Marinus Link in Australia to move ahead with one cable to save costs

The Australian government is stepping in to make sure the Marinus Link project happens in the face of tight global supply chains and inflationary pressures.

The project will provide an additional connection between Tasmania and the Australian mainland in Victoria and is seen as key to the country’s renewables transformation.

On Sunday, the Australian government and the government of Tasmania announced a new deal to continue the project. The federal government is increasing its equity share to 49%, with the share of Tasmania falling to 17.7% and of Victoria remaining at 33.3% as agreed in October.

The project will also be reduced to one 750-MW cable in the first instance, which is anticipated to deliver two-thirds of the project’s economic benefits. The cost for the first stage is estimated at between AUD 3 billion (USD 1.9bn/EUR 1.8bn) and AUD 3.3 billion. Negotiations will continue for a second 750-MW cable.

Meanwhile, the Marinus Link project said on Tuesday it has entered into a capacity reservation agreement with Prysmian Powerlink, securing production and offshore installation capacity for the first 750-MW cable.

The revised deal between the governments further envisages an increase in the concessionality of debt financing via the Australian government's Clean Energy Finance Corporation (CEFC).

The Australian government also said it 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 expand network capacity in Tasmania.

The Marinus Link project is expected to unlock renewable energy generation and storage for the mainland through Tasmania's Battery of the Nation projects, which involve pumped hydro energy storage development in Tasmania. Tasmania’s Minister for Energy and Renewables Guy Barnett said: “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.”

The parties will aim to deliver the project "as close as possible to 2028." A final investment decision is targeted by the end of 2024.

(AUD 1 = USD 0.646/EUR 0.599)

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