FAQs Marinus Link

Marinus Link FAQs

Last updated 6 September 2023

What are the details of the updated agreement between the Tasmanian and the Australian governments to take the project forward?

The Australian Government’s equity share in a joint venture equity increased to 49%, with Tasmania’s share now at 17.7% and Victoria at 33.3%. 
There’s an increase in concessionality of Australian Government debt financing via the Clean Energy Finance Corporation (CEFC) – subject to CEFC independent decision-making and due diligence, delivering lower costs for consumers.  
Based on the updated arrangements, the Tasmanian Government estimates its investment to be between $106-117 million. 
On current cost estimates, Tasmania is projected to be responsible for 3.54% of the current project costs to reach commissioning.
Tasmania will also have the option to sell its stake to the Australian Government upon project commissioning. This means the state is well-positioned to avoid any long-term debt because of the project.

Will there now only be one cable as part of the project?

The project will focus on one cable in the first instance, with cable two negotiations to continue and be considered as part of final investment decision-making.
While ensuring the timely delivery of cable one will be a priority, Marinus Link will continue to progress the environmental and regulatory approvals and works required for the project’s second stage.

Are there revised cost estimates?

Marinus Link’s latest cost estimates indicate that stage one of the project will cost in the range of $3.0-3.3 billion. Based on the updated arrangements, the Tasmanian Government estimates its investment to be $106-117 million.

Will there be a reduction in the economic benefits of just commissioning one cable?

Updated economic analysis from Marinus Link indicates that stage one of the project is expected to deliver more than $2 billion in economic stimulus and more than 2400 jobs.
Cable one will deliver two-thirds of the project’s economic benefits – 75% of the gross market benefits and more than 60% of the economic benefits.
AEMO ISP modelling finds the majority of the benefits (close to two-thirds) from Marinus Link are realised from the first cable.

When will the project be delivered?

Marinus Link is working towards a delivery timeframe as close as possible to 2028, while still seeing a value for money and lowest-cost outcome.

What does this mean for the North West Transmission Developments (NWTD) and Battery of the Nation (BOTN) projects; Tarraleah and Cethana?

The Australian Government will 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 network’s capacity in Tasmania.
Cable one will align with the re-development of the Tarraleah power station and Remaining North West Transmission Developments.
The second stage of the project will align with the Cethana pumped hydro project, which is currently undergoing a business case assessment. The viability of the second cable is dependent on the decision to progress with pumped hydro at Lake Cethana.

Does the new deal mean that Marinus Link is going ahead?

The project is still subject to a whole-of-state (Tasmania) business case and final investment decision.
The whole-of-state business case will consider the financial, economic and social impacts of Marinus Link, NWTD, and its associated energy projects.
The business case will be completed and independently peer-reviewed at least 30 days before a final investment decision is due and will be made publicly available.

Why does Marinus Link need a capacity reservation agreement (CRA)?

A capacity reservation agreement (CRA) means that Marinus Link, with underwriting support from the Australian Government, has reserved a cable manufacturing slot.
The CRA mitigates the risk of delayed equipment delivery in a tight market. It enables Marinus Link to secure capacity, continue tender negotiations and progress to a Final Investment Decision.
This is part of a comprehensive and competitive tender process in a high-demand global market for HVDC cable systems; critical equipment for subsea electrical interconnectors.
This agreement ensures production and offshore installation capacity for one cable of the Marinus Link project, a 750 megawatt (MW) cable system, with negotiations continuing for the second 750 MW phase.
Project contracts for the Marinus Link project are conditional upon the successful conclusion of the commercial negotiations and final investment decision.

Are there financial implications for the Tasmanian Government in underwriting the CRA?

The Capacity Reservation Agreement (CRA) signed with Prysmian Group will be fully underwritten by the Australian Government, meaning that the Australian Government will pay the capacity reservation fee if it becomes payable under the CRA.
There is no additional cash flow requirement for the Tasmanian Government arising from the CRA or the underwriting arrangements.

How will these projects affect power prices?

Current FTI Consulting modelling shows that power prices will be lower with Marinus than without Marinus.
Solar and wind are the lowest-cost forms of renewable energy, while hydro’s value comes from storing energy.
Two-way transmission with the mainland enables access to the lowest-cost solar and wind generation and unlocks hydro storage capability. This will secure energy supply at a price Tasmania is unable to match on it’s own.
Marinus Link will allow Tasmania to combine the benefits of solar, wind and hydro, giving Tasmanians the lowest possible power prices.
For the mainland and Victoria, Marinus Link gives access to hydro storage – a low-cost and clean alternative to gas and coal for firming energy supply.

How will the final cost to consumers be determined?

The final cost to customers will be determined through the Australian Energy Regulator (AER) in a fully transparent, independent process.
The AER will set the Maximum Allowable Revenue (or ‘MAR’) for the project based on a number of factors, including the final costs to complete the project, the cost of debt, return on equity, depreciation of the asset, and other factors.
The MAR is recovered from customers through electricity bills, and transmission costs represent approximately 40% of a typical Tasmanian customer’s electricity bill.
Tasmania’s share of these costs is estimated to be around 11 per cent of the pre-concessional finance MAR and includes a concessional finance ‘discount’ for Tarraleah to be passed through to consumers.
The low-cost financing from Rewiring the Nation will reduce the annual costs of Project Marinus for electricity customers by almost half.

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