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Push for second Tasmania Basslink wins new ARENA funding

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The push for a second undersea cable linking Tasmania’s electricity network with mainland Australia has gained new momentum, with another $20 million in federal government funding put towards developing a business case for the billion-dollar project.

The Australian Renewable Energy Agency and TasNetworks announced on Friday that they would work together to explore a more detailed feasibility and business case assessment for a second interconnector across the Bass Strait, to complement the existing Basslink cable.

The new funding from ARENA comes as state energy ministers meet with the federal government to discuss the future path of the national energy market, and in particular, how to manage the transition from centralised baseload energy generation to distributed renewables.

It also follows a push for Australia’s island state to become the “battery of the nation,” by expanding its hydro power capacity and developing “significant” pumped hydro resources to store and dispatch renewable energy – feasibility studies into which have also been backed by ARENA.

ARENA has previously committed up to $2.5 million for Hydro Tasmania to undertake early stage feasibility studies as part of the Battery of the Nation project.

The third of these studies currently underway considers how Tasmania can play an expanded role in the NEM through increased wind power and reconfiguring or expanding its hydro capacity, which would rely on the installation of a second interconnector.

Preliminary findings from that study indicate that the benefits of a second interconnector could outweigh the costs by $500 million.

But a 2016 report into the feasibility of adding a second undersea link suggested it would not be worth the $1 billion investment unless at least 1,000MW of new renewable energy capacity was built in Tasmania.

And not everyone is convinced that a second cable is the way to go, when the installation of grid-scale battery storage alongside renewable energy generators – and harnessing the collective resource of behind the meter battery storage in homes and businesses – could offer a cheaper and easier fix to problems of balancing variable wind and solar recources.

In one scenario, drawn up by the Australian Energy Market Operator, AEMO found that the benefits of installing a second Bass Strait interconnector might outweigh costs over a 20 year period by just $20 million, and that those benefits might be eroded if battery storage costs continued to fall.

The same report found that under a 45 per cent emissions reduction scenario, the second interconnection would provide minimal capital deferral benefits.

“Increased uptake of large-scale battery storage in all cases dampens the benefit of the additional capacity access provided via the inter-connector,” it said.

In a statement on Friday, ARENA said a second interconnector after Basslink would allow Tasmania to expand the amount of electricity it could provide to the grid, allowing Tasmania to play a greater role in the National Electricity Market.

It would also provide a backup line to the mainland to ensure supply to Tasmania – a key consideration, ever since the existing Basslink cable suffered a “force majeure” outage in December 2015, and tipped the state into a months-long electricity crisis.

TasNetworks and ARENA say they are now defining the scope of the more detailed feasibility and business case assessment to be formally assessed by ARENA.

They said the business case would consider: the optimum capacity of the cable; the preferred route; technical specifications and grid interconnections; timing; detailed cost estimates; and financial and development models.

“Tasmania has some of Australia’s best wind resources, a large established hydro electric system and the potential to develop pumped hydro sites,” said ARENA CEO Ivor Frischknecht.

“To harness this potential, a second interconnector would need to be constructed to enable further generation and storage capacity to be delivered to the rest of the NEM.”  

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  • George Michaelson

    The non financial benefits of course, are impossible to weigh up. further integration of Tassie into an energy market. Capital spend on works of benefit both sides of the gap. Jobs, jobs to feed those jobs their secondary inputs. Not to mention avoidance of a single point of failure.

    We might (for instance) do it even though its line-and-ball *and* do the battery work because we want to get those ancilliary outcomes.

  • Rob G

    About time! Good on many fronts.

  • Peter F

    For about $1b, you can build 500MW of pumped storage in Victoria/SA close to the load without the transmission losses. It will give better security than an undersea cable and can give better frequency support than a DC link.
    In any case to take advantage of it Tasmania will need to build another 1200 to 1500GW of wind or solar. The solar would be far more efficient built in SA or northern Victoria and the wind would need to either be significantly out of sync or have higher capacity factors than Victorian wind to justify the transmission losses

    • The Awul Truth

      You might think that but there’s sizable diversification benefits from having that wind which is close to 50% cap factor in Western Tasmania (and thus cheap) simply due to having more wind output not 100% correlated with all the SA capacity. Plus with all the hydro capacity they put in you can possibly engineer a complete replacement for the Latrobe Valley generators early and knock the cover off the ball of emissions targets.

      • Peter F

        Firstly wind farms in western Tasmania are actually closely correlated with SA. Those in the east face different weather patterns which are poorly correlated with SA (good) but have lower capacity factors,(bad).

        However because even one GW could be supplied by existing hydro the correlation is not important, the generation is. Tasmania uses about 10 TWhr of electricity. It generates 9 from hydro and existing wind so it needs about 250-300 MW of new wind just to break even.

        Victoria uses a bit over 40,000 GWhr of which about 30,000 will come from coal and maximum demand is around 10 GW with coal contributing 4.5 GW. Thus for Tassie to eliminate Victorian coal they will need to add 9 new 500 MW links and at 3.5 GWhr per MW of wind they would need to add 8,500 MW of wind and about 2.5-3GW of pumped hydro. It isn’t going to happen, because it doesn’t make sense

        • RobertO

          Hi Peter F, another silly idea with regard to the cable is install a 500 kV cable but connect it up as a 320 kV cable, just incase we need more energy from Tassie, costing about $50 million more but when we need more power the only changes need are the transformers on each end (doubles the power transmitted? I am not electrical). I believe the size was 600 MW

        • RobertO
  • RobertO

    Hi All, I would like to see a second link via King Island. Add 1000 MW wind at Robin Island, another 1000MW on King Island and you have ample power. The advantage to King Island is you get Optical Fibre in the cable, hence better comms all round, and the additional costs are only about $100 million, but it should be owned by australians and not able to be sold off to any company. King Island currently uses about 2.6 Million Litre of Diesel

    • Peter F

      I used to really like Tass-wind but the economics are very doubtful.

      • RobertO

        Hi Peter F, the first plans were 200 3 MW units with a feed to Victoria only, new WTG are 8MW (10 are on the drawing boards so more is possible). Also if we are spending between $700 and $1100 (Million) linking Tas to Vic then adding another $100 million to add an additional possible 1000 MW is a very good spend
        See https://www.environment.gov.au/system/files/pages/014e6ca4-f681-4ea5-a671-3301dde84217/files/final-report-feasibility-second-tasmanian-interconnector.pdf
        and
        https://reneweconomy.com.au/hold-really-need-second-basslink-cable-33915/
        I would want this as a “community project” owned by Australians for Australians to give the community of KI a boost, that benfits all.

        • Peter F

          Robert you are right the economics are far better now than they were but the economics of wind solar and particularly solar thermal on the mainland are much better too. For example three 20 turbine wind farms and high penetration rooftop solar using old mines and Eppalock dam for pumped hydro would allow greater Bendigo to be net zero with no new transmission infrastructure. Similar schemes with different power and storage mixes could easily supply all the regional areas of Victoria.
          The 8-10 GW turbines you speak of could be built in relatively shallow water off Gippsland at about 20% of the connection costs of King Island

  • Ray Miller

    The bigger issue is lack of overall Australian energy strategy. This is why we need today a comprehensive “business case” to find out how we get to zero emissions as quickly as possible. The TA solution kicking the can down the road is no solution.
    Spending money on isolated “perceived” solutions is a waste of resources and only kicks the can.
    It is clear that significant wind and pumped storage could be justified in TAS today to achieve a high level of resilience within the state.
    Included in the plan should be a focus on building efficiency, as it is always cheaper to use less than generate more.

    • RobertO

      HI Ray Miller, I agree we have no plans on what we should be doing, could be doing. Pollies are only interested in very short term projects, even Snowy 2 is currently a feasibility that may not be the best option but if our PM has his way it’s already being built. We need better long term plans with business cases attached and the need to be updated often according to time frame and some project may not be cost effective, but community benfit effective (sometimes it hard to price non commerical benfits).

  • Ian

    Whether this proposed link is cost effective or not, this proposal shows two things: 1. there is plenty of money for renewables development and 2. if the political climate is right, there is a rapid deployment of whatever development is needed.

    You might say this is not the best use of money, but it does call a deer a horse regarding the use of government financial instruments, and it sets a precedent for other (possibly more) useful projects.

    We know the turn-the-sod to turn-on-the-key for projects like wind, solar, and batteries is months , and we know the paid-off point for these sorts of farms to be less than 10 and closer to 5 years. There is no financial reason to not completely turn our electricity system to 100% renewables within the term of a couple of governments. And also, there are very few technical issues to solve to achieve a high degree of reliability of grid supply at a very reasonable price to consumers.

    We have to continue calling out those that monkey-wrench our energy supply transformation .

  • Graeme Harrison

    Yes, Tasie is ahead of the Eastern states in hydro, but more recent CSIRO work identified 1600+ sites along the Great Divide that were suitable for pumped hydro, with many in the Mel-Syd-Bne segment, so close to major loads.
    With a background in Elec Eng, I can’t believe that it makes sense to put one’s additional/new renewables or pumped-hydro on the other side of a DC-DC link from your major loads.
    So the money is likely far better spent at a number of separate pumped-hydro sites along the Great Divide. The existing decades-old pumped hydro at Kangaroo Valley, South of Sydney already has very large water reservoirs at top and bottom. The size of those pipes and generators could be increased very cost-effectively.

    • RobertO

      Hi Graeme Harrison, Linking tas to vic is part 1, changing tas hydro from gravity to peaked or pumped hydro is part 2, and having an additional 1000 MW wind is what the current plan is. This make tas a battery, and provides ample security for tas. If this is the plan then I ask why not add King Island (KI) to the link, and give them income (to pay for ferry, ability to export to mainland on a regular basis), and kill 2.6 million litres of diesel power, and add 1000 MW wind on KI and Optical Fibre (NBN, OF) in a power cable is about $600/km or $200 000 as opposed to fibre to KI costing $20 million and it become 3rd OF link to tas. It will take about 5 to 8 years to do this.