Marinus Link project update

June 20th, 2022

Category: News

Marinus Link is pleased to announce it has selected seven reputable and proven international businesses to tender for the manufacture, construction and commissioning of the electricity and telecommunications interconnector between Victoria and Tasmania.

This is an important step forward for the project, and indicates strong market confidence in delivering the 1500MW Marinus Link interconnector, which includes specialised high voltage direct current cabling and converter stations.

The seven suppliers shortlisted include 3 for converter stations (being Hitachi Energy, GE Grid Solutions, and Siemens Energy Global GmbH & Co. KG) and 4 for cables (being Sumitomo Electric Industries, Ltd, Nexans Norway AS, NKT HV Cables AB and Prysmian Powerlink S.r.l). The tender requires each bidder to include a strong element of local content (both at a national and state level). This encourages major bidders to proactively engage with local providers, and visa versa. The civil construction works are a particular area of interest and potential for local suppliers in both Tasmania and Victoria.

Marinus Link has worked with these pre-qualified suppliers since November 2021, allowing the national priority project to continue its due diligence and provide the market with up-to-date cost estimates that take into account current and potential economic, supply chain and labour cost head winds anticipated by suppliers.

Like many major infrastructure projects, the Marinus Link interconnector together with the supporting transmission developments in North West Tasmania face challenges including the ongoing impacts of COVID-19, the current and projected costs of key products and services, and the rising cost of assembling land.

“Through our rigorous tender pre-qualification process for Marinus Link with national and international suppliers, we have a more detailed and thorough understanding of the current and potential market conditions anticipated by our suppliers over the course of manufacturing, construction and commissioning phase,” Marinus Link CEO Bess Clark said.

“Like many other transmission businesses across the National Electricity Market in Australia, the cost of labour, materials and gaining community acceptance presents challenges,” Ms Clark said.

Accounting for these challenges, the revised cost for completion of both Marinus Link and the supporting transmission developments in North West Tasmania is AUS$3.8 billion. The updated estimate, an approximate increase of $300 million, or less than 10% on the $2021 estimate of AUS$3.5 billion, remains within the range specified under the Australian Energy Regulator’s Regulatory Investment Test for Transmission (RIT-T), passed by the project in 2021.

“Despite these current and projected cost head winds, our economic modelling suggests Australian electricity consumers can still expect net market benefits of approximately $4 billion above and beyond the cost to build Marinus Link and the supporting Tasmanian transmission developments,” Ms Clark said.

In the draft Integrated System Plan (ISP), the Australian Energy Market Operator (AEMO) deemed Marinus Link as a “fully actionable project” to be delivered as soon as possible. This priority status, which places Marinus Link and the supporting Tasmanian transmission on the optimum development path for Australia’s future grid, is expected to remain in AEMO’s final 2022 ISP due out in the coming weeks.

Background

The Marinus Link interconnector is a proposed 1500 megawatt electricity and telecommunications connection between Victoria and Tasmania, supported by transmission network developments in Tasmania’s North West.

Marinus Link involves approximately 255 kilometres of undersea High Voltage Direct Current (HVDC) cables, and approximately 90 kilometres of underground HVDC cabling and converter stations in Tasmania and Victoria.

The North West Transmission Developments (NWTD) in Tasmania involves approximately 220Km of overhead High Voltage Alternating Current (HVAC) assets that will be required to connect new renewable generation and storage resources.

Marinus Link together with the NWTD will help saving of at least 140 million tonnes of CO2 by 2050, the equivalent of taking approximately a million petrol/diesel cars off the road.

1500 megawatts is approximately the same size as the former Hazelwood power station, and equates to supplying 1.5 million Australian homes with electricity at any given time.

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