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Australian Regulator Approves First Stage of Marinus Link Project; Financial Impact on Tasmanian Consumers Uncertain

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Marinus Project Gets First Stage Approval: Conflicting Views on Bill Impact

The Australian Energy Regulator (AER) has granted approval for the first stage of the Marinus Project, an electricity interconnection between Tasmania and Victoria, which includes the Marinus Link underwater cable and the North West Transmission Developments (NWTD) in Tasmania. Independent reports present conflicting projections regarding the net financial impact of the project on Tasmanian electricity consumers.

Project Components and Scope

The Marinus Project comprises two primary components:

  • North West Transmission Developments (NWTD): 240 kilometers of new and upgraded power lines and energy infrastructure between Palmerston, Burnie, and Sheffield in Tasmania. The AER has approved the first stage, covering infrastructure between Palmerston and Burnie, which constitutes approximately 60% of the total NWTD project.

  • Marinus Link: A proposed multi-billion-dollar undersea power cable connecting Tasmania to Victoria. The first stage of this cable has also received AER approval.

Approved Costs and Cost Recovery

The AER has set the construction cost for the approved stage of the Marinus Link at $3.47 billion, and the first stage of the NWTD at $922 million.

Project costs will be recovered through electricity bills. NWTD costs will be allocated to Tasmanian consumers, while Marinus Link costs will be shared between Tasmanian and Victorian consumers.

Projected Impact on Electricity Bills

The AER estimated that the transmission lines would add approximately $15.50 annually to residential electricity transmission costs starting in 2026.

This figure is projected to increase to $49 per year for a typical residential customer from 2029, when the lines are scheduled to become operational.

Measures Intended to Offset Costs

Several mechanisms have been proposed to reduce the impact on consumer bills:

  • Federal Grant: A $346 million federal government grant is projected to reduce a residential customer's electricity bill by 1% per year, according to the regulator. TasNetworks did not include the full impact of the grant in its application due to pending details.

  • Concessional Loan: Negotiations are underway for a low-cost loan from the Clean Energy Finance Corporation (CEFC). 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%.

Conflicting Projections on Net Bill Impact

Independent analyses and reports offer differing conclusions regarding the overall effect on Tasmanian electricity bills.

"The Marinus Link is likely to increase network charges for Tasmanian consumers, potentially outweighing the benefits from surplus renewable power sales." — Victoria Energy Policy Centre analysis (commissioned by the Bob Brown Foundation)

Government Statement: Energy Minister Nick Duigan stated that the federal grant and concessional loan would lead to consumer savings and 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 decrease by $113 per year due to increased wind and hydro generation entering the grid.

Deloitte Report (2024): A report commissioned by the Federal 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 because infrastructure costs must be recouped from consumers.

Timeline

Construction of the approved stage of the Marinus Project is expected to commence in 2025.