The Hon Chris Bowen MP, Minister for Climate Change and Energy
The Hon Julie Collins MP, Minister for Housing, Homelessness and Small Business
The Hon Jeremy Rockcliff MP, Premier of Tasmania
The Hon Guy Barnett, Tasmanian Minister for Energy and Renewables
Today the Albanese and Rockliff Governments are acting with a new deal to keep the critical MarinusLink project plugged in - driving economic growth and putting downwards pressure on prices across Tasmania and the national East Coast grid.
MarinusLink is an incredibly important project for Tasmania and Australia, reducing cost of living pressures for Tasmanians and the east coast National Electricity Market (NEM) through cleaner and cheaper energy.
Marinus will unlock renewable energy generation and storage for the mainland through Tasmania's Battery of the Nation projects, and unlock the next wave of renewable energy development in Tasmania, attracting investment and jobs in the state.
But the project is competing in a global market with tight supply chains and is facing similar inflationary pressures to other major energy and infrastructure projects around the world.
In recognition of this, the Albanese and Rockliff Governments have worked closely to ensure the project continues, with the following amendments to the original MarinusLink agreement:
- The project will be focused on one cable in the first instance, with negotiations to continue on a second cable, to be considered after FID on cable 1. AEMO ISP modelling finds the majority of the benefits from Marinus Link are realised from the first cable - close to two thirds. In addition, Tasmania will also get an added energy security benefit from cable one, providing critical redundancy for Basslink.
- Working towards a delivery timeframe as close as possible to 2028, or earlier if possible, while still seeing a value for money and lowest cost outcome.
- Increasing the Commonwealth's equity share in a joint venture entity to 49 per cent, with Tasmania's equity share to be approximately 17.7 per cent and Victoria's remaining at 33.3 per cent, significantly reducing costs to Tasmania.
- Tasmania will have the option to sell its stake to the Commonwealth upon commissioning of the project.
- Increasing concessionality of Commonwealth debt financing via the CEFC- subject to CEFC independent decision making and due diligence, delivering lower costs for consumers.
The Commonwealth will also work with the CEFC to provide low-cost debt for the Battery of the Nation Project at Tarraleah, and for the North West Transmission Developments (NWTD), which will increase the capacity of the network in Tasmania.
Importantly, the updated agreement would significantly reduce the cost to Tasmanian consumers and the Tasmanian budget compared to our agreement 10 months ago, despite material project cost increases in the meantime.
Marinus Link's latest cost estimates indicate that stage one of the project will cost in the range of $3.0-3.3 billion, which will deliver two-thirds of the economic benefits of the project. Based on the updated arrangements the Tasmanian Government estimates its investment to be $106-117 million.
Updated economic analysis from Marinus Link Pty Ltd demonstrates that stage one is projected to deliver economic stimulus over $2billion and over 2400 jobs, with around 1400 in Tasmania.
Adjacent to this, the agreement with Victoria will be revised to increase the concessionality of Commonwealth debt financing via the CEFC of the VNI West project, further lowering costs.
We've worked carefully and closely on this new deal to ensure its benefits are realised.
Both Tasmania and Victoria will be the big winners from the Albanese Government's action - with more jobs and security for Australian manufacturers - while the whole National Electricity Market will benefit from lower cost renewables and storage.
This investment in cheaper power will reduce cost of living pressures for Tasmanians and all Australians - it's good for households and good for businesses.
Quotes attributable to Minister for Climate Change and Energy Chris Bowen:
"This is a game changing project for both Tasmania and the mainland and this updated agreement will not only deliver the benefits of MarinusLink, it will be cheaper to Tasmanians.
"The Albanese Government's commitment is a win-win-win - for Tasmanian consumers, for Tasmanian energy security and to put downwards pressure on energy bills."
Quotes attributable to Minister for Housing, Homelessness and Small Business Julie Collins:
"This commitment shows that the Albanese Government will always back Tasmania. We will always work hard to deliver vital investments and major projects to secure Tasmania's future.
"MarinusLink is just another example of the Albanese Government delivering for Tasmania."
Quotes attributable to Tasmanian Premier Jeremy Rockliff:
"This is a great outcome for Tasmania. It will mean jobs, economic growth, energy security and lower power prices with Tasmania investing its fair share and no more.
"I'm very pleased we've been able to land this on the right side of our line in the sand. I want to thank the Prime Minister and his Minister for Climate Change and Energy for coming to the table and working with us to achieve this outcome."
Quotes attributable to Tasmanian Minister for Energy and Renewables Guy Barnett:
"Marinus is crucial to unlocking new renewable generation in Tasmania and brings with it growth in industry, assists with new developments and jobs and helps more Tasmanians electrify.
"This agreement is a big win for Tasmania. It means we can continue to progress the project toward making a final investment decision in 2024, while ensuring Tasmania is only paying its fair share."
