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Energy Minister Chris Bowen steps in to save Bass Strait electricity link to mainland

Tasmania's wealth of green hydro power will help stabilise the mainland grid via the new undersea cable.

Tasmania's wealth of green hydro power will help stabilise the mainland grid via the new undersea cable. Map: TasNetworks

The federal government has come up with the financing to make sure the Marinus Link bringing electricity from Tasmania to the mainland goes ahead.

Faced with the Tasmanian government’s refusal to increase its investment in the project “at any cost”, Canberra will now cover almost half the estimated $3 billion cost of the undersea cable’s initial stage.

Tasmania’s Premier Jeremy Rockliff had faced pressure to reveal the growing costs of the project, said to be more than $3 billion for the first stage alone, after losing two MPs over the issue and now governing in minority.

On Sunday, federal energy minister Chris Bowen said the federal government had reached a new funding agreement with Tasmania that would see the Commonwealth increase its share in the joint venture entity to 49 per cent.

Mr Bowen said the revised agreement was a “game-changer” that would get the project off the ground.

“This updated agreement will not only deliver the benefits of Marinus Link, it will be cheaper to Tasmanians,” he said.

Tasmania’s equity share will now be about 17.7 per cent and Victoria’s will remain at 33.3 per cent.

‘Line in the sand’

Mr Rockliff said the new deal would bring jobs, economic growth, energy security and lower power prices, with the state now investing its fair share and no more.

“I’m very pleased we’ve been able to land this on the right side of our line in the sand,” he said.

The Tasmanian government last month refused to detail the cost blowouts of the proposed undersea link to the mainland, saying contract negotiations were ongoing.

Tasmania’s Energy Minister Guy Barnett said the state would no longer fund the project at any cost and had initiated talks with the federal government to find an alternate funding arrangement.

The costs had blown out significantly from the initial $3.1 billion, with that price tag now attached to just the first stage of the project.

The Marinus Link is a proposed electricity and telecommunications interconnector between Tasmania and Victoria, allowing excess energy generated on the mainland to be stored in Tasmania’s hydro storage, dubbed its Battery of the Nation project.

The project will be focused on one cable in the first instance, with negotiations to continue on a second cable.

The government said modelling found the majority of the benefits from Marinus Link would be realised from the first cable, at close to two-thirds.

Tasmania will have the option to sell its stake to the Commonwealth upon commissioning of the project.

The Tasmanian government estimates its investment is now between $106 million and $117 million.

The project has a planned completion date of 2028.

-with AAP

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