Marinus business case warns of “very large” cost to industry as federal green tick seals its fate

Debate continues to rage over the $5 billion Marinus Link undersea power cable as it clears a series of key development hurdles and the previously hidden Whole-of-State Business Case finally is made public, revealing that some unpalatable cost hikes are likely for major industry in Tasmania.

The federal government gave the environmental all-clear to the Marinus Link undersea power cable over the weekend, building momentum on last week’s rush of final investment decisions (FID) from its three government stakeholders.

The Tasmania Liberals signed off on FID for the state’s 17.7 per cent share in the project on Thursday night, closely followed on Friday by the Victorian Labor government and federal Labor, which hold 33.3 per cent and 49 per cent shares in Marinus Link, respectively.

The Rockliff government’s move to FID was controversial, both for flying in the face of caretaker conventions, still in place following the recent snap state election, but mainly because it had promised to publish Treasury’s Whole-of-State Business Case (WoSBC) for Marinus Link well before making FID.

Instead, the Liberals provided “last-minute” confidential briefings on Tuesday involving a deluge of documents, in a move independent MP Craig Garland has slammed as an “absolutely disgraceful” approach to negotiations on a multi-billion dollar infrastructure project.

The 25-page WoSBC has since been made public, here, as debate continues to rage over the costs versus the benefits of Marinus Link to Tasmania.

The first point of interest is that, according the the WoSBC, the current arrangements in the shareholders agreement (SHA) between the three governments mean that Tasmanian customers will contribute 27.6 per cent of Marinus Link Stage 1’s revenue requirements, and Victorian customers 72.4 per cent.

Transmission fee hikes

Further, the report says Stage 1 Marinus Link and its supporting grid infrastructure the North West Transmission Development (NWTD) will increase transmission prices by an estimated $70 for a typical residential customer and up to $140 for a typical small business customer.

The report says these annual transmission price impacts largely reflect “one off” increases once the transmission infrastructure is in operation and for the same level of consumption do not vary significantly from year to year.

Treasury also says these costs are “found to be broadly offset” by modelled lower wholesale electricity prices compared to “No Marinus”.

The report also notes, however, that roughly 55 per cent of the project cost is yet to be validated and refined for final submission to the Australian Energy Regulator (AER) and – if approved – any cost increases will be met by customers.

On the other hand, the report asserts that transmission costs currently account for less than 10 per cent of residential and small business electricity bills, and notes that concessional funding provided by the Clean Energy Finance Corporation (CEFC) will reduce costs to electricity customers.

Concessional funding applies to Marinus Link Stage 1, NWTD Stage 1 (which is fully paid for by Tasmanian customers) and for part of Hydro Tasmania’s Tarraleah proposed redevelopment costs.

The outlook for Tasmania’s Major Industrial (MI) customers, meanwhile, appears much more grim. According to the WoSBC, the state’s MI customers would face “very large increases in transmission prices under Marinus Link Stage 1” due to their high usage of the network.

According to a customer snapshot published by TasNetworks in its Revised Proposal to the AER for the 2024-29 Regulatory Period, a small number of major industrial customers account for more than 50 per cent of Tasmania’s electricity consumption.

The WoSBC says MI customers combined are estimated to see average price increases from 2030-31 to 2049-50 of almost $20 million (45 per cent) with Marinus Link Stage 1, bearing in mind that transmission costs make up around 20 per cent of MI customer bills.

“This increase would primarily occur upon project commissioning and would come at a time when there appears to be a range of pressures building on major industry nationwide,” the report says.

“In addition, future project cost increases, if they arise, will have a much larger impact on the MI customers,” the report says. “Closure of a MI would have adverse impacts on Tasmania’s economy, especially on employment in the region where it is located.

“It would also increase network costs for other customers under the current regulatory framework arrangements.”

On the other side of the ledger, independent modelling for the WoSBC puts the value of additional economic activity from Marinus Stage 1 at between $1.8 billion and $4.4 billion in total over the first decade from 2025-26 (the equivalent of between 4.4 per cent and 10.8 per cent of Tasmania’s estimated GSP for 2023-24).

More wind and solar

And on the energy market front, the report says Marinus Link Stage 1 is “modelled to drive significant increases in wind capacity and overall installed capacity in Tasmania, making the state a net energy exporter.”

“This is important,” the report continues, “as Hydro Tasmania’s ability to maximise the value of its generation suite will require new renewable generation to be built in the state.”

This is one of the key concerns of some of the biggest opponents of Marinus, who fear that construction of Marinus will pave the way for huge new wind farms that threaten to have outsized and unacceptable impacts on the environment and endangered animal and plant species.

Anger over the environmental implications of Marinus has been fanned by the delayed publication of the federal environment minister’s decision to approve Marinus – which appeared in the EPBC portal at 11:05am on Monday morning, more than 24 hours after it was announced. 

The EPBC decision on Marinus Link has already been pushed out three times by federal Labor; once by former environment minister Tanya Plibersek in February, and then twice by current environment minister Murray Watt. The most recent extension of time expired on July 25.

“It’s fair to say that if Minister Watt doesn’t want you to see the detail [of the EPBC approval of Marinus], there is a good reason why,” said Bob Brown Foundation Campaigner Scott Jordan on Monday, in a statement before the decision had been published. 

“What we do know is that the approval doesn’t include the controversial and environment-destroying transmission line network that will industrialise the north of Tasmania, carve hundreds of hectares through areas like Takayna, Loongana and the Cam River valley.

“But, when lauding the so called financial benefits and justifying the debt, suddenly the Marinus cable and the NW Transmission line are both one interdependent project. Cynical politics remains the driving force behind this ecocidal project,” says Jordan. 

EPBC approval

A 43-page approval decision is now published on the EPBC portal with “strict conditions” related to listed threatened species and communities, listed migratory species and an approved Commonwealth marine area.

Marinus Link CEO Stephanie McGregor welcomed the EPBC approval, following what she described as extensive investigations and surveys to assess the project’s impact.

“We’re confident the conditions adequately ensure any impact on protected matters and the marine environment is appropriately minimised,” McGregor said.

In May 2025, Marinus Link also received a positive assessment of its environmental effects under Victorian legislation. Final primary approvals under Tasmanian legislation are expected in late 2025.

The Rockliff government’s move to FID on Marinus has been controversial, not least because it flies in the face of caretaker conventions, still in place following a state election that was sparked by a vote of no confidence, and from which neither party received a clear mandate to govern.

For caretaker premier Jeremy Rockliff, this has almost certainly blown any chance of winning the support of minor parties or key independent MPs that his party needs to hold power, particularly after breaking his promise to publish a whole-of-state business case for Marinus Link at least 30 days before making FID.

“We don’t need Marinus”

Garland, who is the independent member for Braddon, said on Friday that he did not support Rockliff’s decision, because it would lead to wind farms being developed “all over Tasmania, including in locations that will have massive impacts on the environment, the community, and our Aboriginal heritage.”

“We don’t need Marinus for Tasmania and the costs outweigh any benefits in my view,” he said.

Tasmania Labor leader Dean Winter, who now looks likely to form government, supports the development of Marinus, but last week declined to give his blessing on FID with such short notice from his opponent. 

“Tasmanian Labor supports Marinus because it is the key to unlocking $25 billion worth of renewable energy investment in the state and it will create thousands upon thousands of safe, secure, well-paid jobs for Tasmanians,” the party said in a statement on Monday.

But it also said it would “make the mainland pay” for the hugely costly project by transferring Tasmania’s stake to the Victorian and Australian governments.

“This will save $200 million right now and help get the project moving after 11 years of inertia from the Tasmanian Liberal government,” the statement says.