Canberra, Hobart agree on second Basslink study

Tasmania has won approval from the Coalition government for a new feasibility study into a second electricity cable across Bass Strait following the loss of the current Basslink cable which has plunged the island state into a major energy crisis.

The feasibility study was announced by Prime Minister Malcolm Turnbull and Premier Will Hodgman on Thursday, nearly six months after the Basslink cable was cut.

Tasmania has had to rely on its own energy resources, but the unprecedented falls in dam levels has forced it to turn to gas and diesel generation because it had not invested enough in wind energy or rooftop solar. Wholesale energy prices have jumped seven-fold to nearly $300/MWh.

Many renewable energy advocates say Tasmania should focus on investing in more renewables before building a second link, noting that if the Basslink was re-connected, the state would rely on imports from the coal-heavy Victoria grid to meet its energy needs until dam levels recovered.

Tasmania has previously suggested that the combination of hydro, and large amounts of wind energy, could deliver up to 1GW of reliable electricity to the mainland.

Turnbull said a second cable would open up the possibility of increased renewable energy exports.

“The combination of hydro power, which is dispatchable at any time, and wind would enable Tasmania to deliver on a much larger scale dispatchable renewable energy right across the nation,” he said. “This has the potential of being a very big significant economic investment and economic opportunity for Tasmania.”

“A second Basslink connection would allow more renewable energy to be exported from Tasmania to the rest of the country during times of abundance, and enhance energy security during unexpected challenges such as the low rainfall currently impacting the state.

“This is a welcome development which will set a benchmark to better assess other opportunities to improve the interconnection of the energy system across the country.

“South Australia, for example, is a leader in the installation of new renewable energy such as solar and wind, and better connection between the different parts of the network would enable ever-greater amounts of clean energy to be easily integrated into the system.”

Former Liberal member for Bass and Howard government minister Warwick Smith will undertake the study, which will also involve the Clean Energy Finance Corporation and the Australian Energy Market Operator. An interim report is due next month.

The Basslink cable is expected to be restored in mid-June, barring poor weather and other unexpected hurdles.