North West Transmission Developments: Estimated cost rises from $800m to $1.5bn

A vital, once-in-a-generation upgrade of Tasmania’s energy network is facing ballooning costs of nearly 90 per cent, figures released by TasNetworks show.

The site of the Marinus Link converter station at Heybridge. Picture Supplied

A vital, once-in-a-generation upgrade to North-West Tasmania’s energy network is facing ballooning costs of nearly 90 per cent, figures released by TasNetworks show.

North West Transmission Developments (NWTD), a project closely associated with Marinus Link, originally involved 240km of new or upgraded transmission lines needed to create capacity for a greater number of renewable energy projects expected to come online in the medium-term.

The two stages of NWTD – Palmerston-Sheffield-Heybridge and Stowport to Burnie (Stage 1), and Staverton to Burnie via Hampshire Hills (Stage 2) – were originally budgeted at $800m.

However, according to updated figures provided by TasNetworks on Monday, the first stage alone is now expected to cost $950m.

Stage 2 of NWTD, alongside the second Marinus Link cable, has been deferred indefinitely in the wake of cost blow-outs that saw Marinus’ expected price tag soar from $3bn for both cables, to approximately double.

The second stage of NWTD, if and when it is constructed, is expected to cost $550m, taking the total cost of the development to $1.5bn, a premium of 87.5 per cent on the original forecast.

North West Transmission Developments. Picture: TasNetworks

TasNetworks now believes the first Marinus cable can be delivered for $2.9bn or less, while the second cable, which is “subject to market operators needs and development of additional dispatchable capacity in Tasmania,” would come in at $2.2bn.

In a statement, TasNetworks said new economic modelling commissioned on its behalf proved the “benefits of Marinus Link and NWTD... significantly outweigh the cost”.

According to the modelling, the first 750MW Marinus cable, for which a final investment decision will be made in December 2024 in advance of expected construction in 2025, would contribute $1.4bn to Tasmania’s economy and support 1400 direct and indirect jobs.

TasNetworks CEO Dr Sean McGoldrick. Picture: Supplied

The $1.4bn is “on top of the benefits of slashing emissions, boosting energy security, increasing telecommunications capacity, supporting new energy projects and keeping downward pressure on energy prices,” TasNetworks said.

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Once the first cable is operational, a typical residential consumer could expect to see savings of between $35–$40 per annum on their power bill, the modelling suggested.

TasNetworks CEO, Sean McGoldrick, said Marinus Link and NWTD are necessary pre-requisites for doubling Tasmania’s clean energy generation in line with the state government’s 2040 target.

“Marinus will help give Tasmanians the lowest possible prices and thousands of rewarding clean energy careers,” Dr McGoldrick said.

“The first stage of Marinus will help slash Australia’s emissions by approximately 70 million tonnes in coming decades – the equivalent of taking half a million cars off the road.

“Even with inflation, Marinus is a proven winner for the wallets, the living standards, the careers and the climate safety of all Tasmanians,” he said.