Second Basslink might be risky, says electricity industry analyst

A second Bass Strait electricity interconnector would likely need dramatic changes in energy policy and the closure of generation capacity interstate, an industry expert says.

THe Basslink cable being fed into Bass Strait.

A SECOND Bass Strait electricity interconnector may not be viable without dramatic changes in energy policy and the wholesale retirement of coal-fired generation capacity interstate, an industry expert says.

The Marinus Link is planned to deliver up to 1200MW of hydro and wind power electricity into the mainland national electricity grid.

But IBISWorld senior industry analyst Jason Araveanis said the Marinus Link project was risky.

“The viability of the Marinus Link hinges on the Federal Government’s decisions regarding the underwriting of coal-fired generation,” he said.

“According to the project’s feasibility study, the Marinus Link will only be viable if 7000MW of coal-fired generation capacity is retired by 2030.

“This is equivalent to all coal power stations in Victoria, plus a quarter of that in New South Wales.”

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The project also requires the federal renewable energy target to be increased to 52 per cent by 2030, well above the 26 per cent target currently supported by the Government.

“If the Federal Government plans on developing the Marinus Link, it will require a fundamental change in policy,” he said.

“At this point in time it would be risky to move forward with this project, but give it another five to 10 years and the risk would fall.

“There’s a certain risk that if they started building it today, the assumptions that they’re counting on in the late 2020s might not occur.”

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TasNetworks general manager of Project Marinus Bess Clark said the project could play a vital role in delivering renewable energy.

“In relation to the timing of coal retirement, there is much uncertainty, but we are certain that Marinus Link can help Australia’s continuing energy transition as coal generation retires,” she said.

“Given the exact timing of coal-fired generation [retirement] is uncertain, the Marinus Link Initial Feasibility Report highlights that it is prudent to progress a shovel-ready project that could be ready by the mid 2020s.

“The Commonwealth Government’s funding commitment of $56 million will help to progress environmental approvals to support a shovel-ready project.”