide is a massive vote of confidence in the project — and for Tasmania. Now it is time to get on with it.

As we emerge from the COVID-19 economic crisis, never has there been a better time for the government to take the bull by the horns and commit to proceed with this essential piece of state-building infrastructure.

The Tasmanian Government has a bold vision of doubling Tasmania’s renewable production by 2040, a vision we wholeheartedly support.

But this goal will not be achieved without the Marinus Link being available to export the surplus clean, renewable energy to the mainland.

Tasmania is already at 100 per cent renewable generation capacity, so it is a bit like the chicken and egg dilemma.

Without Marinus there will be no way to export any surplus, cheap, dispatchable renewable energy.

We can then close coal projects in mainland Australia and add true value to decarbonising Australia.

But without certainty that Marinus is going to be built, renewable energy investors are essentially punting the government will be as good as its word, or face the risk of investing billions into what would likely become stranded assets. Not only will this be good for Tasmanian electricity consumers, it has the capacity to attract new industries in search of cheap, reliable energy, just like our state’s hydro energy revolution of the mid-20th century did.

It will also mean downward pressure on electricity prices, by providing reliable, cheap and secure renewable energy into the electricity grid for Tasmania and Australia.

Many rightfully ask — who is going to pay for it?

We support the Tasmanian Government’s position in ensuring the beneficiary pays, which means that since mainland Australia gets most of the long-term benefit, it should pay for the use on an ongoing basis. Confirming a funding model doesn’t need to be a complicated process.

Federal and state governments regularly reach funding agreements on energy and road projects of a similar or even greater financial size.

Surely funding a renewable energy highway across Bass Strait is not that different to funding a freeway in Queensland, Sydney or Melbourne?

All of which is why it is so important that the state and federal governments reach a formal agreement to proceed with the project.

It will mean investors like us will be able to plan with certainty for the renewable future in Tasmania, meaning more investment and jobs for Tasmanians.

It will allow the bold, ambitious and job-rich Hydro Tasmania Battery of the Nation pumped-hydro projects to become a reality.

And it will provide a vital back-up for the Basslink cable, which is operating below designed capacity to try to reduce the risk of another disastrous outage.

No one wants to be in the same position we were in just a few years ago, with the magnificent Lake Gordon at just 4 per cent capacity and the very real risk of electricity rationing.

The Marinus Link has bipartisan support from Liberal and Labor, at state and federal level. It is pencilled in to be operational around 2026, but pencilled in doesn’t cut the mustard for investors deciding whether to invest in Tasmania or elsewhere in the country.

Without urgent action to formally commit to the Marinus Link, there is also a risk it will be overrun by other energy priorities and projects. With that is a loss in investment and sustainable jobs.

We urge the Tasmanian and federal governments to seize the opportunity and formally commit to building the Marinus Link, and help to kickstart the Tasmanian economy and jobs.

Anton Rohner is chief executive of UPC Renewables Australia.