The Australian Economic Regulator (AER) Approves First Stage of Marinus Project
The Australian Economic Regulator (AER) has approved the first stage of the Marinus Project, an electricity link between Tasmania and Victoria, and its associated transmission line.
Project Components and Approval
The Marinus Project consists of two main components: the North West Transmission Developments (NWTD) project and the Marinus Link.
- NWTD Project: This involves 240 kilometers of new or upgraded powerlines and energy infrastructure, stretching from Palmerston to Burnie and looping to Sheffield in Tasmania. The first stage, covering infrastructure between Palmerston and Burnie (approximately 60% of the project), has been approved.
- Marinus Link: This is a proposed multi-billion-dollar underwater cable connecting Tasmania to Victoria. Its first stage has also received AER approval.
Estimated Costs and Recovery
The AER has determined the construction cost for the Marinus Link's approved stage to be $3.47 billion, while the first stage of the NWTD is estimated at $922 million.
These project costs are planned to be recovered through electricity bills.
The NWTD costs will be borne by Tasmanians, while Marinus Link costs will be split between Victorians and Tasmanians.
Impact on Electricity Bills and Offsets
The AER estimated that the transmission lines would initially add about $15.50 annually to residential electricity transmission costs from 2026. This amount is projected to increase to $49 per year for a typical residential customer from 2029, when the lines become operational.
Several measures are intended to offset these costs:
- Federal Grant: A $346 million federal government grant is expected to reduce a residential customer's electricity bill by 1% per year, based on the regulator's current information. TasNetworks did not include the grant's full impact in its application as details were pending.
- Concessional Loan: A low-cost loan from the Clean Energy Finance Corporation (CEFC) is being negotiated. The CEFC has already agreed to provide $3.8 billion in concessional loans for Marinus Link, which it states will reduce transmission costs by 45%. TasNetworks estimates this could reduce the project's impact on customer bills by 60% to 90%.
Differing Projections on Bill Impacts
There is ongoing uncertainty regarding the net effect on Tasmanians' power bills:
- Government Position: Energy Minister Nick Duigan stated that the grant and loan would lead to consumer savings and maintained that energy prices in Tasmania would be lower with the Marinus Project than without it.
- FTI Consulting Report (2025): A report commissioned by Marinus Link estimated power bills could drop by $113 per year due to increased wind and hydro in the grid.
- Deloitte Report (2024): A report commissioned by Treasury found that prices would increase for Tasmanians because the state would be more closely linked to the national energy market.
- Independent MLC Ruth Forrest: Ms. Forrest expressed skepticism, stating that bills would inevitably rise, as infrastructure costs must be recouped from consumers.
Construction of the project is expected to commence this year.